25€¦ · 12th November 2016 Company Secretary NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE, AT...

TH25ANNUAL REPORT

2015-16

SREE SAKTHI PAPER MILLS LIMITED

Sree Sakthi Paper Mills Limited

1

BOARD OF DIRECTORSDr. S. Rajkumar (Managing Director)Mr. A. Padmanabhan (Director)Mr. V V M Rao (Executive Director)Mr. S. Subramoniam, DirectorMr. S. Giridhar, DirectorMrs. E. Kamalam, Women DirectorMr. T. S. Anantharaman, DirectorMr. U. Gururaja Bhat, Independent DirectorMr. Deveshwer Kumar Kapila,Independent Director& Chairman (upto 1-9-2016)Dr. A. R. K. Rao, Independent Director (upto 1-9-2016)Mr. G. K Ajithkumar, Nominee Director (upto 9-7-2016)Mr K. Aravindakshan Nominee Director (from 9-7-2016)

COMPANY SECRETARYMr. R. Ponnambalam

AUDITORSM/s. Balan & Co.31/181 D, Anantha, Mahakavi G. RoadKarikkamuri, Cochin - 682 011

BANKERSFederal Bank LimitedIDBI Bank LimitedBank of IndiaState Bank of TravancorePunjab National Bank

REGISTERED OFFICE57/2993, “Sree Kailas” Paliam RoadErnakulam, Cochin - 682 016, KeralaTel: 0484-3002000, 2373230, 2371085, 2380497Fax: 0484-2370395E-mail:[email protected]: www.sreekailas.com

FACTORIESKraft Paper Unit 1 and 2Industrial Development AreaMuppathadom, Edyar, Aluva - 683 102Tel: 0484-3002100, 2540622, 2555451Fax: 0484-2555835

Duplex Board unit (closed- October2014)Kanjirapilly, PariyaramChalakudy, Thrissur - 680 721

C O N T E N T S

Corporate Information 1

Financial Highlights 2

Notice 3

Directors’ Report 14

Independent Auditor’s Report 51

Balance Sheet 55

Statement of Profit & Loss 56

Cash Flow Statement 57

Notes on Financial Statements 58

Form AOC - 1 75

Independent Auditor’s Report 77on Consolidated Financial Statements

Consolidated Financial Statements 81


2

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3

NOTICENotice is hereby given that the 25th Annual GeneralMeeting of the Company will be held on Friday 30th

December, 2016 at 2.00 p.m, at Hotel Abad PlazaM.G.Road, Ernakulam, Cochin - 35 to transact thefollowing business.

ORDINARY BUSINESS

1. To receive, consider and adopt the AuditedStatement of Profit and Loss for the year ended on31st March, 2016 and the Balance Sheet as at thatdate together with the reports of the Board ofDirectors and Auditors thereon.

2. To appoint a Director in place of Mr. A. Padmanabhan(DIN- 00037472), Director, who retires by rotationin accordance with section 152 of the CompaniesAct, 2013 and being eligible, offers herself for re-appointment.

3. To appoint a Director in place of Mr. S. Subramoniam(DIN-01790968) Director, who retires by rotation inaccordance with section 152 of the Companies Act,2013 and being eligible, offers herself for re-appointment.

4. Appointment of Auditors

To re appoint auditors of the Company to hold officefrom the conclusion of this AGM to the conclusionof the twenty sixth AGM and to fix their remunerationand to pass the following resolution thereof.

“RESOLVED THAT, pursuant to the provisions ofSection 139 of the Companies Act, 2013 and otherapplicable provisions of the Act, if any and the Rulesframed thereunder, as amended from time to time,and pursuant to the recommendations of the AuditCommittee of the Board of Directors, M/s Balan &Co, Chartered Accountants (ICAI Firm Regn.No.000340S) be and is hereby re-appointed asauditors of the Company, to hold office for a periodof one (1) year, from the conclusion of this AGM tothe conclusion of twenty sixth AGM (subject toratification of the appointment by the members atevery AGM held after this AGM) at suchremuneration plus service tax, out-of-pocket,travelling and living expenses etc, as may bemutually agreed upon between the Board ofDirectors of the Company and the Auditors.”

SPECIAL BUSINESS

5. Appointment of Mr. Venkata Mangeswara RaoVarrey (DIN 03630043) Additional Director andas a Wholetime Director and fixing hisremuneration

To consider and if thought fit, to pass with or withoutmodification(s), the following resolution as anOrdinary Resolution:

“RESOLVED THAT, Mr. Venkata Mangeswara RaoVarrey (DIN 03630043), who was appointed as anadditional director of the company by the board ofdirectors with effect from 17th October 2015, in termsof section 161(1) of the companies of the companiesAct, 2013 and Article 82 of the Articles of Associationof the Company and whose term of office expiresat the Annual General Meeting and in respect ofwhom the company has not received any notice inwriting from a member proposing his candidaturefor the office of Director, be and is hereby notappointed as the Director of the Company.

“RESOLVED FURTHER THAT pursuant to the tothe provisions of Section 196, 197, 203 and anyother applicable provisions of the Companies Act2013 and the rules made thereunder (including anystatutory modification(s) or re-enacted thereof forthe time being in force), read with Schedule V to theCompanies Act, 2013, the consent of the company,be and is hereby accorded to the appointment ofMr. Venkata Mangeswara Rao Varrey (DIN03630043), as Wholetime director of the companydesignated as “Director-Operations” for a period ofOne (1) year effective from 25.11.2015 –24.11.2016, on the terms and conditions ofappointment and remuneration as detailed in theExplanatory Statement to this item annexed to thisnotice as per section 102 of the Companies Act2013, and the Board of Directors be and is herebyauthorized to alter and vary such terms ofappointment and remuneration so as to not exceedthe limits specified in Schedule V to the CompaniesAct, 2013, and the Board of Directors be and ishereby autvcvhorised to alter and vary such termsof appointment and remuneration so as to notexceed the limits specified in Schedule V to theCompanies Act, 2013, as may be agreed to by theBoard of Directors and Mr. Venkata MangeswaraRao Varrey (DIN 03630043).

6. Approval for related party transactions

To consider and if thought fit, to pass with or withoutmodification(s), the following resolution as anOrdinary Resolution:

“RESOLVED THAT pursuant to the provisions ofSection 188 and other applicable provisions of theCompanies Act, 2013 read with the rules made thereunder (including any statutory modification(s) orreenactment thereof for the time being in force), theconsent of the Company be and is hereby accordedto enter into the related party transactions by theCompany with the respective related parties andfor the maximum amounts per annum for thefinancial year 2016-17 as mentioned herein below:


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Particulars of Parties Nature of Transaction Annual Amount Rs. Lacs

Dr. S .Rajkumar Lease Building – Rent 9.25

S. Subramoniam Lease Building – Rent 1.78

A. Padmanabhan Lease Building – Rent 0.30

A. Ganesh Lease Building – Rent 2.95

Shri Kailash Logistics Limited Lease Building – Rent 11.25

Shri Kailash Logistics Limited Freight Services 126.54

Sree Sakthi Constructions and Civil Works NILInfrastructure Limited

Maharaj Continental Trades Limited Commission 60.00

Sree Giri Packagings Limited Purchase/Sale of Raw Materials 1200.00

Verizon Industrial Aids Limited Purchase of Raw Materials 260.00

Carto Packs Purchase of Raw Materials NIL

Carto Packs Sale of Paper 80.00

7. To re-appoint Dr. S. Rajkumar (DIN 01790870) asManaging Director.

To consider and if thought fit, to pass, with or withoutmodification the following resolution as an OrdinaryResolution

RESOLVED THAT pursuant to the provisions ofSections 196, 197, 203 and any other applicableprovisions of the Companies Act, 2013 and the rulesmade thereunder (including any statutorymodification(s) or re-enactment thereof for the timebeing in force), read with Schedule V to theCompanies Act, 2013, the consent of the Company,be and is hereby accorded to the re- appointmentof Dr. S. Rajkumar (holding DIN 01790870) asManaging Director of the Company for a period ofOne (1) year effective from 14th August 2016 to 13th

August 2017, on the terms and conditions includingremuneration and perquisites as approved by theBoard of Directors at their meeting held on 14th

August 2016 and as detailed in the ExplanatoryStatement to this item annexed to this notice as persection 102 of the Companies Act, 2013, and theBoard of Directors be and is hereby authorised toalter and vary such terms of appointment andremuneration so as to not exceed the limits specifiedin Schedule V to the Companies Act, 2013, as maybe agreed to by the Board of Directors and Dr. S.Rajkumar (holding DIN 01790870).”

By order of the Board of DirectorsFor Sree Sakthi Paper Mills Limited

Sd/-Cochin -16 R. Ponnambalam12th November 2016 Company Secretary

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE,AT THE MEETING IS ENTITLED TO APPOINT APROXY TO ATTEND AND VOTE INSTEAD OFHIMSELF AND THE PROXY NEED NOT BE AMEMBER OF THE COMPANY.

2. The instrument appointing proxy (duly completed,stamped and signed) in order to be effective mustbe deposited at the registered office of the companynot less than 48 hours before the commencementof the 25th Annual General Meeting of the Company.

3. Corporate Members intending to send theirauthorised representatives to attend the Meeting arerequested to send a duly certified copy of BoardResolution on the letterhead of the Company, signedby one of the Directors or Company Secretary orany other authorized signatory and / or dulynotarized Power of Attorney, authorizing theirrepreives to attend and vote on their behalf at theMeeting.

4. With effect from 1st April 2014, inter alia, provisionsof Section 149 of Companies Act, 2013 has beenbrought into force. In terms of the said section readwith section 152 (6) of the Act, the provisions ofretirement by rotation are not applicable toIndependent Directors. Profile of directors seekingre-appointment as stipulated in terms of Clause 49of the listing agreement with the stock exchangesis provided in the report on corporate governance,which forms an integral part of this annual report.

5. The Register of Members and Share Transferbooks of the Company will remain closed from23-12-2016 to 30-12-2016 (both days inclusive).


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6. All documents referred to in the accompanyingNotice and the Explanatory Statement shall be openfor inspection at the Registered Office of theCompany during normal business hours (9.30 amto 5.30pm) on all working days except Saturdays,up to and including the date of the Annual GeneralMeeting of the Company.

7. Shareholders are requested to bring their copy ofthe Annual Report to the meeting.

8. Members/Proxies should fill the attendance slip forattending the Meeting.

9. Members who hold shares in dematerialized formare required to write their client ID and DPIDnumbers, and those who hold shares in physicalform are requested to write their Folio number inattendance slip for attending the meeting.

10. The information on the Directors appointment orreappointment is provided as per Clause 49 of theListing Agreement and is given in the CorporateGovernance Section of this Annual Report.

11. Under the provisions of the Companies Act, 2013,the amount of dividend remaining unpaid orunclaimed for a period of seven years from the duedate is required to be transferred to the InvestorEducation and Protection Fund (IEPF), constitutedby the Central Government. Unclaimed/unpaiddividend amount relating to Financial year 2007-08have been transferred to the ‘investor Education andProtection Fund’ established by the CentralGovernment. Unclaimed/unpaid dividend amount forFinancial year 2008-09 is being transferred toCentral Government account Those members whohave not encashed their dividend warrants for thefinancial year 2009-10 onwards may lodge a claimwith the Company immediately especially relatingto the year 2009-10 as the unpaid dividend for thesaid year is due to be remitted into I.E.P Fund by12th March 2017.

12. Copies of the Annual Report 2016 are being sentby electronic mode only to all the members whoseemail addresses are registered with the Company /Depository Participant(s) for communicationpurposes unless any member has requested for ahard copy of the same. For members who have notregistered their email addresses, physical copiesof the Annual Report 2015 are being sent by thepermitted mode.

13. The Securities and Exchange Board of India (SEBI)has mandated the submission of the PermanentAccount Number (PAN) by every participant in thesecurities market. Members holding shares inelectronic form are, therefore, requested to submit

their PAN to their Depository Participant(s).Members holding shares in physical form shallsubmit their PAN details to the Company / M/s.Bigshare Services Pvt. Ltd

14. Members holding shares in electronic form arerequested to intimate immediately any change intheir address or bank mandates to their DepositoryParticipants with whom they are maintaining theirdemat accounts. Members holding shares inphysical form are requested to advise any changein their address or bank mandates immediately tothe Company / M/s. Bigshare Services Pvt. Ltd.

15. A Statement pursuant to Section 102 (1) of theCompanies Act, 2013 relating to Special Businessto be transacted at the meeting is annexed hereto.

16. Information and other instructions relating to e-voting are as under:

(i) Pursuant to the provisions of Section 108 andother applicable provisions, if any, of theCompanies Act, 2013 and the Companies(Management and Administration) Rules,2014, as amended and Clause 35B of theListing Agreement, the Company is pleasedto provide to its members facility to exercisetheir right to vote on resolutions proposed tobe passed in the Meeting by electronic means.The members may cast their votes using anelectronic voting system from a place otherthan the venue of the Meeting (‘remote e-voting’).

(ii) The members who have cast their vote byremote e-voting may also attend the Meetingbut shall not be entitled to cast their vote again.

(iii) The Company has engaged the services ofCentral Depository Services India Limited(“CDSL”) as the Agency to provide e-votingfacility.

(iv) The Board of Directors of the Company hasappointed M/s Lakshmmi Subramanian &Associates, as Scrutinizer to scrutinize theVenue Voting and remote e-voting process ina fair and transparent manner and they hascommunicated their will ingness to beappointed and will be available for samepurpose.

(v) Voting rights shall be reckoned on the paid-upvalue of shares registered in the name of themember / beneficial owner (in case ofelectronic shareholding) as on the cut-off datei.e. 23/12/2016

(vi) A person, whose name is recorded in theregister of members or in the register of


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beneficial owners maintained by thedepositories as on the cut-off date, i.e. 23/12/2016 only shall be entitled to avail the facilityof remote e-voting / Venue Voting.

(vii) The voting period begins on 27/12/2016 at09.00 AM and ends on 29/12/2016 at 05.00PM. During this period shareholders’ of theCompany, holding shares either in physicalform or in dematerialized form, as on the cut-off date (record date) of 23/12/2016 may casttheir vote electronically. The e-voting moduleshall be disabled by CDSL for voting thereafter.

(viii) Shareholders who have already voted prior tothe meeting date would not be entitled to voteat the meeting venue.

(ix) The Scrutinizer, after scrutinizing the votes castat the meeting and through remote e-voting,will, not later than three days of conclusion ofthe Meeting, make a consolidated scrutinizer’sreport and submit the same to the Chairman.The results declared along with theconsolidated scrutinizer’s report shall beplaced on the website of the Companywww.sreekailas.com and on the website ofCDSL www.evotingindia.com. The results shallsimultaneously be communicated to the StockExchanges.

(x) Subject to receipt of requisite number of votes,the Resolutions shall be deemed to be passedon the date of the Meeting, i.e. 30 Deember ,2016.

(xi) Instructions and other information relatingto remote e-voting:

a) The shareholders should log on to the e-voting website www.evotingindia.com.

b) Click on Shareholders.

c) Now Enter your User ID

i. For CDSL: 16 digits beneficiary ID,

ii. For NSDL: 8 Character DP IDfollowed by 8 Digits Client ID,

iii. Members holding shares in PhysicalForm should enter Folio Numberregistered with the Company.

d) Next enter the Image Verification asdisplayed and Click on Login.

e) If you are holding shares in demat formand had logged on towww.evotingindia.com and voted on anearlier voting of any company, then yourexisting password is to be used.

f) If you are a first time user follow the stepsgiven below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicablefor both demat shareholders as well as physical shareholders)• Members who have not updated their PAN with the Company/Depository

Participant are requested to use the first two letters of their name and the 8digits of the sequence number in the PAN field.

• In case the sequence number is less than 8 digits enter the applicable numberof 0’s before the number after the first two characters of the name in CAPITALletters. Eg. If your name is Ramesh Kumar with sequence number 1 then enterRA00000001 in the PAN field.

Dividend Bank Details Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recordedOR Date of Birth (DOB) in your demat account or in the company records in order to login.

• If both the details are not recorded with the depository or company please enterthe member id / folio number in the Dividend Bank

g) After entering these details appropriately,click on “SUBMIT” tab.

h) Members holding shares in physical formwill then directly reach the Companyselection screen. However, membersholding shares in demat form will nowreach ‘Password Creation’ menu whereinthey are required to mandatorily entertheir login password in the new passwordfield. Kindly note that this password is tobe also used by the demat holders forvoting for resolutions of any other

company on which they are eligible tovote, provided that company opts for e-voting through CDSL platform. It isstrongly recommended not to share yourpassword with any other person and takeutmost care to keep your passwordconfidential.

i) For Members holding shares in physicalform, the details can be used only for e-voting on the resolutions contained in thisNotice.


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j) On successful login, the system willprompt you to select the E-VotingSequence Number for Sree Sakthi PaperMills Limited.

k) On the voting page, you will see“RESOLUTION DESCRIPTION” andagainst the same the option “YES/NO” forvoting. Select the option YES or NO asdesired. The option YES implies that youassent to the Resolution and option NOimplies that you dissent to the Resolution.

l) Click on the “RESOLUTIONS FILE LINK”if you wish to view the entire Resolutiondetails.

m) After selecting the resolution you havedecided to vote on, click on “SUBMIT”. Aconfirmation box will be displayed. If youwish to confirm your vote, click on “OK”,else to change your vote, click on“CANCEL” and accordingly modify yourvote.

n) Once you “CONFIRM” your vote on theresolution, you will not be allowed tomodify your vote.

o) You can also take a print of the votes castby clicking on “Click here to print” optionon the Voting page.

p) If a demat account holder has forgottenthe login password then Enter the UserID and the image verification code andclick on Forgot Password & enter thedetails as prompted by the system.

(xiii) Note for Non – Individual Shareholders andCustodians

a) Non-Individual shareholders (i.e. otherthan Individuals, HUF, NRI etc.) andCustodian are required to log on to

www.evotingindia.com and registerthemselves as Corporates.

b) A scanned copy of the Registration Formbearing the stamp and sign of the entityshould be emailed [email protected].

c) After receiving the login details aCompliance User should be created usingthe admin login and password. TheCompliance User would be able to linkthe account(s) for which they wish to voteon.

d) The list of accounts linked in the loginshould be mailed [email protected] and onapproval of the accounts they would beable to cast their vote.

e) A scanned copy of the Board Resolutionand Power of Attorney (POA) which theyhave issued in favour of the Custodian, ifany, should be uploaded in PDF formatin the system for the scrutinizer to verifythe same.

f) In case you have any queries or issuesregarding e-voting, you may refer theFrequently Asked Questions (“FAQs”)and e-voting manual available atwww.evotingindia.com, under helpsection or write an email [email protected] / TollFree No: 18002005533.


Sd/-Cochin -16 Ponnambalam12th November 2016 Company Secretary


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Name of Director Date of Birth Date of Appointment Share holding in the Co. (Nos.)

Mr. S Subramoniam 28.05.1957 03.08.1995 333944

QualificationGraduation

ExperienceMore than 27 years experience in cement and transport business. He is in the Board of the Company since1995

Details of Directorship in other companiesSree Sakthi Paper Mills Ltd, Sree Sakthi Constructions & Infrastructure Ltd, Shri Kailash Logistics Ltd, SreeKailash Palchuram Hydro Power Limited, Sree Adisakthi Mukkuttathode Hydro Power Limited and JalashaayiAlamparathode Hydro Power Limited.

Status in other Board Committees of the companyProject Finance Committee Member

Relationships between directors inter-seSon of Ms. E Kamalam & Brother of Dr. Rajkumar, Mr. S Giridhar, Directors of the Company

(IN PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT)

Name of Director Date of Birth Date of Appointment Share holding in the Co. (Nos.)

Mr. A Padmanabhan 26.06.1948 25.06.2009 15866

QualificationBE Degree

ExperienceMore than 16 years. He joined the Company as president Operations in July 2006 and co-opted as Director ofthe company and appointed as Whole Time Director (Operations) from June 2009. He improved the productionconsiderably to achieve the targets

Details of Directorship in other companiesSree Sakthi Constructions & Infrastructure Ltd, Shri Kailash Logistics Ltd, Sree Kashyapa Surya EnergyEquipments (P) Ltd, Shree Sakthi Industrial Park Ltd.

Status in other Board Committees of the companyNIL

Relationships between directors inter-seBrother in Law of Mr. Rajkumar Managing Director of the Company


9

Item No 5.

With a view to professionalize and broadbase theBoard,the Board of Directors at its meeting held on 17th

October,2015 has appointed Mr Mr. VenkataMangeswara Rao Varrey (holding DIN 03630043) as anAdditional Director in accordance with the provisions ofSection 161 of the Companies Act, 2013 and Article 82of the Articles of Association of the Company. He wouldhold office till the date of thisAnnual General Meeting.Further the Board has resolved to appoint him as aWhole-time director designated as Director (operations)for a period of 1 (one) year with effect from 25thNovember, 2015 to 24th November2016 subject toreceipt of approval from the members of the Company .His remuneration had also been fixed and recommendedby the Remuneration Committee (constituted by theBoard) at its meeting held on 13th November 2015 inaccordance with the provisions of Schedule V of theCompaniesAct, 2013

Term and conditions of his appointment are as under;

1. Tenure of office : One year wef 25/11/2015 to24/11/2016

2. Salary : Rs.2,50,000/(RupeeTwoLakhs Fifty Thousand Only)per month from 25/11/2015 to24/11/2016

1. Perquisites: a) Free furnished familyaccommodation.

b) Provision for car for use onOfficial purpose and itsincurring expenditure towardspetrol/diesel, repairs andservicing etc shall be onCompany’s expenses.Driver’s salary will bereimbursed by the Company.

c) Perquisites shall be evaluatedas per Income Tax Rules,1962 wherever applicable.

2. Where in any financial year the Company has noprofit or profits are inadequate, the minimumremuneration payable to the Whole Time Directorshall be the same substantive salary and perquisitesas above mentioned subject to the ceiling set outunder Schedule V of the Companies Act, 2013.

Where in any financial year the Company has no profitsor profits are Inadequate, the minimum remunerationpayable to the whole-tme Director shall be the samesubstantive salary and perquisites as above mentionedsubject to the ceiling set out under Schedule V of theCompanies Act, 2013.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESSPURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Information required to be disclosed in terms ofSchedule V of the Companies Act, 2013

I General Information

1. Nature of Industry - Paper Industry – TheCompany is engaged in manufacture andtrading (including exports) of Kraft Paper andDuplex Board

2. Date of expected date of commencement ofcommercial production - It is an establishedcompany and commercial production at itsEdayar plant commenced in 1993 and duplexboard unit at Chalakudy in 1995

3. In case of new Companies expected date ofcommencement of activities as per projectapproved by financial appearing in theProspectus - NOT APPLICABLE

4. Financial Performance (Rs. in lacks)

Particulars 2013-14 2014-15 2015-16

Gross Sales 21554.41 16405.45 10698.82

Net sales 20306.81 15452.58 10028.24

Profit before tax 635.33 302.62 (1138.96)and Depreciation

Profit before tax 143.26 (1528.71) (1762.88)

Profit after tax 116.08 (1178.14) (1694.95)

Rate of Dividend (%) 6 Nil Nil

The effective capital of the Company based onthe Audited Accounts for the year ended31.03.2015 was Rs 61.85 crores

The Company has not made any default in therepayment of its debts (including publicdeposits) or debentures or interest paymentsthereon for a continuous period of 30 days inthe preceding financial year.

5 Foreign investments or collaborations – TheCompany do not have any foreign investmentsor collaborations.

II Information about the appointee:

Mr Mr. Venkata Mangeswara Rao Varrey

1. Background details

Mr. V V Mangeswara Rao, resident of Kakinadais a B.Com Graduate and a Post Graduate ofIIM Ahmadabad and is having 35 years ofprofessional career in the field of factorymanagement, sales & marketing and materials,besides effective coordination with Governmentbodies. He has worked in Electro Steel Castings


10

Ltd; Sirpur Paper Mills Ltd; WIMCO PhotophoneLtd etc.

Among his var ious employment, hisemployment with Sirpur Paper Mills Ltd duringthe year 1994-2001 is note worthy- TURNEDAROUND the incipient sick unit into arejuvenated force in the paper industry byevolving and implementing a series of wellplanned strategies.

2 Past Remuneration

Paid by the Company- NIL

3 Recognition of awards - NIL

4. Job Profile and his suitability - As given inthe point II (1) above

5. Remuneration proposed - As mentioned in theExplanatory statement of Item no.5. consideringhis

Director is comparable with the prevailingmarket rates.

6. Pecuniary Relationship : Mr. V V MangeswaraRao,to the extent of remuneration received/receivable by him.

III Other information

Disclosures as required under Schedule V of theCompanies Act, 2013 is incorporated in theDirectors report and Corporate Governance Reportas the case may be forming part of the AnnualReport

Although the Whole-time Directorship has endedby 24-11-2016, the tenure and the payment ofremuneration for the said period is subject toapproval of members in General meeting.Accordingly the proposed resolution is placedbefore the shareholders for their approval

The concerned director is interested in the resolutionbeing related to his own appointment. Other thanthe aforesaid, none of the Directors and KeyManagerial Personnel of the Company and theirrelatives are concerned or interested in theresolution as set out in item No. 5 of theaccompanying notice.

Item No. 6

The Companies Act, 2013 aims to ensure transparencyin the transactions and dealings between the relatedparties of the Company. The provisions of Section 188(1)of the Companies Act, 2013 that govern the RelatedParty:

a) Sale, purchase or supply of any goods or materials

b) Selling or otherwise disposing of, or buying, propertyof any kind

c) Leasing of property of any kind

d) Availing or rendering of any services

e) appointment of any agent for purchase or sale ofgoods, materials, services or property;

f) such related party’s appointment to any office orplace of profit in the company, its subsidiarycompany or associate company; and

g) underwriting the subscription of any securities orderivatives thereof, of the company

In the light of provisions of the Companies Act, 2013,the Board of Directors of your Company hasapproved the proposed transactions along withannual limit that your Company may enter into withthe related parties (as defined under section 2(76)of the Companies Act, 2013)

The particulars of the transaction pursuant to theprovisions of Section 188 and the Companies(Meetings of Board and its Powers) Rules, 2014 areas under:

Transactions, requires that for entering into anycontract or arrangement as mentioned herein belowwith the related party, the Company must obtain priorapproval of the Board of Directors and in case ofthe Company, prior approval of the shareholders byway of an Ordinary Resolution must be obtained incase of transactions

exceeding 10% of the turnover of the Company

exceeding 10% of the net worth of the Company

exceeding 10% of the networth; or exceeding 10%of turnover of the company; or 100 crores whicheveris lower.

exceeding 10% of turnover or; Rs.50 croreswhichever is lower

Monthly remuneration exceeding Rs. Two and halflakhs

exceeding 1% of net worth.

(1) Name of the Related Party:

(2) Name of the Director or Key ManagerialPersonnel who is related, if any: As provided intable below

(3) Nature of Relationship:

(4) Nature, material terms, monetary value andparticulars of the contract or arrangement: Thedetails are as mentioned below:


11

(Rs. In Lakhs)

Sl. No. Particulars of Parties Nature of Transaction AmountAlready Incurred

1 Dr. S .Rajkumar Lease Building – Rent 03.70

2 S. Subramoniam Lease Building – Rent 01.09

3 A. Padmanabhan Lease Building – Rent 0.72

4 A. Ganesh Lease Building – Rent 0.30

5 Shri Kailash Logistics Limited Lease Building – Rent Nil

6 Shri Kailash Logistics Limited Freight Services 48.97

7 Sree Sakthi Constructions and Civil Works NilInfrastructure Limited

8 Maharaj Continental Trades Limited Commission 33.12

9 Sree Giri Packagings Limited Purchase of Raw Materials 264.17

10 Verizon Industrial Aids Limited Purchase of Raw Materials 166.87

11 Carto Packs Purchase of Raw Materials 06.04

12 Carto Packs Sale of Paper 33.52

(Rs. In Lakhs)

Sl.No. Particulars of Parties Nature of Transaction Proposed Amountper annum

1 Dr. S .Rajkumar Lease Building – Rent 15.00

2 S. Subramoniam Lease Building – Rent 05.00

3 A. Padmanabhan Lease Building – Rent 05.75

4 A. Ganesh Lease Building – Rent 01.50

5 Shri Kailash Logistics Limited Lease Building – Rent 04.00

6 Shri Kailash Logistics Limited Freight Services 400.00

7 Sree Sakthi Constructions and Civil Works 10.00Infrastructure Limited

8 Maharaj Continental Trades Limited Commission 150.00

9 Sree Giri Packagings Limited Purchase of Raw Materials 3500.00

10 Verizon Industrial Aids Limited Purchase of Raw Materials 1050.00

11 Carto Packs Purchase of Raw Materials 100.00

12 Carto Packs Sale of Paper 370.00

The Company is in existence more than twenty yearsand major related party transactions developed over theyears are generally with its associates. The related partytransactions are entered into based on consideration ofvarious business exigencies such as synergy inoperations and sale and transport of finished goods andalso keeping in view of Company’s long term strategyfor assured supply of raw material-waste paper anddispatch of finished goods without any hindrance.

The respective agreements are negotiated on arm’slength basis and are intended to further the Company’sinterests. The Board had considered all relevant factorsin entering into the arrangements.

The Copies of the above mentioned existing agreementsshall be available for inspection by the members at theRegistered Office of the Company during the normalbusiness hours (10 am to 5.30 pm) on all working days(except Saturdays) upto the date of Annual GeneralMeeting of the Company.

The members are further informed that no member/s ofthe Company being a related party or having any interestin the contract or arrangement as set out at item No. 06shall be entitled to vote on this special resolution.

The Board of Directors recommends the resolution setforth in item No. 06 for approval of the Members.


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Except the Directors and their relatives (to the extent oftheir interest in each contract as specified above), noother director or Key Managerial Personnel or theirrelatives, is concerned or interested, financially orotherwise, in passing of this resolution.

Item No. 7

Dr. S. Rajkumar is Managing Director of the Companysince inception and his last tenure of appointment wasfor a period of 01 years wef 14.08.2015 to 13.08.2016.At the meeting of Board of directors of the companyheld on 14th August 2016, it was decided to reappointDr. S. Rajkumar as Managing Director for further periodfrom the expiry date of the present tenure. TheNomination and Remuneration Committee of the Boardwas requested to approve and recommend theremuneration payable to Dr. S. Rajkumar.

The Nomination and Remuneration Committee had meton 14.08.2016 and after evaluating as required underthe provisions of new Companies Act, 2013 hasrecommended the re appointment of Dr S. Rajkumar asManaging Director for a period of one year from 14th

August 2016 and lieu of company running in loss andconsidering the financial constraints recommended NILremuneration.

Term and conditions of his appointment are as under;

1. Tenure of office : One year wef 14/8/2016to 13/8/2017

2. Salary & Perquisites : NIL

Where in any financial year the Company has no profitsor profits are Inadequate, the minimum remunerationpayable to the Managing Director shall be the samesubstantive salary and perquisites as above mentionedsubject to the ceiling set out under Schedule V of theCompanies Act, 2013.

Information required to be disclosed in terms ofSchedule V of the Companies Act, 2013

I General Information

5. Nature of Industry - Paper Industry – TheCompany is engaged in manufacture andtrading (including exports) of Kraft Paper andDuplex Board

6. Date of expected date of commencement ofcommercial production - It is an establishedcompany and commercial production at itsEdayar plant commenced in 1993 and duplexboard unit at Chalakudy in 1995

7. In case of new Companies expected date ofcommencement of activities as per projectapproved by financial appearing in theProspectus - NOT APPLICABLE

8. Financial Performance (Rs. in lacks)

Particulars 2013-14 2014-15 2015-16

Gross Sales 21554.41 16405.45 10698.82

Net sales 20306.81 15452.58 10028.24

Profit before tax 635.33 302.62 (1138.960and Depreciation

Profit before tax 143.26 (1528.71) (1762.88)

Profit after tax 116.08 (1178.14) (1694.95)

Rate of Dividend (%) 6 Nil Nil

The effective capital of the Company based onthe Audited Accounts for the year ended31.03.2016 is Rs 42.80 crores

The Company has not made any default in therepayment of its debts (including publicdeposits) or debentures or interest paymentsthereon for a continuous period of 30 days inthe preceding financial year.

5 Foreign investments or collaborations – TheCompany do not have any foreign investmentsor collaborations.

II Information about the appointee: Dr. S. Rajkumar

1. Background details

Dr. S. Rajkumar is a post graduate in commerceand has been in the service of the Company asManaging Director since the incorporation of theCompany in 1991. He has been instrumental insetting up of Kraft paper unit at Edayar whichcommenced the commercial production in theyear 1993 and Duplex Board unit at Chalakudywhich commenced the commercial productionin the year 1995. Besides he has takenconsiderable strain and responsibility in settingup the 3rd unit at Edayar which commencedcommercial production in the year 2007. Forsetting up this 3rd unit he has successfullymobilised Funds through public issue of sharesand Company’s shares were listed in BSE. DrS. Rajkumar is 56 years old and has wideexperience in marketing management andadministration and has in depth knowledge ofPaper Industry. Over the last 23 years he hassteered the Company successfully andconsistently made profits even when the Paperindustry is facing depressed conditions byadopting cost control measures. Since theinception of the Company he has taken effectivesteps to increase the production capacitygradually and under his leadership Companyhas reached as one of the leadingmanufacturers of Kraft Paper in South India withinstalled capacity of 85000 MT per year.


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He is also a Director in the following Companies

1. Shri Kailash Logistics Ltd

2. Sree Sakthi Construction and Infrastructure Ltd

3. Jalashaayi Alamparathodu Hydro Power Ltd.

4. Sree Adisakhti Mukkuttathode Hydro Power Ltd

5. Sree Kailas Palchuram Hydro Power Ltd. and

6. Sree Sakthi Industrial Park Limited

2. Past Remuneration

During the Financial year 2015-16 he was paidthe following remuneration:

Particulars Rs./lakhs

Salary 24.00

House Rent Allowance 11.40

Total 35.40

3. Recognition or awards

Dr S. Rajkumar was honoured with OutstandingEntrepreneurship Award by Kerala StateIndustrial Development Corporation Ltd(KSIDC) on the occasion of Golden Jubileecelebrations in 2011. He also have beenawarded with First P.K. Ittoop Memorial Awardfor Industry.

4. Job Profile and his suitability - As given inthe point II (1) above

5. Remuneration proposed - As mentioned in theExplanatory statement of Item no.07.Considering his vast experience and the

services rendered as Managing Director of theCompany since its inception, the remunerationproposed to Dr. S. Rajkumar, the ManagingDirector is comparable with the prevailingmarket rates.

6. Pecuniary Relationship : Dr. S. Rajkumar tothe extent of remuneration received/ receivableby him. All transactions with related parties asdisclosed at Annexure V of Directors Report.

III Other Information :

Disclosures as required under Schedule V ofCompanies Act, 2013 is incorporated in theDirectors report and Corporate Governance Reportas the case may be forming part of the AnnualReport. Dr. S. Rajkumar to the extent of remunerationreceived/ receivable by him and Mr.S.Subramoniam,Mr.S.Giridhar, and Mrs E.Kamalam and Mr.A.Padmanabhan being related to Dr. S. Rajkumarinterested in the resolution mentioned in item no.07of the notice. None of the other directors of the otherdirectors of the Company is in any way concernedor interested in the resolution. Accordingly, yoursDirectors recommend this resolution for yourapproval.


Sd/-Cochin -16 R. Ponnambalam12th November 2016 Company Secretary


14

Your Directors have pleasure in presenting their 25th

Annual Report and the Audited Financial Statements ofthe Company for the year ended 31st March 2016.

REVIEW OF OPERATIONS 2015-16

The company is engaged in the business ofmanufacturing Kraft paper and paper board

In the year under review, the total production was 38606MT as compared to the previous financial yearproduction of 57571 MT and thus the total productionfell short by 18965 MT. The operation relates toproduction at Kraft Paper units 1& 2 at Edayar, duplexboard unit at Chalakudy having stopped operation inthe previous year

As mentioned in the last year’s report, with thecompletion of the repairs and maintenance work of theboiler and other equipments, the operation of the KraftPaper Unit have been put into stable operation from thelast Quarter of the financial year 2014-15 . athough theCompany had drawn up plans to operate at 80% capacityin the year under review the Company could achieveonly 59% capacity utilisation The Company sufferedsetback as the company continued to go through a phaseof poor demand scenario. The company was facingdifficulties in sales due to imported paper coming intothe country As regards the Kraft Paper, the marketconditions were sluggish from the year 2013-14 whichcontinued affecting the profitability which was comingdown from year to year . The average sales realisationrate in the year was Rs.25975/ as compared to previousyear sales realization rate Rs.29525/- Apart from lackof sales demand, the company also faced various issueswith the indigenous waste purchase, labour unrest andpollution problems and ultimately as per notice receivedfrom Kerala State Pollution Control Board the Companywas forced to stop operations since June 2016

The net loss of the Company for the year ended wouldhave been lesser by Rs. 676.21 lakhs if the REC incomewere recognized on the unsold stock (including openingstock) of REC Certificates (45081) as income at the floorprice of Rs. 1500/- fixed by Government.

DIVIDEND

In view of loss, your Directors decided not to recommendpayment of dividend on the equity shares and nonconvertible cumulative Redeemable Preference Sharesfor the financial year under review.

EXPORT PERFORMANCE

Your company’s exports of paper and paper boardsduring the year was NIL as compared to 1518.98 Mtduring the previous year. The export amounted Rs. NILas against Rs 385.65 lacs in the previous year.

PROSPECTS

The outlook for paper sector is positive. The sale pricesmay go up

As mentioned above the operations of the factories ofthe company remain closed. The company is seriouslylooking to restart operations In order to resumeoperations, defects in the effluent management systemis to be rectified. However, it would not be possible torectify the defects pointed out by Kerala State PollutionControl Board in the efflument management system asit involves heavy capital expenditure on the one handand the long time to be taken for completion of the jobon the other hand. To raise funds to finance therectification work of effluent waste management systemwill also require time

FINANCIAL PERFORMANCE (Rs. Lacs)

Particulars For the For theyear ended year ended 31.03.2016 31.03.2015

Sales (Gross) 10698.81 16405.45

Less: Excise Duty 670.58 952.86

Sales (Net) 10028.24 15452.59

Operation Profit/Loss (497.32) 287.73

Interest and Finance 641.64 590.35

Depreciation 328.99 376.81

Profit Before Tax (1467.95) (679.43)

Provision for Tax 0.00 0.00

Profit After Tax (1694.95) (1178.14)

Balance of Profit (727.31) 513.25brought forward

Amount available for (967.64) (664.89)appropriation

Appropriation

General Reserve 0.00 0.00

Proposed Dividend & 0.00 0.00tax on Dividend

Retained profit carried (727.31)to Balance Sheet

SUBSIDIARY COMPANIES

As of 31st March 2016 the company had 3 subsidiariesviz. Sree Kailas Palchuram Hydro Power Limited, SreeAdisakthi Mukkuttathode Hydro Power Limited andJalashaayi Alamparathode Hydro Power Limited byvirtue of the Company having control on the Board ofthese companies. Steps are being initiated to implementthe project with the assistance of Government / Privateparties.

DIRECTORS’ REPORT


15

The Board of directors of the company at its meetingheld on 30.05.2011 decided to avail the exemption undersection 212 of the Companies Act, 1956 pursuant toGC No.2/2011 dated 08.02.2011 issued by the CentralGovernment. As required in the Circular, theconsolidated financial statements audited by theStatutory Auditors of the company attached along withthe Annual Reports of the company. Annual accountsof the subsidiary companies and the related detailedinformation would be sent to those shareholders seekinginformation in this regard at any point of time. Furtherannual accounts of the subsidiary companies would beavailable for inspection by any shareholders at theregistered office of the company.

INDUSTRIAL RELATIONS

The industrial relations remained cordial and satisfactoryduring the year under review.

CHANGES IN NATURE OF BUSINESS

No significant changes had been made in the nature ofthe company during the financial year.

MATERIAL CHANGES AND COMMITMENTSOCCURRED BETWEEN THE DATE OF BALANCESHEET AND THE DATE OF AUDIT REPORT

No significant material changes and commitments haveoccurred between the date of the balance sheet andthe date of the audit report.

FINANCE

A) Deposits

The Company has not accepted deposit from thepublic falling within the ambit of Section 73 of theCompanies Act, 2013 and The Companies(Acceptance of Deposits) Rules, 2014.

B) Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investmentscovered under the provisions of Section 186 of theCompanies Act, 2013 are given in the notes to theFinancial Statements.

C) Commitments

During the year under review no additional fundsraised All the repayment and interest commitmentswere met as per terms of arrangement with theBanks.

In the current financial year the Company hasobtained Unsecured loans to the extent of Rs.

INTERNAL CONTROL SYSTEM

Your Company has adequate internal control and internalcheck system commensurate with size of theorganization.

The Company has appointed M/s. Pooja A Nayak & Co.,

Chartered Accountants, Ernakulam as the InternalAuditor of the Company to monitor and evaluate theefficacy and adequacy of internal control system in theCompany, its compliance with operating systems,accounting procedures and policies of the Company andits subsidiary.

Significant audit observations are presented to the AuditCommittee of the Board and corrective actions takenthereon

BOARD OF DIRECTORS AND KEY MANAGERIALPERSONNEL

In the Annual General Meeting held on 30 September2015, Dr. A. R. K. Rao was appointed as IndependentDirector for further consecutive term of one year and hewill be retiring at the ensuing Annual General meeting.However in the meantime he has resigned from theBoard on 16th August 2016. Sri Deveshwer Kumar KapilaIndependent Director and Chairman of the Companyhas also resigned from the Board on 16th August 2016

Consequently they cease to be members of AuditCommittee, .Nomination and Remuneration Committee,CSR Committee (Sri D.K. Kapila), ShareholdersRelationship Committee(Dr.ARK Rao).

Consequent to the resignation of Sri A.R.K.Rao and SriDeveshwer Kumar Kapila, there are one Independentdirector five promotional directors, one nominee Directorand two other directors, thereby having less than 50%representation of Independent Directors in the Board ofDirectors. The requirement of Independent Directors hasto be fulfilled by filling vacancy created for complyingRegulation 25(6) of SEBI (LODR) Regulations, 2015.

Efforts are being made to identify suitable personsfulfilling the criteria of independent as required undersection 149 of the Companies Act 2013, to fill up thevacancies of Independent Directors

In terms of Article 83 of the Articles of Association ofthe Company, Mr. A. Padmanabhan and Mr. S.Subramoniam, Director, retire on rotation, and beingeligible offer themselves for re-appointment.

The Company has received declarations from all theIndependent Directors of the Company confirming thatthey meet with the criteria of Independence asprescribed both under sub section (6) of Section 149 ofthe Companies Act, 2013 and under SEBI (ListingObligations and Disclosure Requirements) Regulations,2015.

Mr. N. Purushothama Prabhu, Whole Time DirectorOperations resigned from Board with effect from12.02.2016. Mr. Varrey Venkata Mangeswara Rao wasappointed as Additional Director at the meeting of Boardof Directors held on 17-10-2015. In accordance with theCompanies Act 2013, he would hold office of Directorup to the ensuing Annual General Meeting. The Board


16

also appointed him as Whole Time Director in Operationsof the Company for a period of one year w.e.f 25-11-2015 to 24-11-2016 The Company has not received any

notice from a member proposing his name for the officeof Director with necessary deposit in accordance withthe provisions s of Companies Act, 2013

KEY MANAGERIAL PERSONNEL (KMP)

The details of the Key Managerial Personnel of the Company appointed pursuant to section to section203 of the Companies Act, 2013 are as follows

Sl. No. Name Designation With effect from To

1 Dr S.Rajkumar Managing Director 14-08-2014 13-08-201514-08-2015 13-08-201614-082016

2 Mr. R.Ponnambalam Company Secretary 09-10-2013

3 Ms Usha Venugopal Chief Financial officer 01-09-2014 11-04-2016

4 Ms Deepa Praveen Chief Financial officer 19-05-2016 25-09-2016

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013and SEBI (Listing Obligations and DisclosureRegulations) Regulation 2015, the Board has carriedout an annual performance evaluation of its ownperformance, the directors individually as well as theevaluation of the working of its Committee. The mannerin which the evaluation has been carried out has beenexplained in the Governance Report.

REMUNERATION TO DIRECTORS

The Remuneration paid to the Executive Directors andthe Sitting Fees paid to the Non-Executive andIndependent Directors are disclosed in the Extract tothe Annual Return i.e Annexure IV to the Board’s Report.

AUDIT COMMITTEE

The Audit Committee of the Board was reconstituted on30-5-2015 and consists of Mr. Deveshwer Kumar Kapila,Independent Director, Mr. U.Gururaja Bhat, IndependentDirector, Dr. A R K Rao, Independent Director and Mr.S. Giridhar Non Independent Director.

CORPORATE SOCIAL RESPONSIBILITYCOMMITTEE.

The Corporate Social Responsibility Committee of theCompany consists of Mr. Deveshwer KumarKapila,(since resigned) Independent Director, Dr. SRajkumar, Managing Director and Mr. A Padmanabhan,Whole Time Director.

However your Company is not obliged to spend anyamount on CSR activities under the provisions ofCompanies Act , 2013 based on the criteria laid downtherein

The Annual Report on CSR Activities for the FinancialYear 2015-16 is annexed at Annexure VII to theDirectors Report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee was re-constituted on 30-05-2015 and consists of Mr.Deveshwer Kumar Kapila, Independent Director(sinceresigned), Mr. U.Gururaja Bhat, Independent Director,Dr. A R K Rao, Independent Director(since resigned)and Mr. S. Giridhar Non Independent Director.

REMUNERATION POLICY

The Company’s remuneration policy is directed towardsrewarding performance based on review ofachievements periodically. The remuneration policy isin consonance with the existing industry practice.

SHAREHOLDERS RELATIONSHIP COMMITTEE

Composition of the Committee as from 30 July 2015:

Dr S. Rajkumar Managing director

Mr.U.G. Bhat Independent Director

Dr. A R K Rao, Independent Director (since resigned)

Mr.S.Giridhar Non Executive/ Non Independent Director

AUDITORS

M/s Balan & Co. Chartered Accountants, the presentAuditors of the Company retire and are eligible forreappointment and the proposal has been placed beforeyou. Necessary certificate has been obtained from theAuditors as per section 139 and 141 of Companies Act2013

FOREIGN EXCHANGE EARNINGS AND OUT-GO

During the year under review, the foreign exchangeearned by the company by way of exports proceeds isNIL (previous year - Rs. 389.65 Lacs). The foreignexchange outgo for the company for import purchases– Rs lacs (previous year - Rs 5831.15 lacs)


17

PARTICULARS UNDER SECTION 134

Conservation of Energy, Technology Absorption

Statement of particulars under Section 134 (3) (m) ofthe Companies Act, 2013 read with Rule, 8 of TheCompanies (Accounts) Rules, 2014, is annexed asAnnexure -I

Particulars of Employees

None of the employees of the company are comingunder the provisions of section 197(12) of theCompanies Act, 2103, read with Rule 5(1) of theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

The Company’s Equity Shares are listed with BombayStock Exchange. The Company has implemented all themandatory provisions of Clause 49 of the ListingAgreement relating to the Corporate Governance. TheReport on Management’s Disc ussion and Analysis andReport on Corporate Governance are forming part ofDirectors’ Report and are annexed as Annexure -II andAnnexure – III respectively. As required by the ListingAgreement, an Auditors’ Certificate on CorporateGovernance and a Declaration by the Vice Chairmanand Managing Director with regard to Code of Conductare attached to the said Report. Further, as required byClause 49 of the Listing Agreement, a Certificate, dulysigned by the Vice- Chairman and Managing Directorand General Manager– Finance, was submitted to theBoard of Directors on the financial statements and cashflow statement of the Company for the year ended March31, 2016 at the Meeting held on 13th June 2016

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form MGT 9, of theCompany is annexed as Annexure IV to this Report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered intoduring the financial year were on an arm’s length basisand were in the ordinary course of business. There areno materially significant related party transactions madeby the Company with Promoters, Directors, KeyManagerial Personnel or other designated personswhich may have a potential conflict with the interest ofthe Company at large.

All Related Party Transactions are placed before theAudit Committee for approval. Further prior approval ofthe Shareholders of the company at the Annual GeneralMeeting dated 30 September, 2015 has been taken forthe business related transactions entered into with theRelated Parties during the year.

Particulars of contract or arrangements with relatedparties is annexed in Form AOC 2 as Annexure V

SECRETARIAL AUDITOR

The Board has appointed M/s. Lakshmi Subramoniam& Associates, Practising Company Secretary, to conductSecretarial Audit for the financial year 2015-16. TheSecretarial Audit Report for the financial year endedMarch 31, 2016 is annexed herewith marked asAnnexure VI to this Report.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In accordance with Section 177 of the Companies Act,2013 and Regulation 22 of SEBI(LODR)Regulation2015,the Company has constituted a Whistle Blower Policy/Vigil Mechanism to establish a vigil mechanism for thedirectors and employees to report genuine concerns insuch manner as may be prescribed and to report to themanagement instances of unethical behavior, actual orsuspected fraud or violation of the Company’s code ofconduct.

The detail of the Whistle Blower Policy has been postedon the website of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under 134(3) (c) of theCompanies Act, 2013 Directors report that:

1. In the preparation of the annual accounts for thefinancial year ended 31st March 2016 the applicableaccounting standards had been followed along withproper explanation relating to material departures.

2. The directors had selected such accounting policiesand applied them consistently and made judgmentand estimates that were reasonable and prudentso as to give a true and fair view of the state ofaffairs of the Company at the end of the financialyear and of the loss of the company for the yearunder review.

3. The Directors had taken proper and sufficient carefor the maintenance of adequate accounting recordsin accordance with the provisions of the Act, forsafeguarding the assets of the company and forpreventing and detecting fraud and otherirregularities.

4. The directors had prepared the Annual Accountsfor the financial year ended 31st March 2016 on a‘going concern’ basis.

5. That proper internal financial controls were in placeand that the financial controls were adequate andwere operating effectively.

6. The Directors have devised proper systems toensure compliance with the provisions of allapplicable laws and that such systems are adequateand operating effectively.


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GENERAL

Your directors state that no disclosure or reporting isrequired in respect of the following items as there wereno transactions on these items during the year underreview:

1) Details relating to deposits covered under ChapterV of the Act.

2) Issue of equity shares with differential rights as todividend, voting or otherwise.

3) Issue of shares (including sweat equity shares) toemployees of the Company under any scheme.

4) Neither the Managing Director nor the Whole-timeDirectors of the Company receive any remunerationor commission from any of its subsidiaries.

5) No significant or material orders were passed bythe Regulators or Courts or Tribunal which impact

the going concern status and Company’s operationsin future.

Your Directors further state that during the year underreview, there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention,Prohibition and Redressal) Act, 2013

ACKNOWLEDGEMENT

The Board places on record, its appreciation for thecooperation and support received from shareholders,customers, suppliers, employees, governmentauthorities and banks.

By and on behalf of the Board of Directors

Sd/-Date :12/11/2016


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Annexure - IANNEXURES TO THE DIRECTORS’ REPORT

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

CONSERVATION OF ENERGY(a) Energy conservation measures taken:

At Kraft Paper Units• wer factor improvement – we had added additional

capacitors of 150 Kvar and improved the powerfactor from 0.95 to 0.97

• Unutilised 400 W mercury vapour lamps replacedwith 150 W metal halide lamps and tube lights

• Due to installation of Variable Frequency (VF) Drivesin Plants 1& 2 in the year 2012-13, as an Energy

conservation measure, we are getting benefits inenergy reduction since then. During the FinancialYear 2014-15 we have saved around 2,32,595 Unitsin Plant-2 and 1,40,922 Units in Plant-1. Noappreciable saving in the year 2015- 16 since thefactory operation was erratic

• VF Drives were installed for three pumps in Plant-2and for one pump in Plant-1.

At Duplex Board Unit - NIL

THE FACORY REMAINED CLOSED

FORM - A (See Rule 8)A. POWER AND FUEL CONSUMPTION 31.3.2016 31.3.2015 31.3.2016 31.3.2015

1 Electricity 2. Coal (Quality - Non Coking Coal;Usage at Boilers for steam generation)

a) Purchased Quantity (MT) 5491.19 6286.15Unit 11695700 19855530 Amount (Rs/Lacs) 257.76 309.39Amount (Rs/Lacs) 749.76 1190.82 Average Rate / Mt Rs 4693.70 4921.72Rate/Unit 6.41 5.99 3. Furnace Oil Nil Nil

b) Own Generation 4. Bio fuelsi) Through Diesel Generator Quantity (MT) 29106.7 36828.7

Unit Nil 4306 Amount (Rs/Lacs) 655.49 942.21Unit per Ltr. of diesel oil Nil 1.65 Average Rate / Mt Rs 2252.01 2558.36Cost/Unit Nil 35.18

B. CONSUMPTION PER UNIT OF PRODUCTION.ii) Through steam turbine/generator* Electricity (kwh) 492 485

Unit 7283023 8047338 Coal (Kg) 142 110*(The steam generated is used both for paper Furnace Oil Nil Nilproduction and power generation, cost cannot Biofuels (Kg) 754 645be appropriated separately.)

A. RESEARCH AND DEVELOPMENT (R&D)

Specific Areas in which (R&D): Several specialapplications have been developed and carried out bythe Company successfully introduced during the year tocater customer specific requirements.

Benefit derived as a result of the above R&D: Betterrunnability and improvement in the quality.

Future plan of action: The Company would undertakeappropriate R&D activities depending upon futurerequirements.

Expenditure on R&D: N.A

B. TECHNOLOGY ABSORPTION, ADAPTION,INNOVATION: The process of improvement is acontinuous one and the Company is experimenting withuse of new raw materials, fuels etc. to improveproductivity further.

Particulars of imported technology: No Technologyhas been imported.

FORM - B (See Rule 8)DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION


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The Indian Paper industry, estimated to be around Rs.50,000 crores, during 2013-14, accounts for about 2.6%of the world’s production of paper and paper board. Theoperating capacity of the industry currently stands at12.75 million tones. India is one of the fastest growingmarkets for paper and paperboard globally, presentingan exciting scenario. During the current year thedomestic production is estimated to be around 11.38million tonnes, while consumption is anticipated to toucharound 13.10 million tonnes, and it is expected to touch13.95 million tonnes in 2015-16 and 17.6 million tonesin 2017-18.

The last five decades of the Indian Paper industry havebeen a period of growth, transformation and

Annexure II

MANAGEMENT DISCUSSION AND ANLYSIS REPORTA Brief note on Indian Paper Industry – Present and Future

improvements. The industry has been taken a great leapforward and transformed itself from technologicalobsolence to competitive sustenance through state-of-art-technology, innovative developments and improvedcustomer service. Looking forward, the demand in Indiais projected to double and to cross 25 million tonnesduring 2025.

Several growth triggers are in place to take the IndianPaper industry in India to a new level. These includeseconomic growth, increase in literacy rate, populationgrowth, changing demographics, improving livingstandards, increase in advertising and promotionalactivities and increasing multi colour printing facilities.

The projected demand for the paper is as below;

(‘ 000 tonnes) 2013-14 2014-15 2015-16 2016-17 2017-18 CAGR %Paper Board 6030 6450 6900 7400 7980 7.1

Writing & Printing paper 4100 4370 4660 4970 5300 6.7

Specialty paper 570 620 680 750 830 9.9

Newsprint 2400 2700 2950 3340 3500 10.4

Total 13100 14140 15190 16460 17610

In writing and printing paper market, cream wove is likelyto grow around 3 to 4 percent, maplitho by about 5 to 6percent. The copier segment especially the brandedcopier is likely to grow around 15 percent.

The market for the packaging paper is currently growingat a steady pace of 7 to 8 percent. Among the type ofpackaging paper are all kinds test liners, corrugatedboard, kraft paper for paper bags and classic brownpaper as well as cover layers of plaster board. As a rule,a high portion of recovered paper is common to all ofthem. They perform important function in merchandisemanagement: protection from damage during transit andstorage, as information carriers or purely for imageenhancement.

For this reason, the quality and functionality requirementthat packaging paper has to meet differ widely numerousconditions have to be considered, such as the suitabilityand compatibility of the materials for packaged goods,statutory regulations on hygiene, packaging regulationprovisions, marketing aspects, and of course, cost.

The Indian packaging industry is currently estimated atRs. 24000 crores. With the increase in sales of consumergoods like home care products, food products, liquorand soft drinks, the industry is growing at a high pace of

over 10 percent for high quality superior variety paperboards.

The specialty paper growth is likely to be around 10percent and especially tissue paper is growing at a paceof over 12 percent. About 25 percent of the specialtypaper is met by import.

The newspaper growth is over 10 percent due to higherliteracy rate and higher corporate spending onadvertisements. At present more than 65 percent ofnewsprint requirement is imported.

Overall paper industry is poised for a big leap forward.This opens up the need for the large capacity additionsto meet the emerging demand. Over the last 5 years thecapacity additions are mainly in writing and printingpaper. Consequently the operating rates of thepackaging industry have increased. Thus a major portionof investment is likely to be in packaging industry to meetthe rising demand of the packaging board.

The specialty paper has also witnessing a goodinvestment during the last 5 years and likely to continuefor the next 5 years and the complete demand will bemet from domestic production.

Similarly, the newspaper segment is likely to attract moreinvestment during the next 5 years, to outpace theimported newsprint.


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Annexure – III

REPORT ON CORPORATE GOVERNANCE1. Corporate Governance Philosophy

The Management believes that corporate growth, goals, transparency and enhanced stakeholder value are tobe achieved only through good Corporate Governance.

2. a) Board of Directors

The Board of Directors of the Company as on 31 March, 2016 comprised of:

Sl. Name Designation Executive/ Promoter/ No. of other CommitteeNo Non Executive Independent Companies in which he

Director Director in which he is a Member/is a Director Chairman

1 Mr. A.S. Unny* Chairman Non Executive Independent 03 04/02

2 Dr. S. Rajkumar Managing Director Executive Promoter 07 02/Nil

3 Mr. A. Padmanabhan Director Executive Non Independent 04 Nil/Nil

4 Mr. S. Giridhar Director Non Executive Non Independent 07 3/NIL

5 Mr. N. Purushothama Prabhu1 Wholetime Director Executive Non- Independent 01 NIL(Operations)

6 Mr. V.VM. Rao2 Wholetime Director Executive Non- Independent 01 NIL(Operations)

7 Mr. S. Subramoniam Director Non Executive Non- Independent 05 1/Nil

8 Mrs. E. Kamalam Director Non Executive Non- Independent Nil Nil

9 Mr. U. Gururaja Bhat Director Non Executive Independent 02 3/Nil

10 Mr. Deveshwer Kumar Kapila Director Non Executive Independent 07 2/Nil

11 Dr. A.R.K. Rao Director Non Executive Independent Nil 1/Nil

12 Mr.T. S. Anantharaman Director Non Executive Non Independent 04 Nil/Nil

13 Mr. Ajith kumar Director Non Executive Nominee Director 03 Nil

*Expired on 17.05.20151 Ceased from Directorship from 12.02.20162 Appointed as Additional Director from 13.11.2015

2 b) Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out the annual PerformanceEvaluation of its own performance, the Directors Individually as well as the working of its Committees.

Various aspects of the Board’s functioning were evaluated such as adequacy of the composition of theBoard and its Committees, Board Culture, execution and performance of specific duties, obligations andgovernance.

A separate exercise was carried out to evaluate the performance of individual Directors including theChairman of the Board, who were evaluated on parameters such as level ofengagement and contribution,independence of judgement,safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. Theperformance evaluation of the Chairman and the Non Independent Directors was carried out by theIndependent Directors. The Directors expressed their satisfaction with the evaluation process.

3. Board Meetings and Annual General Meeting & Directors’ Attendance

During the year 2015-16, Seven Board Meetings were held on 01st April 2015, 05th May 2015, 30th May 2015,30th July 2015, 17th October 2015, 13th November 2015 and 13th February 2016. The Annual General Meetingwas held on 30th September, 2015.

Attendance of each director, at the Board Meetings held during the year 2015-16 and at the last AnnualGeneral Meeting is as follows:


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Sl. Name Board Meetings Last AGMNo. Held Attended Attended

1 Mr. A. S. Unni* 7 Nil No

2 Dr. S. Rajkumar 7 7 Yes

3 Mr. A. Padmanabhan 7 7 Yes

4 Mr. S. Giridhar 7 5 Yes

5 Mr. N. Purushothama Prabhu** 7 5 Yes

6 Mr. V.V.M.Rao*** 7 1 No

7 Mr. S.Subramoniam 7 5 Yes

8 Mrs. E.Kamalam 7 3 Yes

9 Mr. U.Gururaja Bhat 7 7 Yes

10 Mr. Deveshwer Kumar Kapila 7 7 Yes

11 Dr. A.R.K. Rao 7 5 No

12 Mr. T. S. Anantharaman 7 5 Yes

13 Mr. Ajith kumar 7 2 No

*Expired on 17.05.2015** Ceased from Directorship from 12.02.2016***Appointed as Additional Director from 13.11.2015

4. Audit Committee

By constituting an independent and qualified Audit Committee, the Company has complied with the requirementsof Section 177 of the Companies Act, 2013 and Section 292A of the Companies Act, 1956, as applicable andRegulation 18 of the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 relating to thecomposition of the Audit Committee. The Committee reviews: the financial reporting by ensuring compliancewith Accounting Standards and review Financial Policies of the Company; review and monitor the auditor’sindependence and performance, and effectiveness of audit process; recommend the appointment of StatutoryAuditors/ internal auditors and fix their remuneration; approval or any subsequent modification of transactionsof the company with related parties; scrutiny of inter-corporate loans and investments; valuation of undertakingsor assets of the company, wherever it is necessary; evaluation of internal financial controls and risk managementsystems and monitoring the end use of funds raised through public offers and related matters. The Auditcommittee was reconstituted on 30 May 2015.

The Audit Committee consists of the following members:

Sl. Name Designation Independent/ No. of MeetingNo. Non Independent Attended

1 Mr. A. S. Unni* Member Independent Nil

2 Mr. Deveshwer Kumar Kapila Member Independent 4

3 Mr. U. Gururaja Bhat Chairman Independent 4

4 Mr. S. Giridhar Member Non-Independent 4

5 Dr. A R K Rao (w.e.f 30.05.2015) Member Independent 4

* Expired on 17.05.2015

During the year 2015-16, Four Audit Committee Meetings were held on 30th May 2015, 30th July 2015, 13th

November, 2015 and 13th February 2016.


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5. Nomination & Remuneration Committee

Nomination & Remuneration Committee consists of the following members:

Sl. Name Designation Independent/ No. of MeetingNo. Non Independent Attended

1 Mr. A. S. Unni* Member Independent Nil

2 Mr. Deveshwer Kumar Kapila Chairman Independent 4

3 Mr. U. Gururaja Bhat Member Independent 3

4 Dr. A R K Rao Member Independent 3

5 Mr. S. Giridhar (w.e.f 30.05.2015) Member Non-Independent 2

* Expired on 17.05.2015

During the year 2015-16, one Nomination and Remuneration Committee Meeting was held on 04th May 2015,09th June 2015, 30th July 2015 and 17th October 2015.

5 a) Remuneration to Directors

Remuneration to Managing Director/ Whole-time Director as recommended by the Nomination andRemuneration Committee is approved by the Board of Directors within the ceiling prescribed under ScheduleV to the Companies Act, 2013. The same is also approved by the Members of the Company in GeneralMeeting. No Sitting Fee is paid to the Managing Director / Whole-time Director.

The Non-Executive directors are remunerated by way of sitting fees as decided by the Board of Directorsof the Company from time to time for attending Board/ Committee meetings.

The Company has not granted any stock option to any of its Directors. Details of remuneration paid to theDirectors are given in Extract of Annual Return in Form MGT – 9 at Annexure IV.

6. Shareholders Relationship Committee

The Shareholders Relationship Committee’s composition and the terms of reference meet with the requirementsof provisions of the Companies Act, 2013. It is primarily responsible to consider and review all matters connectedwith the Company’s transfer of securities and redressal of shareholders/investors/security holders’ complaintsand resolve the grievances of security holders of the Company.

The Shareholders Relationship Committee consists of the following members:

Sl. Name Designation Independent/No. Non Independent

1 Mr. A. S. Unni* Chairman Non Independent

2 Dr S. Rajkumar Member Non-Independent

3 Mr. U. Gururaja Bhat Member Independent

4 Mr. S. Giridhar Member Non-Independent

* Expired on 17.05.2015

7. Status of Investor Grievances

Name & designation of compliance officer Mr.R. PonnambalamCompany Secretary

Number of shareholders complaints received during 2015-16 03

Number of complaints resolved to the satisfaction of shareholders 03

Number of pending complaints as on 31.03.2016. Nil


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8. Risk Management Committee.

Our risk Management Committee comprises the following Members:


1 Mr. U. Gururaja Bhat Member Independent

2 Mr. Deveshwer Kumar Kapila * Member Independent

3 Mr. A. Padmanabhan Member Non Independent

4 Mr.T. S. Anantharaman Member Non Independent

5 Mr. R. Ponnambalam Member Company Secretary

6 Mrs. Usha Venugopal** Member CFO

* Resigned 16-08-2016**Ceased to be Chief Financial Officer from 11/04/2016.

The purpose of the committee is to assist the Board in fulfilling its corporate governance duties by overseeingthe responsibilities with regard to the identification, evaluation and mitigation of operational, strategic andenvironmental risks. The committee has the overall responsibility of monitoring and approving the risk policiesand associated practices of the Company. The Company’s Risk Management Policy is placed in the Company’swebsite www.sreekalias.com

9. Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee consists of the following members:


1 Mr. D K Kapila * Member Independent

2 Dr. S Rajkumar Member Non Independent

3 Mr. A Padmanabhan Member Non Independent

*Resigned 16-08-2016

10. Share Issue / Transfer Committee

The Share Issue/Transfer committee meeting consists of the following members:


3 Dr S. Rajkumar Member Non-Independent

4 Mr. S. Giridhar Member Non-Independent

No meeting of the committee was held during the year under review.

11. Project Finance Committee

A Project Finance Committee was constituted during the financial year 2007-08 for implementation of newdiversified projects. The Committee consists of Mr. A.S.Unni (Expired on 17.05.2015), Dr. S. Rajkumar, Mr. S.Subramonaim. No meeting of the committee was held during the year under review.

12. Code of Conduct

As required by the amended Clause 49 of the Listing Agreement, the Board of directors of the Company hasadopted a Code of Conduct for all Board members and senior management of the Company. The Code ofConduct has been posted on the web site www.sreekailas.com of the Company. The members of the Board ofDirectors and Senior Management have affirmed compliance of the said code during the period under review.The Annual Report of the Company does contain a declaration to this effect duly signed by the CEO asrequired by the Clause 49 of the Listing Agreement.


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13 a. Disclosures on materially significant related party transactions i.e. transactions of the Companyof material nature with its promoters, the directors or the management, their relatives, etc. thathave potential conflict with the interest of the Company at large.

None of the transactions with any of the related parties were in conflict with the interest of the Company.Attention of the members is drawn to the disclosures of transactions with the related parties set out inNotes on Accounts forming part of the Annual Report. All related party transactions are negotiated onarms length basis and are only intended to further the interests of the Company. Companies Policy onRelated Party is uploaded in the Company Website www.sreekailas.com.

13 b. Details of non-compliance by the Company, penalties, strictures imposed on the Company by theStock Exchange or SEBI or any other statutory authority, on any matter related to the capitalmarkets, during the last three years.

There has been no instance of non-compliance by the Company on any matter related to Capital Marketsduring the last three years and hence no penalties or strictures have been imposed on the Company bythe Stock Exchange or SEBI or any other Statutory Authority.

13 c. Disclosures on Accounting Treatment

Disclosures of accounting treatment wherever applicable have been made in the Audited Financial Accountsfor the year ended 31st March 2015

13 d. Board Disclosures – Risk Management

The Company has laid down procedures to inform the Board Members about the risk assessment andminimization procedures and they are being reviewed periodically. The Risk Management Policy is uploadedin the Company Website www.sreekailas.com.

14. CEO /CFO Certification

A Certificate from CEO and CFO has been placed before the Board confirming that:

(a) They have reviewed financial statements and the cash flow statement for the year and that to the best oftheir knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or containstatements that might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliancewith existing accounting standards, applicable laws and regulations.

(b) There are, to the best of their knowledge and belief, no transactions entered into by the Company duringthe year which are fraudulent, illegal or violation of the company’s code of conduct.

(c) They accept responsibility for establishing and maintaining internal controls and that they have evaluatedthe effectiveness of the internal control systems of the company and they have disclosed to the auditorsand the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which theyare aware and the steps they have taken or propose to take to rectify these deficiencies.

(d) They have indicated to the auditors and the Audit Committee:

(i) significant changes in internal control during the year;

(ii) significant changes in accounting policies during the year and that the same have been disclosed inthe notes to the financial statements; and

(iii) they have not come across any instances of significant fraud and involvement therein, if any, of themanagement or an employee having a significant role in the company’s internal control system.


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15. Annual General Meetings

The details of the last 3 Annual General Meetings and Special Resolutions passed by the Company are notedbelow:

Year Location Date Time Special Resolution

2012 Hotel Abad Plaza Friday 3.00 PMM. G. Road, Ernakulam 24.08.2012

Cochin – 35

2013 Hotel Abad Plaza Thursday 3.00 PMM. G. Road, Ernakulam 12.09.2013

Cochin - 35

2014 Hotel Abad Plaza Tuesday 2.00 PMM. G. Road, Ernakulam 30.09.2014

Cochin - 35

2015 Hotel Abad Plaza Wednesday 2.00PMM. G. Road, Ernakulam 30.09.2015

Cochin – 35

During the year under review there were no resolution passed by the Company’s members through postalballot.

Year Declaration date Resolutions

2015-15 Nil Nil

2014-15 24.04.2014

1. Re-appointment of Mr. A. Padmanabhanas Executive Director of the Companyand fixation of remuneration.

2. Re-fixation of remuneration payable to Dr.S. Rajkumar, Vice Chairman & ManagingDirector of the Company

1. Appointment of N. Rajagopal Pai aswholetime Director (Operations)

2. To increase the number of Directors ofthe Company

1. Approval of borrowing limit.2. Authorization under section 180 (1)(a) of

the Companies Act, 20133. Approval for Related Party Transactions.

1. Appointment of Mr. A. R. K. Rao as anIndependent Director.

2. Approval of Related Party Transaction.3. Re-appoint Dr. S. Rajkumar as Managing

Director.4. Re-appointment of Mr. N. Purushothama

Prabhu as Whole Time Director and fixinghis remuneration.

5. Re-appointment of Mr. A. Padmanabhanas Executive Director of the Companyand fixation of remuneration.

1. Alteration of Articles of Association pursuant to Section 31of theCompanies Act, 1956 and applicable provisions of Companies Act,2013, Articles 3,117 & Clause (iii) of 119 replaced by new Articlesrespectively and new articles 4-A & 4AA inserted after article 4regarding rates attached to redeemable preference shares.

2. Alternation of object clause of Memorandum of Association Pursuantto Section 17 of the Companies Act, 1956 & other applicable provisionsof Companies Act, 2013 main objects of the company altered byinserting new sub clause (iii) & (iv) after the existing sub clause (ii) toclause III A including infrastructure activities.

3. Alteration of capital clause of Memorandum of Association pursuantto Section 16,94 & 95 of the Companies Act, 1956 & other applicableprovisions of Companies Act, 2013, existing authorized capital of Rs.50 Crores divided into 25 Crores of Equity share capital and 25 croresof Preference share capital.


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2013 04.02.2013

2012 Nil Nil

16. Means of Communication

The Company’s corporate website, www.sreekailas.com provides comprehensive information to theShareholders.

The Financial Results are generally published in ‘Business Standard’, in English and in ‘Mangalam’, inMalayalam. The Results are also placed on the Company’s Web Site, www.sreekailas.com. The Companyalso usually sends shareholders letters along with copy of results directly to the investor on quarterly basis aspart of good corporate governance measure.

17. General Shareholder Information

AGM: Date, time & venue : Friday, 30 September 2016, 2.00P.M at Hotel Abad Plaza,M.G.Road Cochin – 35

Financial Year : April 01 to March 31

Financial Calendar (tentative : June 2016 Audited results for 2015-16and subject to change) August 2016 First Quarter Results for 2016-17

Deceber2016 Annual General Meeting for 2015-16October 2016 Second Quarter Results for 2016-17January 2017 Third Quarter Results for 2016-17March 2017 Review of performance 2016-17May 2017 Audited results for 2016-17September 2017 Annual General Meeting for 2016-17

Date of Book closure : 23.12.2016 to 30.12.2016 (both days inclusive)

Dividend Payment Date : No Dividend Declared

Listing on Stock Exchanges : The Stock Exchange, Mumbai Phiroze Jeejeebhoy Towers Dalal StreetMumbai 400 001 Ph: (91)(22)2272 1233 - 1234 (General) 2272 1121 -1122, 2272 2375 (Corporate Relations Department) Web Site:www.bseindia.com E-mail: [email protected] Fax: (91)(22)2272 1919,2272 3027 (General) 2272 3719, 2272 2039, 2272 2061 2272 3121,2272 2037, 2272 2041 (Corporate Relations Department)

Payment of Annual Listing : Listing Fee has been paid to the Stock Exchange, in which theFees to the Stock Exchange Company’s Equity Shares are listed, upto March 31, 2016

Stock Code : Under Demat System the ISIN allotted to the Company’s Equity Sharesis : INE266H01014 The Company’s Stock Code is 532701

4. Pursuant to Section 80 of the Companies Act, 1956 & other applicableprovisions of Companies Act, 2013, resolution was passed givingauthority to the Board of Directors for issue of non convertibleredeemable preference share of Rs. 10/- each up to Rs. 25 Croreswith such rights, privileges and at such coupon rate not exceeding12.25% to various entities/ persons and in various trenches.

1. Special Resolution Under Section 17 of the Companies Act, 1956 foralter the Object Clause in Memorandum of Association.

2. Special Resolution under Section 149 (2A) of the companies Act,1956 for commencement of business set out in Other objects.

3. Special Resolution under Section 94 (1) (a) of the companies Act,1956 for increasing the Authorized Share capital and amendment ofcapital clause in the Memorandum of Association.

4. Special Resolution under Section 31 of the Companies Act, 1956 toalter Capital clause in the Articles of Association.


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Market Price Data (BSE)

Month High (Rs.) Low (Rs.) Volume (No. BSE Sensex BSE Sensexof Shares) (High) (Low)

Apr-15 16.9 13.55 94379 29094.61 26897.54

May-15 17.85 13.15 176278 28071.16 26423.99

Jun-15 14.5 12.12 291153 27968.75 26307.07

Jul-15 15.4 13.1 133862 28578.33 27416.39

Aug-15 17.86 12.61 226876 28417.59 25298.42

Sep-15 15.5 12.8 129783 26471.82 24833.54

Oct-15 14.39 12.5 46495 27618.14 26168.71

Nov-15 13.88 12 44621 26824.3 25451.42

Dec-15 13.58 11.56 201240 26256.42 24867.73

Jan-16 13.08 9.51 66209 26197.27 23839.76

Feb-16 11.75 9.04 35228 25002.32 22494.61

Mar-16 10.9 8.91 65847 25479.62 23133.18

Performance, in comparison : Please see the enclosed Chart for comparison of the Price movementto BSE Sensex of the Company’s Shares (closing) with BSE Sensex movement (closing).

Registrar and TransferAgents : M/s. Bigshare Services Private Limited, E/2, Ansa Industrial Estate,and Share transfersystem Saki Vihar Road, Sakinaka, Andheri (E), Mumbai - 400 072,

Tel: 022-28470652, Fax: 022-28475207".Both physical and demat transfers are done through the Registrar andTransfer Agents. The shares of the Company are under compulsorydemat mode.


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Distribution of Shareholding : Distribution No. of share % of share No. of % of shareas on 31st March 2016 Holder holders shares holding

1 – 5000 7541 82.1639 14224830 8.6546

50001-10000 888 9.6753 6874440 4.1825

10001-20000 337 3.6718 5234000 3.1844

20001-30000 107 1.1658 2757000 1.6774

30001-40000 70 0.7627 2486570 1.5129

40001-50000 56 0.6102 2637670 1.6048

50001-100000 89 0.9697 6465890 3.9339

100001 & above 90 0.9806 123681770 75.2495

TOTAL 9178 100.00 164362170 100.00

Shareholding pattern as on : Category No. of No. of % of share31st March 2016 shareholder shares held holding

A. Promoters HoldingsPromoter & promoter 14 7994313 48.6384group

B. Non PromotersHoldingInstitutional Investors 0 0 0Non-Institutional Investors 102 406151 2.4711a. Corporate Bodiesb. Indian Public 9007 7035685 42.8060

Individuals up to 1 lac 43 981164 5.9695Individuals > 1 lacs 3 16016 0.0974

c. NRI 7 2888 0.0176d. Any other

Grand Total 9176 16436217 100.00

Name and number of shares Name No. of % of share Categoryheld and percentage share shares held holding

holding of entities / persons 1. Dr. S. Rajkumar 4670114 28.41 Indian Promoterholding more than 1% shares 2. Mr. A.Padmanbhan 1317803 8.02 Promoter groupof the Company as on 3. Mr. Gopinathan C.K 1000000 6.0841 Individual31.03.2016 4. Mr. S.Giridhar 849660 5.1694 Promoter group

5. Mr. Raja Ram 727689 4.4274 Individual6. Mr. S.Subramonium 333944 2.0318 Promoter group7. Mrs. Rajee Rajkumar 285544 1.7373 Promoter group8. Mr. S.Subramaniam 232840 1.4166 Promoter group9. Mr. Ajay Girdharilal 175000 1.0647 Individual

Bhartiya

TOTAL 9592594 58.3625

Dematerialization of shares : Break up of Shares as on 31/03/2016and liquidity a) In dematerialized mode NSDL - 12965483

CDSL - 3458886b) In Physical mode 11848

Total - 16436217100% of Shares of Promotor and Promoters group were dematerializedpursuant to SEBI Circular No: ISD /3/2011 dt. 17.06.2011.

Outstanding GDRs / ADRs / : NilWarrants or any Convertibleinstruments, conversion dateand likely impact on equity


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Plant Locations : Kraft Paper Unit IIndustrial Development Area, Muppathadom, Edayar,Aluva - 682 102, Kerala; Tel: 0484-2540622, 2555451

Kraft Paper Unit IIIndustrial Development Area, Muppathadom, Edayar,Aluva - 683 102, Kerala; Tel: 0484-2540622, 2555451

Duplex Board UnitKanjirapilly, Pariyaram, Chalakudy, Thrissur - 680 721,Kerala; Tel: 0487-2746229, 2747527

Address for correspondence : Sree Sakthi Paper Mills Limited57/2993, “Sree Kailas”, Paliam Road, Ernakulam,Cochin - 682 016, KeralaTel: 0484 -2373230, 2382182, Fax: 0484-2370395Email: [email protected], Web: www.sreekailas.com

DECLARATIONAll the members of the Board of Directors of the Company and Senior Management of the Company have affirmedcompliance of the Code of conduct for the year ended 31st March 2016. The Code of Conduct laid down for allBoard members and Senior Management of the Company is posted on the website of the Company.

Dr. S. Rajkumar

Cochin – 16 Sd/-31-03-2016 Managing Director

COMPLIANCE CERTIFICATE OF THE AUDITORS

To

The Members of Sree Sakthi Paper Mills Limited,

We have examined the Compliance of conditions of Corporate Governance by Sree Sakthi Paper Mills Limited(the “company”) for the year ended March 31st, 2016 as stipulated in chapter IV of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations, 2015 pursuant to the Listing Agreementof the said Company with stock exchanges.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance ofthe conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that thecompany has complied with the conditions of Corporate Governance as stipulated in the provisions as specifiedin chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations, 2015 pursuant to Listing Agreement of the said Company with stock exchanges.

We further state that such complaint is neither an assurance as to the future viability of the company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For Balan & Co.Chartered Accountants

Sd/-Place : Cochin -11 A .Mohanan B.Sc., FCA, DISADate : 13.06.2016 Partner (M.No. 20627)


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Annexure IIIAREMUNERATION POLICY

Preamble

The Board of Directors of Sree Sakthi Paper Mills Limited (“the Company”) constituted the “Nomination andRemuneration Committee” at the meeting held on 30 May, 2014 with immediate effect, after renaming theRemuneration Committee formed earlier, consisting of Four (04) Non-Executive Directors of which majority areIndependent Directors.

The Nomination and Remuneration Committee and this policy shall be in compliance with Section 178 of theCompanies Act, 2013 read along with the applicable rules thereto and clause 49 under the Listing Agreement.

The Remuneration Policy provides a framework for remuneration paid to the members of the Board of Directors(“Board”), Key Managerial Personnel (“KMP”) and the Senior Management Personnel (“SMP”) of the Company(collectively referred to as “Executives”). The expression ‘‘Senior Management’’ means personnel of the Companywho are members of its core management team excluding Board of Directors comprising all members ofmanagement one level below the Executive Directors, including the functional heads.

The policy would be reviewed every year by the Nomination and Remuneration Committee of the Board of Directors.

1. Aims & Objectives

The aims and objectives of this remuneration policy may be summarized as follows:

The Remuneration Policy aims to enable the Company to attract, retain and motivate highly qualified membersfor the Board and Executive level.

The Remuneration Policy seeks to enable the Company to provide a well balanced and performance- relatedcompensation package, taking into account shareholder interests, industry standards and relevant Indiancorporate regulations.

The Remuneration Policy will ensure that the interests of Board Members & Executives are aligned with thebusiness strategy and risk tolerance, objectives, values and long-term interests of the Company and will beconsistent with the “pay-for-performance” principle.

The Remuneration Policy will ensure that remuneration to Directors and Executives involves a balance betweenfixed and incentive pay reflecting short and long-term performance objectives appropriate to the working ofthe Company and its goals.

2. Principles of Remuneration

Support for Strategic Objectives: Remuneration and reward frameworks and decisions shall be developedin a manner that is consistent with, supports and reinforces the achievement of the Company’s vision andstrategy.

Transparency: The process of remuneration management shall be transparent, conducted in good faith andin accordance with appropriate levels of confidentiality.

Internal equity: The Company shall remunerate the Board Members and the Executives in terms of theirroles within the organisation. Positions shall be formally evaluated to determine their relative weight in relationto other positions within the Company.

External equity: The Company strives to pay an equitable remuneration, capable of attracting and retaininghigh quality personnel. Therefore the Company will remain logically mindful of the ongoing need to attract andretain high quality people and the influence of external remuneration pressures.

Flexibility: Remuneration and reward offerings shall be sufficiently flexible to meet both the needs of individualsand those of the Company whilst complying with relevant tax and other legislation.

Performance-Driven Remuneration: The Company shall entrench a culture of performance drivenremuneration through the implementation of the Performance Incentive System.

Affordability and Sustainability: The Company shall ensure that remuneration is affordable on a sustainablebasis.

3. Nomination and Remuneration Committee

The earlier Remuneration Committee of the Board of Directors now re-named as Nomination and RemunerationCommittee. Members of the Committee shall be appointed by the Board and shall comprise of three or more


32

Non-Executive Directors out of which not less than one-half shall be Independent Directors.

The Committee shall be responsible for:

Formulating framework and/or policy for remuneration, terms of employment including service contracts,policy for and scope of pension arrangements, etc for Executives and reviewing it on a periodic basis;

Formulate the criteria for determining qualifications, positive attributes and independence of a Director andrecommend to the Board a policy, relating to the remuneration for the Director.

Identifying persons who are qualified to become Directors and who may be appointed as Executives inaccordance with the criteria laid down in this policy, recommend to the Board their appointment and removaland carry out their evaluation.

Formulating terms for cessation of employment and ensure that any payments made are fair to the individualand the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;

The Committee shall:

review the ongoing appropriateness and relevance of the Remuneration Policy;

ensure that all provisions regarding disclosure of remuneration, including pensions, are fulfilled;

obtain reliable, up-to-date information about remuneration in other companies;

ensure that no Director or Executive is involved in any decisions as to their own remuneration.

Without prejudice to the generality of the terms of reference to the Nomination and Remuneration Committeeset out above, the Committee shall:

operate the Company’s share option schemes (if any) or other incentives schemes (if any) as they apply to. Itshall recommend to the Board the total aggregate amount of any grants to employees (with the specific grantsto individuals to be at the discretion of the Board) and make amendments to the terms of such schemes(subject to the provisions of the schemes relating to amendment);

liaise with the trustee / custodian of any employee share scheme which is created by the Company for thebenefit of employees or Directors and

review the terms of Executive Directors’ service contracts from time to time.

4. Procedure for selection and appointment of the Board Members

Board membership criteria

• The Committee, along with the Board, reviews on an annual basis, appropriate skills, characteristics andexperience required of the Board as a whole and its individual members. The objective is to have a Boardwith diverse background and experience in business, government, academics, technology and in areasthat are relevant for the Company’s global operations.

• In evaluating the suitability of individual Board Members, the Committee takes into account many factors,including general understanding of the Company’s business dynamics, global business and socialperspective, educational and professional background and personal achievements.

• In addition, Directors must be willing to devote sufficient time and energy in carrying out their duties andresponsibilities effectively. They must have the aptitude to critically evaluate management’s working aspart of a team in an environment of collegiality and trust.

• The Committee evaluates each individual with the objective of having a group that best enables thesuccess of the Company’s business.

Selection of Board Members/ extending invitation to a potential Director to join the Board

One of the roles of the Committee is to periodically identify competency gaps in the Board, evaluate potentialcandidates as per the criteria laid above, ascertain their availability and make suitable recommendations tothe Board. The objective is to ensure that the Company’s Board is appropriate at all points of time to be ableto take decisions commensurate with the size and scale of operations of the Company. The Committee alsoidentifies suitable candidates in the event of a vacancy being created on the Board on account of retirement,resignation or demise of an existing Board member. Based on the recommendations of the Committee, theBoard evaluates the candidate(s) and decides on the selection of the appropriate member.

The Board then makes an invitation (verbal / written) to the new member to join the Board as a Director. Onacceptance of the same, the new Director is appointed by the Board.


33

5. Procedure for selection and appointment of Executives other than Board Members

The Committee shall actively liaise with the relevant departments of the Company to study the requirement formanagement personnel, and produce a written document thereon;

The Committee may conduct a wide-ranging search for candidates for the positions of Employees within theCompany, within enterprises controlled by the Company or within enterprises in which the Company holdsequity, if any, and on the human resources market;

The professional, academic qualifications, professional titles, detailed work experience and all concurrentlyheld positions of the initial candidates shall be compiled as a written document;

A meeting of the Committee shall be convened, and the qualifications of the initial candidates shall be examinedon the basis of the conditions for appointment of the Employees;

Before the selection of Employee, the recommendations of and relevant information on the relevant candidate(s)shall be submitted to the Board of Directors;

The Committee shall carry out other follow-up tasks based on the decisions of and feedback from the Boardof Directors.

6. Compensation Structure

(a) Remuneration to Non-Executive Directors:

The Non-executive Directors of the Company are paid remuneration by way of sitting fees only for attendingthe Meetings of the Board of Directors and its Committees. The sitting fees paid to the Non-executiveDirectors for attending Meetings of Board of Directors, Audit Committee of Board of Directors andNomination and Remuneration Committee is Rs. 10,000/- per meeting. Beside the sitting fees they arealso entitled to reimbursement of expenses. The Non-Executive Directors of the Company are not paidany other remuneration or commission.

The sitting fees of the Non-Executive Directors for attending meetings of Board of Directors and theCommittees of Board of Directors may be modified or implemented from time to time only with the approvalof the Board in due compliance of the provisions of Companies Act, 2013.

(b) Remuneration to Executive Directors, Key Managerial Personnel(s) (KMPs) & Senior ManagementPersonnel (s) (SMPs):• The remuneration/compensation/ commission etc. to the Managing Director/ Whole-Time Director,

KMP and Senior Management Personnel will be determined by the Committee and recommended tothe Board for approval. The remuneration/compensation/ commission etc. shall be subject to theprior/post approval of the shareholders of the Company and Central Government, wherever required.The remuneration determined for MD/WTDs, KMPs and SMPs are subjected to the approval of theBoard of Directors in due compliance of the provisions of Companies Act, 2013. The remuneration forthe KMP and the SMP at the time of the appointment has to be approved by the Board.

• If in any financial year, the Company has no profits or its profits are inadequate, the Company shallpay remuneration to its Managing Director / Whole-Time Director in accordance with the provisions ofSchedule V of the Act and if it is not able to comply with such provisions, with the previous approval ofthe Central Government.

• As a policy, the Executive Directors are neither paid sitting fee nor any commission.

7. Role of Independent Directors

The Committee shall, in consultation with the Independent Directors of the Company, prepare and submit thispolicy to the Board for its approval

The Independent Directors shall have power and authority to determine appropriate levels of remuneration ofExecutive Directors and Employees and have a prime role in appointing and where necessary recommendremoval of Executive Directors and Employees.

The Independent Directors shall submit its recommendations/ proposals/ decisions to the Committee whichthe Committee shall consult and take to the Board of Directors.

8. Approval and publication

This Remuneration Policy as framed by the Committee shall be recommended to the Board of Directors for itsapproval.


34

This policy shall be hosted on the Company’s website.

The policy shall form part of Director’s report to be issued by the Board of Directors in terms of CompaniesAct, 2013

9. Supplementary provisions

This Policy shall formally be implemented from the date on which they are adopted pursuant to a resolution ofthe Board of Directors.

Any matters not provided for in this Policy shall be handled in accordance with relevant State laws andregulations and the Company’s Articles of Association. If this Policy conflict with any laws or regulationssubsequently promulgated by the state or with the Company’s Articles of Association as amended pursuantto lawful procedure, the relevant state laws and regulations and the Company’s Articles of Association shallprevail, and this Policy shall be amended in a timely manner and submitted to the Board of Directors for reviewand adoption.

The right to interpret this Policy vests in the Board of Directors of the Company.


35

Annexure IVFORM NO. MGT 9

EXTRACT OF ANNUAL RETURNAs on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management &Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

1. CIN L21012KL1991PLC006207

2. Registration Date 03 October 1991

3. Name of the Company SREE SAKTHI PAPER MILLS LIMITED

4. Category/Sub-category of the Company Public Company Limited by Shares/ Indian Non-Government Company

5. Address of the Registered office & Sree Kailas 57/2993 /94contact details Paliam Road, Ernakulam, Cochin - 682 016

6. Whether listed company Yes/No

7. Name, Address & contact details of Bigshare Services Pvt. Ltd. E-2, Ansa Industrial Estate,the Registrar & Transfer Agent, if any. Sakivihar Road, Saki Naka, Andheri (E), Mumbai – 400 072

Tel No.: 022 4043 0200, E-mail: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

S. No. Name and Description of NIC Code of the % to total turnovermain products / services Product/service of the company

1 Kraft Paper 17014 100%

2 Duplex Board 17021 -

III. Particulars of holding, Subsidiary and Associate Companies

S. No. Name and Address of CIN/GLN Holding/ % of shares Applicablethe Company Subsidiary/ held Section

Associate

1 Sree Kailas Palchuram U40100KL2008PLC022145 Subsidiary 47.00 2(87)(i)Hydro Power Limited57/2993, Sree Kailas,Paliam Road, Kochi 682016

2 Adisakthi Mukkuttathode U40100KL20 8PLC022144 Subsidiary 47.00 2(87)(i)Hydro Power Limited57/2993, Sree KailasPaliam Road, Kochi 682016

3 Jalashaayi Alamparathodu U40100KL2008PLC022143 Subsidiary 47.00 2(87)(i)Hydro Power Limited57/2993, Sree Kailas,Paliam Road, Kochi 682016


36

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

Category-wise Share Holding

Category of No. of Shares held at the No. of Shares held at % ChangeShareholders beginning of the year: the end of the year during the

[As on 31st March 2015] [As on 31st March 2016] year

Demat Physical Total Total Demat Physical Total Total% of % of

Shares Shares

(A) Shareholding ofPromoter andPromoter Group2

Indian

(A) Individual/ 8153744 0 8153744 49.61 7948889 0 7948889 48.36 (1.25)HUF

(B) Central/ 0 0 0 0.00 0 0 0 0.00 0.00State Government(s)

(C) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00

(D) Financial 0 0 0 0.00 0 0 0 0.00 0.00Institutions / Banks

(E) Any Others (Specify)

(i) Group Companies 45424 0 45424 .28 45424 0 45424 0.28 0.00

(ii) Trusts 0 0 0 0.00 0 0 0 0.00 0.00

(iii) Directors Relatives 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total (A)(1) : 81991168 0 81991168 49.89 7994313 0 7994313 48.64 (1.25)

Foreign

(A) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00

(B) Individual 0 0 0 0.00 0 0 0 0.00 0.00

(C) Institutions 0 0 0 0.00 0 0 0 0.00 0.00

(D) Qualified Foreign 0 0 0 0.00 0 0 0 0.00 0.00Investor

(E) Any Others (Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total (A)(2) : 0 0 0 0.00 0 0 0 0.00 0.00

Total Holding for 81991168 0 81991168 49.89 7994313 0 7994313 48.64 (1.25)Promoters (A)=(A)(1) + (A)(2)

(B) Public Shareholding

Institutions

(A) Central / State 0 0 0 0.00 0 0 0 0.00 0.00Government(s)

(B) Financial Institutions / 0 0 0 0.00 0 0 0 0.00 0.00Banks

(C) Mutual Funds / UTI 0 0 0 0.00 0 0 0 0.00 0.00

(D) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00

(E) Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00

(F) Fii’s 0 0 0 0.00 0 0 0 0.00 0.00

(G) Foreign Venture 0 0 0 0.00 0 0 0 0.00 0.00Capital Investors

(H) Qualified Foreign 0 0 0 0.00 0 0 0 0.00 0.00Investor

(I) Any Others (Specify) 0 0 0 0.00 0 0 0 0.00 0.00


37

Category of No. of Shares held at the No. of Shares held at % ChangeShareholders beginning of the year: the end of the year during the

[As on 31st March 2015] [As on 31st March 2016] year

Demat Physical Total Total Demat Physical Total Total% of % of

Shares Shares

(J) Foreign Portfolio 0 0 0 0.00 0 0 0 0.00 0.00Investor

(K) Alternate Investment 0 0 0 0.00 0 0 0 0.00 0.00Fund

Sub Total (B)(1) : 0 0 0 0.00 0 0 0 0.00 0.00

Non-institutions

(A) Bodies Corporate 429391 0 429391 2.61 406151 0 406151 2.47 (0.14)

(B) Individual

(i) (Capital Upto to 4012778 18448 4024626 24.49 3871178 11748 3882926 23.62 (0.87)Rs. 1 Lakh)

(ii) (Capital Greater Than 2730458 0 2730458 16.61 3152759 0 3152759 19.18 2.57Rs. 1 Lakh)

(C) Any Others (Specify)

(i) Trusts 0 0 0 0.00 0 0 0 0.00 0.00

(ii) Clearing Member 6254 0 6254 0.04 2888 0 2888 0.02 0.02

(iii) Non Resident 1030304 0 1030304 6.27 981164 0 981164 5.97 0.30Indians (NRI)

(iv) Directors Relatives 15916 100 16016 0.10 15916 100 16016 0.10 0.00

(v) Employee 0 0 0 0.00 0 0 0 0.00 0.00

(vi) Overseas Bodies 0 0 0 0.00 0 0 0 0.00 0.00Corporates

(vii) Unclaimed Suspense 0 0 0 0.00 0 0 0 0.00 0.00Account

(D) Qualified Foreign 0 0 0 0.00 0 0 0 0.00 0.00Investor

Sub Total (B)(2) : 8225101 11948 8237049 50.12 8430056 11848 8441904 51.36 1.24

Total Public 8225101 11948 8237049 50.12 8430056 11848 8441904 51.36 1.24Shareholding (B)=(B)(1) + (B)(2)

(C) Shares Held byCustodians and againstwhich DepositoryReceipts have beenIssued

(A) Shares Held by 0 0 0 0.00 0 0 0 0.00 0.00Custodians

(i) Promoter and 0 0 0 0.00 0 0 0 0.00 0.00Promoter Group

(ii) Public 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total (C)(1) : 0 0 0 0.00 0 0 0 0.00 0.00(C)=(C)(1)

Grand Total(A)+(B)+(C) 16424369 11848 16436217 100.00 16424369 11848 16436217 100.00


38

B) Shareholding of Promoter-

S. Shareholder’s Name Shareholding at the Shareholding at theNo. beginning of the year end of the year

No. of % of total % of Shares No. of % of total % of Shares % change inShares Shares Pledged/ Shares Shares Pledged/ shareholding

of the encumbered of the encumbered duringcompany to total company to total the year

shares shares

1 S Rajkumar 4670114 28.41 - 4670114 28.41 - 0.00

2 S Giridhar 1006328 6.12 - 849660 5.17 (0.95)

3 Ambili Subrahmaniam 56860 0.35 - 56860 0.3459 0.00

4 E Kamalam 17868 0.11 - 17868 0.1087 0.00

5 S Rajkumar 10000 0.06 - 10000 0.06 - 0.00

6 Gururaja Bhat. U . 50 0.00 - 50 0.00 - 0.00

7 Ayyappan Padmanabhan 1317803 8.02 - 1317803 8.02 - 0.00

8 N Subramanian 25748 0.16 - 13738 0.0836 0.00

9 Vignesh R 130159 0.79 - 130159 0.79 - 0.00

10 Vignesh R 146546 0.89 - 146546 0.89 - 0.00

11 A Ganesh 90260 0.55 - 90260 0.55 - 0.00

12 Rajee Rajkumar 285544 1.74 - 285544 1.74 - 0.00

13 Subramaniam Sivathanu Pillai 333944 2.03 - 333944 2.03 - 0.00

14 Rajee Sakunthala 23292 0.14 - 23292 0.14 - 0.00

15 Meenakshi Giridhar 3051 0.02 - 3051 0.02 - (0.02)

16 Sree Kailas Leasing and 45424 0.28 - 45424 0.28 - 0.00Commercial Carriers Ltd

Total 8199168 49.89 - (0.66)

C) Change in Promoters’ Shareholding (please specify, if there is no change)

S Particulars Shareholding at the Cumulative ShareholdingNo. beginning of the year during the year

No. of % of total No. of % of totalshares shares shares shares

of the of thecompany company

At the beginning of the year 8306821

Date wise Increase / Decrease in PromotersShareholding during the year:

1 DECREASE 10/04/2015 8000 0.05 8191168 49.84

2 DECREASE 17/04/2015 3000 0.02 8188168 49.82

3 DECREASE 24/04/2015 1000 0.01 8187168 49.81

4 DECREASE 01/05/2015 2000 0.01 8185168 49.80

5 DECREASE 08/05/2015 2187 0.01 8182981 49.79

6 DECREASE 15/05/2015 4000 0.02 8178981 49.76

7 DECREASE 22/05/2015 1200 0.01 8177781 49.75

8 DECREASE 29/05/2015 3600 0.02 8174181 49.73

9 DECREASE 05/06/2015 4000 0.02 8170181 49.71

10 SAME 12/06/2015 0 0.00 8170181 49.71

11 DECREASE 19/06/2015 7508 0.05 8162673 49.66

12 SAME 26/06/2015 0 0.00 8162673 49.66

13 SAME 30/06/2015 0 0.00 8162673 49.66

14 DECREASE 03/07/2015 6000 0.04 8156673 49.63

15 DECREASE 10/07/2015 3000 0.02 8153673 49.61


39

S Particulars Shareholding at the Cumulative ShareholdingNo. beginning of the year during the year



16 DECREASE 17/07/2015 3000 0.02 8150673 49.59

17 DECREASE 24/07/2015 3000 0.02 8147673 49.57

18 DECREASE 31/07/2015 3000 0.02 8144673 49.55

19 DECREASE 07/08/2015 5873 0.04 8138800 49.52

20 DECREASE 14/08/2015 5000 0.03 8133800 49.49

21 DECREASE 21/08/2015 6000 0.04 8127800 49.45

22 DECREASE 28/08/2015 3000 0.02 8124800 49.43

23 SAME 04/09/2015 0 0.00 8124800 49.43

24 DECREASE 11/09/2015 3101 0.02 8121699 49.41

25 DECREASE 18/09/2015 10 0.00 8121689 49.41

26 DECREASE 22/09/2015 11000 0.07 8110689 49.35

27 DECREASE 23/09/2015 12 0.00 8110677 49.35

28 SAME 25/09/2015 0 0.00 8110677 49.35

29 SAME 30/09/2015 0 0.00 8110677 49.35

30 SAME 02/10/2015 0 0.00 8110677 49.35

31 DECREASE 09/10/2015 500 0.00 8110177 49.34

32 DECREASE 16/10/2015 212 0.00 8109965 49.34

33 DECREASE 23/10/2015 3531 0.02 8106434 49.32

34 SAME 30/10/2015 0 0.00 8106434 49.32

35 SAME 06/11/2015 0 0.00 8106434 49.32

36 DECREASE 13/11/2015 600 0.00 8105834 49.32

37 DECREASE 20/11/2015 7032 0.04 8098802 49.27

38 DECREASE 27/11/2015 3000 0.02 8095802 49.26

39 DECREASE 04/12/2015 13026 0.08 8082776 49.18

40 DECREASE 11/12/2015 6678 0.04 8076098 49.14

41 DECREASE 18/12/2015 1753 0.01 8074345 49.13

42 DECREASE 25/12/2015 51325 0.31 8023020 48.81

43 DECREASE 31/12/2015 10368 0.06 8012652 48.75

44 SAME 01/01/2016 0 0.00 8012652 48.75

45 SAME 08/01/2016 0 0.00 8012652 48.75

46 DECREASE 15/01/2016 4 0.00 8012648 48.75

47 SAME 22/01/2016 0 0.00 8012648 48.75

48 DECREASE 29/01/2016 300 0.00 8012348 48.75

49 DECREASE 05/02/2016 7000 0.04 8005348 48.71

50 SAME 12/02/2016 0 0.00 8005348 48.71

51 DECREASE 19/02/2016 33342 0.20 7972006 48.50

52 INCREASE 26/02/2016 33342 0.20 8005348 48.71

53 DECREASE 04/03/2016 8000 0.05 7997348 48.66

54 DECREASE 11/03/2016 638 0.00 7996710 48.65

55 DECREASE 18/03/2016 1101 0.01 7995609 48.65

56 DECREASE 25/03/2016 1 0.00 7995608 48.65

57 DECREASE 31/03/2016 1295 0.01 7994313 48.64

At the end of the year 7994313 48.64


40

D) Shareholding Pattern of top ten Shareholders:

(Other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No. and Name For Each of the Shareholding at the Cumulative Shareholdingof the Share Holder Top 10 Shareholders beginning of the year during the year



1. PATTABHIRAM T S At the beginning of the year 107000 0.65 107000 0.65

120109001290240 Date wise Increase / Decrease in Nil Nil Nil NilShareholding during the yearspecifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/ sweat equity etc):

At the end of the year 107000 0.65 107000 0.65

2 RAJA RAM At the beginning of the year 727689 4.43 727689 4.43

120109004733879 Date wise Increase / Decrease in Nil Nil Nil NilShareholding during the yearspecifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/ sweat equity etc):


3. SREY FINANCIAL At the beginning of the year 136000 0.83 136000 0.83

SERVICE PVT. LTD 08/01/2016 (6000) (0.04) 130000 0.79

120132001200658 At the end of the year 130000 0.79 130000 0.79

4. PRAVIN KANTILAL At the beginning of the year 18079 0.11 18079 0.11

VAKIL 12/06/2015 36335 0.22 54414 0.33

120137008465 03/07/2015 79950 0.49 134364 0.82


5. GULU KHUBA At the beginning of the year 87602 0.53 87602 0.53

WATUMULL Date wise Increase / Decrease in Nil Nil Nil Nil120243002722 Shareholding during the year

specifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/ sweat equity etc):


6. SUBRAMANIAM At the beginning of the year 232840 1.42 232840 1.42

SIVATHANU PILLAI Date wise Increase / Decrease in Nil Nil Nil NilIN30021411637742 Promoters Shareholding during the

year specifying the reasons forincrease/ decrease (e.g. allotment/transfer/ bonus/ sweat equity etc):



41

Sl. No. and Name For Each of the Shareholding at the Cumulative Shareholdingof the Share Holder Top 10 Shareholders beginning of the year during the year



7. GOPINATHAN C K At the beginning of the year 560641 3.41 560641 3.41

IN30089610335392 10/04/2015 13000 0.08 573641 3.4924/04/2015 3613 0.02 577254 3.5101/05/2015 8000 0.05 585254 3.5608/05/2015 14746 0.09 600000 3.6515/05/2015 50000 0.30 650000 3.9529/05/2015 35000 0.21 685000 4.1705/06/2015 36730 0.22 721730 4.3919/06/2015 19473 0.12 741203 4.5126/06/2015 8797 0.05 750000 4.5607/08/2015 125565 0.76 875565 5.3314/08/2015 26723 0.16 902288 5.4921/08/2015 185 0.00 902473 5.4928/08/2015 10417 0.06 912890 5.5504/09/2015 9381 0.06 922271 5.6118/09/2015 5000 0.03 927271 5.6423/09/2015 72729 0.44 1000000 6.08


8. SIVAKALA GANESH At the beginning of the year 131343 0.80 131343 0.80

IN30089610439369 Date wise Increase / Decrease in Nil Nil Nil NilShareholding during the yearspecifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/ sweat equity etc):


9. AJAY GIRDHARILAL At the beginning of the year 175000 1.06 175000 1.06

BHARTIYA Date wise Increase / Decrease in Nil Nil Nil NilIN30107110033877 Shareholding during the year

specifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/ sweat equity etc):


10. SIVAKALA S At the beginning of the year 91439 0.56 91439 0.56

IN30189510267403 Date wise Increase / Decrease in Nil Nil Nil NilShareholding during the yearspecifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/ sweat equity etc):



42

E) Shareholding of Directors and Key Managerial Personnel:

S Shareholding of each Directors and Shareholding at the Cumulative ShareholdingNo. each Key Managerial Personnel beginning of the year during the year



1 S Rajkumar 4670114 28.41 4670114 28.41

2 Ayyappan Padmanabhan 1317803 8.02 1317803 8.02

3 S Giridhar 1090328 6.64 849660 5.17

4 Subramaniam Sivathanu Pillai 333944 2.03 333944 2.03

5 E Kamalam 17868 0.11 17868 0.11

6 Anantharaman T S 15866 0.10 15866 0.10

7 A R K Rao 100 0.00 100 0.00

8 D K Kapila 50 0.00 50 0.00

9 Gururaja Bhat. U 50 0.00 50 0.00

Total 7699163 46.85 7615163 46.33

F) INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment.

In lakhs

Secured Loans Unsecured Deposits Totalexcluding Loans Indebtednessdeposits

Indebtedness at the beginning of the financial year

i) Principal Amount 2378.46 753.45 1.43 3133.34

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) 2378.46 753.45 1.43 3133.34

Change in Indebtedness during the financial year

* Addition 853.11 853.11

* Reduction (153.13) (153.13)

Net Change 699.98

Indebtedness at the end of the financial year

i) Principal Amount 3231.57 600.32 1.43 3833.32

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) 3231.57 600.32 1.43 3833.32

XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Rs. In Lacs)

S Particulars of Remuneration Name of MD/WTD/ Manager TotalNo. Amount

Dr. S. Mr. A. Mr. N. Mr. V. V. M.Rajkumar Padmanbhan Purushothama Rao

Prabhu

1 Gross salary

(a) Salary as per provisions contained in 35.40 19.00 6.00 10.42 70.82section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) 14.81 1.20 - 16.01Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) - - - -Income- tax Act, 1961


43

S Particulars of Remuneration Name of MD/WTD/ Manager TotalNo. Amount

Dr. S. Mr. A. Mr. N. Mr. V. V. M.Rajkumar Padmanbhan Purushothama Rao

Prabhu

2 Stock Option - - - -

3 Sweat Equity - - - -

4 Commission- as % of profit- others, specify… - - - -

5 Others, medical expense 0.18 - - 0.18

Total (A) 50.39 20.20 6.00 10.42 87.01

Ceiling as per the Act

B. Remuneration to other directors

S Particulars of Remuneration Name of Directors TotalNo. Amount

1 Independent Directors Mr. D K Dr. A R K Mr. U G Mr. K GKapila Rao Bhat Ajithkumar

Fee for attending board committee meetings 1,40,000 1,00,000 1,40,000 30,000 4,10,000

Commission - - - - -

Others, please specify - - - - -

Total (1) 1,40,000 1,00,000 1,40,000 30,000 4,10,000

2 Other Non-Executive Directors Mr. S. Mr. S. Mrs. E. Mr. T.S.Giridhar Subramaniam Kamalam Anantharaman

Fee for attending board committee meetings 90,000 40,000 40,000 60,000 2,30,000

Commission - - - - -

Others, please specify - - - - -

Total (2) 90,000 40,000 40,000 60,000 2,30,000

Total (B)=(1+2) 2,30,000 1,40,000 1,80,000 90,000 6,40,000

Total Managerial Remuneration (A+B) 93,41,000

Overall Ceiling as per the Act

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (Rs. In Lakhs)

S. No. Particulars of Remuneration Key Managerial Personnel

CEO CS CFO Total

1 Gross salary

(a) Salary as per provisions contained in section 17(1) NA 02.62 9.00 10.63of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 NA NA NA NA

(c) Profits in lieu of salary under section 17(3) NA NA NA NAIncome-tax Act, 1961

2 Stock Option NA NA NA NA

3 Sweat Equity NA NA NA NA

4 Commission NA NA NA NA

- as % of profit NA NA NA NA

others, specify… NA NA NA NA

5 Others, please specify NA NA NA NA

Total 0 2.62 08.01 10.63


44

XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Authority Appeal made,Companies Description Penalty/ [RD/NCLT/ if any (give

Act Punishment/ COURT] Details)Compoundingfees imposed

A. COMPANY

Penalty Nil Nil Nil Nil Nil

Punishment Nil Nil Nil Nil Nil

Compounding Nil Nil Nil Nil Nil

B. DIRECTORS




C. OTHER OFFICERS IN DEFAULT





45

Annexure VFORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies(Accounts) Rules, 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to insub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third provisothereto.

Financial Year 2015-16

1. Details of contracts or arrangements or transactions not at Arm’s length basis.

Sl. No. Particulars Details

1 Name (s) of the related party & nature of relationship Nil

Nature of contracts/arrangements/transaction Nil

Duration of the contracts/arrangements/transaction Nil

Salient terms of the contracts or arrangements or transaction including the value, if any Nil

Justification for entering into such contracts or arrangements or transactions’ Nil

Date of approval by the Board Nil

Amount paid as advances, if any Nil

Date on which the special resolution was passed in General meeting as required under Nilfirst proviso to section 188

2. Details of contracts or arrangements or transactions at Arm’s length basis. (Rs.in Lakhs)

Sl. No. Particulars Details

1 Name (s) of the related party & nature of relationship Dr. S .Rajkumar, Managing Director

Nature of contracts/arrangements/transaction Lease Building – Rent, Remuneration andunsecured Loan

Duration of the contracts/arrangements/transaction Annual

Salient terms of the contracts or arrangements or Rent - 14.80transaction including the value, if any Remuneration – 35.40

Unsecured Loan – 14.50

2 Name (s) of the related party & nature of relationship S. Subramoniam, Director

Nature of contracts/arrangements/transaction Lease Building - Rent


Salient terms of the contracts or arrangements or 4.35transaction including the value, if any

3 Name (s) of the related party & nature of relationship A. Padmanabhan, Whole Time Director

Nature of contracts/arrangements/transaction Lease Building – Rent, Remuneration andUnsecured Loan


Salient terms of the contracts or arrangements or Rent - 1.20transaction including the value, if any Remuneration – 19.00

Unsecured Loan – 6.70

4 Name (s) of the related party & nature of relationship A. Ganesh, Relative of Director

Nature of contracts/arrangements/transaction Lease Building - Rent




46

5 Name (s) of the related party & nature of relationship Shri Kailash Logistics Limited, Company in whichDirectors hold more than 2% interest

Nature of contracts/arrangements/transaction Lease Building – Rent, andFreight Services


Salient terms of the contracts or arrangements or Rent - 4.80transaction including the value, if any Freight Services - 226.05

6 Name (s) of the related party & nature of relationship Sree Sakthi Constructions andInfrastructure Limited. Company in whichDirectors hold more than 2% interest

Nature of contracts/arrangements/transaction Civil Works



7 Name (s) of the related party & nature of relationship Maharaj Continental Trades Limited, Company inwhich Directors hold more than 2% interest

Nature of contracts/arrangements/transaction Commission



8 Name (s) of the related party & nature of relationship Sree Giri Packagings Limited, Company in whichDirectors hold more than 2% interest

Nature of contracts/arrangements/transaction Purchase of Raw Materials



9 Name (s) of the related party & nature of relationship Verizon Industrial Aids Limited Company in whichDirectors hold more than 2% interest

Nature of contracts/arrangements/transaction Purchase of Raw Materials



10 Name (s) of the related party & nature of relationship Carto Packs, Firm of which Mr. S Rajkumar is theManaging Partner.

Nature of contracts/arrangements/transaction Purchase of Raw Material, and Sale of Paper


Salient terms of the contracts or arrangements or Purchase of Raw Materials - 7.94transaction including the value, if any Sale of Finished goods - 168.85

11 Date of approval by the Board 14 August 2014For Cartopacks Central Government approvalwas obtained vide letter no. MCA/Portal/297/May/2012 dated 24.05.2012 for a period of 03 years,under Companies Act, 1956

12 Amount paid as advances, if any Nil

13 Date on which the special resolution was passed in 30 September 2015general meeting (if any)

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/-Cochin - 16 S RAJKUMAR12-11-2016 (MANAGING DIRECTOR)


47

ToThe MembersSree Sakthi Paper Mills LimitedSree Kailas 57/2993/94Paliam road, ErnakulamKerala- 682016

We have conducted the secretarial audit of the complianceof applicable statutory provisions and the adherence togood corporate practices by M/s. Sree Sakthi Paper MillsLimited (hereinafter called the company). Secretarial Auditwas conducted in a manner that provided us a reasonablebasis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers,minute books, forms and returns filed and other recordsmaintained by the company and also the informationprovided by the Company, its officers, agents andauthorized representatives during the conduct ofsecretarial audit, We hereby report that in our opinion, thecompany has, during the audit period covering the financialyear ended on 31st March, 2016, complied with thestatutory provisions listed hereunder and also that theCompany has proper Board-processes and compliance-mechanism in place to the extent, in the manner andsubject to the reporting made hereinafter:

We have examined the books, papers, minute books, formsand returns filed and other records maintained by SreeSakthi Paper Mills Limited (“the Company”) for thefinancial year ended on 31st March, 2016 according tothe provisions as applicable to the Company during theperiod of audit:

(i) The Companies Act, 2013 (the Act) and the Rulesmade thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956(‘SCRA’) and the Rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations andBye-laws framed thereunder to the extent ofRegulation 55A;

(iv) The following Regulations and Guidelines prescribedunder the Securities and Exchange Board of India Act,1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

(b) The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations, 1992;

(c) The Securities and Exchange Board of India(Registrars to an Issue and Share TransferAgents) Regulations, 1993 regarding the

Companies Act and dealing with client to theextent of securities issued;

(d) The Securities and Exchange Board of India(Issue of Capital and Disclosure Requirements)Regulations, 2009;

(v) The below mentioned are the laws/ Regulations (asamended from time to time), as informed and certifiedby the management of the Company which arespecifically applicable to the Company based on theirindustry;

• Forest (Conservation) Act, 1980

• Chemical Accidents (Emergency Planning,Preparedness and Response) Rules, 1996

• Indian Boilers Act, 1923

• The Air (Prevention and control of Pollution) Act,1981

• The Water (Prevention and control of Pollution)Act, 1974

• Hazardous Wastes (Management and Handling)Rules, 2016

• Environment Protection Act, 1986

The Company is in the process of updating its system toensure compliance with the above Laws/Regulations.However, regarding Kerala pollution control board hasordered closure of the two factory units for the violationsof consent order given by them as detailed in the eventsbelow in this report. However the company’s applicationwith the tribunal is pending.

We have also examined compliance with the applicableclauses of the following:

i. Secretarial Standards with respect to Meetings ofBoard of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries ofIndia applicable with effect from 1 July, 2015.

ii. The Listing Agreements entered into by the Companywith the Stock Exchanges, where the equity sharesof the Company are listed and the Uniform ListingAgreement entered with the stock exchanges pursuantto the provisions of the Securities Exchange Board ofIndia (Listing Obligations and DisclosureRequirements) Regulation, 2015 (applicable witheffect from 01 December, 2015).

During the period under review, the Company has generallycomplied with the provisions of the Act, Rules, Regulations,Guidelines, Standards etc., mentioned above subject tothe following observations:

1. Since being the first year of implementation ofSecretarial Standards, the Company is in the process

Annexure VI

SECRETARIAL AUDIT REPORTFor the financial year ended 31.03.2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment andRemuneration Personnel) Rules, 2014]


48

of initiating the strict compliances of SS 1 & SS 2 incertain areas and also needs improvement under SEBI(Listing Obligations and Disclosure Requirements)Regulations, 2015.

2. There were few instances of delay in filing forms andreturns with ROC and few updations required in thestatutory registers during the financial year and alsofew instances of delay in complying with certainclauses of the equity listing agreement entered intowith the stock exchange in which the company is listed,which as per the management resulted due to theclosure of the factory units and the unrest of thelabourers.

We further report that there were no actions/eventsoccurred in the pursuance of;

(a) The Securities and Exchange Board of India (ShareBased employee Benefits) Regulations, 2014

(b) The Securities and Exchange Board of India (Delistingof Equity Shares) Regulations, 2009

(c) The Securities and Exchange Board of India (Buybackof Securities) Regulations, 1998

(d) The Securities and Exchange Board of India (Issueand Listing of Debt Securities) Regulations, 2008;

requiring compliance thereof by the Company during theFinancial Year under review.

We further report that, on examination of the relevantdocuments and records and based on the informationprovided by the Company, its officers and authorizedrepresentatives during the conduct of the audit, in ouropinion, company is in the process of establishingadequate systems and control mechanism to monitor andensure compliance with applicable laws including IndustrialLaws, Environmental Laws, Human Resources and labourlaws including the following laws:

1. Employees Provident Fund and MiscellaneousProvisions Act, 1952

2. Employees’ State Insurance Act, 1948

3. The Contract Labour (Regulation & Abolition) Act,1970

4. The Factories Act, 1948

5. The Industrial Disputes Act, 1947

6. The Workmen’s Compensation Act, 1923 & Rules

7. Payment of Gratuity Act 1972 & Rules

8. The Payment of Bonus Act, 1965

9. The Minimum Wages Act, 1948

10. The Maternity Benefit Act, 1961

11. Apprentices Act, 1961

We further report, that the compliance by the Company ofapplicable financial laws, like direct and indirect tax laws,has not been reviewed in this Audit since the same have

been subject to review by statutory financial auditor andother designated professionals.

We further report that:

The Board of Directors of the Company is constituted witha balance of Executive Directors, Non-Executive Directorsand Independent Directors. The changes in thecomposition of the Board of Directors that took place duringthe period under review were carried out in compliancewith the provisions of the Act.

Adequate notice is given to all directors to schedule theBoard Meetings, Committee Meetings, agenda anddetailed notes on agenda were delivered and a systemexists for seeking and obtaining further information andclarifications on the agenda items before the meeting andfor meaningful participation at the meeting.

As per the information and explanation given by theCompany, its officers and authorized representativesduring the conduct of the audit, all decisions at BoardMeetings and Committee Meetings are carried outunanimously.

We further report that during the audit period, no events,other than the following, have occurred during the year,which have a major bearing on the Company’s affairs

• The company was granted AGM extension for a periodof 2 Months ending November 30, 2016 by theRegistrar of Companies, Kerala. However theCompany’s application for 1 more month is pendingfor approval as on the date of this report.

• The Company has got approval from its shareholdersunder section 180(1)(a) read with section 188 of theCompanies Act, 2013 for selling and/or transferringand/or disposing off one of its unit in Chalakudy,Thrissur to its related company, but due to the pendacyof certain institutional clearances the sale is pending.

• On June 27, 2016 by the order of Kerala High Court,Two units located at Edayar was closed for violationof the Kerala Pollution Control Board, order dated May24, 2016.

For LAKSHMMI SUBRAMANIAN & ASSOCIATES

Sd/-P S Srinivasan

Place: Chennai PartnerDate: 12 November 2016 C.P.NO. 3122

Note: This report is to be read with our letter of evendate which is annexed as Annexure A and form formsan integral part of this report.


49

To,The MembersSree Sakthi Paper Mills LimitedSree Kailas 57/2993/94Paliam road, ErnakulamKerala- 682016

1. Maintenance of secretar ial records is theresponsibility of the management of the Company.Our responsibility is to express an opinion on thesesecretarial records based on our audit.

2. We have followed the audit practices and processesas were appropriate to obtain reasonable assuranceabout the correctness of the contents of thesecretarial records. The verification was done onthe random test basis to ensure that correct factsare reflected in secretarial records. We believe thatthe processes and practices, we followed provide areasonable basis for our opinion.

3. We have not ver ified the correctness andappropriateness of financial records and Books ofAccounts of the Company.

4. Where ever required, we have obtained theManagement representation about the complianceof laws, rules and regulations and happening ofevents etc.

5. The compliance of the provisions of Corporate andother applicable laws, rules, regulations, standardsis the responsibility of management. Ourexamination was limited to the verification ofprocedures on random test basis.

6. The Secretarial Audit report is neither an assuranceas to the future viability of the company nor of theefficacy or effectiveness with which the managementhas conducted the affairs of the Company.

For LAKSHMMI SUBRAMANIAN & ASSOCIATES

Sd/-P S Srinivasan

Place: Chennai PartnerDate: 12 November 2016 C.P.NO. 3122

ANNEXURE-A


50

Annexure VII

ANNUAL REPORT ON CSR ACTIVITIES FOR THE FINANCIAL YEAR 2015-16[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies

(Corporate Social Responsibility) Rules, 2014]

1 Brief outline of the Company’s CSR policy,projects and programs proposed to beundertaken with web-link to CSR policy andprojects or programs

2 Composition of the CSR Committee.

3 Average Net profits of the company for the lastthree financial year

4 Prescribed CSR expenditure (Two percent of theamount in item no. 3 above)

5 Details of CSR Spent during the Financial Year

Manner in which the amount was spent during the financial year ended 31.03.2016

CSR project Sector in Projects or Amount Amount spent Cumulative Amount spentactivity which the programs (1) Outlay (budget) on the projects expenditure up Direct or

project is local area or project or or programs to the throughcovered other (2) specify programs wise sub-heads: reporting implementing

the state & district (1) Direct period agencywhere projects or expenditure on

programs were projects orundertaken programs

(2) over heads

* * Local area: Ernakulam 335000 325000 325000 325000District in the

State of Kerala

* The Company has not undertaken any CSR activity directly, but the Company has spent an amount of Rs. 3.25lakhs through the support of Charitable Institutions having a track record of more than 3 years in undertakinghealth programmes.

7. Responsibility Statement of the CSR Committee: Since the CSR Policy and projects to be adopted is underpreparation - the implementation and monitoring of CSR policy will be complied with once the policy is finalized.

Sd/-Dr. S RajkumarManaging Director

CSR Policy and projects to be adopted is underpreparation for approval of the Board.

The Committee is constituted with Mr. DeveshwerKumar Kapila, Independent Director(since resigned 16-8-2016), Dr. S Rajkumar, Managing Director and Mr. APadmanabhan, Whole Time Director.

Loss Rs. 197.65 lakhs

NIL

Amount budgeted for the year 2015-16 : NilAmount spent upto 31.03.2016 : 3.25 lakhsAmount Unspent if any : Nil


51

INDEPENDENT AUDITOR’S REPORTTo the Members of M/s. Sree Sakthi Paper Mills Limited,Kochi.

Report on the Financial Statements

We have audited the accompanying financial statementsof M/s. Sree Sakthi Paper Mills Limited, Kochi whichcomprises of:-

(a) The Balance Sheet as at 31st March, 2016

(b) The Statement of Profit and Loss for the year ended31st March 2016

(c) Cash Flow Statement for the year ended 31st March2016, and

(d) A Summary of significant accounting policies andother explanatory information.

Management’s responsibility for the financialstatements

The Company’s Board of Directors are responsible forthe matters stated in Section 134(5) of the CompaniesAct 2013(“the Act”) with respect to the preparation ofthese financial statements that give a true and fair viewof the financial position, financial performance and cashflows of the company in accordance with the accountingprinciples generally accepted in India, including theAccounting Standards specified under Section 133 ofthe Act, read with Rule 7 of Companies (Accounts)Rules, 2014. This responsibility also includesmaintenance of adequate accounting records inaccordance with the provisions of the Act forsafeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accountingpolicies; making judgments and estimates that arereasonable and prudent; and design, implementationand maintenance of adequate internal financial controls,that were operating effectively for ensuring the accuracyand completeness of the accounting records, relevantto the preparation and presentation of the financialstatements that give a true and fair view and are freefrom material misstatement, whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on thesefinancial statements based on our audit. We have takeninto account the provisions of the Act, the accountingand auditing standards and matters which are requiredto be included in the audit report under the provisions ofthe Act and the Rules made there under. We conductedour audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. ThoseStandards require that we comply with ethicalrequirements and plan and perform the audit to obtain

reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in thefinancial statements. The procedures selected dependon the auditor’s judgment, including the assessment ofthe risks of material misstatement of the financialstatements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internalfinancial control relevant to the Company’s preparationof the financial statements that give a true and fair viewin order to design audit procedures that are appropriatein the circumstances, but not for the purpose ofexpressing an opinion on whether the company has inplace an adequate internal financial controls system overfinancial reporting and the operating effectiveness ofsuch controls. An audit also includes evaluating theappropriateness of accounting policies used and thereasonableness of the accounting estimates made byCompany’s Directors, as well as evaluating the overallpresentation of the financial statements. We believe thatthe audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion onthe financial statements.

Opinion

In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidfinancial statements give the information required by theAct in the manner so required and give a true and fairview in conformity with the accounting principlesgenerally accepted in India of the state of affairs of theCompany as at March 31, 2016; and its LOSS and itscash flows for the year ended 31st March 2016.

Emphasis of Matter

We invite the attention of the users to Note No. 13(1),regarding notice No. PCB/ESC/CO-99/07 dated24.05.2016 issued by the Pollution Control Board, Kerala.Our opinion is not qualified in respect of this matter.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report)Order, 2016 (“The Order”) issued by the CentralGovernment of India in terms of sub-section 11 ofsection 143 of the Act, we give in the Annexure astatement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act, we reportthat:

a) We have sought and obtained all the informationand explanations which to the best of ourknowledge and belief were necessary for thepurpose of our audit;


52

b) In our opinion proper books of account asrequired by law have been kept by the Companyso far as appears from our examination of thosebooks.

c) The Balance Sheet, Statement of Profit andLoss, and Cash Flow Statement dealt with bythis Report are in agreement with the books ofaccount.

d) In our opinion, the aforesaid financial statementscomply with the Accounting Standards specifiedunder section 133 of the Companies Act, 2013,read with Rule 7 of Companies (Accounts),Rules 2014;

e) On the basis of written representations receivedfrom the directors as on March 31, 2016, andtaken on record by the Board of Directors, noneof the directors is disqualified as on March 31,2016, from being appointed as a director interms of sub-section (2) of section 164 of theCompanies Act, 2013.

f) The report on internal financial control asrequired under clause(i) of sub section 3 ofsection 143 of the Companies Act 2013 isattached as Annexure 2.

g) With respect to other matters to be included inthe Auditors Report in accordance with Rule 11of Companies (Audit and Auditors) Rules, 2014,in our opinion and to the best of our informationand according to the explanations given to us:i. The company has disclosed the impact of

pending litigations on its financial positionin its financial statements.

ii. The company has made provisions, asrequired under any law or accountingstandard, for material foreseeable losses.

iii. There has been no delay in transferringamounts, required to be transferred toInvestor Education and Protection Fund bythe company.


Kochi -11 FRN:000340S13.06.2016 Sd/-

A. Mohanan, B.Sc.,FCA,DISAM. No. 20627

Partner

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi -16(2015-‘16)

Annexure 1 : Referred to in paragraph 1 of report onother Legal and Regulatory requirements of our reportof even date-

(i) (a) The Company is maintaining proper recordsshowing full particulars including quantitative

details and situation of fixed assets.

(b) The fixed assets have been physically verifiedby the management at reasonable intervals andthe discrepancies noticed have been properlydealt with in the books of accounts.

(c) According to the information and explanationgiven to us, the title deeds of immovableproperties of the Company are held in the nameof the Company, except for 1.75 acres ofindustrial land in the possession of the Companyat Edayar , purchased in financial year 2012-13. The company has paid the entire purchaseconsideration and is waiting for final clearancefor effecting legal transfer of ownership.

(ii) The inventory has been physically verified duringthe year by the management. In our opinion,the frequency of verification is reasonable. Thediscrepancies noticed on verification betweenthe physical stocks and the book records werenot material and have been properly dealt within the books of account.

(iii) (a) Except for unsecured loans Rs. 5,36,353 /-, Rs.5,36,413/- and Rs.7,11,603/- advanced to thesubsidiary companies M/s Sree AdisakthiMukkuttathode Hydropower Limited, M/sJalashaayi Alamparathodu Hydro power Limitedand M/s Sree Kailas Palchuram Hydro powerLimited respectively prior to 2013, the Companyhas not granted any loans, secured orunsecured, to Companies , firms, LLPs, or otherparties covered in the register maintained underSection 189 of the Companies Act, 2013.

(b) The terms and conditions of the above loansgranted are not prejudicial to the interest of thecompany.

(c) The company has not stipulated any scheduleof repayment of principal.

(iv) The company has complied with the provisions ofSec 185 and 186 of the companies Act 2013 inrespect of loans, investments, guarantees andsecurities made by it. We are informed by thecompany that the provisions of Sec 185 are notapplicable to the loans made to the subsidiarycompanies amounting to Rs.17,84,369 /- before 12-09-2013, being the effective date of sec 185 of thecompanies Act 2013

(v) In our opinion and according to the information andexplanations given to us, the Company has notaccepted any deposits during the year. Therefore,the provisions of clause 3 (v) of the Companies(Auditor’s Report) Order, 2016, are not applicableto the Company.

(vi) We have broadly reviewed the books and recordsmaintained by the company pursuant to the order


53

of the Central Government 148 (1) of theCompanies Act 2013 and are of the opinion thatprima facie the prescribed accounts and recordshave been made and maintained. We have howevernot made a detailed examination of the records witha view to determining whether these records areaccurate or complete.

(vii) (a) According to the information given to us andon the basis of the checks conducted by uswe repor t that the company has beengenerally regular in depositing undisputedstatutory dues including Provident fund,Employees state insurance, Income Tax, SalesTax, Wealth Tax, Service Tax, Duty ofCustoms, Duty of Excise, Value added tax,

Cess and any other statutory dues withappropriate authorities except for income taxof Rs. 48.80 lakhs and TDS of Rs. 0.87 lakhswhich were in arrears as at 31.3.2016 for aperiod of more than six months from the datethey became payable.

(b) According to the information and explanationsgiven to us, and based on the records of thecompany examined by us, the particulars ofdues towards income tax, sales tax, wealthtax, service tax, duty of customs, duty ofexcise, value added tax and cess as at 31st

March 2016, which have not been depositedon account of any dispute are furnished as :

Sl. Name of the Nature of Amount of Period to Forum where theNo. statute Dues tax disputed which the Dispute is pending

Rs. In lakhs dispute relates

1 Income tax Act Income Tax 20.53 A.Y 2007-‘08 CIT (Appeals), Kochi

2 Income Tax Act Income Tax 11.68 AY-2011-12 CIT(Appeals), Kochi

3 Central Sales Tax Act Central Sales tax 15.48 A.Y 2007-‘08 Deputy Commissioner(Appeals), Kochi

(viii) In our opinion and according to the information andexplanation given to us, the Company has notdefaulted in repayment of loans or borrowings tofinancial institutions, banks and Government. Therewere no debenture holders at any time during theyear.

(ix) The company has not made any initial public offeror further public offer or has availed any new termloans during the year..

(x) To the best of our knowledge and belief andaccording to the information and explanations givento us, no material fraud by the Company or anyfraud on the company by its officers or employeesduring the year was noticed or reported, nor wewere informed of such case by the management.

(xi) In our opinion, the managerial remuneration hasbeen paid or provided in accordance with therequisite approvals mandated by the provisions ofSection 197 read with Schedule V to the CompaniesAct, 2013.

(xii) In our opinion, the Company is not a NidhiCompany. Therefore, the provisions of clause 3 (xii)of the Companies (Auditor’s Report) Order, 2016,are not applicable to the Company.

(xiii) In our opinion, all transactions with the relatedparties are in compliance with Section 177 and 188

of Companies Act, 2013 where applicable and thedetails have been disclosed in the Financialstatements etc. as required by the applicableaccounting standards.

(xiv) According to the information and explanations givento us, the Company has not made any preferentialallotment or private placement of shares or fully orpartly convertible debentures during the year underreview.

(xv) In our opinion and according to the information andexplanations given to us, the Company has notentered into any non cash transactions withdirectors or persons connected with him for whichprovisions of section 192 are applicable.

(xvi) In our opinion and according to the information andexplanations given to us, the Company is notrequired to be registered under Section 45–IA ofthe Reserve Bank of India Act, 1934.


Kochi -11 FRN:000340S13.06.2016 Sd/-


Partner


54

Report on the Internal Financial Controls under Clause(i) of Sub-section 3 of Section 143 of the Companies Act,2013 (‘the Act’)

We have audited the internal financial controls over financialreporting of Sree Sakthi Paper Mills Ltd (the company) as of31st March, 2016 in conjunction with our audit of thestandalone financial statements of the company for the yearended on that date.

Management’s responsibility for Internal FinancialControls

The company’s management is responsible for establishingand maintaining internal financial controls based on theinternal control over financial reporting criteria establishedby the company considering the essential components ofinternal control stated in the guidance note on audit of internalfinancial controls over financial reporting issued by theInstitute of Char tered Accountants of India. Theseresponsibilities include the design, implementation andmaintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’spolicies, the safeguarding of its assets, the prevention anddetection of frauds and errors, the accuracy andcompleteness of accounting records and the timelypreparation of reliable financial information as required underthe Companies Act, 2013.


Our responsibility is to express an opinion on the Company’sinternal financial controls over financial reporting based onour audit. We conducted our audit in accordance with theguidance note on audit of internal financial controls overfinancial reporting (the Guidance Note) and the standardson auditing, issued by ICAI and deemed to be prescribedunder Section 143(10) of the Companies Act, 2013 to theextent applicable to an audit of internal financial controls,both applicable to an audit of internal financial controls and,both issued by the Institute of Chartered Accountants of India.Those standards and the Guidance Notes require that wecomply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whetheradequate internal financial controls over financial reportingwas established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain Auditevidence about the adequacy of the internal financial controlssystem over financial repor ting and their operatingeffectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding ofinternal financial controls over financial reporting, assessingthe risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internalcontrols based on the assessed risk. The procedures selecteddepend on the auditor’s judgment including the assessmentof risks of material misstatement of the financial statements,whether due to fraud or error,

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit

opinion on the company’s internal financial control systemsover financial reporting.

Meaning of internal financial controls over financialreporting

A company’s internal financial controls over financial reportingis a process designed to provide reasonable assuranceregarding the reliability of financial reporting and thepreparation of the financial statements for external purposesin accordance with generally accepted accounting principles.A company’s internal financial controls over financial reportingincludes those policies and procedures that (1) [pertain tothe maintenance of the records that, in reasonable detail,accurately and fairy reflect the transactions and dispositionsof the assets of the company; (2) provide reasonableassurance that the transactions are recorded as necessaryto permit preparation of financial statements in accordancewith generally accepted accounting principles, and that thereceipts and expenditures of the company are being madeonly in accordance with authorizations of management anddirectors of the company; and (3) provide reasonableassurance regarding the prevention or timely deduction ofunauthorised acquisition, use, or disposition of the company’sassets that could have a material effect on the financialstatements .

Inherent Limitations of Internal Financial Controls OverFinancial Reporting

Because of the inherent limitations of internal financialcontrols over financial reporting, including the possibility ofcollusion of improper management override of controls,material misstatements due to error or fraud may occur andnot be deducted. Also, projections of any evaluation of theinternal financial controls over the financial reporting to futureperiods are subject to the risk that the internal financial controlover financial reporting may become inadequate because ofchanges in conditions , or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion, the company has, in all material respects, anadequate internal financial controls system over financialreporting and such internal financial controls over financialreporting were operating effectively as at March 31, 2016,based on the internal control over the financial reportingcriteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Noteon Audit of internal Financial Reporting issued by the Instituteof Chartered Accountants of India.


Kochi -11 FRN:000340S13.06.2016 Sd/-


Partner

ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF SREE SAKTHI PAPER MILLS LIMITED


55

BALANCE SHEET AS AT 31st MARCH 2016Note As at As atNo. 31.03.2016 31.03.2015

Rs in Lacs Rs in Lacs

I. EQUITY AND LIABILITIES(1) Share Holders’ Funds:

(a) Share Capital 1 2,643.62 2,643.62(b) Reserves & Surplus 2 (185.33) 1,509.61(c) Money received against share warrants - -

(2) Share application money pending allotment

(3) Non-Current Liabilities(a) Long term borrorwings 3 856.91 1,000.73(b) Deferred tax liabilities (Net) 4 898.02 965.95(c) Other long term liabilities 5 1.43 11.49(d) Long term provisions 6 65.78 75.48

(4) Current Liabilities(a) Short term borrowings 7 2,270.11 2,722.57(b) Trade payables 8 1,810.16 1,742.52(c) Other current liabilities 9 917.64 1,290.45(d) Short-term provisions 10 4.78 -

---------------------------------------------- ----------------------------------------------TOTAL 9,283.12 11,962.42

=================== ===================II. ASSETS

(1) Non-current assets(a) Fixed assets

(i) Tangible assets 11 5,502.65 5,834.82(ii) Intangible assets 0.16 0.85(iii) Capital work-in-progress 22.92 18.19

(b) Non-current investments 12 66.98 88.46(c) Deferred tax assets (net) - -(d) Long term loans and advances 13 151.51 242.51(e) Other non-current assets

(2) Current assets(a) Inventories 14 998.51 1,761.34(b) Trade receivables 15 1,664.34 2,597.27(c) Cash and bank balance 16 364.29 418.30(d) Short-term loans and advances 17 496.08 973.01(e) Other current assets 18 15.68 27.67

---------------------------------------------- ----------------------------------------------TOTAL 9,283.12 11,962.42

=================== ===================

Subject to our report of even date For and on behalf of the Board

For Balan & Co. Sd/- Sd/-Chartered Accountants R.Ponnambalam S.RajkumarFRN: 000340S Company Secretary Vice Chairman & Managing Director

Sd/- Sd/- Sd/-A. Mohanan, B.Sc., FCA, DISA Deepa Praveen Devaswar kumar KapilaM. No.20627 Chief Financial Officer ChairmanPartner

Sd/-Cochin -16 V.V.M Rao13.06.2016 Whole Time Director-Operations


56

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2016Note For the year ended For the year endedNo. 31.03.2016 31.03.2015


I. Revenue from Operations 19 10,140.09 15,559.57II. Other income 20 71.93 100.82

---------------------------------------------- ----------------------------------------------III. TOTAL REVENUE 10,212.02 15,660.39

=================== ===================IV. EXPENSES

Cost of materials consumed 21 6,507.44 9,784.37(Increase) / Decrease in Stock 22 (45.27) (73.75)Employee benefit expense 23 974.15 1,284.16Finance cost 24 641.64 590.35Depreciation and amortization Expenses 25 328.99 376.81Other expense 26 3,273.02 4,377.88

---------------------------------------------- ----------------------------------------------TOTAL EXPENSES 11,679.97 16,339.82

=================== ===================V. Profit before exceptional and extraordinary items and tax (1,467.95) (679.43)

VI. Exceptional Itemsa) Income tax relating to earlier years 76.33 58.22b) Provision for retrenchment compensation written back (11.19) -

---------------------------------------------- ----------------------------------------------VII. Profit before extraordinary items (1,533.09) (737.65)

=================== ===================VIII. Extraordinary Items

a) Retrenchment compensation - 176.26b) Impairment loss of tangible assets 23.25 614.80c) Provision for Diminuition in value of long term investment 21.48 -d) Provision for advances for hydropower projects 125.06 -e) Provision for dimnuition in value of spares 60.00 -

---------------------------------------------- ----------------------------------------------IX. Profit before Tax (1,762.88) (1,528.71)

=================== ===================X. Tax Expense

(1) Current tax - -(2) Deferred tax (67.93) (350.57)

---------------------------------------------- ----------------------------------------------XI. Profit (Loss) for the period (1,694.95) (1,178.14)

=================== ===================XII. Profit (Loss) for the period from continuing operations - (16.79)

---------------------------------------------- ----------------------------------------------XIII. Profit/(loss) for the period from discontinuing operations - (1,161.35)

---------------------------------------------- ----------------------------------------------XIV. Earnings Per Equity Share (Basic and Diluted) -

before exceptional and extraordinary items (9.34) (3.16)

XV Earnings Per Equity Share (Basic and Diluted) -after extra ordinary items (11.14) (7.97)

Weighted Average Number of Shares (in Nos) 16,436,217.00 16,436,217.00Accounting Policies & Notes on Accounts 1-27






57

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2016In terms of AS - 3 on Cash Flow Statement under Indirect Method

2015-16 2014-15Rs in Lacs Rs in Lacs

A. Cash Flow from Operating activitiesNet profit Before Taxation (1,665.06) (1,532.92)Adjustment for:Impairment loss 23.25 62.43Gain on sale of FA (4.77) -Provision for Depreciation 306.00 1,443.99Interest on Borrowings 641.64 590.35Interest Income (39.00) (41.82)Dividend income (4.23) (3.64)Rebate on Loan Repayment - -Preliminary Exp W/off - -Loss on sale of Investments - -Loss on sale of Fixed Assets - 922.89 - 2,051.31

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------(742.17) 518.39

---------------------------------------- ----------------------------------------Operating profit before working capital changes(Increase)/Decrease in Sundry Debtors 929.41 998.40(Increase)/Decrease in Loans & Advances 508.05 (85.14)(Increase)/Decrease in Inventories 762.83 (303.45)Increase/(Decrease) in Sundry Creditors & Other liabilities (318.66) 1,881.63 (522.60) 87.21

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------Cash from operations 1,139.46 605.60Income tax paid (4.46) (39.79)

---------------------------------------- ----------------------------------------Net cash flow from operating activities 1,135.00 565.81

================ ================B. Cash flow from Investing Activities

Purchase of Fixed assets - (202.67)Capital Work-in-Progress (4.74) (1.42)Sale of Fixed assets 8.40 5.62Interest Income 39.00 41.83Purchase of Investments -Dividend received 4.23 3.64Proceeds from Sale of Investments -

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------Net cash flow from Investing activities 46.89 (153.00)

================ ================C. Cash flow from Financing activities

Proceeds from Long term Borrowings - -Proceeds from working capital borrowings (135.94) (32.41)Proceeds from unsecured loan - buyers credit (313.00) 525.24Repayment of Long term Borrowings (145.32) (1,137.29)Proceeds from capital raised - 1,000.00Repayment of Short term Borrowings - buyers credit - -Interest on borrowings (641.64) (590.35)Dividend & Corporate Dividend Tax paid - (115.38)

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------Net Cash flow from Financing Activities (1,235.90) (350.19)

================ ================Net Increase/Decrease in Cash & Cash Equivalents (54.01) 62.62Cash & Cash Equivalents as on 31/3/15 418.30 355.68Cash & Cash Equivalents as on 31/3/16 364.29 418.30






58

Significant Accounting Policies

1 Basis of accounting

The accounts of the Company are prepared underthe historical cost convention on accrual basis as agoing concern.

2 Revenue Recognition:

Items of income and expenditure are recognized onaccrual basis except for the following, since it is notpossible to ascertain with reasonable accuracy thequantum to be provided in respect of:

a. Interest & delayed payment charges on overduebills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the timeof assessment of tax / duty.

c. Insurance and Other claims.

3 Government Grant

Duty Draw Back Income is recognised on accrualbasis based on FOB value of exports.

4 Fixed Assets & Depreciation:

i) Tangible assets are stated at cost net ofrecoverble taxes, trade discounts and rebatesand include amounts added on revaluation ,less accumulated depreciation and impairmentloss, if any . The cost of tangible assetscomprises its pur chase price, borrowing costand any cost directly attributable to bringing theasset to its working condition for its intendeduse.

ii) Subsequent expenditures related to an item oftangible asset are added to the book value onlyif they increase the future benefits from theexisting asset beyond its previously assessedstandard of performance.

iii) Projects under which the assets are not readyfor their intended use are shown as Capital WorkIn Progress.

iv) Any asset is treated as impaired when thecarrying cost of asset exceeds its recoverablevalue. Such impairment loss is charged to theStatement of Profit and Loss in the year in whichan asset is identified as impaired. Anyimpairment loss recognised in prior accountingperiod is reversed if there has been a changein the estimate of recoverable amount.

v) Depreciation is provided based on the usefullife of the asset in the manner prescribed inSchedule II of the Companies Act , 2013.

5 Investments:

Long term Investments are stated at cost lessprovision for decline in value other than temporary.Current investments are stated at lower of cost andfair market value on category of investment basis.The quantum of permanent fall in the value of suchinvestments are assessed based on its performanceover the period of last ten years.

6 Inventory:

Inventory of raw materials and consumables arevalued at cost or net realizable value, whichever islower, under FIFO Method. Finished Goods arevalued at cost or net realizable value whichever islower. Cost for the purposes of valuation of finishedgoods includes cost of material, labour and otherdirect expenses. Stock-in-process is valued at rawmaterial cost plus proportionate direct cost,wherever applicable.

7 Foreign Currency Transactions:

Expenditure/Income in foreign currency is convertedinto Indian rupees at the rate of exchange prevailingon the date of transaction. Asset/Liability in respectof foreign exchange transactions outstanding as atthe end of the year is restated at the exchange rateprevailing on that date.

8 Forward Contracts:

Premium or discount at the inception of forwardcontract is recognised as expense or income overthe period of contract. Any profit or loss arising oncancellation or renewal of forward contract isrecognised as income or expense of the year.

9 Deferred tax/Income tax:

Deferred tax is accounted for, by computing the taxeffect of timing differences between taxable incomeand accounting income.

Provision for Current tax is made on the basis ofapplicable tax laws existing in the country.

Minimum Alternative Tax and its credit areaccounted based on the Guidance notes issued bythe Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carriedforward to the extent that there is reasonablecertainty that sufficient future taxable income willbe availed against which such deferred tax assetscan be realised.

10 Intangible Assets:

Intangible asset, viz, computer software is stated at

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2016


59

cost of acquisition less accumulated amortization.Computer software is amortized over a period of 5Years.

11 Others:i) Contingent Liabilities are not provided for and

are disclosed in notes to the accounts.ii) Gratuity and leave encashment liability is

worked out based on actuarial valuation as atthe end of the year.

12 Impairment of assets

Subsequent to Board’s decision to close downChalakudy plant operations, Company has re-assessed the market value of assets of Chalakudyunit. Impairment is done to Plant & Machinery andbuilding by comparing the value given by theapproved valuer and carrying amount outstandingin books after providing depreciation as per theCompanies Act 2013. Persuant to the decision ofthe company to close down the operation at DuplexBoard Unit, Chalakudy, the company had revaluedthe building , plant or machinery and other assetsof the unit at its realisable value and had treated as“scrap assets / assets available for sale”. The valueof such assets remaining unsold at the year endwas Rs 1,12,14,896 and loss on account of fall invalue recognized.

13. Additional Diclosures

1 Pollution Control Board, Kerala, has issued a closurenotice No. (PCB /ESC /CO-99 /07) dated 24.05.2016on the Company . In the opinion of the Company,the order issued by Pollution Contol Board is notmaintainable. The Honourable High Court of Keralahas stayed the above Order.

2 Most of the balances of Sundry Debtors, SundryCreditors, Advances and Deposits are subject toconfirmation.

3 Previous year figures have been re-cast, wherevernecessary to comply with the requirements of

Schedule III of The Companies Act 2013

4 Assets, Loans and advances are in realizable statein the ordinary course of business.

5 Lease Transactions :

All assets acquired under finance lease basis arecapitalized with corresponding liability recognizingthe future liability on leases. The total minimum leasepayments as on the balance sheet date, interestembedded in such payments and present value oflease payments are as follows :(i) Total minimum

lease payments Nil (PreviousYear Nil)(ii) Future interest

embedded in i) Nil (PreviousYear Nil)(iii) Present value of

lease payments (i-ii) Nil (Previous Year Nil)

Finance charges on lease payments amounting to(Previous Year Nil) for the year has been debited toprofit and loss account under the head interest andbank charges.Lease expenses under noncancelable operating lease during the year amountsto Rs NIL(Previous Year Rs Nil)

Future minimum lease payments under noncancellable operating lease as on 31-03-2016 is asfollowsPayable within One year NILPayable after one year but before five years NIL

5 Discontinuing operations

The company had discontinued the operation ofDuplex Board Unit, Chalakudy with effect from14.11.2014. Pursuant to such plan the company hadrevalued building and plant & machinery at itsrealizable value. The loss on such revaluation wasrecognised as “impairment loss” during the year ofrevaluation. During the current year, the companyhas revalued the remaining assets(except land) atDBU Chalakudy at cost or realisable valuewhichever is less. The loss if any on such revaluationis recognised as impairment loss during the year.

Note - 1 : SHARE CAPITAL (Rs in Lakhs)

1 Break up of Share Capital As at As at31.03.2016 31.03.2015

AUTHORISED5,00,00,000 Equity shares of Rs 10 each(Previous year 5,00,00,000 Equity shares of Rs 10 each ) 5,000.00 5,000.00

ISSUED, SUBSCRIBED & FULLY PAID UP1,64,36,217 Equity Shares of Rs.10/- each fully paid up 1,643.62 1,643.62

100,00,000 11.25% non-convertible cumulative redeemableprefernce shares of Rs 10/- each 1,000.00 1,000.00

---------------------------------------------- ----------------------------------------------TOTAL 2,643.62 2,643.62

=================== ===================(Out of the total issued, subscribed and fully paid up capital, 72,13,177(PY 75,99,147) Equity shares are held by Directors and NIL (PY NIL) by Officers.


60

2 Reconciliation statement of shares

Particulars 31.03.2016 31.03.2015

Equity Shares Preference Equity Shares PreferenceShares Shares

No. of shares at the beginning of the year 16,436,217.00 10,000,000.00 16,436,217.00 -

Add: Fresh issue - - - 10,000,000.00

Less: shares bought back - - - -

No. of shares at the end of the year 16,436,217.00 10,000,000.00 16,436,217.00 10,000,000.00

3 Details of Shareholders holding more than 5% Shares

Name of shareholder No. of shares % of No. of shares % ofheld as on shareholding held as on shareholding

31.03.16 31.03.15

S.Rajkumar 4,680,114.00 28.47 4,680,114.00 28.47

A.Padmanabhan 1,317,803.00 8.02 1,317,803.00 8.02

S.Giridhar 849,660.00 5.16 1,006,328.00 6.12

4 During the last 5 years, the company has not issued any shares pursuant to any contract without payment beingreceived in cash, as bonus shares or has not brought back any shares

5 No shares have been reserved for issue under options and contracts / commitments for the sale of shares / disinvestment

6 The Company has not issued any securities convertible into Equity or Preference Shares

7 No shares have been forfeited till date.

8 Out of the total share capital issued and called up, no calls are outstanding as unpaid

(Rs in Lakhs)

Note - 2 : RESERVES & SURPLUS As at As at31.03.2016 31.03.2015

Capital ReserveAmount as per Last Balance Sheet 36.68 36.68(+) Addtions/ transfers during the Year - -Closing Balance 36.68 36.68

Securities Premium AccountAmount as per Last Balance Sheet 1667.24 1,667.24(+) Addtions/ transfers during the Year - -Closing Balance 1667.24 1,667.24

General ReserveAmount as per Last Balance Sheet 533.00 533.00(+) Addtions/ transfers during the Year - -Closing Balance 533.00 533.00

SurplusAmount as per Last Balance Sheet (727.31) 513.25(-) Adjustment of depreciation - (62.44)(+) Net profit/(net loss) for the current year (1,694.95) (1,178.14)(-) Transfer to General Reserve - -(-) Proposed dividend @ 6% - -(-) Dividend distribution tax - -Closing Balance (2,422.26) (727.31)

---------------------------------------------- ----------------------------------------------TOTAL (185.33) 1,509.61

=================== ===================


61

(Rs in Lakhs)

Note - 3 : LONG TERM BORROWINGS As at As at31.03.2016 31.03.2015

A. SECUREDLong Term BorrowingsTerm Loans from:a. Federal Bank Ltd 146.47 166.06b. SBT Panampilly nagar 501.36 592.70c.. Punjab National Bank 205.83 236.28

---------------------------------------------- ----------------------------------------------853.66 995.04

---------------------------------------------- ----------------------------------------------Vehicle loan Axis Bank 1.32 2.32Vehicle loan Axis Bank 1.93 3.37

---------------------------------------------- ----------------------------------------------3.25 5.69

---------------------------------------------- ----------------------------------------------Total 856.91 1,000.73

=================== ===================

1 Nature of Security

a. Term Loan Nature of Security

i) Federal Bank Ltd Paripassu first charge on the fixed assets and pari passusecond charge on the current asets of the company.

ii) SBT panampilly nagar Paripassu first charge on the fixed assets including equitablemortgage of land and pari passu second charge on thecurrent asets of the company.

iii) Punjab National Bank Paripassu first charge on the fixed assets including equitablemortgage of land and pari passu second charge on thecurrent asets of the company.

b. Vehicle loan Hypothecation of Maruti Swift Desire

c. Vehicle loan Hypothecation of Maruti Ertiga VDI

2 Personal Guarantee Details Nil

3 Terms of Repayment of Term Loans

Loan Terms of Repayment.

a. Federal Bank Ltd Repayment in graded instalments in 84 monthsMonth 1 -40 : Rs 1.50 lakhs eachMonth 41 – 60 : Rs 2.50 Lakhs eachMonth 61 – 84 : Rs 3.75 Lakhs each

b. SBT panampilly nagar Repayment in 131 monthly instalments ofRs 7,58,000/- each and final payment of 7,02,000/-

c. Axis Bank Repayment in 59 monthly instalments ofRs 16,66,000 each and last instalment of Rs. 17,06,000

d. Punjab National bank Repayment in 120 monthly instalments ofRs 4,17,000/- each commencing from June 2014

e. Vehicle loan Axis Bank Repayment in 36 EMI of Rs 17399/- each

f. Vehicle loan Axis Bank Repayment in 60 EMI of Rs 11044/- each

g. Vehicle loanAxis Bank Repayment in 60 EMI of Rs 16083/- each

There is no continuing default/default as on the date of balance sheet in repayment of loans and interest.

(Rs in Lakhs)

Note - 4 : DEFERRED TAX LIABILITY As at As at31.03.2016 31.03.2015

Deferred Tax liability 1112.17 1,036.38Less: Deferred Tax Asset 214.15 70.43

---------------------------------------------- ----------------------------------------------TOTAL 898.02 965.95

=================== ===================


62

Arising on account of timing Current Up to Total as ondifference in Deferred Tax Liability Year 31.03.15 31.03.16

Depreciation 75.79 1,025.45 1,101.24----------------------------------------- ----------------------------------------- -----------------------------------------

75.79 1025.45 1101.24Less: Deferred Tax AssetProvision for bad and doubtful debt 24.67 38.84 63.51Provision for gratuity & leave encashment -0.55 20.66 20.11Provision for unrecognised expense 119.60 - 119.60

----------------------------------------- ----------------------------------------- -----------------------------------------143.72 59.50 203.22

----------------------------------------- ----------------------------------------- -----------------------------------------Net Deferred Tax Liability -67.93 965.95 898.02

================= ================= =================

(Rs in Lakhs)

Note - 5 : OTHER LONG TERM LIABILITIES As at As at31.03.2016 31.03.2015

Deposits from dealers/customers 1.43 11.49

Note - 6 : LONG TERM PROVISIONSProvision for Employee Benefit

Gratuity & Leave encashment 65.78 75.48

Note - 7 : SHORT TERM BORROWINGSA. SECURED LOANS

LOAN REPAYABLE ON DEMAND FROM BANKSa. Industrial Development Bank of India Ltd (Cash credit) 291.37 298.98b. Federal Bank Ltd (Cash credit) 925.32 1,042.01c. Bank of India (Cash credit) 304.86 316.50

---------------------------------------------- ----------------------------------------------1521.55 1657.49

---------------------------------------------- ----------------------------------------------B. UNSECURED LOANS

LOANS REPAYABLE ON DEMAND FROM BANKSa. IDBI - Dubai - Buyer’s Credit 357.50 324.69b. Bank of India - Tokyo - Buyer’s credit 109.29 295.12c. Federal Bank - Buyer’s credit 256.47 435.77

---------------------------------------------- ----------------------------------------------723.26 1,055.58

---------------------------------------------- ----------------------------------------------LOANS REPAYABLE ON DEMAND FROM RELATED PARTIES:a. Loan from Directors 25.30 9.50

---------------------------------------------- ----------------------------------------------25.30 9.50

---------------------------------------------- ----------------------------------------------TOTAL 2270.11 2,722.57

=================== ===================

Working Capital Facility from Banks Nature of Security Repayment terms Limit sanctioned

a. Industrial Development All the loans are secured by pari passu on demand Rs 3,00,00,000Bank of India Ltd (Cash credit) 1st charge on the entire current assets

b. Federal Bank Ltd (Cash credit) and paripassu second charge on the Rs 9,25,00,000c. Bank of India (Cash credit) entire fixed assets of the company. Rs 30,00,0000


(Rs in Lakhs)

NOTE - 8 : TRADE PAYABLES As at As at31.03.2016 31.03.2015

a. Due to Micro, Small and Medium Enterprises 0.76 0.76b. Others

(a) Supplies 1721.85 1,588.16(b) Stores & Spares 87.55 153.60

---------------------------------------------- ----------------------------------------------TOTAL 1810.16 1742.52

=================== ===================


63

Based on the information available with the Company as at the year-end, balances due to undertaking definedunder Micro, Small and Medium Enterprises development Act 2006 is Rs 75,735

Particulars For the year ended For the year ended31st March, 2016 31st March, 2015

The principal amount and the interest due thereon remaining unpaid toany supplier as at the end of each accounting year. 95,617 96,135

The amount of interest paid by the Company along with the amountsof the payment made to the supplier beyond the appointed day duringthe year. Nil Nil

The amount of interest due and payable for the period of delay in makingpayment (which have been paid but beyond the appointed day during theyear) but without adding the interest specified under this Act. Nil Nil

The amount of interest accrued and remaining unpaid at the end ofthe year. 19,882 20,400

The amount of further interest remaining due and payable even in thesucceeding years, until such date when the interest dues as above areactually paid to the small enterprise. Nil Nil

(Rs in Lakhs)

Note - 9 : OTHER CURRENT LIABILITIES As at As at31.03.2016 31.03.2015

a. Current maturity of long term debtsa. Federal Bank Ltd 18.00 18.00b. SBT panampilly nagar 90.96 90.96c. Punjab National Bank 41.70 41.70d. Vehicle loan - Axis Bank - 1.50e. Vehicle loan Axis Bank 1.33 1.33f. Vehicle loan Axis Bank 1.93 1.93

---------------------------------------------- ----------------------------------------------153.92 155.42

---------------------------------------------- ----------------------------------------------b Interest Accrued but not due on unsecured Loans

a. Interest on buyers credit 2.40 3.99---------------------------------------------- ----------------------------------------------

2.40 3.99---------------------------------------------- ----------------------------------------------

c Items covered under Investor Education and Protection fund :Dividend Payable 10.95 12.41

---------------------------------------------- ----------------------------------------------10.95 12.41

---------------------------------------------- ----------------------------------------------d Other liabilities

1. Employee benefit expenses payable 62.05 236.682. Statutory dues payable 167.56 283.823. Other expense payable 520.76 598.13

---------------------------------------------- ----------------------------------------------750.37 1,118.63

---------------------------------------------- ----------------------------------------------TOTAL 917.64 1290.45

=================== ===================

There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2016

Note - 10 : SHORT TERM PROVISIONSa Provision for Employee Benefit

Gratuity & Leave encashment 4.78 ----------------------------------------------- ----------------------------------------------

TOTAL 4.78 -=================== ===================


64

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65

Note - 12 : NON-CURRENT INVESTMENTS (Rs in Lakhs)

Particulars As at Market As at Market31.03.2016 value 31.03.2015 Value

as on as on31.03.2016 31.03.2015

A Non-Trade Investments- Quoted

a. In Equity Instruments2080 Equity shares of I.D.B.I.Ltd ofRs 10 each fully paid up 0.35 1.45 0.35 1.47

b. In Mutual Funds130597 units of ICICI Prudential Infrastructure fund 30.01 15.53 30.01 20.52125646 Units of L&T Oppurtunities Fund 30.00 19.22 30.00 22.7723286 units of UTI Master Growth Unit Scheme 10.00 6.62 10.00 7.82Less: Provision for diminuition in value of longterm investment (18.48) - - -

51.88 42.82 70.36 52.58

B Non-Trade Investments- UnquotedIn Equity Instrumentsa. Investments in Subsidiaries

JALA SHAAYI ALAMPARATHODU HYDRO POWER LTD 4.70 4.70(47,001 Equity Shares of Rs 10 each fully paid up)SREE KAILAS PALCHURAM HYDRO POWER LTD 4.70 4.70(47,001 Equity Shares of Rs 10 each fully paid up)SREE ADI SAKTHI MUKKUTTATHODE HYDRO POWER LTD 4.70 4.70(47,001 Equity Shares of Rs 10 each fully paid up)

b. Investment in othersKerala Enviro Infrastructure Ltd 1.00 1.00(10,000 Equity Shares of Rs 10 each fully paid up)Cochin Waste 2 Energy P Ltd 3.00 3.00(30,000 Equity Shares of Rs 10 each fully paid up)Less: Provision for permanent diminuition in value oflong term investment (3.00) -

15.10 18.10

TOTAL 66.98 88.46

Current market value of the quoted investments is Rs 42.82 Lakhs (Previous Year Rs.52.58 Lakhs)

(Rs in Lakhs)

Note - 13 : LONG TERM LOANS AND ADVANCES 2015-16 2014-15Rs in Lacs Rs in Lacs

(Unsecured, considered good)Capital advance 87.43 87.75Less: Provision for doubtful advances 83.12 4.31 10.54 77.21

---------------------------------------------- ----------------------------------------------

Security deposit 119.42Less: Provision for irrecoverable deposits 8.16 111.26 133.43

----------------------------------------------Loans and advances to related parties

ADVANCE TO SUBSIDIARY COMPANIESa. Jalashaayi Alamparathode Hydro Power Ltd. 8.62 7.51b. Sree Kailas Palchuram Hydro Power Ltd 18.22 16.39c. Sree Adisakthi Mukkuttathode Hydro Power Ltd 9.10 7.97

---------------------------------------------- ----------------------------------------------TOTAL 151.51 242.51

=================== ===================


66

(Rs in Lakhs)

Note - 14 : INVENTORIES As at As at31.03.2016 31.03.2015

1. Raw Materials & Packing Materials 127.55 317.322. Goods in transit - raw material 47.73 86.633 Work - in - progress 15.16 42.124. Finished Goods 308.64 250.595. Stores, Spares & Fuel 498.40 1,064.226. Renewable Energy Certificate 1.03 0.46

---------------------------------------------- ----------------------------------------------TOTAL 998.51 1,761.34

=================== ===================Mode of valuation: Inventory of raw materials and consumables are valued at cost or net realizable value, whichever islower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for thepurposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process isvalued at raw material cost plus proportionate direct cost, wherever applicable.

Inventories in the nature of Renewable Energy Certificates (REC) are accounted for in accordance with Guidance Note onAccounting for Self Generated Emission Reductions issued by ICAI. Accordingly, RECs are recognised on approval ofcertificate from respective authority, which are valued at lower of cost or net realisable value. Cost comprises of costincurred for certification of REC and NRV is the floor price fixed by Central Electricity Regulatory Commission.

(Rs in Lakhs)

Note - 15 : TRADE RECEIVABLES As at As at31.03.2016 31.03.2015

SECUREDMore than six months from the date they became due - -

UNSECUREDConsidered Good(i) Exceeding Six Months From They become Due 516.44 567.05(ii) Others 1,147.90 2,030.22Considered Doubtful 235.41 162.35Less : Provision for doubtful debts (235.41) (162.35)

---------------------------------------------- ----------------------------------------------TOTAL 1664.34 2,597.27

=================== ===================Debts due by:1 Directors Nil2 Officers Nil3 Firms in which any director is a partner Carto Pack Rs 75.09 lakhs(Previous Year Rs 66.93 Lakhs)4 Private Companies in which any Director is a

director or member Nil

Note - 16 : CASH AND BANK BALANCES1. Cash and Cash equivalents

(a) Cash in hand 1.96 2.60(b) Balance with banks - Current Accounts 12.92 63.00

2. Other bank balances(a) Unpaid Dividend 10.95 12.41(b) Fixed Deposits

(kept as margin money against LC/BG limit sanctioned by banks) 338.46 340.29---------------------------------------------- ----------------------------------------------

TOTAL 364.29 418.30=================== ===================

Details of fixed deposits with banks

Name of Bank 2015-16 2014-15

Bank of India 79.48 73.71Federal Bank Ltd 154.89 160.31Industrial Development Bank of India 104.09 106.27

---------------------------------------------- ----------------------------------------------TOTAL 338.46 340.29

=================== ===================


67

(Rs in Lakhs)

Note - 17 : SHORT TERM LOANS AND ADVANCES As at As at31.03.2016 31.03.2015

a Advances to related parties - 3.61b Others

I. Unsecured, considered gooda. Security deposit 10.95 17.60b. Advance income tax 250.41 322.29c. Cenvat Credit availed 99.78 156.51d. Others 134.94 473.00

---------------------------------------------- ----------------------------------------------TOTAL 496.08 973.01

=================== ===================Provision for Security Deposit Rs. 18,75,145 (Previous Year Rs. 18,75,145)

Note - 18 : OTHER CURRENT ASSETS(i) Interest accrued on deposits 8.68 10.34(ii) Other receivables 7.00 17.33

---------------------------------------------- ----------------------------------------------TOTAL 15.68 27.67

=================== ===================

(Rs in Lakhs)

Note - 19 : REVENUE FROM OPERATIONS For the year ended For the year ended31.03.2016 31.03.2015

(i) SALE OF MANUFACTURED PRODUCTS 10,698.82 16,405.44(ii) OTHER OPERATING INCOME

Duty draw back income - 6.84PROCESS WASTE INCOME 3.82Sale- scrap 46.86 59.38Sale of Renewable Energy Certificate 61.17 111.85 40.77 106.99

------------------------------------- -------------------------------------10,810.67 16,512.43

Less: excise duty 670.58 952.86---------------------------------------------- ----------------------------------------------

TOTAL 10140.09 15,559.57=================== ===================

Note - 20 : OTHER INCOMEInterest [Tax Deducted at Source Rs 4.45 Lakhs (Previous year Rs2.61 Lakhs)] 39.00 41.83Dividend Received 4.22 3.64Other Non operating Income 28.71 55.35

---------------------------------------------- ----------------------------------------------TOTAL 71.93 100.82

=================== ===================

Note - 21 : COST OF MATERIAL CONSUMEDRaw material consumed 6356.72 9,617.13Packing Material Consumed 150.72 167.24

---------------------------------------------- ----------------------------------------------TOTAL 6507.44 9,784.37

=================== ===================

(Rs in Lakhs)

Consumption of Raw Materials Value Value31.03.2016 31.03.2015

Imported Waste Paper 4,519.76 6,595.85Indigenous Waste Paper 1,390.82 2,286.72Imported Chemicals - -Indigenous Chemical 446.14 734.56

---------------------------------------------- ----------------------------------------------TOTAL 6,356.72 9,617.13

=================== ===================


68

Percentage Consumption of Raw MaterialsParticulars Value (Rs.in Lakhs) Percentage %

31.03.16 31.03.15 31.03.16 31.03.15

Imported 4,519.76 6,595.85 71.10% 68.58%Indigenous 1,836.96 3,021.28 28.90% 31.42%

------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------Total 6356.72 9,617.13 100.00% 100.00%

================= ================= ================= =================

Note - 22 : (INCREASE)/ DECREASE IN STOCK For the year ended For the year ended31.03.2016 31.03.2015

Closing StockFinished Goods 308.64 236.41Stock in Process 15.16 323.80 42.12 278.53

------------------------------------------ ------------------------------------------Less: Opening StockFinished Goods 236.41 124.47Stock in Process 42.12 278.53 80.31 204.78

------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------(Increase)/Decrease in Stock (45.27) (73.75)

================= =================

Note - 23 : EMPLOYEE BENEFIT EXPENSESSalaries, Wages & Allowance 427.45 588.85Remuneration to Managerial persons 68.92 69.93Bonus 14.76 25.98Gratuity 12.20 (4.72)Leave Encashment (0.37) (11.11)Staff Welfare Expenses 50.63 70.11Employer’s Contribution to PF 16.36 22.07Employer’s Contribution to ESI 12.65 18.45Coolie charges - contract 283.12 364.60Allowances and expenses to contract workers 84.22 138.29Others 4.21 1.71

---------------------------------------------- ----------------------------------------------TOTAL 974.15 1,284.16

=================== ===================

Details of Employee Benefits : Disclosures required under Accounting Standard 15 – Employee Benefits (Revised2005)a. Defined Contribution Plans : During the Year, the following amounts have been recognised in the Profit and Loss

account on account of defined contribution plan

Particulars 2015-16 2014-15

Employers Contribution to Provident Fund 16.36 22.07Employers Contribution to Employee’s State Insurance 12.65 18.45

b. Defined benefit Plans- Gratuity:i. Actuarial Assumptions:

Particulars 31.03.2016 31.03.2015

Mortality Table Indian Assured Lives Indian Assured LivesMortality (1994-96) Mortality (1994-96)

Ultimate UltimateAttrition Rate Modified q(x) values Modified q(x) values

under above under aboveMortality Table Mortality Table

Discount Rate 7.00%p.a 7.00%p.aRate of increase in compensation level 5.00%p.a 5.00%p.aRate of Return on Plan Assets Not Applicable Not ApplicableExpected Average remaining working life of Employees (Years) 7.86 8.73


69

ii. Reconciliation of Opening and Closing balances of the present value of the defined benefit obligation:

(Rs in Lakhs)

Particulars 31.03.2016 31.03.2015

Present value of obligations at the beginning of the period 68.29 94.65

Interest Cost 4.89 7.37

Current Service Cost 3.28 3.96

Benefits paid (13.20) (18.22)

Actuarial (Gain)/Loss 0.48 (28.23)

Present value of obligations at the end of the period 63.74 68.29

iii. Net Asset/Liability to be recognised in the Balance Sheet (Rs in Lakhs)

Particulars 31.03.2016 31.03.2015


Fair value of Plan Assets at the end of the period

Funded Status (63.74) (68.29)

Unrecognised Actuarial (Gain)/Losses

Net Asst/Liability to be recognised in Balance Sheet 63.74 68.29

iv. Expenses recognized in the Profit and Loss Account (Rs in Lakhs)

Particulars 31.03.2016 31.03.2015

Current Service Cost 3.28 0

Past Service Cost


Expected Return on Plan Assets

Curtailment Cost /(Credit)

Settlement Cost /(Credit)

Net Actuarial (Gain)/Loss recognised in the period 0.48 (28.23)

Expenses recognised in the statement of Profit and Loss Account 8.66 (4.72)

The above disclosures are based on information furnished by the independent actuary and relied upon by the auditors.

The estimates of future Salary increases, considered in the actuarial valuation, takes into account of inflation, seniority,promotion and other relevant factors, such as supply and demand in the employment market.

c. Defined benefit Plans- Leave Plani. Actuarial Assumptions (Rs in Lakhs)

Particulars 31.03.2016 31.03.2015


Ultimate Ultimate

Attrition Rate Modified q(x) values Modified q(x) valuesunder above under above

Mortality Table Mortality Table

Discount Rate 7.00% 7.00%

Inter Valuation leave accrual 24 days per annum 24 days per annum

Rate of increase in compensation level 5.00%p.a 5.00%p.a

Rate of Return on Plan Assets Not Applicable Not Applicable

Expected Average remaining working life of Employees (Years) 7.86 8.73


70


(Rs in Lakhs)

Particulars As on 31.03.2016 As on 31.03.2015




Benefits paid -

Actuarial (Gain)/Loss (10.19) (23.40)




Present value of obligations at the end of the period (6.80) (7.18)

Fair value of Plan Assets at the end of the period -



Net Asset/Liability to be recognised in Balance Sheet (6.80) (7.18)

Expenses recognised in the Profit and Loss Account (Rs in Lakhs)



Past Service Cost -





Net Actuarial (Gain)/Loss recognised in the period (10.19) (23.40)

Expenses recognised in the statement of Profit and Loss Account (0.37) (11.11)

The above disclosures are based on information furnished by the independent Actuary and relied upon by the auditors.

(Rs in Lakhs)

Note - 24 : FINANCE COST For the year ended For the year ended31.03.2016 31.03.2015

Closing Stock

Interest expense 444.82 453.31

Other borrowing cost 133.24 123.21

Applicable net gain/loss on foreign currency transaction/translation 63.58 13.83---------------------------------------------- ----------------------------------------------

TOTAL 641.64 590.35=================== ===================

(Rs in Lakhs)

Note - 25 : DEPRECIATION AND For the year ended For the year ended AMORTIZATION EXPENSES 31.03.2016 31.03.2015


Amortization 0.70 1.62---------------------------------------------- ----------------------------------------------

TOTAL 328.99 376.81=================== ===================

Impairment on tangible assets of closed down unit at Chalakudy, calculated as per AS 27, amounting to Rs 23,24,999 isdisclosed separately in the Profit & Loss Statement.


71

(Rs in Lakhs)

Note - 26 : OTHER EXPENSES For the year ended For the year ended31.03.2016 31.03.2015

Payment to AuditorAudit Fees 5.60 5.00Auditors Out of pocket Expense 0.20 0.42Fee for other services 0.42 0.58Audit fee for certfication 1.03 -Stores & spares consumed 214.97 393.92Power and fuel 1934.36 2,621.67Rent 66.36 61.06Repairs and Maintenance- Plant & Machinery 117.38 188.93Repairs and Maintenance- Building 1.03 2.42Insurance charges 22.78 27.57Rates & Taxes 7.49 9.48Discount 191.22 154.99Sales Commision 87.99 85.36Provision for advance 113.59Miscellaneous expenses 508.60 826.48

---------------------------------------------- ----------------------------------------------TOTAL 3,273.02 4,377.88

=================== ===================CONSUMPTION - STORES AND SPARES

Particulars Value (Rs.in Lakhs) Percentage %

31.03.16 31.03.15 31.03.16 31.03.15

Indigenous 214.97 393.92 100 100.00

Imported - - - ------------------------------------------- ------------------------------------------ ------------------------------------------ ------------------------------------------

Total 214.97 393.92 100 100.00================= ================= ================= =================

Stock - in - process

Particulars Quantity (in MT) Value (Rs.in Lakhs)

31.03.16 31.03.15 31.03.16 31.03.15

Opening 181.8 268.36 42.12 83.31Closing 0.60 181.80 15.16 42.12

Donations to Political Parties (Rs in Lakhs)


CPI (M) - 0.40------------------------------------------ ------------------------------------------

Total - 0.40================= =================

Value of Imports calculated on C.I.F Basis (Rs in lakhs)


Raw Material 4,026.97 5,829.32Stores and Spares 8.72 1.83

Expenditure in Foreign Currency: (Rs in lakhs)


Nil -

Earnings in Foreign Exchange (Rs in lakhs)


Export of goods on FOB Basis Nil 389.65


72

Details in respect of related parties pursuant to AS 18

Details of Transactions

S. Name of Related party Nature of Nature of Amount (Rs in Lakhs)

No. Relationship Transactions 2015-16 2014-15

1 Mr S Raj Kumar Key Management Managerial 35.40 35.40Personnel Remuneration(Vice Chairman &Managing Director)

Unsecured Loan 9.09 -

2 Rent 14.81 14.68

3 Mrs Rajee Rajkumar Relative of No transaction - -Key ManagementPersonnel

4 Mr Vignesh Rajkumar No transaction - -

5 Mr Vishakh Rajkumar No transaction - -

6 Mr S SivathanuPillai Sitting Fees - 0.10

7 Mrs E Kamalam Sitting Fees 0.30 0.40

Mr. S. Subramaniam Sitting Fees 0.50 0.40

8 Rent 4.35 4.36

9 Mr. A Ganesh Rent 1.20 1.20

10 Mr. S Giridhar Sitting Fees 0.90 0.90

11. Mr A. Padmanabhan Key Management Remuneration and 17.10 22.80Personnel Allowances(Executive Director)


11 Rent 1.20 6.14

12 Mr. N. Purushotama Prabhu Key Management Remuneration and 6.00 11.79Personnel Allowances(Director- Operations)

13 VVM Rao Key Management Remuneration and 10.42 -Personnel Allowances(Director- Operations)

Sitting Fees 0.10 -

14 Shri Kailash Logistics Limited Enterprises over which Freight Charges 226.05 222.52any person mentionedin 1 to 12 above is ableto exercise significantinfluence

Unsecured Loan - 38.00

Rent 4.80 3.60

15 Carto Packs Purchase of Raw Material 7.94 42.31

16 Sale of Finished Goods 168.85 197.85

17 SreeSakthi Constructions and Civil work 7.35 1.42Infrastructure (P) Ltd

18 Maharaja Continental Trades Ltd Sales Commission 135.72 208.39

19 Sree Giri Packagings Ltd Purchase of Raw Material 1,461.58 2,625.35

20 Verizon Industrial Aids Ltd Purchase of Raw Material 779.93 981.91

Sree Kashyap Surya Energy No transaction - -Equipments Pvt Ltd


73




21 Jala Shaayi Alamparathodu Subsidiary Advance 1.11 0.23Hydro Power Ltd Company

Interest on advances 0.67 -

Investment in Subsidiary Co 4.70 4.70

22 Sree Kailas Palchuram Advance 1.82 0.50Hydro Power Ltd



Sree Adi Sakthi Mukkuttathode Advance 1.14 0.53Hydro Power Ltd



Earnings per share:The company reports basic and diluted Earnings per Share in accordance with AS 20. Basic Earnings per equity share havebeen computed by dividing net profit after tax by the weighted average number of equity shares outstanding at the end ofthe year. Diluted Earnings per share have been computed using the weighted average number of equity shares and potentialequity shares outstanding at the end of the year.

(Rs in Lakhs)


Profit after tax (in Rs in Lakhs.) (1,694.95)

Less: Cumulative preference dividend not provided (135.40) (1,830.35) (1,310.10)--------------------------------------------

Weighted average number of shares used as denominatorfor calculating basic and diluted earning per share 16,436,217 16,436,217

Nominal value of shares (Rs.) 10 10

Basic and diluted earnings per share (Rs.) (11.14) (7.97)

Note - 27 : CONTINGENT LIABILITIES NOT PROVIDED FORa) Unexpired Contracts for Capital Expenditure : Rs 278 lakhs (Previous year Rs 278 Lakhs)

b) Usance Letter of credit remaining unpaid as on 31.03.2016 amounts to Rs 2361 Lakhs (Previous years Rs.2585.86Lakhs)

c) Guarantee given by bank on behalf of the Company Rs 118.00 Lakhs (Previous year Rs 133.32 Lakhs)

d) Amount of Income tax liabilities disputed in appeal Rs.38.21 lakhs ( Previous year Rs 38.61 Lakhs)

e) Additional claims of electricity charges disputed Rs 2.80 Lakhs ( Previous year Rs 2.80 lakhs)

f) Sales Tax demand disputed under appeal is Rs. 15.48(Previous year 15.48 Lakhs)

g) Excise duty disputed under appeal Rs 350.79 Lakhs (previous year Rs 143.78 Lakhs)

h) Claim towards water charge raised by Kerala Water Authority for Rs 78.42L disputed in appeal (Previous year Rs 78.42Lakhs)

i) Acturial valuation of gratuity is presently based on the retirement age of 55 years. The Union has filed a case beforeKerala High Court for increasing the retirement age to 58. Impact on provision for gratuity, if the case is decided againstthe Company,has not been ascertained.

j) Customs duty liability of Rs 58.79 Lac (P Y Rs 58.79 Lac) under EPCG cliam

k) Arrears of non - convertible cumulative preference dividend is Rs 26.69 Lac (PY Rs131.96)


74

Details of Provisions Pursuant to Accounting Standard – 29 – Provisions, Contingent Liabilities and ContingentAssets

Provision made Utilized duringOpening Balance Closing Balanceduring the year the year

01.04.15 01.04.14 2015-16 2014-15 2015-16 2014-15 31.03.16 31.03.15

Sundry Debtors 162.34 92.35 73 90.00 - 20.01 235.41 162.34

Income tax 244.60 197.28 0 47.32 168.94 - 75.66 244.60

Proposed Dividend - 98.62 0 - - 98.62 - -

Corporate Dividend tax (25.14) 16.76 0 16.76 41.90 - (25.14)

Gratuity & Leave encashment 112.95 112.95 -5 (37.47) 37.47 4.34 70.56 112.95

Capital Advances - - 83 - - - 83 -

Investment - - 21.48 - - - 21.48 -

Deposits - - 8 - - - 8 -






75

Form AOC-1(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of

Companies (Accounts) Rules, 2015)

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part “A”: Subsidiaries(Information in respect of each subsidiary to be presented with amounts in Rs.)

No. Particulars Details1 Name of the subsidiary Sree Kailas Sree Adisakthi Jalashaayi

Palchuram Hydro Mukkuttathode AlamparathodePower Ltd Hydro Power Ltd Hydro Power Ltd

Reporting period for the subsidiary 01.04.2015 to 01.04.2015 to 01.04.2015 toconcerned, if different from the 31.03.2016 31.03.2016 31.03.2016holding company’s reporting period

Reporting currency and Exchange No Foreign No Foreign No Foreignrate as on the last date of the Subsidiary Subsidiary Subsidiaryrelevant Financial year in thecase of foreign subsidiaries

Share capital 10,00,000.00 10,00,000.00 10,00,000.00

Reserves & surplus (1,76,276.00) 62,130.00 2,04,662.00

Total assets 4,221.00 - -

Total Liabilities 17,03,740.00 8,72,944.00 8,21,172.00

Investments - - -

Turnover - - -

Profit before taxation 1,06,178.00 1,38,859.00 1,41,441.00

Provision for taxation 41,000.00 50,000.00 51,000.00

Profit after taxation 67,908.00 86,919.00 90,623.00

Proposed Dividend - - -

% of shareholding 47.00 47.00 47.00

Notes: The following information shall be furnished at the end of the statement:1. Names of subsidiaries which are yet to commence operations:

a) Sree Kailas Palchuram Hydro Power Ltdb) Sree Adisakthi Mukkuttathode Hydro Power Ltdc) Jalashaayi Alamparathode Hydro Power Ltd

2. Names of subsidiaries which have been liquidated or sold during the year: Nil


76

Sree Sakthi Paper Mills Limited - Consolidated

Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate

Companies and Joint Ventures

Name of associates/Joint Ventures Nil

1. Latest audited Balance Sheet Date Nil

2. Shares of Associate/Joint Ventures held by the Company on the year end. Nil

i. No. Nil

ii. Amount of Investment in Associates/Joint Venture Nil

iii. Extend of Holding% Nil

3. Description of how there is significant influence Nil

4. Reason why the associate/joint venture is not consolidated Nil

5. Net worth attributable to shareholding as per latest audited Balance Sheet Nil

6. Profit/Loss for the year Nil

i. Considered in Consolidation Nil

ii. Not Considered in Consolidation Nil

1. Names of associates or joint ventures which are yet to commence operations.

2. Names of associates or joint ventures which have been liquidated or sold during the year. Note: This Form isto be certified in the same manner in which the Balance Sheet is to be certified.

For and on behalf of the Board

Sd/-S. Rajkumar, (DIN 01790870)

Vice Chairman & Managing Director

Sd/- Sd/-R. Ponnambalam A. Padmanabhan, (DIN 00037472)

Company Secretary Executive Director

Sd/- Sd/-Cochin -16 Usha Venugopal N. Purushotama Prabhu (DIN 000384830)12-11-2016 Chief Financial Officer Whole Time Director - Operations


77

To the Members of M/s. Sree Sakthi Paper Mills Limited,Kochi.

Report on the Consolidated financial statements

We have audited the accompanying Consolidated financialstatements of M/s. Sree Sakthi Paper Mills Limited, KochiKochi (hereinafter referred to as “the Holding Company”) andits subsidiaries – Sree Adi Sakthi Mukkuttathodu Hydro powerlimited, Sree Kailas Palchuram Hydro Power Limited andJalashaayi Alamparathodu Hydro power Limited(the HoldingCompany and its Subsidiaries together referred to as “theGroup”) , which comprises of:-

(a) The Consolidated Balance Sheet as at 31st March, 2016

(b) The Consolidated Statement of Profit and Loss for theyear ended 31st March 2016

(c) Consolidated Cash Flow Statement for the year ended31st March 2016, and

(d) A Summary of significant accounting policies and otherexplanatory information.

(hereinafter referred to as “the consolidated financialstatements”)

Management’s responsibility for the Consolidatedfinancial statements

The Holding Company’s Board of Directors are responsiblefor the matters stated in Section 134(5) of the CompaniesAct 2013(“the Act”) with respect to the preparation of theseConsolidated financial statements that give a true and fairview of the consolidated financial position, consolidatedfinancial performance and consolidated cash flows of thecompany in accordance with the accounting principlesgenerally accepted in India, including the AccountingStandards specified under Section 133 of the Act, read withRule 7 of Companies (Accounts) Rules, 2014. Thisresponsibility of the respective Board of Directors of thecompanies included in the group also includes maintenanceof adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and otherirregularities; selection and application of appropriateaccounting policies; making judgments and estimates thatare reasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, that wereoperating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to thepreparation and presentation of the Consolidated financialstatements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit. Wehave taken into account the provisions of the Act, theaccounting and auditing standards and matters which arerequired to be included in the audit report under the provisionsof the Act and the Rules made there under. We conductedour audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance aboutwhether the consolidated financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in theConsolidated financial statements. The procedures selecteddepend on the auditor’s judgment, including the assessmentof the risks of material misstatement of the Consolidatedfinancial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internalfinancial control relevant to the Company’s preparation ofthe Consolidated financial statements that give a true andfair view in order to design audit procedures that areappropriate in the circumstances, but not for the purpose ofexpressing an opinion on whether the company has in placean adequate internal financial controls system over financialreporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of theaccounting estimates made by Holding Company’s Board ofDirectors, as well as evaluating the overall presentation ofthe Consolidated financial statements. We believe that theaudit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Consolidatedfinancial statements.

Opinion

In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid Consolidatedfinancial statements give the information required by the Actin the manner so required and give a true and fair view inconformity with the accounting principles generally acceptedin India of the consolidated state of affairs of the Companyas at March 31, 2016; and its consolidated LOSS and itsconsolidated cash flows for the year ended 31st March 2016.

Emphasis of Matter

We invite the attention of the users to Note No. 13(1),regarding notice No. PCB/ESC/CO-99/07 dated 24.05.2016issued by the Pollution Control Board, Kerala. Our opinion isnot qualified in respect of this matter.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order,2016 (“The Order”) issued by the Central Governmentof India in terms of sub-section 11 of section 143 of theAct, based on the comments in the Auditors Report ofthe Holding company and Subsidiary companiesincorporated in India, we give in the Annexure astatement on the matters specified in paragraphs 3 and4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the informationand explanations which to the best of our knowledgeand belief were necessary for the purpose of ouraudit of the aforesaid consolidated financialstatements.

b) In our opinion proper books of account as requiredby law relating to the preparation of the aforesaid

INDEPENDENT AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS


78

consolidated financial statements have been keptby the Company so far as appears from ourexamination of those books.

c) The Consolidated Balance Sheet, ConsolidatedStatement of Profit and Loss, and ConsolidatedCash Flow Statement dealt with by this Report arein agreement with the books of account.

d) In our opinion, the aforesaid Consolidated financialstatements comply with the Accounting Standardsspecified under section 133 of the Companies Act,2013, read with Rule 7 of Companies (Accounts),Rules 2014;

e) On the basis of written representations receivedfrom the directors as on March 31, 2016, and takenon record by the Board of Directors of the HoldingCompany and other reports of the statutory auditorsof its subsidiary companies incorporated in India,none of the directors is disqualified as on March31, 2016, from being appointed as a director in termsof sub-section (2) of section 164 of the CompaniesAct, 2013.

f) The report on internal financial control as requiredunder clause(i) of sub section 3 of section 143 ofthe Companies Act 2013 is attached as Annexure2.

g) With respect to other matters to be included in theAuditors Report in accordance with Rule 11 ofCompanies (Audit and Auditors) Rules, 2014, in ouropinion and to the best of our information andaccording to the explanations given to us:

i. The company has disclosed the impact ofpending litigations on its consolidated financialposition in its Consolidated financialstatements.

ii. The company has made provisions, as requiredunder any law or accounting standard, formaterial foreseeable losses.

iii. There has been no delay in transferringamounts, required to be transferred to InvestorEducation and Protection Fund by the companythe Holding company and its subsidiarycompanies incorporated in India.

For Balan & CoChartered Accountants

Kochi -11 FRN:000340S13.06.2016 Sd/-

A. Mohanan, B.Sc.,FCA,DISAM. No.20627

Partner

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi -16 (2015-‘16)

Annexure 1 : Referred to in paragraph 1 of report on otherLegal and Regulatory requirements of our report of even date-

(i) (a) The Group is maintaining proper records showingfull particulars including quantitative details andsituation of fixed assets.

(b) The fixed assets have been physically verified bythe management at reasonable intervals and thediscrepancies noticed have been properly dealt within the books of accounts.

(c) According to the information and explanation givento us, the title deeds of immovable properties of theGroup are held in the name of the Group, except for1.75 acres of industrial land in the possession ofthe Group at Edayar , purchased in financial year2012-13. The Group has paid the entire purchaseconsideration and is waiting for final clearance foreffecting legal transfer of ownership.

(ii) The inventory has been physically verified during theyear by the management. In our opinion, the frequencyof verification is reasonable. The discrepancies noticedon verification between the physical stocks and the bookrecords were not material and have been properly dealtwith in the books of account.

(iii) (a) Except for unsecured loans Rs. 5,36,353 /-, Rs.5,36,413/- and Rs.7,11,603/- advanced to thesubsidiary companies M/s Sree AdisakthiMukkuttathode Hydropower Limited, M/s JalashaayiAlamparathodu Hydro power Limited and M/s SreeKailas Palchuram Hydro power Limited respectivelyprior to 2013, the Group has not granted any loans,secured or unsecured, to Companies , firms, LLPs,or other parties covered in the register maintainedunder Section 189 of the Companies Act, 2013.

(b) The terms and conditions of the above loans grantedare not prejudicial to the interest of the company.

(c) The company has not stipulated any schedule ofrepayment of principal.

(iv) The Group has complied with the provisions of Sec 185and 186 of the companies Act 2013 in respect of loans,investments, guarantees and securities made by it. Weare informed by the Group that the provisions of Sec185 are not applicable to the loans made to the subsidiarycompanies amounting to Rs.17,84,369 /- before 12-09-2013, being the effective date of sec 185 of thecompanies Act 2013

(v) In our opinion and according to the information andexplanations given to us, the Group has not acceptedany deposits during the year. Therefore, the provisionsof clause 3 (v) of the Companies (Auditor’s Report) Order,2016, are not applicable to the Group.

(vi) We have broadly reviewed the books and recordsmaintained by the Group pursuant to the order of theCentral Government 148 (1) of the Companies Act 2013and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.We have however not made a detailed examination ofthe records with a view to determining whether theserecords are accurate or complete.

(vii) (a) According to the information given to us and on thebasis of the checks conducted by us we report thatthe company has been generally regular indepositing undisputed statutory dues including


79

Provident fund, Employees state insurance, IncomeTax, Sales Tax, Wealth Tax, Service Tax, Duty ofCustoms, Duty of Excise, Value added tax, Cessand any other statutory dues with appropriateauthorities except for income tax of Rs. 48.80 lakhsand TDS of Rs. 0.87 lakhs which were in arrears asat 31.3.2016 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations givento us, and based on the records of the Groupexamined by us, the particulars of dues towardsincome tax, sales tax, wealth tax, service tax, dutyof customs, duty of excise, value added tax and cessas at 31st March 2016, which have not beendeposited on account of any dispute are furnishedas :

Sl. Name of the Nature of Amount of Period to Forum where theNo. statute Dues tax disputed which the Dispute is pending

Rs. In lakhs dispute relates

1 Income tax Act Income Tax 20.53 A.Y 2007-‘08 CIT (Appeals), Kochi

2 Income Tax Act Income Tax 11.68 AY-2011-12 CIT(Appeals), Kochi

3 Central Sales Tax Act Central Sales tax 15.48 A.Y 2007-‘08 Deputy Commissioner(Appeals), Kochi

(viii) In our opinion and according to the information andexplanation given to us, the Group has not defaulted inrepayment of loans or borrowings to financial institutions,banks and Government. There were no debentureholders at any time during the year.

(ix) The Group has not made any initial public offer or furtherpublic offer or has availed any new term loans duringthe year..

(x) To the best of our knowledge and belief and accordingto the information and explanations given to us, nomaterial fraud by the Group or any fraud on the Groupby its officers or employees during the year was noticedor reported, nor we were informed of such case by themanagement.

(xi) In our opinion, the managerial remuneration has beenpaid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Companies in the Group does notinclude a Nidhi Company. Therefore, the provisions ofclause 3 (xii) of the Companies (Auditor’s Report) Order,2016, are not applicable to the Group.

(xiii)In our opinion, all transactions with the related partiesare in compliance with Section 177 and 188 ofCompanies Act, 2013 where applicable and the details

have been disclosed in the Consolidated financialstatements etc. as required by the applicable accountingstandards.

(xiv) According to the information and explanations given tous, the Group has not made any preferential allotmentor private placement of shares or fully or partlyconvertible debentures during the year under review.

(xv) In our opinion and according to the information andexplanations given to us, the Group has not entered intoany non cash transactions with directors or personsconnected with him for which provisions of section 192are applicable.

(xvi) In our opinion and according to the information andexplanations given to us, the Group is not required to beregistered under Section 45–IA of the Reserve Bank ofIndia Act, 1934.


Kochi -11 FRN:000340S13.06.2016 Sd/-


Partner


80

Report on the Internal Financial Controls under Clause(i) of Sub-section 3 of Section 143 of the Companies Act,2013 (‘the Act’)

We have audited the internal financial controls over financialreporting of Sree Sakthi Paper Mills Ltd (the company) as of31st March, 2016 in conjunction with our audit of theconsolidated financial statements of the company for the yearended on that date.

Management’s responsibility for Internal FinancialControls

The company’s management is responsible for establishingand maintaining internal financial controls based on theinternal control over financial reporting criteria establishedby the company considering the essential components ofinternal control stated in the guidance note on audit of internalfinancial controls over financial reporting issued by theInstitute of Char tered Accountants of India. Theseresponsibilities include the design, implementation andmaintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’spolicies, the safeguarding of its assets, the prevention anddetection of frauds and errors, the accuracy andcompleteness of accounting records and the timelypreparation of reliable financial information as required underthe Companies Act, 2013.


Our responsibility is to express an opinion on the Company’sinternal financial controls over financial reporting based onour audit. We conducted our audit in accordance with theguidance note on audit of internal financial controls overfinancial reporting (the Guidance Note) and the standardson auditing, issued by ICAI and deemed to be prescribedunder Section 143(10) of the Companies Act, 2013 to theextent applicable to an audit of internal financial controls,both applicable to an audit of internal financial controls and,both issued by the Institute of Chartered Accountants of India.Those standards and the Guidance Notes require that wecomply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whetheradequate internal financial controls over financial reportingwas established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain Auditevidence about the adequacy of the internal financial controlssystem over financial repor ting and their operatingeffectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding ofinternal financial controls over financial reporting, assessingthe risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internalcontrols based on the assessed risk. The procedures selecteddepend on the auditor’s judgment including the assessmentof risks of material misstatement of the financial statements,whether due to fraud or error,

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our auditopinion on the company’s internal financial control systemsover financial reporting.

Meaning of internal financial controls over financialreporting

A company’s internal financial controls over financial reportingis a process designed to provide reasonable assuranceregarding the reliability of financial reporting and thepreparation of the financial statements for external purposesin accordance with generally accepted accounting principles.A company’s internal financial controls over financial reportingincludes those policies and procedures that (1) [pertain tothe maintenance of the records that, in reasonable detail,accurately and fairy reflect the transactions and dispositionsof the assets of the company; (2) provide reasonableassurance that the transactions are recorded as necessaryto permit preparation of financial statements in accordancewith generally accepted accounting principles, and that thereceipts and expenditures of the company are being madeonly in accordance with authorizations of management anddirectors of the company; and (3) provide reasonableassurance regarding the prevention or timely deduction ofunauthorised acquisition, use, or disposition of the company’sassets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls OverFinancial Reporting

Because of the inherent limitations of internal financialcontrols over financial reporting, including the possibility ofcollusion of improper management override of controls,material misstatements due to error or fraud may occur andnot be deducted. Also, projections of any evaluation of theinternal financial controls over the financial reporting to futureperiods are subject to the risk that the internal financial controlover financial reporting may become inadequate because ofchanges in conditions , or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion, the company has, in all material respects, anadequate internal financial controls system over financialreporting and such internal financial controls over financialreporting were operating effectively as at March 31, 2016,based on the internal control over the financial reportingcriteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Noteon Audit of internal Financial Reporting issued by the Instituteof Chartered Accountants of India.


Kochi -11 FRN:000340S13.06.2016 Sd/-


Partner

ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATEDFINANCIAL STATEMENTS OF SREE SAKTHI PAPER MILLS LIMITED


81

CONSOLIDATED BALANCE SHEET AS AT 31st MARCH 2016Note As at As atNo. 31.03.2016 31.03.2015


I. EQUITY AND LIABILITIES(1) Share Holders’ Funds:

(a) Share Capital 1 2,643.62 2,643.62(b) Reserves & Surplus 2 (185.00) 1,510.04(c) Money received against share warrants - -

(2) Share application money pending allotment

(3) Minority Interest 16.28 16.38

(4) Non-Current Liabilities(a) Long term borrorwings 3 856.91 1,000.73(b) Deferred tax liabilities (Net) 4 898.06 965.99(c) Other long term liabilities 5 1.43 11.49(d) Long term provisions 6 65.78 75.48

(5) Current Liabilities(a) Short term borrowings 7 2,270.11 2,719.05(b) Trade payables 8 1,810.16 1,742.52(c) Other current liabilities 9 918.43 1,291.11(d) Short-term provisions 10 6.25 1.42

---------------------------------------------- ----------------------------------------------TOTAL 9,302.03 11,977.83

=================== ===================II. ASSETS

(1) Non-current assets(a) Fixed assets

(i) Tangible assets 11 5,502.69 5,834.87(ii) Intangible assets 0.16 0.85(iii) Capital work-in-progress 22.92 18.19

(b) Non-current investments 12 52.88 74.36(c) Deferred tax assets (net) -(d) Long term loans and advances 13 115.57 210.65(e) Other non-current assets

(2) Current assets(a) Inventories 14 998.51 1,761.34(b) Trade receivables 15 1,664.34 2,593.75(c) Cash and bank balance 16 427.72 477.68(d) Short-term loans and advances 17 501.08 978.01(e) Other current assets 18 16.16 28.13

---------------------------------------------- ----------------------------------------------TOTAL 9,302.03 11,977.83

=================== ===================






82

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED31st MARCH 2016

Note For the year ended For the year endedNo. 31.03.2016 31.03.2015


Revenue from Operations 19 10,140.09 15,559.57Other income 20 76.68 105.42

---------------------------------------------- ----------------------------------------------TOTAL REVENUE 10,216.77 15,664.99

=================== ===================EXPENSESCost of materials consumed 21 6,507.44 9,784.37(Increase) / Decrease in Stock 22 (45.27) (73.75)Employee benefit expense 23 974.15 1,284.16Finance cost 24 644.75 590.35Depreciation and amortization Expenses 25 328.99 376.81Other expense 26 3,273.27 4,378.62

---------------------------------------------- ----------------------------------------------TOTAL EXPENSES 11,683.33 16,340.56

=================== ===================Profit before exceptional and extraordinary items and tax (1,466.56) (675.57)Exceptional Items -a) Income tax relating to earlier years 76.44 58.22b) Provision for retrenchment compensation written back (11.19)

---------------------------------------------- ----------------------------------------------Profit before extraordinary items (1,531.81) (733.79)

=================== ===================Extraordinary Items - -a) Retrenchment compensation 176.26b) Impairment loss of tangible assets 23.25 614.80c) Provision for Diminuition in value of long term investment 21.48d) Provision for advances for hydropower projects 125.06e) Provision for dimnuition in value of spares 60.00

---------------------------------------------- ----------------------------------------------Profit before Tax (1,761.60) (1,524.85)

=================== ===================Tax Expense(1) Current tax 1.47 -(2) Deferred tax (67.93) (349.16)

---------------------------------------------- ----------------------------------------------Profit/(loss) for the year (before adjustment of minority interest) (1,695.14) (1,175.69)

=================== ===================Less: Share of profit/(loss) transferred to minority interest (0.10) 1.30

---------------------------------------------- ----------------------------------------------Profit for the year after adjustment for minority interest (1,695.04) (1,176.99)

=================== ===================Profit (Loss) for the period from continuing operations - (14.34)

---------------------------------------------- ----------------------------------------------Profit/(loss) for the period from discontinuing operations - (1,161.35)

---------------------------------------------- ----------------------------------------------Earnings Per Equity Share (Basic and Diluted) - (9.32) (3.13)before exceptional and extraordinary itemsEarnings Per Equity Share (Basic and Diluted) - (11.14) (7.95)after extra ordinary itemsWeighted Average Number of Shares(in Nos.) 16,436,217.00 16,436,217.00Accounting Policies & Notes on Accounts 1-27






83

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2016In terms of AS - 3 on Cash Flow Statement under Indirect Method

2015-16 2014-15Rs in Lacs Rs in Lacs

A. Cash Flow from Operating activitiesNet profit Before Taxation (1,663.68) (1,529.01)Adjustment for:Impairment loss 23.25 62.43Gain on sale of FA (4.77)Provision for Depreciation 306.00 1,443.99Interest on Borrowings 644.75 590.35Interest Income (43.74) (46.42)Dividend income (4.23) (3.64)Rebate on Loan Repayment - -Preliminary Exp W/off - -Loss on sale of Investments - -Loss on sale of Fixed Assets - 921.26 - 2,046.71

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------(742.42) 517.70

---------------------------------------- ----------------------------------------Operating profit before working capital changes(Increase)/Decrease in Sundry Debtors 929.41 998.40(Increase)/Decrease in Loans & Advances 512.10 (63.73)(Increase)/Decrease in Inventories 762.82 (303.45)Increase/(Decrease) in Sundry Creditors & Other liabilities (318.52) 1,885.81 (543.78) 87.44

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------Cash from operations 1,143.39 605.14

---------------------------------------- ----------------------------------------Income tax paid (5.98) (39.79)

---------------------------------------- ----------------------------------------Net cash from operating activities 1,137.41 565.35

================ ================

B. Cash flow from Investing ActivitiesPurchase of Fixed assets - (202.67)Capital Work-in-Progress (4.74) (1.42)Sale of Fixed assets 8.40 5.62Interest Income 43.74 46.43Purchase of Investments -Dividend received 4.23 3.64Proceeds from Sale of Investments

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------Net cash from Investing activities 51.63 (148.40)

================ ================C. Cash flow from Financing activities

Proceeds from Long term Borrowings - -Proceeds from working capital borrowings (135.94) (32.41)Proceeds from unsecured loan - buyers credit (313.00) 525.24Repayment of Long term Borrowings (145.31) (1,137.29)Proceeds from capital raised - 1,000.00Repayment of Short term Borrowings - buyers credit - -Interest on borrowings (644.75) (590.35)Dividend & Corporate Dividend Tax paid - (115.38)

---------------------------------------- ---------------------------------------- ---------------------------------------- ----------------------------------------Net Cash flow from Financing Activities (1,239.00) (350.19)

================ ================Net Increase/Decrease in Cash & Cash Equivalents (49.96) 66.76Cash & Cash Equivalents ason 31/3/15 477.68 410.92Cash & Cash Equivalents ason 31/3/16 427.72 477.68






84

A. BASIS OF PREPARATION OF CONSOLIDATEDFINANCIAL STATEMENTSThese consolidated financial statements have beenprepared to comply with the Generally Accepted AccountingPrinciples in India (Indian GAAP), including the AccountingStandards notified under the relevant provisions of theCompanies Act, 2013.

B. PRINCIPLES OF CONSOLIDATIONThe consolidated financial statement relates to Sree SakthiPaper Mills Limited (‘the Company’) and its subsidiarycompanies . The consolidated financial statements havebeen prepared on the following basis:

a) The financial statements of the Company and itssubsidiary companies are combined on a line-by-linebasis by adding together the book values of like itemsof assets, liabilities, income and expenses, after fullyeliminating intra-group balances and intra-grouptransactions in accordance with Accounting Standard(AS) 21 - “Consolidated Financial Statements”

b) The difference between the cost of investment in thesubsidiaries, over the net assets at the time ofacquisition of shares in the subsidiaries is recognisedin the financial statements as Goodwill or CapitalReserve, as the case may be.

c ) Minority Interest’s share of net profit of consolidatedsubsidiaries for the year is identified and adjustedagainst the income of the group in order to arrive atthe net income attributable to shareholders of theCompany.

d) Minority Interest’s share of net assets of consolidatedsubsidiar ies is identified and presented in theconsolidated balance sheet separate from liabilities andthe equity of the Company’s shareholders.

e) As far as possible, the consolidated financial statementsare prepared using uniform accounting policies for liketransactions and other events in similar circumstancesand are presented in the same manner as theCompany’s separate financial statements.

C. Other Significant Accounting Policies

1 Basis of accountingThe accounts of the Company are prepared under thehistorical cost convention on accrual basis as a goingconcern.

2 Revenue Recognition:Items of income and expenditure are recognized onaccrual basis except for the following, since it is notpossible to ascertain with reasonable accuracy thequantum to be provided in respect of:

a. Interest & delayed payment charges on overduebills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time ofassessment of tax / duty.

c. Insurance and Other claims.

3 Government GrantDuty Draw Back Income is recognised on accrual basisbased on FOB value of exports.

4 Fixed Assets & Depreciation:i) Tangible assets are stated at cost net of recoverble

taxes, trade discounts and rebates and includeamounts added on revaluation , less accumulateddepreciation and impairment loss, if any . The costof tangible assets comprises its pur-chase price,borrowing cost and any cost directly attributableto bringing the asset to its working condition forits intended use.

ii) Subsequent expenditures related to an item oftangible asset are added to the book value only ifthey increase the future benefits from the existingasset beyond its previously assessed standard ofperformance.

iii) Projects under which the assets are not ready fortheir intended use are shown as Capital Work InProgress.

iv) Any asset is treated as impaired when the carryingcost of asset exceeds its recoverable value. Suchimpairment loss is charged to the Statement ofProfit and Loss in the year in which an asset isidentified as impaired. Any impairment lossrecognised in prior accounting period is reversedif there has been a change in the estimate ofrecoverable amount.

v) Depreciation is provided based on the useful lifeof the asset in the manner prescribed in ScheduleII of the Companies Act , 2013.

5 Investments:Long term Investments are stated at cost less provisionfor decline in value other than temporary. Currentinvestments are stated at lower of cost and fair marketvalue on category of investment basis. The quantumof permanent fall in the value of such investments areassessed based on its performance over the period oflast ten years.

6 Inventory:Inventory of raw materials and consumables are valuedat cost or net realizable value, whichever is lower, underFIFO Method. Finished Goods are valued at cost ornet realizable value whichever is lower. Cost for thepurposes of valuation of finished goods includes costof material, labour and other direct expenses. Stock-in-process is valued at raw mater ial cost plusproportionate direct cost, wherever applicable.

7 Foreign Currency Transactions:Expenditure/Income in foreign currency is convertedinto Indian rupees at the rate of exchange prevailingon the date of transaction. Asset/Liability in respect offoreign exchange transactions outstanding as at theend of the year is restated at the exchange rateprevailing on that date.

8 Forward Contracts:Premium or discount at the inception of forward contractis recognised as expense or income over the period ofcontract. Any profit or loss arising on cancellation orrenewal of forward contract is recognised as incomeor expense of the year.

NOTES ON CONSOLIDATED FINANCIAL STATEMENTS OF SREE SAKTHI PAPER MILLSLIMITED, COCHIN AND SUBSIDIARIES FOR THE YEAR ENDED 31ST MARCH 2016


85

9 Deferred tax/Income tax:

Deferred tax is accounted for, by computing the taxeffect of timing differences between taxable income andaccounting income.

Provision for Current tax is made on the basis ofapplicable tax laws existing in the country.Minimum Alternative Tax and its credit are accountedbased on the Guidance notes issued by the Institute ofChartered Accountants of India.

Deferred tax assets are recognized and carried forwardto the extent that there is reasonable certainty thatsufficient future taxable income will be availed againstwhich such deferred tax assets can be realised.

10 Intangible Assets:

Intangible asset, viz, computer software is stated atcost of acquisition less accumulated amortization.Computer software is amortized over a period of 5Years.

11 Others:i) Contingent Liabilities are not provided for and are

disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is workedout based on actuarial valuation as at the end ofthe year.

12 Impairment of assetsSubsequent to Board’s decision to close downChalakudy plant operations, Company has re-assessedthe market value of assets of Chalakudy unit.Impairment is done to Plant & Machinery and buildingby comparing the value given by the approved valuerand carrying amount outstanding in books afterproviding depreciation as per the Companies Act 2013.Persuant to the decision of the company to close downthe operation at Duplex Board Unit , Chalakudy, thecompany had revalued the building , plant or machineryand other assets of the unit at its realisable value andhad treated as “scrap assets / assets available for sale”.The value of such assets remaining unsold at the yearend was Rs 1,12,14,896 and loss on account of fall invalue recognized.

Additional Diclosures1 Pollution Control Board, Kerala, has issued a

closure notice No. (PCB /ESC /CO-99 /07) dated24.05.2016 on the Company . In the opinion of theCompany, the order issued by Pollution ContolBoard is not maintainable. The Honourable HighCourt of Kerala has stayed the above Order.

2 Most of the balances of Sundry Debtors, SundryCreditors, Advances and Deposits are subject toconfirmation.

3 Previous year figures have been re-cast, wherevernecessary to comply with the requirements ofSchedule IIII of The Companies Act 2013

4 Assets, Loans and advances are in realizable statein the ordinary course of business.

5 Lease Transactions :

All assets acquired under finance lease basis arecapitalized with corresponding liability recognizingthe future liability on leases. The total minimumlease payments as on the balance sheet date,interest embedded in such payments and presentvalue of lease payments are as follows :

(i) Total minimum Nillease payments (Previous Year Nil)

(ii) Future interest Nilembedded in i) (Previous Year Nil)

(iii) Present value of Nillease payments (i-ii) (Previous Year Nil)

Finance charges on lease payments amountingto (Previous Year Nil) for the year has been debitedto profit and loss account under the head interestand bank charges.Lease expenses under noncancelable operating lease during the yearamounts to Rs NIL(Previous Year Rs Nil)

Future minimum lease payments under noncancellable operating lease as on 31-03-2016 isas follows

Payable within One year NILPayable after one year NILbut before five years

5 Discontinuing operations

The company had discontinued the operation of DuplexBoard Unit, Chalakudy with effect from 14.11.2014.Pursuant to such plan the company had revaluedbuilding and plant & machinery at its realizable value.The loss on such revaluation was recognised as“impairment loss” during the year of revaluation. Duringthe current year, the company has revalued theremaining assets(except land) at DBU Chalakudy atcost or realisable value whichever is less. The loss ifany on such revaluation is recognised as impairmentloss during the year.

Note - 1 : SHARE CAPITAL (Rs in Lakhs)

1 Break up of Share Capital As at As at31.03.2016 31.03.2015

AUTHORISED5,00,00,000 Equity shares of Rs 10 each(Previous year 5,00,00,000 Equity shares of Rs 10 each ) 5,000.00 5,000.00

ISSUED, SUBSCRIBED & FULLY PAID UP1,64,36,217 Equity Shares of Rs.10/- each fully paid up 1,643.62 1,643.62

100,00,000 11.25% non-convertible cumulative redeemableprefernce shares of Rs 10/- each 1,000.00 1,000.00

---------------------------------------------- ----------------------------------------------TOTAL 2,643.62 2,643.62

=================== ===================


86

2 Reconciliation statement of shares

Particulars 31.03.2016 31.03.2015

Equity Shares Preference Equity Shares PreferenceShares Shares

No: of shares at the beginning of the year 16,436,217.00 10,000,000.00 16,436,217.00

Add: Fresh issue - - 10,000,000.00

Less: Dhares bought back - - - -

No: of shares at the end of the year 16,436,217.00 10,000,000.00 16,436,217.00 10,000,000.00

3 Details of Shareholders holding more than 5% Shares

Name of shareholder No. of shares % of No. of shares % ofheld as on shareholding held as on shareholding

31.03.16 31.03.15

S.Rajkumar 4,680,114.00 28.47 4,680,114.00 28.47

A.Padmanabhan 1,317,803.00 8.02 1,317,803.00 8.02

S.Giridhar 849,660.00 5.16 1,006,328.00 6.12

4 During the last 5 years ,the company has not issued any shares pursuant to any contract without payment beingreceived in cash, as bonus shares or has not brought back any shares

5 No shares have been reserved for issue under options and contracts / commitments for the sale of shares / disinvestment

6 The Company has not issued any securities convertible into Equity or Preference Shares

7 No shares have been forfeited till date.

8 Out of the total share capital issued and called up, no calls are outstanding as unpaid

(Rs in Lakhs)

Note - 2 : RESERVES & SURPLUS As at As at31.03.2016 31.03.2015

Capital ReserveAmount as per Last Balance Sheet 36.68 36.68(+) Addtions/ transfers during the Year - -

---------------------------------------------- ----------------------------------------------Closing Balance 36.68 36.68

---------------------------------------------- ----------------------------------------------Securities Premium Account

Amount as per Last Balance Sheet 1,667.24 1,667.24(+) Addtions/ transfers during the Year - -

---------------------------------------------- ----------------------------------------------Closing Balance 1,667.24 1,667.24

---------------------------------------------- ----------------------------------------------General Reserve

Amount as per Last Balance Sheet 533.00 533.00(+) Addtions/ transfers during the Year - -

---------------------------------------------- ----------------------------------------------Closing Balance 533.00 533.00

---------------------------------------------- ----------------------------------------------Surplus

Amount as per Last Balance Sheet (726.88) 512.56(-) Adjustment of depreciation - (62.45)(+) Net profit/(net loss) for the current year (1,695.04) (1,176.99)(-) Transfer to General Reserve - -(-) Proposed dividend @ 6% -(-) Dividend distribution tax -

---------------------------------------------- ----------------------------------------------Closing Balance (2,421.92) (726.88)

---------------------------------------------- ----------------------------------------------TOTAL (185.00) 1,510.04

=================== ===================


87

(Rs in Lakhs)

Note - 3 : LONG TERM BORROWINGS As at As at31.03.2016 31.03.2015

A SECUREDLong Term BorrowingsTerm Loans from:a. Federal Bank Ltd 146.47 166.06b. SBT Panampilly Nagar 501.36 592.70e. Punjab National bank 205.83 236.28

---------------------------------------------- ----------------------------------------------853.66 995.04

---------------------------------------------- ----------------------------------------------Vehicle loan - Axis Bank 1.32 2.32Vehicle loan - Axis Bank 1.93 3.37

---------------------------------------------- ----------------------------------------------3.25 5.69

---------------------------------------------- ----------------------------------------------Total 856.91 1,000.73

=================== ===================

1 Nature of Security

a. Term Loan Nature of Security

i) Federal Bank Ltd Paripassu first charge on the fixed assets and pari passusecond charge on the current asets of the company.

ii) SBT panampilly nagar Paripassu first charge on the fixed assets including equitablemortgage of land and pari passu second charge on thecurrent asets of the company.

iii) Punjab National Bank Paripassu first charge on the fixed assets including equitablemortgage of land and pari passu second charge on thecurrent asets of the company.

b. Vehicle loan Hypothecation of Maruti Swift Desire

c. Vehicle loan Hypothecation of Maruti Ertiga VDI

2 Personal Guarantee Details Nil

3 Terms of Repayment of Term Loans

Loan Terms of Repayment.

a. Federal Bank Ltd Repayment in graded instalments in 84 months:Month 1 -40 : Rs 1.50 lakhs eachMonth 41 – 60 : Rs 2.50 Lakhs eachMonth 61 – 84 : Rs 3.75 Lakhs each

b. SBT panampilly nagar Repayment in 131 monthly instalments ofRs 7,58,000/- each and final payment of 7,02,000/-

c. Axis Bank Repayment in 59 monthly instalments ofRs 16,66,000 each and last instalment of Rs. 17,06,000

d. Punjab National bank Repayment in 120 monthly instalments ofRs 4,17,000/- each commencing from June 2014

e. Vehicle loan Axis Bank Repayment in 36 EMI of Rs 17399/- each

f. Vehicle loan Axis Bank Repayment in 60 EMI of Rs 11044/- each

g. Vehicle loanAxis Bank Repayment in 60 EMI of Rs 16083/- each


(Rs in Lakhs)

Note - 4 : DEFERRED TAX LIABILITY As at As at31.03.2016 31.03.2015

Deferred Tax liability 1,112.21 1,036.48

Less: Deferred Tax Asset 214.15 70.43---------------------------------------------- ----------------------------------------------

TOTAL 898.06 965.99=================== ===================


88

Arising on account of timing Current Up to Total as ondifference in Deferred Tax Liability Year 31.03.15 31.03.16

Depreciation 75.79 1,025.49 1,101.28----------------------------------------- ----------------------------------------- -----------------------------------------

75.79 1,025.49 1,101.28Less: Deferred Tax AssetProvision for bad and doubtful debt 24.67 38.84 63.51Provision for gratuity & leave encashment (0.55) 20.66 20.11Provision for unrecognised expense 119.60 - 119.60

----------------------------------------- ----------------------------------------- -----------------------------------------143.72 59.50 203.22

----------------------------------------- ----------------------------------------- -----------------------------------------Net Deferred Tax Liability (67.93) 965.99 898.06

================= ================= =================

(Rs in Lakhs)

Note - 5 : OTHER LONG TERM LIABILITIES As at As at31.03.2016 31.03.2015

Deposits from dealers/customers 1.43 11.49

Note - 6 : LONG TERM PROVISIONSProvision for Employee Benefit

Gratuity & Leave encashment 65.78 75.48

Note - 7 : SHORT TERM BORROWINGSA. SECURED LOANS

LOAN REPAYABLE ON DEMAND FROM BANKSa. Industrial Development Bank of India Ltd (Cash credit) 291.37 298.98b. Federal Bank Ltd (Cash credit) 925.32 1,042.01c. Bank of India (Cash credit) 304.86 316.50

---------------------------------------------- ----------------------------------------------1,521.55 1,657.49

---------------------------------------------- ----------------------------------------------B. UNSECURED LOANS

LOANS REPAYABLE ON DEMAND FROM BANKSa. IDBI - Dubai - Buyer’s Credit 357.50 324.69b. Bank of India - Tokyo - Buyer’s credit 109.29 295.12c. Federal Bank - Buyer’s credit 256.47 435.77

---------------------------------------------- ----------------------------------------------723.26 1,055.58

---------------------------------------------- ----------------------------------------------Loans and payables from othersSBI Global Factors LTD (3.52)

LOANS REPAYABLE ON DEMAND FROM RELATED PARTIES:a. Loan from Directors 25.30 9.50

---------------------------------------------- ----------------------------------------------25.30 9.50

---------------------------------------------- ----------------------------------------------TOTAL 2,270.11 2,719.05

=================== ===================

Working Capital Facility from Banks Nature of Security Repayment terms Limit sanctioned

a. Industrial Development All the loans are secured by pari passu on demand Rs 3,00,00,000Bank of India Ltd (Cash credit) 1st charge on the entire current assets

b. Federal Bank Ltd (Cash credit) and paripassu second charge on the Rs 9,25,00,000c. Bank of India (Cash credit) entire fixed assets of the company. Rs 30,00,0000


(Rs in Lakhs)

NOTE - 8 : TRADE PAYABLES As at As at31.03.2016 31.03.2015

a. Due to Micro, Small and Medium Enterprises 0.76 0.76b. Others

(a) Supplies 1,721.85 1,588.16(b) Stores & Spares 87.55 153.60

---------------------------------------------- ----------------------------------------------TOTAL 1,810.16 1,742.52

=================== ===================


89

Based on the information available with the Company as at the year-end, balances due to undertaking definedunder Micro, Small and Medium Enterprises development Act 2006 is Rs 75735

Particulars For the year ended For the year ended31st March, 2016 31st March, 2015

The principal amount and the interest due thereon remaining unpaid toany supplier as at the end of each accounting year. 95,617 96,135

The amount of interest paid by the Company along with the amounts of thepayment made to the supplier beyond the appointed day during the year. Nil Nil

The amount of interest due and payable for the period of delay in makingpayment (which have been paid but beyond the appointed day during theyear) but without adding the interest specified under this Act. Nil Nil

The amount of interest accrued and remaining unpaid at the end of the year. 19,882 20,400

The amount of further interest remaining due and payable even in thesucceeding years, until such date when the interest dues as above areactually paid to the small enterprise. Nil Nil

(Rs in Lakhs)

Note - 9 : OTHER CURRENT LIABILITIES As at As at31.03.2016 31.03.2015

a. Current maturity of long term debtsa. Federal Bank Ltd 18.00 18.00b. SBT panampilly nagar 90.96 90.96c. Punjab National Bank 41.70 41.70d. Vehicle loan Axis Bank - 1.50e. Vehicle loan Axis Bank 1.33 1.33f. Vehicle loan Axis Bank 1.93 1.93

---------------------------------------------- ----------------------------------------------153.92 155.42

---------------------------------------------- ----------------------------------------------b Interest Accrued but not due on unsecured Loans

a. Interest on buyers credit 2.40 3.99---------------------------------------------- ----------------------------------------------

2.40 3.99---------------------------------------------- ----------------------------------------------

c Items covered under Investor Education and Protection fund :Dividend Payable 10.95 12.41

---------------------------------------------- ----------------------------------------------10.95 12.41

---------------------------------------------- ----------------------------------------------d Other liabilities

1. Employee benefit expenses payable 62.05 236.682. Statutory dues payable 167.56 283.823. Other expense payable 521.55 598.79

---------------------------------------------- ----------------------------------------------751.16 1,119.29

---------------------------------------------- ----------------------------------------------TOTAL 918.43 1,291.11

=================== ===================

There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2016

Note - 10 : SHORT TERM PROVISIONSa Provision for Employee Benefit

Gratuity & Leave encashment 4.78 -Income Tax 1.47 1.42

---------------------------------------------- ----------------------------------------------TOTAL 6.25 1.42

=================== ===================


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91

Note - 12 : NON-CURRENT INVESTMENTS (Rs in Lakhs)

Particulars As at Market As at Market31.03.2016 value 31.03.2015 Value

as on as on31.03.2016 31.03.2015

A Non-Trade Investments- Quoted

a. In Equity Instruments2080 Equity shares of I.D.B.I.Ltd of Rs 10 each fully paid up 0.35 1.45 0.35 1.47

b. In Mutual Funds130597 units of ICICI Prudential Infrastructure fund 30.01 15.53 30.01 20.52125646 Units of L&T Oppurtunities Fund 30.00 19.22 30.00 22.7723286 units of UTI Master Growth Unit Scheme 10.00 6.62 10.00 7.82Less: Provision for diminuition in value of longterm investment (18.48) - - -

51.88 42.82 70.36 52.58

B Non-Trade Investments- UnquotedIn Equity Instrumentsa. Investment in others

Kerala Enviro Infrastructure Ltd 1.00 1.00(10,000 Equity Shares of Rs 10 each fully paid up)Cochin Waste 2 Energy P Ltd 3.00 3.00(30,000 Equity Shares of Rs 10 each fully paid up)Less: Provision for permanent diminuition in value of longterm investment -3.00 -

1.00 4.00

TOTAL 52.88 74.36

Current market value of the quoted investments is Rs 42.82 Lakhs (Previous Year Rs.52.58 Lakhs)

(Rs in Lakhs)

Note - 13 : LONG TERM LOANS AND ADVANCES 31.03.2016 31.03.2015Rs in Lacs Rs in Lacs

(Unsecured, considered good)Capital advance 87.43 87.75Less: Provision for doubtful advances 83.12 4.31 10.54 77.21

---------------------------------------------- ----------------------------------------------Security depositLess: Provision for irrecoverable deposits 111.26 133.44

---------------------------------------------- ----------------------------------------------TOTAL 115.57 210.65

=================== ===================

(Rs in Lakhs)

Note - 14 : INVENTORIES As at As at31.03.2016 31.03.2015

1. Raw Materials & Packing Materials 127.55 317.322. Goods in transit - raw material 47.73 86.633. Work - in - progress 15.16 42.124. Finished Goods 308.64 250.595. Stores, Spares & Fuel 498.40 1,064.226. Renewable Energy Certificate 1.03 0.46

---------------------------------------------- ----------------------------------------------TOTAL 998.51 1,761.34

=================== ===================

Mode of valuation: Inventory of raw materials and consumables are valued at cost or net realizable value, whichever islower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for thepurposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process isvalued at raw material cost plus proportionate direct cost, wherever applicable.


92

Inventories in the nature of Renewable Energy Certificates (REC) are accounted for in accordance with Guidance Note onAccounting for Self Generated Emission Reductions issued by ICAI. Accordingly, RECs are recognised on approval ofcertificate from respective authority, which are valued at lower of cost or net realisable value. Cost comprises of costincurred for certification of REC and NRV is the floor price fixed by Central Electricity Regulatory Commission.

(Rs in Lakhs)

Note - 15 : TRADE RECEIVABLES As at As at31.03.2016 31.03.2015

SECUREDMore than six months from the date they became due - -

UNSECUREDConsidered Good(i) Exceeding Six Months From They become Due 516.44 563.53(ii) Others 1,147.90 2,030.22Considered Doubtful 235.41 162.35Less : Provision for doubtful debts (235.41) (162.35)

---------------------------------------------- ----------------------------------------------TOTAL 1,664.34 2,593.75

=================== ===================Debts due by:1 Directors Nil2 Officers Nil3 Firms in which any director is a partner Carto Pack Rs 75.09 lakhs(Previous Year Rs 66.93 Lakhs)4 Private Companies in which any Director is a

director or member Nil

Note - 16 : CASH AND BANK BALANCES1. Cash and Cash equivalents

(a) Cash in hand 1.96 2.60(b) Balance with banks - Current Accounts 13.97 64.28

2. Other bank balances(a) Unpaid Dividend 10.95 12.41(b) Fixed Deposits

(kept as margin money against LC/BG limit sanctioned by banks) 400.84 398.39---------------------------------------------- ----------------------------------------------

TOTAL 427.72 477.68=================== ===================

Details of fixed deposits with banks

Name of Bank 2015-16 2014-15

Bank of India 79.48 73.71Federal Bank Ltd 217.27 218.41Industrial Development Bank of India 104.09 106.27

---------------------------------------------- ----------------------------------------------TOTAL 400.84 398.39

=================== ===================

(Rs in Lakhs)

Note - 17 : SHORT TERM LOANS AND ADVANCES As at As at31.03.2016 31.03.2015

a Advances to related parties - 3.61b Others

I. Unsecured, considered gooda. Security deposit 10.95 17.60b. Advance income tax 250.41 322.29c. Cenvat Credit availed 99.78 156.51d. Others 139.94 478.00

---------------------------------------------- ----------------------------------------------TOTAL 501.08 978.01

=================== ===================Provision for Security Deposit Rs. 18,75,145 (Previous Year Rs. 18,75,145)


93

(Rs in Lakhs)

Note - 18 : OTHER CURRENT ASSETS As at As at31.03.2016 31.03.2015

(i) Interest accrued on deposits 9.16 10.80(ii) Other receivables 7.00 17.33

---------------------------------------------- ----------------------------------------------TOTAL 16.16 28.13

=================== ===================

(Rs in Lakhs)

Note - 19 : REVENUE FROM OPERATIONS For the year ended For the year ended31.03.2016 31.03.2015

(i) SALE OF MANUFACTURED PRODUCTS 10,698.82 16,405.44

(ii) OTHER OPERATING INCOMEDuty draw back income - 6.84PROCESS WASTE INCOME 3.82 -Sale- scrap 46.86 59.38Sale of Renewable Energy Certificate 61.17 111.85 40.77 106.99

-------------------------------- --------------------------------10,810.67 16,512.43

Less: excise duty 670.58 952.86---------------------------------------------- ----------------------------------------------

TOTAL 10,140.09 15,559.57=================== ===================

Note - 20 : OTHER INCOMEInterest [Tax Deducted at Source Rs 4.45 Lakhs (Previous year Rs2.61 Lakhs)] 43.74 46.43Dividend Received 4.23 3.64Other Non operating Income 28.71 55.35

---------------------------------------------- ----------------------------------------------TOTAL 76.68 105.42

=================== ===================

Note - 21 : COST OF MATERIAL CONSUMEDRaw material consumed 6,356.72 9,617.13Packing Material Consumed 150.72 167.24

---------------------------------------------- ----------------------------------------------TOTAL 6,507.44 9,784.37

=================== ===================

(Rs in Lakhs)

Consumption of Raw Materials Value Value31.03.2016 31.03.2015

Imported Waste Paper 4,519.76 6,508.92Indigenous Waste Paper 1,412.13 2,373.65Imported Chemicals - -Indigenous Chemical 424.83 734.56

---------------------------------------------- ----------------------------------------------TOTAL 6,356.72 9,617.13

=================== ===================

Percentage Consumption of Raw Materials


31.03.16 31.03.15 31.03.16 31.03.15

Imported 4519.76 6508.92 71.00 68.58Indigenous 1836.96 3108.21 29.00 31.42

------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------TOTAL 6356.72 9617.13 100.00 100.00

================= ================= ================= =================


94

(Rs in Lakhs)

Note - 22 : (INCREASE)/ DECREASE IN STOCK For the year ended For the year ended31.03.2016 31.03.2015

Closing StockFinished Goods 308.64 236.41Stock in Process 15.16 323.80 42.12 278.53

------------------------------------------ ------------------------------------------Less: Opening StockFinished Goods 236.41 124.47Stock in Process 42.12 278.53 80.31 204.78

------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------(Increase)/Decrease in Stock (45.27) (73.75)

================= =================

Note - 23 : EMPLOYEE BENEFIT EXPENSES

Salaries, Wages & Allowance 427.45 588.85Remuneration to Managerial persons 68.92 69.93Bonus 14.76 25.98Gratuity 12.20 (4.72)Leave Encashment (0.37) (11.11)Staff Welfare Expenses 50.63 70.11Employer’s Contribution to PF 16.36 22.07Employer’s Contribution to ESI 12.65 18.45Coolie charges - contract 283.12 364.60Allowances and expenses to contract workers 84.22 138.29Others 4.21 1.71

---------------------------------------------- ----------------------------------------------TOTAL 974.15 1,284.16

=================== ===================

Details of Employee Benefits : Disclosures required under Accounting Standard 15 – Employee Benefits (Revised2005)

a. Defined Contribution Plans : During the Year, the following amounts have been recognised in the Profit and Lossaccount on account of defined contribution plan


Employers Contribution to Provident Fund 16.36 22.07

Employers Contribution to Employee’s State Insurance 12.65 18.45

b. Defined benefit Plans- Gratuity:i. Actuarial Assumptions:

Particulars 31.03.2016 31.03.2015


Ultimate Ultimate



Discount Rate 7.00%p.a 7.00%p.a





95


(Rs in Lakhs)

Particulars 31.03.2016 31.03.2015




Benefits paid (13.20) (18.22)

Actuarial (Gain)/Loss 0.48 (28.23)



Particulars 31.03.2016 31.03.2015


Fair value of Plan Assets at the end of the period



Net Asst/Liability to be recognised in Balance Sheet 63.74 68.29

iv. Expenses recognized in the Profit and Loss Account (Rs in Lakhs)

Particulars 31.03.2016 31.03.2015


Past Service Cost





Net Actuarial (Gain)/Loss recognised in the period 0.48 -28.23

Expenses recognised in the statement of Profit and Loss Account 8.66 -4.72

The above disclosures are based on information furnished by the independent actuary and relied upon by the auditors.The estimates of future Salary increases, considered in the actuarial valuation, takes into account of inflation, seniority,promotion and other relevant factors, such as supply and demand in the employment market.

c. Defined benefit Plans- Leave Plani. Actuarial Assumptions (Rs in Lakhs)

Particulars 31.03.2016 31.03.2015


Ultimate Ultimate



Discount Rate 0.07 7.00%

Inter Valuation leave accrual 24 days per annum 24 days per annum





96


(Rs in Lakhs)





Benefits paid - -

Actuarial (Gain)/Loss (10.19) (23.40)




Present value of obligations at the end of the period (6.80) (7.18)

Fair value of Plan Assets at the end of the period -



Net Asset/Liability to be recognised in Balance Sheet (6.80) (7.18)

Expenses recognised in the Profit and Loss Account (Rs in Lakhs)



Past Service Cost -





Net Actuarial (Gain)/Loss recognised in the period (10.19) (23.40)

Expenses recognised in the statement of Profit and Loss Account (0.37) (11.11)

The above disclosures are based on information furnished by the independent Actuary and relied upon by the auditors.

(Rs in Lakhs)

Note - 24 : FINANCE COST For the year ended For the year ended31.03.2016 31.03.2015

Interest expense 447.93 453.31

Other borrowing cost 133.24 123.21

Applicable net gain/loss on foreign currency transaction/translation 63.58 13.83---------------------------------------------- ----------------------------------------------

TOTAL 644.75 590.35=================== ===================

(Rs in Lakhs)

Note - 25 : DEPRECIATION AND For the year ended For the year ended AMORTIZATION EXPENSES 31.03.2016 31.03.2015


Amortisation 0.70 1.62---------------------------------------------- ----------------------------------------------

TOTAL 328.99 376.81=================== ===================

Impairment on tangible assets of closed down unit at Chalakudy, calculated as per AS 27, amounting to Rs 23,24,999 isdisclosed separately in the Profit & Loss Statement.


97

(Rs in Lakhs)

Note - 26 : OTHER EXPENSES For the year ended For the year ended31.03.2016 31.03.2015

Payment to AuditorAudit Fees 5.60 5.00Auditors Out of pocket Expense 0.20 0.42Fee for other services 0.42 0.58Audit fee for certfication 1.04 -Stores & spares consumed 214.97 393.92Power and fuel 1,934.36 2,621.67Rent 66.36 61.06Repairs and Maintenance- Plant & Machinery 117.38 188.93Repairs and Maintenance- Building 1.03 2.42Insurance charges 22.78 27.57Rates & Taxes 7.49 9.48Discount 191.22 154.99Sales Commision 87.99 85.36Provision for advance 113.59Miscellaneous expenses 508.84 827.22

---------------------------------------------- ----------------------------------------------TOTAL 3,273.27 4,378.62

=================== ===================

CONSUMPTION - STORES AND SPARES


31.03.16 31.03.15 31.03.16 31.03.15

Indigenous 214.97 393.92 100.00 100.00Imported 0 0 - -

------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------Total 214.97 393.92 100.00 100.00

================= ================= ================= =================

Stock - in - process

Particulars Quantity (in MT) Value (Rs. in Lakhs)

31.03.16 31.03.15 31.03.16 31.03.15

Opening 181.8 268.36 42.12 83.31Closing 0.60 181.8 15.16 42.12

Donations to Political Parties (Rs in Lakhs)


CPI (M) - 0.40------------------------------------------ ------------------------------------------

- 0.40================= =================

Value of Imports calculated on C.I.F Basis (Rs in Lakhs)


Raw Material 4,026.97 5,829.32Stores and Spares 8.72 1.83

Expenditure in Foreign Currency: (Rs in Lakhs)


Nil -

Earnings in Foreign Exchange (Rs in Lakhs)


Export of goods on FOB Basis 0.00 389.65


98

Details in respect of related parties pursuant to AS 18




1 Mr S Raj Kumar Key Management Managerial 35.40 35.40Personnel Remuneration(Vice Chairman &Managing Director)


2 Rent 14.81 14.68

3 Mrs Rajee Rajkumar Relative of No transaction - -Key ManagementPersonnel

4 Mr Vignesh Rajkumar No transaction - -

5 Mr Vishakh Rajkumar No transaction - -

6 Mr S SivathanuPillai Sitting Fees - 0.10

7 Mrs E Kamalam Sitting Fees 0.30 0.40

Mr. S. Subramaniam Sitting Fees 0.50 0.40

8 Rent 4.35 4.36

9 Mr. A Ganesh Rent 1.20 1.20

10 Mr. S Giridhar Sitting Fees 0.90 0.90

11. Mr A. Padmanabhan Key Management Remuneration and 17.10 22.80Personnel Allowances(Executive Director)


11 Rent 1.20 6.14

12 Mr. N. Purushotama Prabhu Key Management Remuneration and 6.00 11.79Personnel Allowances(Director- Operations)

13 VVM Rao Key Management Remuneration and 10.42 -Personnel Allowances(Director- Operations)

Sitting Fees 0.10 -

14 Shri Kailash Logistics Limited Enterprises over which Freight Charges 226.05 222.52any person mentionedin 1 to 12 above is ableto exercise significantinfluence

Unsecured Loan - 38.00

Rent 4.80 3.60

15 Carto Packs Purchase of Raw Material 7.94 42.31

16 Sale of Finished Goods 168.85 197.85

17 SreeSakthi Constructions and Civil work 7.35 1.42Infrastructure (P) Ltd

18 Maharaja Continental Trades Ltd Sales Commission 135.72 208.39

19 Sree Giri Packagings Ltd Purchase of Raw Material 1,461.58 2,625.35

20 Verizon Industrial Aids Ltd Purchase of Raw Material 779.93 981.91

Sree Kashyap Surya Energy No transaction - -Equipments Pvt Ltd


99




21 Jala Shaayi Alamparathodu Subsidiary Advance 1.11 0.23Hydro Power Ltd Company



22 Sree Kailas Palchuram Advance 1.82 0.50Hydro Power Ltd



Sree Adi Sakthi Mukkuttathode Advance 1.14 0.53Hydro Power Ltd



Earnings per share:The company reports basic and diluted Earnings per Share in accordance with AS 20. Basic Earnings per equity share havebeen computed by dividing net profit after tax by the weighted average number of equity shares outstanding at the end ofthe year. Diluted Earnings per share have been computed using the weighted average number of equity shares and potentialequity shares outstanding at the end of the year.

(Rs in Lakhs)


Profit after tax (in Rs in Lakhs.) (1,695.14)

Less: Cumulative preference dividend not provided (135.40) (1,830.54) (1,310.10)--------------------------------------------

Weighted average number of shares used as denominatorfor calculating basic and diluted earning per share 16,436,217.00 16,436,217.00

Nominal value of shares (Rs.) 10.00 10.00

Basic and diluted earnings per share (Rs.) (11.14) (7.97)

Note - 27 : CONTINGENT LIABILITIES NOT PROVIDED FORa) Unexpired Contracts for Capital Expenditure : Rs 278 lakhs (Previous year Rs 278 Lakhs)

b) Usance Letter of credit remaining unpaid as on 31.03.2016 amounts to Rs 2361 Lakhs (Previous years Rs.2585.86Lakhs)

c) Guarantee given by bank on behalf of the Company Rs 118.00 Lakhs (Previous year Rs 133.32 Lakhs)

d) Amount of Income tax liabilities disputed in appeal Rs.38.21 lakhs (Previous year Rs 38.61 Lakhs)

e) Additional claims of electricity charges disputed Rs 2.80 Lakhs (Previous year Rs 2.80 lakhs)

f) Sales Tax demand disputed under appeal is Rs. 15.48(Previous year 15.48 Lakhs)

g) Excise duty disputed under appeal Rs 350.79 Lakhs (previous year Rs 143.78 Lakhs)

h) Claim towards water charge raised by Kerala Water Authority for Rs 78.42L disputed in appeal (Previous year Rs 78.42Lakhs)

i) Acturial valuation of gratuity is presently based on the retirement age of 55 years. The Union has filed a case beforeKerala High Court for increasing the retirement age to 58. Impact on provision for gratuity, if the case is decided againstthe Company,has not been ascertained.

j) Customs duty liability of Rs 58.79 Lac (P Y Rs 58.79 Lac) under EPCG claim

k) Arrears of non - convertible cumulative preference dividend is Rs 26.69 Lac (PY Rs131.96)

Details of Provisions Pursuant to Accounting Standard – 29 – Provisions, Contingent Liabilities and ContingentAssets

Provision made Utilized duringOpening Balance Closing Balanceduring the year the year

01.04.15 01.04.14 2015-16 2014-15 2015-16 2014-15 31.03.16 31.03.15

Sundry Debtors 162.34 92.35 73.07 90.00 20.01 235.41 162.34

Income tax 244.6 197.28 1.47 47.32 168.94 - 77.13 244.60

Proposed Dividend - 98.62 - - - 98.62 0 -

Corporate Dividend tax (25.14) 16.76 - 16.76 16.76 - -

Gratuity & Leave encashment 112.95 112.95 - (37.47) 42.39 4.34 70.56 112.95

Capital Advances - - 83 - - - 83 -

Investment - - 21.48 - - - 21.48 -






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SREE SAKTHI PAPER MILLS LTD.Regd. Office : Sree Kailas, 57/2993

Paliam Road, Cochin - 682 016www.sreekailas.com, E-mail: [email protected]

ATTENDANCE SLIP

TO BE HANDED OVER AT THE ENTRANCE OF THE MEETING HALL

NAME OF THE SHAREHOLDER (IN BLOCK LETTERS) :

MEMBER’S FOLIO/ID No. :

NAME OF THE PROXY (IN BLOCK LETTERS) :

(To be filled in if the proxy attends instead of the member) :

No. of shares held .......................................................................................

I hereby record my presence at the 25th Annual General Meeting of the members of Sree Sakthi Paper Mills Limited held on30th December 2016 at 2:00 p.m. at Hotel Abad Plaza, M.G. Road, Ernakulam, Cochin - 35.

Members / Proxy Signature

Note: A member / proxy attending the meeting must complete this Attendance Slip and hand it over at the entrance

SREE SAKTHI PAPER MILLS LTD.Regd. Office : Sree Kailas, 57/2993

Paliam Road, Cochin - 682 016www.sreekailas.com, E-mail: [email protected]

PROXY FORM

I / We ...............................................................................................................................................................................................

of ................................................................................................. being a Member/Members of Sree Sakthi Paper Mills Ltd.

hereby appoint ............................................................................................................................................................................

of ................................................................................... or failing ............................................................... of ................................

or failing ................................................................... of ................................................................. as my / our proxy to attend

and vote for me/us on my/our behalf at the 25th Annual General Meeting of the Company to be held on 30th December 2016at 2.00 p.m. at Hotel Abad Plaza, M.G. Road, Ernakulam and at any adjournment thereof.

Signed this ...................... day of ...................... 2016

Signature ......................................................................

Note: The proxy form must be returned so as to reach the Registered Office of the Company, Sree Kailas, 57/2993, PaliamRoad, Cochin - 16 not less than forty eight hours before the time for holding the aforesaid meeting. The proxy need not bea member of the Company.

AffixOne Rupee

RevenueStamp

If Undelivered Please Return to

SREESAKTHIPAPERMILLSLTD.Regd.Office: Sree Kailas, 57/2993 Paliam Road, Cochin - 682016

25€¦ · 12th November 2016 Company Secretary NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE, AT...

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Transcript of 25€¦ · 12th November 2016 Company Secretary NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE, AT...