SREE SAKTHI PAPER MILLS LIMITED CIN:L93000KL1991PLC006207

Regd Office : “Sree Kailas”,57/2993-94, Paliam Road, Ernakulam, Cochin- 682 016

Phone: (0484) 2382182, E-mail: sreesakthi@sreekailas.com

03 October 2018

Department of Corporate Services,

The Bombay Stock Exchange Ltd,

P J Towers, Dalal Street,

Mumbai – 400 001

Dear Sir,

Sub: Submission of Annual Report pursuant to Regulation 34 of the SEBI (Listing

Obligations and Disclosure Requirement) Regulations, 2015

Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations and

Disclosure Requirements) Regulation 2015, please find enclosed the Annual Report for

the financial year ended 31st March, 2018, which has been duly approved and adopted

by the members of the Company as per the provisions of the Companies Act, 2013 at the

27th Annual General Meeting of the Company held on Saturday, 29th September, 2018.

Kindly take the same into your records.

Thanking you,

Yours Faithfully,

For Sree Sakthi Paper Mills Ltd

R. Ponnambalam

Company Secretary

Encl: as above.

SREE SAKTHI PAPER MILLS LIMITED

27TH ANNUAL REPORT

2017-18

1

CONTENTS

Corporate Information 1

Financial Highlights 2

Notice 3-12

Directors’ Report 13-53

Independent Auditor’s Report 54-60

Balance Sheet 61

Statement of Profit & Loss 62

Notes on Financial Statements 63-91

Cash Flow Statement 92

Form AOC - 1 93-94

Independent Auditor’s Report 95-98

on Consolidated Financial Statements

Consolidated Financial Statements 99-129

BOARD OF DIRECTORS Dr. S. Rajkumar, Vice Chairman & Managing

Director

Mrs. RajeeRajkumar, Non-Executive Director

Mr. S. Subramoniam, Non- Executive Director

Mrs. E. Kamalam, Women Director

Mr. G. Raghavan, Independent Director

Mr. N. Subramanian, Independent Director

Mr. U. GururajaBhat, Independent Director

Mr. AkhileshAgarwal – Non-Executive Director

CHIEF FINANCIAL OFFICER

Mr. V.N. Sridharan

COMPANY SECRETARY Mr. R. Ponnambalam

AUDITORS M/s. KPR& Co. 31/181 D, Anantha, Mahakavi G. Road Karikkamuri, Cochin - 682 011

BANKERS Federal Bank Limited

IDBI Bank Limited

State Bank of India

REGISTERED OFFICE 57/2993, “Sree Kailas” Paliam Road

Ernakulam, Cochin - 682 016, Kerala

Tel: 0484-3002000 Fax: 0484-2370395

E-mail:secretary@sreekailas.com

Web: www.sreekailas.com

FACTORIES Kraft Paper Unit 1 and 2 (Closed in June 2016)

Industrial Development Area

Muppathadom, Edayar, Aluva - 683 102

2

FINANCIAL HIGHLIGHTS (8 YEARS) Rs. In lakhs

Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Sales (Gross) 19,081.81 20,837.99 21,766.94 21,554.41 16,405.45 10,698.82 2,400.67 26.89

Sales (Net) 18,292.83 19,792.31 20,505.57 20,306.81 15,559.7 10,140.09 2,782.31 27.25

Total Income 18,356.74 19,837.31 20,565.49 20,443.01 15,660.39 10,212.02 2,894.05 1,156.48

Profit before tax 1,052.75 1,023.57 702.9 143.26 -1,528.71 -1,762.8 -4,244.94 -1,039.82

Profit after tax 701.333 660.33 469.12 116.08 -1,178.14 -1,694.95 -3,658.14 -767.43

Earnings per Share 4.27 4.02 2.85 0.071 -7.79 -11.14 -23.08 -5.43

Dividend Rate (%) 21 21 15 6 - - - -

Reserves & Retained Earnings 2,309.61 2,568.79 2,749.47 2,750.18 1,509.61 -185.33 -3,843.47 -4,431.65

Share Capital 1,643.62 1,643.62 1,643.62 1,643.62 2,643.62 2,643.62 2,643.62 1,729.62

Shareholders’ Funds 3,953.24 4,212.41 4,393.09 4,393.08 4,253.23 2,458.29 -1,199.85 -2,702.03

Fixed Assets(Gross Block) 7,748.46 10,357.61 10,838.2 10,985.32 11,182.37 9,192.51 1,638.70 1,069.51

Fixed Assets(Net Block) 5,287.67 7,472.88 7,451.11 7,145.04 5,835.68 5,502.81 965.80 770.11

3

NOTICE

Notice is hereby given that the 27th

Annual General Meeting of

the Company will be held on Saturday 29th

September, 2018 at

2.00 p.m, at Hotel Abad Plaza M.G.Road, Ernakulam, Cochin - 35

to transact the following business.

ORDINARY BUSINESS

1. To receive, consider and adopt the audited financial

statements (both standalone and consolidated financial

statements) for the financial year ended 31st March, 2018 and

the Report of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Subramoniam

Sivathanupillai (DIN-01790968), Director, who retires by rotation

in accordance with section 152 of the Companies Act, 2013 and

being eligible, offers himself for re-appointment.

SPECIAL BUSINESS

3. Regularisation of Mrs. Rajee Rajkumar (DIN: 363280) as

Director of the Company

To consider and if thought fit, to pass with or without

modification(s), the following resolution as an Ordinary

Resolution:

"RESOLVED THAT pursuant to the provisions of Section 161(1) of

the Companies Act, 2013 and Articles of Association of the

company, Mrs. RajeeRajkumar (DIN: 363280) who was appointed

as an Additional Director at the meeting of the Board of Directors

of the Company held on 2nd

February, 2018and whose term

expires at the ensuing Annual General Meeting of the company

and be and is hereby appointed as a Director of the Company

whose period of office will be liable to determination by

retirement of directors by rotation"..”

4. Approval for related party transactions

To consider and if thought fit, to pass with or without

modification(s), the following resolution as an Ordinary

Resolution:

“RESOLVED THAT pursuant to the provisions of Section 188 and

other applicable provisions of the Companies Act, 2013 read with

the rules made there under (including any statutory

modification(s) or re enactment thereof for the time being in

force), the consent of the Company be and is hereby accorded to

enter into the related party transactions by the Company with

the respective related parties and for the maximum amounts per

annum for the financial year 2018-19 as mentioned herein below:

Particulars

of Parties

Nature of

Transaction

Nature of

Relationship

Annual

Amount

(Rs. Lacs)

Visakh

Homes

Limited

Repairs and

Modification

for Warehouse

Mr.S.Rajkumar

holds the

directorship 250.00

Visakh

Homes

Limited

Commission for

marketing

warehouse

Mr.S.Rajkumar

holds the

directorship 100.00

5. Change in name of the company

To consider & if thought fit, to pass, with or without

modification(s), following resolution as SPECIAL RESOLUTION:

“RESOLVED THAT pursuant to Section 13 and all other applicable

provisions, if any, of the Companies Act, 2013 (including any

statutory modification or re-enactment thereof, for the time

being in force) and Rule 29 of the Companies (Incorporation)

Rules, 2014, subject to approval of the Central Government

(power delegated to Registrar of Companies) and any other

Regulatory Authorities as may be necessary, consent of the

members be and are hereby accorded to change the name of the

Company from “SREE SAKTHI PAPER MILLS LIMITED” to “CELLA

SPACE LIMITED” as may be approved by the Central Government,

Registrar of Companies, Kerala and other Regulatory Authorities,

whether under the Companies Act, 2013 or any other Rules,

Laws, Acts, Statutes or Regulations as may be applicable to the

Company.

FURTHER RESOLVED THAT the Name Clause being Clause I in the

Memorandum of Association of the Company be altered

accordingly and substituted by the following clause:

I. The Name of the Company is CELLA SPACE LIMITED.

FURTHER RESOLVED THAT in terms of Section 14 of the

Companies Act, 2013 the Articles of Association of the Company

be altered by deleting the existing name of the Company

wherever appearing and substituting it with the new name of the

Company.

FURTHER RESOLVED THAT the Board of Directors or any

Committee thereof be and is hereby authorized to accept any

other name approved by the relevant Regulatory Authorities and

seek approval for the change in the name of the Company

accordingly without making any further reference to the

members for their approval.”

4

6. To re-appoint Dr. S. Rajkumar (DIN 01790870) as Managing

Director.

To consider and if thought fit, to pass, with or without

modification the following resolution as an Ordinary Resolution

“RESOLVED THAT in accordance with the provisions of Sections

196, 197 and 203 read with Schedule V and all other applicable

provisions, if any, of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial Personnel) Rules,

2014 (including any statutory modification(s) or re-enactment

thereof, for the time being in force) and subject to such consents

and permissions, as may be required, approval of the Members

of the Company be and is here accorded for re-appointment Dr.

S. Rajkumar (holding DIN 01790870), as the Managing Director of

the Company, for a period of 1 (One) years with effect from 13th

August, 2018, on such terms and conditions as set out in this

resolution and the explanatory statement annexed hereto and

payment of such remuneration, as may be determined by the

Board or a duly constituted Committee thereof, from time to

time, within the maximum limits of remuneration for Managing

Director approved by the Members of the Company .

7.Appointment of Mr. UliarGururajaBhat (DIN 00353361) as an

Independent Director

To consider and if thought fit, to pass with or without

modification(s), the following resolution as anSpecial Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149 and

152 read with Schedule IV and other applicable provisions, if any,

of the Companies Act, 2013 (“the Act”) and the Companies

(Appointment and Qualification of Directors) Rules, 2014 and the

applicable provisions of the Securities and Exchange Board of

India (Listing Obligations and Disclosure Requirements)

Regulations, 2015 (including any statutory modification(s) or re-

enactment(s) thereof, for the time being in force), Mr.

UliarGururajaBhat (holding DIN 00353361), who was appointed

as an Independent Director and who holds office of Independent

Director up to the date of this Annual General Meeting and being

eligible, and in respect of whom the Company has received a

notice in writing under Section 160 of the Act from a member

proposing his candidature for the office of Director, be and is

hereby re-appointed as an Independent Director of the Company,

not liable to retire by rotation and to hold office for a second

term of 5 (five) consecutive years on the Board of the Company.”

By order of the Board of Directors For SreeSakthi Paper Mills Limited

Sd/-

Chennai -17 R. Ponnambalam August 13, 2018 Company Secretary

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE, AT THE

MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND

VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A

MEMBER OF THE COMPANY.

2. The instrument appointing proxy (duly completed, stamped

and signed) in order to be effective must be deposited at the

registered office of the company not less than 48 hours before

the commencement of the 27th

Annual General Meeting of the

Company.

3. Corporate Members intending to send their authorised

representatives to attend the Meeting are requested to send a

duly certified copy of Board Resolution on the letterhead of the

Company, signed by one of the Directors or Company Secretary

or any other authorized signatory and / or duly notarized Power

of Attorney, authorizing their representatives to attend and vote

on their behalf at the Meeting.

4. With effect from 1st April 2014, inter alia, provisions of Section

149 of Companies Act, 2013 has been brought into force. In

terms of the said section read with section 152 (6) of the Act, the

provisions of retirement by rotation are not applicable to

Independent Directors. Profile of directors seeking re-

appointment as stipulated in terms of Securities and Exchange

Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015 with the stock exchanges is provided in the

report on corporate governance, which forms an integral part of

this annual report.

5. The Register of Members and Share Transfer books of the

Company will remain closed from 20-09-2018 to 29-09-2018

(both days inclusive).

6. All documents referred to in the accompanying Notice and the

Explanatory Statement shall be open for inspection at the

Registered Office of the Company during normal business hours

(9.30 am to 5.30pm) on all working days except Saturdays, up to

and including the date of the Annual General Meeting of the

Company.

7. Shareholders are requested to bring their copy of the Annual

Report to the meeting.

8. Members/Proxies should fill the attendance slip for attending

the Meeting.

9. Members who hold shares in dematerialized form are required

to write their client ID and DPID numbers, and those who hold

shares in physical form are requested to write their Folio number

in attendance slip for attending the meeting.

5

10. The information on the Directors appointment or

reappointment is provided as per Securities and Exchange Board

of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015 and is given in the Corporate Governance

Section of this Annual Report.

11. Under the provisions of the Companies Act, 2013, the amount

of dividend remaining unpaid or unclaimed for a period of seven

years from the due date is required to be transferred to the

Investor Education and Protection Fund (IEPF), constituted by the

Central Government. The details of Unclaimeddividend /Interest

transferred to IEPF for the last 10 years are as follows.

Year Dividend / interest(Rs.) Date/Due date of transfer to IEPF

a/c Date of filing of form INV-1/IEPF-1

2007-08 1,34,835 04-12-2015 04-12-2015

2008-09 1,50,087 04-05-2017 11-05-2017

2009-10

Interim 1,63,742 29.06.2017 21-07-2017

Final 91,098 09.10.2017 NA

2010-11

Interim 1,02,524 01.01.2018 NA

Final 1,12,650.2 02.10.2018 NA

2011-12 2,15,111.7 02.09.2019 NA

2012-13 1,49,506.5 12.10.2020 NA

2013-14 1,05,349.2 31.10.2021 NA

2014-15 Not declared NA

2015-16 Not declared NA

2016-17 Not declared NA

Those members who have not encashed their dividend warrants

for the financial year 2010-11 onwards may lodge a claim with

the Company immediately especially relating to the year 2010-11

as the unpaid dividend for the said year is due to be remitted into

I.E.P Fund by 02nd

October, 2018.

12. Copies of the Annual Report 2018 are being sent by electronic

mode only to all the members whose email addresses are

registered with the Company / Depository Participant(s) for

communication purposes unless any member has requested for a

hard copy of the same. For members who have not registered

their email addresses, physical copies of the Annual Report 2018

are being sent by the permitted mode.

13. The Securities and Exchange Board of India (SEBI) has

mandated the submission of the Permanent Account Number

(PAN) by every participant in the securities market. Members

holding shares in electronic form are, therefore, requested to

submit their PAN to their Depository Participant(s). Members

holding shares in physical form shall submit their PAN details to

the Company / M/s. Bigshare Services Pvt. Ltd

14. Members holding shares in electronic form are requested to

intimate immediately any change in their address or bank

mandates to their Depository Participants with whom they are

maintaining their demat accounts. Members holding shares in

physical form are requested to advise any change in their address

or bank mandates immediately to the Company / M/s. Bigshare

Services Pvt. Ltd.

15. A Statement pursuant to Section 102 (1) of the Companies

Act, 2013 relating to Special Business to be transacted at the

meeting is annexed hereto.

6

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

as under:

(i) Pursuant to the provisions of Section 108 and other applicable

provisions, if any, of the Companies Act, 2013 and the Companies

(Management and Administration) Rules, 2014, as amended and

Regulation 44 of the Securities and Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations,

2015 the Company is pleased to provide to its members facility to

exercise their right to vote on resolutions proposed to be passed

in the Meeting by electronic means. The members may cast their

votes using an electronic voting system from a place other than

the venue of the Meeting (‘remote e-voting’).

(ii) The members who have cast their vote by remote e-voting

may also attend the Meeting but shall not be entitled to cast

their vote again.

(iii) The Company has engaged the services of Central Depository

Services Limited (“CDSL”) as the Agency to provide e-voting

facility.

(iv) TheBoard of Directors of the Company has appointed Mr.

Adv. Vijayaraghavan, as Scrutinizer to scrutinize the Venue Voting

and remote e-voting process in a fair and transparent manner

and they has communicated their willingness to be appointed

and will be available for same purpose.

(v) Voting rights shall be reckoned on the paid-up value of shares

registered in the name of the member / beneficial owner (in case

of electronic shareholding) as on the cut-off date i.e. 20/09/2018

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

or in the register of beneficial owners maintained by the

depositories as on the cut-off date, i.e. 20/09/2018 only shall be

entitled to avail the facility of remote e-voting / Venue Voting.

(vii) The voting period begins on 26/09/2018 at 09.00 AM and

ends on 28/09/2018 at 05.00 PM. During this period

shareholders’ of the Company, holding shares either in physical

form or in dematerialized form, as on the cut-off date (record

date) of 20/09/2018 may cast their vote electronically. The e-

voting module shall be disabled by CDSL for voting thereafter.

(viii) Shareholders who have already voted prior to the meeting

date would not be entitled to vote at the meeting venue.

(ix) The Scrutinizer, after scrutinizing the votes cast at the

meeting and through remote e-voting, will, not later than three

days of conclusion of the Meeting, make a consolidated

scrutinizer’s report and submit the same to the Chairman. The

results declared along with the consolidated scrutinizer’s report

shall be placed on the website of the Company

www.sreekailas.com and on the website of CDSL

www.evotingindia.com. The results shall simultaneously be

communicated to the Stock Exchanges.

(x) Subject to receipt of requisite number of votes, the

Resolutions shall be deemed to be passed on the date of the

Meeting, i.e. 29th

September , 2018.

(xi) Instructions and other information relating to 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 ID followed by 8 Digits

Client ID,

iii. Members holding shares in Physical Form should

enter Folio Number registered with the Company.

d) Next enter the Image Verification as displayed and Click

on Login.

e) If you are holding shares in demat form and had logged

on to www.evotingindia.com and voted on an earlier

voting of any company, then your existing password is

to be used.

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

For Members holding shares in Demat Form and Physical Form

7

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for 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 8 digits of the sequence number in the PAN field.

In case the sequence number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with sequence number 1 then enter RA00000001 in the PAN field.

Dividend Bank Details OR Date of Birth (DOB)

Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded 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 enter the member id / folio number in the Dividend Bank

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

h) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in

demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new

password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company

on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to

share your password with any other person and take utmost care to keep your password confidential.

i) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

j) On successful login, the system will prompt you to select the E-Voting Sequence Number for SreeSakthi Paper Mills Limited.

k) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option

YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the

Resolution.

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

m) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to

confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

n) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

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

p) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and click on Forgot

Password & enter the details as prompted by the system.

(xiii) Note for Non – Individual Shareholders and Custodians

a) Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com

and register themselves as Corporates.

b) A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to

helpdesk.evoting@cdslindia.com.

c) After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User

would be able to link the account(s) for which they wish to vote on.

d) The list of accounts linked in the login should be mailed to helpdesk.evoting@cdslindia.com and on approval of the accounts they

would be able to cast their vote.

e) A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any,

should be uploaded in PDF format in the system for the scrutinizer to verify the same.

f) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting

manual available at www.evotingindia.com, under help section or write an email to helpdesk.evoting@cdslindia.com / Toll Free No:

18002005533.

By order of the Board of Directors For Sree Sakthi Paper Mills Limited

Sd/-

Chennai -17 R. Ponnambalam August 13, 2018 Company Secretary

Information for reappointment / appointment of Directors as required under Regulation 36 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulation, 2015

8

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

Mr. S Subramoniam 28.05.1957 03.08.1995 -

Qualification: Graduate

Experience:Experience More than 27 years experience in cement and transport business. He is in the Board of the Company since 1995

Details of Directorship in other companies – SreeSakthi Constructions & Infrastructure Ltd, Sree Kailash Palchuram Hydro Power

Limited, SreeAdisakthiMukkuttathode Hydro Power Limited and Jalashaayi Alamparathode Hydro Power Limited

Status in other Board Committees of the company – NIL

Relationships between directors inter-se:-

Son of Ms. E Kamalam& Brother of Dr. Rajkumar, Directors of the Company

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

Mrs. RajeeRajkumar 10.06.1969 02.02.2018 285544

Qualification: Graduate

Experience: Has been involved in the activities of the Company for the past 10 years

Details of Directorship in other companies – ShriKailash Logistics (Chennai) Limited

Status in other Board Committees of the company – NIL

Relationships between directors inter-se:-

Wife of Mr. S.Rajkumar, Managing Director of the Company

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

Mr. S. Rajkumar 15.10.1958 11.07.2011 84,52,995

Qualification: Post Graduation

Experience

Dr. S. Rajkumar has been in the service of the Company as Managing Director since the incorporation of the Company in 1991. He has

been instrumental in setting up of Kraft paper unit at Edayar which commenced the commercial production in the year 1993 and

Duplex Board unit at Chalakudy which commenced the commercial production in the year 1995. Besides he has taken considerable

strain and responsibility in setting up the 3rd unit at Edayar which commenced commercial production in the year 2007. For setting up

this 3rd unit he has successfully mobilised Funds through public issue of shares and Company’s shares were listed in BSE. Dr S. Rajkumar

is 60 years old and has wide experience in marketing management and administration and has in depth knowledge of Paper Industry.

Over the last 27 years he has steered the Company successfully and consistently made profits even when the Paper industry is facing

depressed conditions by adopting cost control measures. Since the inception of the Company he has taken effective steps to increase

the production capacity gradually and under his leadership Company has reached as one of the leading manufacturers of Kraft Paper in

South India with installed capacity of 85000 MT per year.

Details of Directorship in other companies –Sree Kailash Palchuram Hydro Power Limited, SreeAdisakthiMukkuttathode Hydro Power

9

Limited and JalashaayiAlamparathode Hydro Power Limited, Shree Sakthi Industrial Park Limited, Visakh Homes Limited, ShriKailash

Logistics (Chennai) Limited.

Status in other Board Committees of the company – Chairperson of the Stakeholders Relationship Committee, Chairperson of CSR

Committee, Chairperson of Share Allotment Committee

Relationships between directors inter-se

Son of Mrs. E Kamalam, Brother of Mr. S Subramoniam, Directors and Husband of Mrs. RajeeRajkumar, Director of the Company

Name of Director

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

Mr. U. GururajaBhat 15.04.1938 23.02.2017 50

Qualification - Graduate in Science & Mathematics and Degree in Mechanical Engineering

Experience: Twenty Five (25) years experience in Paper Mill Maintenance, Projects covering Development Activities and Expansion of

the mill involving Engineering, procurement and construction activities – Thirty Two (32) years experience in Managing large scale

projects involving co-ordination of all phases of engineering, procurement, construction, start up and commencing activities of pulp &

paper Mills in India.

Details of Directorship in other companies - Emami Paper Mills Ltd., SPB Projects & Consultants Limited

Status in other Board Committees of the company

Member of the Audit Committee and Nomination, Shareholders relation Committee, Risk Management Committee and Remuneration

Committee

Relationships between directors inter-se- Not related to any other directors of the Company.

ROUTE MAP TO REACH THE VENUE OF ANNUAL GENERAL MEETING Venue: Hotel Abad Plaza, M.G. Road, Cochin - 35

10

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

Item No. 3

The Board of Directors of the Company on 2nd

February 2018,

have appointed Mrs. RajeeRajkumar (DIN:00363280) as

Additional Director of the Company , in terms of Section 161 of

the Companies Act, 2013. Pursuant to Section 161 of the

Companies Act, 2013 the above director holds office up to the

date of theensuing Annual General Meeting. In this regard the

Company has received notice in writing from a member along

with the deposit of requisite amount under section 160 of the

Act, proposing the candidature of Mrs. RajeeRajkumar for the

office of Director of the Company, to be appointed as such under

the provisions of Section 152 of the Companies Act, 2013.

The Company has received (i) consent in writing to act as Director

in Form DIR 2 pursuant to Rule 8 of the Companies (Appointment

& Qualification of Directors) Rules, 2014; (ii) intimation in Form

DIR 8 pursuant to Rule 14 of the Companies (Appointment &

Qualification of Directors) Rules, 2014 from Mrs.

RajeeRajkumarto the effect that he is not disqualified in

accordance with sub-section (2) of Section 164 of the Companies

Act, 2013.

A copy of the draft letter of appointment, setting out the terms

and conditions of appointment of Mrs. RajeeRajkumar, is

available for inspection, without any fee, by the members at the

Company’s registered office during normal hours on working days

up to the of the AGM.

Mrs. RajeeRajkumar holds 285544 equity shares in the Company.

Mr. Rajkumar, Mr. S. Subramoniam and Mrs. E.Kamalam being

related to Mr. RajeeRajkumar interested in the resolution

mentioned in item no.03 of the notice. None of the other

directors of the Company is in any way concerned or interested in

the resolution. Accordingly, yours Directors recommend this

resolution for your approval.

Item No. 4

The Companies Act, 2013 aims to ensure transparency in the

transactions and dealings between the related parties of the

Company. The provisions of Section 188(1) of the Companies Act,

2013 that govern the Related Party:

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

b) Selling or otherwise disposing of, or buying, property of

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 of

goods, materials, services or property;

f) such related party's appointment to any office or place

of profit in the company, its subsidiary company or

associate company; and

g) underwriting the subscription of any securities or

derivatives thereof, of the company

In the light of provisions of the Companies Act, 2013, the Board

of Directors of your Company has approved the proposed

transactions along with annual limit that your Company may

enter into with the related parties (as defined under section 2(76)

of the Companies Act, 2013)

The particulars of the transaction pursuant to the provisions of

Section 188 and the Companies (Meetings of Board and its

Powers) Rules, 2014 are as under:

Transactions, requires that for entering into any contract or

arrangement as mentioned herein below with the related party,

the Company must obtain prior approval of the Board of

Directors and in case of the Company, prior approval of the

shareholders by way of an Ordinary Resolution must be obtained

in case of transactionsexceeding 10% of the turnover of the

Companyexceeding 10% of the net worth of the

Companyexceeding 10% of the networth; or exceeding 10% of

turnover of the company; or 100 crores whichever is lower.

exceeding 10% of turnover or; Rs.50 crores whichever is

lower

Monthly remuneration exceeding Rs. Two and half

lakhs

exceeding 1% of net worth.

(1) Name of the Related Party:

(2) Name of the Director or Key Managerial Personnel who is

related, if any: As provided in table below

(3) Nature of Relationship:

(4) Nature, material terms, monetary value and particulars of the

contract or arrangement: The details are as mentioned below:

11

(Rs. In Lakhs)

Sl.No

.

Particulars of Parties Nature of Transaction Nature of Relationship Proposed Amount

per annum

1

Visakh Homes Limited

Repairs and Modification for

Warehouse

Mr.S.Rajkumar holds the

directorship 250.00

2

Visakh Homes Limited

Commission for marketing

warehouse

Mr.S.Rajkumar holds the

directorship 100.00

The Company is in existence more than twenty years and major

related party transactions developed over the years are generally

with its associates. The related party transactions are entered

into based on consideration of various business exigencies such

as synergy in operations and sale and transport of finished goods

and also keeping in view of Company’s long term strategy for

assured supply of raw material-waste paper and dispatch of

finished goods without any hindrance.

The respective agreements are negotiated on arm’s length basis

and are intended to further the Company’s interests. The Board

had considered all relevant factors in entering into the

arrangements.

The Copies of the above mentioned existing agreements shall be

available for inspection by the members at the Registered Office

of the Company during the normal business hours (10 am to 5.30

pm) on all working days (except Saturdays) upto the date of

Annual General Meeting of the Company.

The members are further informed that no member/s of the

Company being a related party or having any interest in the

contract or arrangement as set out at item No. 04 shall be

entitled to vote on this special resolution.

The Board of Directors recommends the resolution set forth in

item No. 04 for approval of the Members.

Except the Directors and their relatives (to the extent of their

interest in each contract as specified above), no other director or

Key Managerial Personnel or their relatives, is concerned or

interested, financially or otherwise, in passing of this resolution.

Item No. 5

The members may note that the Paper manufacturing Unit I & II

at Edayar was closed down in June, 2016 in pursuance of

Pollution Control Board order. The Board of Directors of the

Company considered the feasibility report for resuming

production activities but found it not viable. Therefore the Board

of Directors have decided to discontinue the paper operations

and to diversify into a new line of business viz., logistics,

warehousing, cold storage and industrial parks. In this connection

the Company has obtained Shareholders approval by way of

Postal Ballot to alter the Main Object Clause of the Memorandum

of Association of the company so as to enable the company to

carry on the above business.

The name of the company is desired to be changed to reflect the

true nature of the Business. Therefore the Board of directors

have decided to change the name of the Company from “SREE

SAKTHI PAPER MILLS LIMITED” to “CELLA SPACE LIMITED”.

The proposed change of name will not affect any of the rights of

the Company or of the shareholders/stakeholders of the

Company. All existing share certificates bearing the current name

of the Company will, after the change of name, continue to be

valid for all purposes.

As per the provisions of Sections 13 of the Companies Act, 2014,

approval of the shareholders is required to be accorded for

changing the name of the Company & consequent alteration in

the Memorandum of Association and Articles of Association by

way of passing a Special Resolution.

Hence, the resolution is put up for shareholders approval.

None of the directors, Key Managerial Personnel and their

relatives is concerned or interested in the aforesaid resolution,

except to the extent of their shareholding in the Company, if any.

Item No. 6

Dr. S. Rajkumar is Managing Director of the Company since

inception and his last tenure of appointment was for a period of

01 years w.e.f. 14.08.2017 to 13.08.2018. At the meeting of

Board of directors of the company held on 13th

August 2018, it

was decided to reappoint Dr. S. Rajkumar as Managing Director

for further period from the expiry date of the present tenure.

The Nomination and Remuneration Committee had met on 13th

August 2018 and after evaluating as required under the

provisions of new Companies Act, 2013 has recommended the re

appointment of Dr S. Rajkumar as Managing Director for a period

of one year from 14th

August, 2018 and lieu of company running

12

in loss and considering the financial constraints recommended

NIL remuneration.

Term and conditions of his appointment are as under;

1.Tenureof office:

2. Salary & Perquisites :

One year

wef 14/8/2018 to

13/8/2019

NIL

Mr.S.Subramoniam, Mrs.RajeeRajkumar and MrsE.Kamalam

being related to Dr. S. Rajkumar interested in the resolution

mentioned in item no.06 of the notice. None of the other

directors of the other directors of the Company is in any way

concerned or interested in the resolution. Accordingly, yours

Directors recommend this resolution for your approval.

Item No. 7

Your Board is of the opinion that Mr. U G Bhat, Director fulfill the

conditions specified in the Act for reappointment as Independent

Directors of the Company. Details in respect of director who are

proposed to be appointed as Independent Director, is furnished

in the Corporate Governance section of the Annual Report. Mr.U

G Bhat eminent personalities in his respective fields. Your Board

considers that his continued association with the Company would

be of immense benefit to the Company. In view thereof, your

Board has recommended him to be classified as Independent

Director.

The classification of the aforementioned director also as

Independent Directors pursuant to Section 149 of the Companies

Act, 2013 read with Rules made thereunder, with his respective

term of office to be for respective periods as mentioned in the

resolutions years with effect from this Annual General Meeting.

Concerned Director is interested in his respective resolutions

being related to his own appointment. Other than the aforesaid,

none of the Directors and Key Managerial Personnel of the

Company and their relatives are concerned or interested in the

resolutions as set out in item Nos. 7 of the accompanying notice.

None of the directors are related inter se to each other. This

explanatory statement may also be regarded as a disclosure

under clause 49 of the listing agreement with the Stock Exchange.

By order of the Board of Directors

For SreeSakthi Paper Mills Limited Sd/-

Chennai -17 R. Ponnambalam August 13, 2018 Company Secretary

13

DIRECTOR’S REPORT

Your Directors have pleasure in presenting their 27th

Annual Report and

the Audited Financial Statements of the Company for the year ended 31st

March 2018.

FINANCIAL PERFORMANCE

Brief Financial Highlights with comparison of previous financial year are as

follows:

( Rs. Lacs)

Particulars For the year

ended

31.03.2018

For the year

ended

31.03.2017

Sales (Gross) 26.89 2289.26

Add: Excise Duty 0.36 111.41

Sales (Net) 27.25 2400.67

Operation Profit/Loss (1297.46) (3561.90)

Interest and Finance 213.97 570.47

Depreciation 73.07 138.48

Profit Before Tax (1039.82) (4270.85)

Provision for Tax 0.00 0.00

Profit After Tax (767.43) (3684.05)

Balance of Profit brought forward (767.43) (3684.05)

Amount available for

appropriation

(902.83) (3819.45)

Appropriation

General Reserve 0.00 0.00

Proposed Dividend & tax on

Dividend

0.00 0.00

Retained profit carried to Balance

Sheet

0.00 0.00

OPERATIONAL PERFORMANCE

The company has sold its plant and machinery of Edayar Unit during the

year. Pursuant to change in the business activity of the company from

Paper Business to Logistics Business, the Company is in the process for

leasing the existing building which was used as building for paper business

by making slight modification and renovation work to make into a

Warehouse.

SUBSIDIARY COMPANIES

As of 31st March 2018, your Company has 3 subsidiaries viz. Sree Kailas

Palchuram Hydro Power Limited, Sree Adi sakthi Mukkuttathode Hydro

Power Limited and Jalashaayi Alamparathode Hydro Power Limited by

virtue of the Company having control on the Board of these companies.

Steps are being initiated to implement the project with the assistance of

Government / Private parties. Pursuant to the provisions of Section 129(3)

of the Act, a statement containing salient features of the financial

statements of your Company’s Subsidiaries in Form AOC-1 is attached to

the Financial Statements of your Company.

Annual accounts of the subsidiary companies and the related detailed

information would be sent to those shareholders seeking information in

this regard at any point of time. Further annual accounts of the subsidiary

companies would be available for inspection by any shareholders at the

registered office of the company.

DIVIDEND& RESERVES

In view of loss, your Directors decided not to recommend payment of

dividend on the equity shares and non convertible cumulative Redeemable

Preference Shares for the financial year under review. Your Company has

not transferred any amount to reserves during the Financial Year under

review.

EXPORT PERFORMANCE

Your company’s business of export of paper and paper boards during the

year was NIL.

INDUSTRIAL RELATIONS

The industrial relations remained cordial and satisfactory during the year

under review.

CHANGES IN NATURE OF BUSINESS

During the period of FY 2016-17 the Company had received closure notice

from Kerala State Pollution Control Board. In pursuance of this order, the

entire paper manufacturing business was discontinued. After reviewing

the various possibilities to resume production, the board found that there

are no prospects for re-opening of the units. Therefore the Board of

Directors had decided to change the Business activity from Kraft paper

manufacturing to Dry Chill Cold Storage (Logistics Business). The Company

had got approval from Government of Kerala to establish Dry Chill Cold

Storage (Logistics Business).

Your company has undertaken the implementation of Dry Chill Cold

Storage (Logistics Business) and planning to establish 2.50 lakhs sq. ft

Warehousing space in the Next One Year.

CHANGES IN SHARE CAPITAL DURING THE FINANCIAL YEAR, IF ANY

During the Financial Year 2017-18, Company has allotted 8,60,000 shares

on 29/03/2018.

14

As on date of this report, the Authorized share capital of the Company is

Rs. 50,00,00,000/- (Rupees Fifty Crores Only) divided into 2,50,00,000

equity shares of Rs. 10/- each and 2,50,00,000 preference shares of Rs.

10/- each. The total issued, subscribed and paid up share capital of the

Company as on the date of the report is Rs. 17,29,62,170/- (Rupees

Seventeen Crore Twenty Nine Lakhs Sixty Two Thousand One Hundred and

Seventy Only) divided into 1,72,96,217 equity shares of Rs. 10/- each and

Rs. 10,00,00,000/- (Rupees Ten Crores Only) divided into 1,00,00,000

Preference shares of Rs. 10/- each .

MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE

DATE OF BALANCE SHEET AND THE DATE OF AUDIT REPORT

There were no material changes/events occurred between financial year

end date and date of the Board’s report.

FINANCE

A). Deposits

The Company has not accepted deposit from the public falling within the

ambit of Section 73 of the Companies Act, 2013 and The Companies

(Acceptance of Deposits) Rules, 2014.

B) Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the

provisions of Section 186 of the Companies Act, 2013 are given in the

notes to the Financial Statements.

C) Commitments

The Company has raised share capital by an amount of Rs. 3 (Three) Crore

by way of allotment of 30 lakhs 11.25% Non Convertible Cumulative

Redeemable Preference Shares of Rs. 10/- each to the Promoter Directors

to redeem the existing preference share capital of the Company issued to

KSIDC during 4th

Quarter, 2018.All the repayment and interest

commitments were met as per terms of arrangement with the Banks.

In the current financial year the Company has obtained Unsecured loans

from Directors to the extent of Rs. 676.15 lakhs.

INTERNAL CONTROL SYSTEM

Your Company has adequate internal control and internal check system

commensurate with size of the organization. Audit Committee periodically

reviews the Internal Financial Control and Risk Assessment System of the

Company. During the year, Internal Financial Controls were tested and no

material weaknesses in the design or operating effectiveness were

observed.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of the Company at March 31, 2018 consisted of 8 Directors, out

of which 3 were independent directors, one was Managing Director, one

was additional Director, 2 was promoter director and one was non

executive director. The current composition of the board consisted of 8

Directors, out of which 3 were independent directors, one was Managing

Director and one was additional Director , 2 was promoter director and

one was non executive director.

Changes in the composition of the Board

The Board of Directors at their meeting held on 02.02.2018, approve the

resignation of Mr. A Padmanabhan (DIN: 0037472) and Mr. S Giridhar

(DIN: 0362916) from the Board with effect from 11.01.2018.

During the financial year in order to fulfill the requirement of Independent

Directors by complying with SEBI (LODR) Regulations, 2015, the Board of

Directors of the Company have appointed Mr. G. Raghavan (DIN-

03630043) and Mr. N. Subramanian (DIN-03602858) as Independent

Directors of the Company with effect from 29th

December, 2017 to hold

office for a period of five consecutive years, not liable to retire by rotation.

Mr. AkhileshAgarwal (DIN: 00918838) has also been appointed as

additional director at the Board Meeting held on 24th

June, 2017 and

reappointed as director at the 26th

AGM on 29th

December, 2017.

The Board of Directors at their meeting held on 02.02.2018, approved the

appointment of Mrs. Rajee Rajkumar (DIN: 0033280) additional director

subject to the approval of members. She holds office till the conclusion of

the ensuing AGM and is eligible for appointment. Her appointment is

being proposed in the notice of the forthcoming AGM.

In accordance with the provisions of section 152(6) of the Act and the of

Article 83 of the Articles of Association of the Company , Mr. S

Subramaniam, Director is proposed to retire by rotation at the ensuing

Annual General Meeting (AGM), and being eligible, offers himself for re-

appointment. The Board recommends his re-appointment.

Declaration of independence

All independent directors have given declarations that they meet the

criteria of independence as laid down under section 149 of the companies

act 2013 and as amended by the Companies (Amendment) Act, 2017 and

regulation 16 of SEBI(LODR) Regulations, 2015, which have been relied on

by Company and were placed at the Board meeting. In the opinion of the

Board, the independent directors fulfill the necessary criteria for

independence as stipulated under the statutes.

KEY MANAGERIAL PERSONNEL (KMP)

The details of the Key Managerial Personnel of the Company appointed

pursuant to section to section 203 of the Companies Act, 2013 are as

follows

15

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met Six (6) times during the financial year on 03rd

April 2017, 24th

June, 2017, 27th

September, 2017, 29th

December, 2017, 02nd

February, 2018, 12th

February, 2018.

The provisions of Companies Act, 2013 and listing regulations were adhered

to while considering the time gap of 120 days between two meetings.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing

Obligations and Disclosure Regulations) Regulation 2015, the Board has

carried out an annual performance evaluation of its own performance, the

directors individually as well as the evaluation of the working of its

Committee. The manner in which the evaluation has been carried out has

been explained in the Governance Report.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company has practice of conducting familiarization program of the

independent directors.

REMUNERATION TO DIRECTORS

The Remuneration paid to the Executive Directors and the Sitting Fees paid

to the Non‐Executive and Independent Directors are disclosed in the Extract

to the Annual Return i.e Annexure I to the Board’s Report.

POLICY OF DIRECTOR APPOINTMENT AND REMUNERATION:

Preamble

The Board of Directors of Sree Sakthi Paper Mills Limited (“the

Company”) constituted the “Nomination and Remuneration

Committee” at the meeting held on 30 May, 2014 with

immediate effect, after renaming the Remuneration Committee

formed earlier, consisting of Four (04) Non-Executive Directors

of which majority are Independent Directors.

The Nomination and Remuneration Committee and this policy

shall be in compliance with Section 178 of the Companies 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

Company who are members of its core management team

excluding Board of Directors comprising all members of

management 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 members for the

Board and Executive level. The Remuneration Policy seeks to

enable the Company to provide a well balanced and

performance- related compensation package, taking into

account shareholder interests, industry standards and relevant

Indian corporate regulations.

The Remuneration Policy will ensure that the interests of Board

Members & Executives are aligned with the business strategy

and risk tolerance, objectives, values and long-term interests of

the Company and will be consistent with the “pay-for-

performance” principle.

The Remuneration Policy will ensure that remuneration to

Directors and Executives involves a balance between fixed and

incentive pay reflecting short and long-term performance

objectives appropriate to the working of the Company and its

goals.

Sl.No Name Designation With effect from To

1 DrS.Rajkumar Managing Director 14-08-2018 13-08-2019

2 Mr. R.Ponnambalam Company Secretary

09-10-2013

3 Mr. V.N. Sridharan Chief Financial officer 12-11-2016

16

2. Principles of Remuneration

Support for Strategic Objectives: Remuneration and reward frameworks and

decisions shall be developed in a manner that is consistent with, supports

and reinforces the achievement of the Company’s vision and strategy.

Transparency: The process of remuneration management shall be

transparent, conducted in good faith and in accordance with appropriate

levels of confidentiality.

Internal equity: The Company shall remunerate the Board Members and

the Executives in terms of their roles within the organisation. Positions

shall be formally evaluated to determine their relative weight in relation to

other positions within the Company.

External equity: The Company strives to pay an equitable remuneration,

capable of attracting and retaining high quality personnel. Therefore the

Company will remain logically mindful of the ongoing need to attract and

retain 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 individuals and those of the Company whilst

complying with relevant tax and other legislation.

Performance-Driven Remuneration: The Company shall entrench a culture

of performance driven remuneration through the implementation of the

Performance Incentive System.

Affordability and Sustainability: The Company shall ensure that

remuneration is affordable on a sustainable basis.

3. Nomination and Remuneration Committee

The earlier Remuneration Committee of the Board of Directors now re-

named as Nomination and Remuneration Committee. Members of the

Committee shall be appointed by the Board and shall comprise of three or

more 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 and recommend 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 in accordance with the

criteria laid down in this policy, recommend to the Board their

appointment and removal and carry out their evaluation.

Formulating terms for cessation of employment and ensure

that any payments made are fair to the individual and 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 Committee set out above,

the Committee shall operate the Company’s share option

schemes (if any) or other incentives schemes (if any) as they

apply to. It shall recommend to the Board the total aggregate

amount of any grants to employees (with the specific grants to

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 the benefit 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 and experience required

of the Board as a whole and its individual members. The

objective is to have a Board with diverse background and

experience in business, government, academics, technology

and in areas that 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 social perspective, educational and professional

background and personal achievements.

• In addition, Directors must be willing to devote sufficient time

and energy in carrying out their duties and responsibilities

effectively. They must have the aptitude to critically evaluate

management’s working as part 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 the success 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 potential candidates as

per the criteria laid above, ascertain their availability and make

suitable recommendations to the Board.

17

The objective is to ensure that the Company’s Board is

appropriate at all points of time to be able to take decisions

commensurate with the size and scale of operations of the

Company. The Committee also identifies 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,

the Board 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. On acceptance of

the same, the new Director is appointed by the Board.

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 for

management personnel, and produce a written document

thereon; The Committee may conduct a wide-ranging search

for candidates for the positions of Employees within the

Company, within enterprises controlled by the Company or

within enterprises in which the Company holds equity, if any,

and on the human resources market; The professional,

academic qualifications, professional titles, detailed work

experience and all concurrently held 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 examined on 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 Board of 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 attending the

Meetings of the Board of Directors and its Committees. The

sitting fees paid to the Non-executive Directors for attending

Meetings of Board of Directors, Audit Committee of Board of

Directors and Nomination and Remuneration Committee is Rs.

10,000/- per meeting.

Beside the sitting fees they are also entitled to reimbursement

of expenses. The Non-Executive Directors of the Company are

not paid any other remuneration or commission.

The sitting fees of the Non-Executive Directors for attending

meetings of Board of Directors and the

Committees of Board of Directors may be modified or

implemented from time to time only with the approval of the

Board in due compliance of the provisions of Companies Act,

2013.

(b) Remuneration to Executive Directors, Key Managerial

Personnel(s) (KMPs) & Senior Management

Personnel (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 to the Board for approval.

The remuneration/compensation/ commission etc. shall be

subject to the prior/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 the Board of Directors in due

compliance of the provisions of Companies Act, 2013. The

remuneration for the 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 shall pay remuneration to

its Managing Director / Whole-Time Director in accordance

with the provisions of

Schedule V of the Act and if it is not able to comply with such

provisions, with the previous approval of the 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 this policy to the

Board for its approval. The Independent Directors shall have

power and authority to determine appropriate levels of

remuneration of Executive Directors and Employees and have a

prime role in appointing and where necessary recommend

removal of Executive Directors and Employees.

The Independent Directors shall submit its recommendations/

proposals/ decisions to the Committee which the 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 its approval. This

policy shall be hosted on the Company’s website.

18

The policy shall form part of Director’s report to be issued by

the Board of Directors in terms of Companies Act, 2013

9. Supplementary provisions

This Policy shall formally be implemented from the date on

which they are adopted pursuant to a resolution of the Board

of Directors. Any matters not provided for in this Policy shall be

handled in accordance with relevant State laws and regulations

and the Company’s Articles of Association. If this Policy conflict

with any laws or regulations subsequently promulgated by the

state or with the Company’s Articles of Association as amended

pursuant to lawful procedure, the relevant state laws and

regulations and the Company’s Articles of Association shall

prevail, and this Policy shall be amended in a timely manner

and submitted to the Board of Directors for review and

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

Directors of the Company.

BOARD COMMITTEES

Board Committees plays a vital role in improving the Board effectiveness in areas where more focused and discussions are required. Board has constituted the following Committees in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and its compositions are as follows: (i) Audit Committee

Mr. N Subramanian – Chairman Mr. G Raghavan – Member Mr. U.G.Bhat – Member (ii) Nomination and Remuneration Committee Mr. G Raghavan – Chairman Mr. N Subramanian – Member Mr. U.G.Bhat – Member (iii) Shareholders Relationship Committee Mr. S. Rajkumar – Chairman Mr. U.G. Bhat – Member Mr. N Subramanian- Member (iv) Risk Management Committee Mr. G Raghavan – Chairman Mr. U.G.Bhat – Member Mr. N Subramanian – Member (v) Corporate Social Responsibility Committee Mr. S. Rajkumar-Chairman Mr. Akhilesh Agarwal-Member Mr. N Subramanian-Member (vi) Share Issue/Transfer Committee Mr. S. Rajkumar-Chairman Mr. G.Raghavan -Member Mr. N Subramanian-Member (vii) Machinery Disposal Committee Mr. S. Rajkumar-Chairman Mr. G.Raghavan -Member Mr. N Subramanian-Member

(viii) Project Finance Committee Mr. S. Rajkumar-Chairman Mr. S.Subramanian-Member REMUNERATION POLICY

The Company’s remuneration policy is directed towards

rewarding performance based on review of achievements

periodically. The remuneration policy is in consonance with the

existing industry practice.

RISK MANAGEMENT POLICY

The Company has formulated a Risk Management Policy to

identify, assess, monitor and mitigate various risks to the

Company. Identified risks and the mitigation plans are

discussed at the meetings of the Risk Management Committee

and the Board of Directors of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Your Board has constituted a CSR Committee consisting of the

above mentioned three members. CSR policy is also framed and

annexed. But during the year, the profit as determined in

Section 135 (5) of the Companies Act, 2013 is less than the

threshold limit. Hence there was no requirement to spend

under the CSR policy. Statement is annexed is annexed as

Annexure VI to this Report.

AUDITORS

At the AGM held on 29th

December, 2017, M/s. KPR & Co. (FRN:

005326S), Chartered Accountants, Cochin, Kerala was

appointed as the Statutory Auditors of the Company to hold

office for a period of five years commencing from the

conclusion of 26th

Annual General Meeting till the conclusion of

31st

Annual General Meeting subject to ratification by every

members every year.

The Company has received a letter from M/s. KPR & Co. (FRN:

005326S), Chartered Accountants, Cochin, Kerala to the effect

that their appointment as Auditors, if made, would be within

the limits under Section 141 of the Companies Act, 2013.

PARTICULARS UNDER SECTION 134

Conservation of Energy, Technology Absorption

Statement of particulars under Section 134(3)(m) of the

Companies Act, 2013 read with Rule, 8 of The Companies

(Accounts) Rules, 2014, is annexed as Annexure –III

CORPORATE GOVERNANCE

Your Company is committed to good corporate governance

aligned with the best corporate practices. A separate Report on

Corporate Governance in Annexure-IV along with Auditor’s

Certificate on Compliance with the conditions of Corporate

19

Governance is provided as a part of this Annual Report, besides

the Management Discussion and Analysis.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form MGT 9, of the Company is

annexed as Annexure I to this Report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the

financial year were on an arm’s length basis and were in the

ordinary course of business. There are no materially significant

related party transactions made by the Company with

Promoters, Directors, Key Managerial Personnel or other

designated persons which may have a potential conflict with

the interest of the Company at large.

All Related Party Transactions are placed before the Audit

Committee for approval.

Particulars of contract or arrangements with related parties are

annexed in Form AOC 2 as Annexure II.

SECRETARIAL AUDITOR

The Board has appointed M/s. Sreevidhya, Practising Company

Secretary, to conduct Secretarial Audit for the financial year

2017-18. The Secretarial Audit Report for the financial year

ended March 31, 2018 is annexed herewith marked as

Annexure V 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 establi

sh a vigil mechanism for the directors and employees to rep

ort genuine concerns in such manner as may be prescribed

and to report to the management instances of unethical behavi

or, actual or suspected fraud or violation of the Company’s cod

e of conduct.

The detail of the Whistle Blower Policy has been posted on the

website of the Company.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place an Anti-Sexual Harassment Policy in

line with the requirements of the Sexual Harassment of Women

at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Internal Complaints Committee (“ICC”) has been set up to

redress the complaints received regarding sexual harassment.

All employees are covered under this policy.

During the financial year 2017-18, there were no cases

reported under Sexual Harassment of Women at Workplace

(Prevention Prohibition and Redressal) Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under

134(3) (c) of the Companies Act, 2013 Directors report that:

1. In the preparation of the annual accounts for the financial

year ended 31st March, 2018 the applicable accounting

standards had been followed along with proper explanation

relating to material departures.

2. The directors had selected such accounting policies and

applied them consistently and made judgment and estimates

that were reasonable and prudent so as to give a true and fair

view of the state of affairs of the Company at the end of the

financial year and of the loss of the company for the year under

review.

3. The Directors had taken proper and sufficient care for the

maintenance of adequate accounting records in accordance

with the provisions of the Act, for safeguarding the assets of

the company and for preventing and detecting fraud and other

irregularities.

4. The directors had prepared the Annual Accounts for the

financial year ended 31st March, 2018 on a ‘going concern’

basis.

5. That proper internal financial controls were in place and that

the financial controls were adequate and were operating

effectively.

6. The Directors have devised proper systems to ensure

compliance with the provisions of all applicable laws and that

such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

The Board places on record, its appreciation for the co-operation and support received from shareholders, customers, suppliers,

employees, government authorities and banks.

By and on behalf of the Board of Directors

Sd/- Sd/- Chennai – 17 S.Rajkumar N.Subramanian Date: 13/08/2018 Managing Director Director

20

Annexure I FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2018

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 &

contact details

Sree Kailas 57/2993 /94

Paliam Road

Ernakulam, Cochin - 682 016

6. Whether listed company Yes/No

7. Name, Address & contact details of the

Registrar & Transfer Agent, if any.

Bigshare Services Pvt. Ltd.

E-2, Ansa Industrial Estate,

Sakivihar Road, Saki Naka, Andheri (E),

Mumbai – 400 072, Tel No. 022 4043 0200

E-mail : investor@bigshareonline.com

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 main products /

services

NIC Code of the

Product/service

% to total turnover of the company

1 Kraft Paper 17014 100%

2 Warehousing Business 52109 -

III. Particulars of holding, Subsidiary and Associate Companies

Sl

No

Name and Address of the Company CIN/GLN Holding/Subsidiary/As

sociate

% of shares held Applicable

Section

1 Sree Kailas Palchuram Hydro Power

Limited 57/2993, Sree Kailas, Paliam

Road, Kochi 682016

U40100KL2008PLC02

2145

Subsidiary 47.00 2(87)(i)

21

2 AdisakthiMukkuttathode Hydro Power Limited 57/2993, Sree Kailas Paliam Road, Kochi 682016

U40100KL20

8PLC022144

Subsidiary 47.00 2(87)(i)

3 JalashaayiAlamparathodu Hydro Power

Limited

U40100KL2008PLC02

2143

Subsidiary 47.00 2(87)(i)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) Category-wise Share Holding

No. of Shares held at the beginning of the year: 01/04/2017 00:0

No. of Shares held at the end of the year :31/03/2018

Category of Shareholder Demat Physica

l

Total Shares

Total % Demat Physic

al

Total Shares

Total % % Chang

e

(A) Shareholding of Promoter and Promoter Group2

Indian

(a) INDIVIDUAL / HUF

7777092 0 7777092 47.32 8303378 0 8303378 48.01 0.69

(b) Central / State government(s)

0 0 0 0.00 0 0 0 0.00 0.00

(c) BODIES CORPORATE

0 0 0 0.00 0 0 0 0.00 0.00

(d) FINANCIAL INSTITUTIONS / BANKS

0 0 0 0.00 0 0 0 0.00 0.00

(e) ANY OTHERS (Specify)

(i) GROUP COMPANIES 0 0 0 0.00 0 0 0 0.00 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) : 7777092 0 7777092 47.32 8303378 0 8303378 48.01 0.69

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 INVESTOR

0 0 0 0.00 0 0 0 0.00 0.00

(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 promoters

(A)=(A)(1) + (A)(2) 7777092 0 7777092 47.32 8303378 0 8303378 48.01 0.69

(B) Public shareholding

Institutions

(a) Central / State government(s)

22

0 0 0 0.00 0 0 0 0.00 0.00

(b) FINANCIAL INSTITUTIONS / BANKS

0 0 0 0.00 0 0 0 0.00 0.00

(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 CAPITAL INVESTORS

0 0 0 0.00 0 0 0 0.00 0.00

(h) QUALIFIED FOREIGN INVESTOR

0 0 0 0.00 0 0 0 0.00 0.00

(i) ANY OTHERS (Specify)

0 0 0 0.00 0 0 0 0.00 0.00

(j) FOREIGN PORTFOLIO INVESTOR

0 0 0 0.00 0 0 0 0.00 0.00

(k) ALTERNATE INVESTMENT FUND

0 0 0 0.00 0 0 0 0.00 0.00

SUB TOTAL (B)(1) : 0 0 0 0.00 0 0 0 0.00 0.00

Non-institutions

(a) BODIES CORPORATE

438341 0 438341 2.67 578202 0 578202 3.34 0.68

(b) INDIVIDUAL

(i) (CAPITAL UPTO TO Rs. 1 Lakh)

3861144 11748 3872892 23.56 3782273 11748 3794021 21.94 (1.63)

(ii) (CAPITAL GREATER THAN Rs. 1 Lakh)

3349136 0 3349136 20.38 3713887 0 3713887 21.47 1.10

(c) ANY OTHERS (Specify)

(i) TRUSTS 0 0 0 0.00 0 0 0 0.00 0.00

(ii) CLEARING MEMBER 34147 0 34147 0.21 7301 0 7301 0.04 (0.17)

(iii) NON RESIDENT INDIANS (NRI)

83785 0 83785 0.51 688 0 688 0.00 (0.51)

(iv) NON RESIDENT INDIANS (REPAT)

128229 0 128229 0.78 147899 0 147899 0.86 0.07

(v) NON RESIDENT INDIANS (NON REPAT)

736369 0 736369 4.48 734625 0 734625 4.25 (0.23)

(vi) DIRECTORS RELATIVES 15916 100 16016 0.10 15916 100 16016 0.09 (0.00)

(vii) EMPLOYEE 0 0 0 0.00 0 0 0 0.00 0.00

(viii) OVERSEAS BODIES CORPORATES

0 0 0 0.00 0 0 0 0.00 0.00

(ix) UNCLAIMED SUSPENSE ACCOUNT

0 0 0 0.00 0 0 0 0.00 0.00

(x) IEPF 0 0 0 0.00 0 0 0 0.00 0.00

(d) QUALIFIED FOREIGN INVESTOR

0 0 0 0.00 0 0 0 0.00 0.00

23

210 0 210 0.00 200 0 200 0.00 (0.00)

SUB TOTAL (B)(2) : 8647277 11848 8659125 52.68 8980991 11848 8992839 51.99 (0.69)

Total Public Shareholding

(B)=(B)(1) + (B)(2) 8647277 11848 8659125 52.68 8980991 11848 8992839 51.99 (0.69)

(C) Shares held by Custodians and against which Depository Receipts have been issued

(a) SHARES HELD BY CUSTODIANS

0 0 0 0.00 0 0 0 0.00 0.00

(i) Promoter and Promoter Group

0 0 0 0.00 0 0 0 0.00 0.00

(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) 0 0.00 0 0 0 0.00 0.00

Grand Total (A) + (B) + (C) 16424369 11848 16436217 100.00 17284369 11848 17296217 100.00 0.00

B) Shareholding of Promoter-

Shareholding at the beginning of the year 01/04/2017

Shareholding at the end of the year 31/03/2018

Sr.No

NAME Number of Shares

% Shares of the

Company

% of Shares Pledged/

encumbered to total shares

Number of Shares

% Shares of the

Company

% of Shares Pledged/

encumbered to total shares

% Change

in sharehol

ding during

the year

1 GURURAJA BHAT. U . 50 0.00 0.00 50 0.00 0.00 0.00

2 S RAJKUMAR . 10000 0.06 0.00 10000 0.06 0.00 0.00

3 N SUBRAMANIAN 12738 0.08 0.00 12738 0.07 0.00 0.00

4 E KAMALAM 17868 0.11 0.00 0 0.00 0.00 -0.11

5 RAJEE SAKUNTHALA . 22977 0.14 0.00 22977 0.13 0.00 0.00

6 AMBILI SUBRAHMANIAM

49331 0.30 0.00 0 0.00 0.00 -0.30

7 A GANESH 89940 0.55 0.00 89940 0.52 0.00 -0.03

8 VIGNESH R 130159 0.79 0.00 130159 0.75 0.00 -0.04

9 VIGNESH R 146546 0.89 0.00 146546 0.85 0.00 -0.04

24

10 RAJEE RAJKUMAR 285544 1.74 0.00 285544 1.65 0.00 -0.09

11 SUBRAMONIAM SIVATHANU PILLAI

333944 2.03 0.00 67429 0.39 0.00 -1.64

12 S GIRIDHAR 713223 4.34 0.00 713223 4.12 0.00 -0.22

13 AYYAPPAN PADMANABHAN

1294658 7.88 0.00 1294658 7.49 0.00 -0.39

14 S RAJKUMAR 4670114 28.41 0.00 5530114 31.97 0.00 3.56

7777092 47.32 0.00 8303378 48.01 0.00 0.69

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

Sr. No.

Name Shareholding Date

Increase /

Decrease in

shareholding

Reason

Cumulative Shareholding during the year

No. of Shares at the

beginning (01.04.2017) / End of the

year (31.03.2018)

% of Total Shares of

the Company

Number of

Shares

Percentage

of total shares of the

company

1 GURURAJA BHAT. U . 50 0.00 04/01/2017

31/03/2018 0 50 0.00

2 S RAJKUMAR . 10000 0.06 04/01/2017

31/03/2018 0 10000 0.06

3 N SUBRAMANIAN 12738 0.08 04/01/2017

31/03/2018 0 12738 0.07

4 E KAMALAM 17868 0.11 04/01/2017

01/05/2018 17868 SOLD 0 0.00

31/03/2018 0 0 0.00

5 RAJEE SAKUNTHALA . 22977 0.14 04/01/2017

12/01/2018 0 22977 0.13

6 AMBILI SUBRAHMANIAM 49331 0.30 30/03/2018

01/05/2018 49331 SOLD 0

31/03/2018 0 0 0.00

7 A GANESH 89940 0.55 04/01/2017

31/03/2018 0 89940 0.52

25

8 VIGNESH R 130159 0.79 04/01/2017

31/03/2018 0 130159 0.75

9 VIGNESH R 146546 0.89 04/01/2017

31/03/2018 0 146546 0.85

10 RAJEE RAJKUMAR 285544 1.74 04/01/2017

31/03/2018 0 285544 1.65

11 SUBRAMONIAM SIVATHANU PILLAI

333944 2.03 04/01/2017

01/05/2018 266515 SOLD 67429 0.39

31/03/2018 0 67429 0.39

12 S GIRIDHAR 713223 4.34 04/01/2017

31/03/2018 0 713223 4.12

13 AYYAPPAN PADMANABHAN 1294658 7.88 04/01/2017

31/03/2018 0 1294658 7.49

14 S RAJKUMAR 4670114 28.41 04/01/2017

29/03/2018 860000

31/03/2018 0 5530114 31.97

D) Shareholding Pattern of top ten Shareholders:

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

Sr.No NAME No. of Shares at the begining/End of the year

Date Increase/Decrease in share-holding

Reason Number of Shares

Percentage of total shares of the company

1 GOPINATHAN C K 1,006,000 31-Mar-17 0 Transfer 1,006,000 3.50

21-Apr-17 -6000 Transfer 1,000,000 3.47

28-Apr-17 -21999 Transfer 978,001 3.40

5-May-17 -17066 Transfer 960,935 3.34

12-May-17 -19449 Transfer 941,486 3.27

19-May-17 -22347 Transfer 919,139 3.19

26-May-17 -28086 Transfer 891,053 3.10

2-Jun-17 -71053 Transfer 820,000 2.85

15-Dec-17 -47508 Transfer 772,492 2.68

29-Dec-17 -30000 Transfer 742,492 2.58

5-Jan-18 -492492 Transfer 250,000 0.87

12-Jan-18 -200000 Transfer 50,000 0.17

26

26-Jan-18 -35000 Transfer 15,000 0.05

2-Feb-18 -15000 Transfer 0 0.00

31-Mar-18 0 Transfer 0 0.00

2 RAJA RAM 727,689 31-Mar-17 0 Transfer 727,689 2.53

16-Feb-18 -10000 Transfer 717,689 2.49

717,689 31-Mar-18 0 Transfer 717,689 2.49

3 ANAND MOHAN 0 31-Mar-17 Transfer 0 0.00

21-Apr-17 7520 Transfer 7,520 0.03

28-Apr-17 12000 Transfer 19,520 0.07

5-May-17 5000 Transfer 24,520 0.09

7-Jul-17 9060 Transfer 33,580 0.12

21-Dec-17 21420 Transfer 55,000 0.19

29-Dec-17 500 Transfer 55,500 0.19

5-Jan-18 279000 Transfer 334,500 1.16

31-Mar-18 334500 Transfer 669,000 2.32

669,000 31-Mar-18 0 Transfer 669,000 2.32

4 SUBRAMANIAM SIVATHANU PILLAI

232,840 31-Mar-17 0 Transfer 232,840 0.81

31-Mar-18 232840 Transfer 465,680 1.62

465,680 31-Mar-18 0 Transfer 465,680 1.62

5 SIVAKALA GANESH 222,782 31-Mar-17 0 Transfer 222,782 0.77

445,564 31-Mar-18 0 Transfer 445,564 1.55

31-Mar-18 222782 Transfer 445,564 1.55

6 BALRAM BHARWANI 187,187 31-Mar-17 0 Transfer 187,187 0.65

19-May-17 1833 Transfer 189,020 0.66

26-May-17 3080 Transfer 192,100 0.67

21-Jul-17 983 Transfer 193,083 0.67

18-Aug-17 2850 Transfer 195,933 0.68

8-Sep-17 17 Transfer 195,950 0.68

15-Sep-17 2950 Transfer 198,900 0.69

22-Sep-17 600 Transfer 199,500 0.69

29-Sep-17 50 Transfer 199,550 0.69

13-Oct-17 550 Transfer 200,100 0.70

24-Nov-17 100 Transfer 200,200 0.70

1-Dec-17 150 Transfer 200,350 0.70

16-Feb-18 -350 Transfer 200,000 0.69

31-Mar-18 200000 Transfer 400,000 1.39

27

400,000 31-Mar-18 0 Transfer 400,000 1.39

7 ABHISHEK SINGHVI 0 31-Mar-17 Transfer 0 0.00

12-Jan-18 66657 Transfer 66,657 0.23

2-Feb-18 33343 Transfer 100,000 0.35

9-Feb-18 2947 Transfer 102,947 0.36

16-Feb-18 16297 Transfer 119,244 0.41

23-Feb-18 7000 Transfer 126,244 0.44

2-Mar-18 756 Transfer 127,000 0.44

31-Mar-18 127000 Transfer 254,000 0.88

254,000 31-Mar-18 0 Transfer 254,000 0.88

8 BOSCO ARMANDO MENEZES

0 31-Mar-17 Transfer 0 0.00

12-Jan-18 10000 Transfer 10,000 0.03

26-Jan-18 27210 Transfer 37,210 0.13

2-Feb-18 20240 Transfer 57,450 0.20

9-Feb-18 57806 Transfer 115,256 0.40

16-Feb-18 744 Transfer 116,000 0.40

232,000 31-Mar-18 0 Transfer 232,000 0.81

31-Mar-18 116000 Transfer 232,000 0.81

9 PARANJOTHI SUNDARAM

0 31-Mar-17 Transfer 0 0.00

22-Sep-17 14000 Transfer 14,000 0.05

20-Oct-17 2500 Transfer 16,500 0.06

15-Dec-17 80000 Transfer 96,500 0.34

29-Dec-17 44955 Transfer 141,455 0.49

12-Jan-18 80000 Transfer 221,455 0.77

221,455 31-Mar-18 0 Transfer 221,455 0.77

10 LAL TOLANI 91,615 31-Mar-17 0 Transfer 91,615 0.32

7-Apr-17 4000 Transfer 95,615 0.33

12-May-17 3831 Transfer 99,446 0.35

19-May-17 24 Transfer 99,470 0.35

2-Jun-17 2000 Transfer 101,470 0.35

31-Mar-18 101470 Transfer 202,940 0.71

202,940 31-Mar-18 0 Transfer 202,940 0.71

11 AJAY GIRDHARILAL BHARTIYA

167,500 31-Mar-17 0 Transfer 167,500 0.58

28-Apr-17 -2000 Transfer 165,500 0.58

3-Nov-17 -2500 Transfer 163,000 0.57

28

15-Dec-17 -88000 Transfer 75,000 0.26

5-Jan-18 -50000 Transfer 25,000 0.09

12-Jan-18 -25000 Transfer 0 0.00

31-Mar-18 0 Transfer 0 0.00

12 SadashivamurthyAnuradha

0 31-Mar-17 Transfer 0 0.00

21-Dec-17 6500 Transfer 6,500 0.02

5-Jan-18 72500 Transfer 79,000 0.27

158,000 31-Mar-18 0 Transfer 158,000 0.55

31-Mar-18 79000 Transfer 158,000 0.55

13 CHIRAYUSH PRAVIN VAKIL

134,364 31-Mar-17 0 Transfer 134,364 0.47

12-Jan-18 -2000 Transfer 132,364 0.46

132,364 31-Mar-18 0 Transfer 132,364 0.46

14 SREY FINANCIAL SERVICE PVT. LTD

130,000 31-Mar-17 0 Transfer 130,000 0.45

15-Dec-17 -43661 Transfer 86,339 0.30

86,339 31-Mar-18 0 Transfer 86,339 0.30

15 GULU KHUBA WATUMULL

87,602 31-Mar-17 0 Transfer 87,602 0.30

87,602 31-Mar-18 0 Transfer 87,602 0.30

E) Shareholding of Directors and Key Managerial Personnel:

S.No Shareholding of each Directors and each Key

Managerial Personnel

Shareholding at the beginning of the

year

Cumulative Shareholding

during the Year

No. of shares % of total

shares of the

company

No. of shares % of

total

shares of

the

company

1 S Rajkumar 4680114 28.41 5540114 32.03

2 SubramaniamSivathanuPillai 333944 2.03 67429 0.39

3 E Kamalam 17868 0.11 0 0

4 GururajaBhat. U 50 0.00 50 0.00

5 N Subramanian 0 0 0 0

6 AkhileshAgarwal 0 0 0 0

29

7 G Raghavan 0 0 0 0

8. RajeeRajkumar 285544 1.74 285544 1.65

Total 7211455 43.81 7055873 34.07

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

In lakhs

Secured Loans

excluding deposits Unsecured Loans Deposits

Total

Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 2,216.30 2051.38 1.43 4,269.11

ii) Interest due but not paid 16.80 16.80

iii) Interest accrued but not due

Total (i+ii+iii) 2,233.10 2,051.38 1.43 4,285.91

Change in Indebtedness during the financial year

* Addition - -

* Reduction

1,511.09 503.54 2,014.63

Net Change

Indebtedness at the end of the financial year

i) Principal Amount 712.01 1,547.84 1.43 2,261.28

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) 712.01 1,547.84 1.43 2,261.28

XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

(Rs. In Lacs)

SN. Particulars of Remuneration Name of MD/WTD/ Manager Total

Amount

1 Gross salary

(a) Salary as per provisions

contained in section 17(1) of the

Income-tax Act, 1961

0 0 0

(b) Value of perquisites u/s 17(2)

Income-tax Act, 1961

0 0 0

(c) Profits in lieu of salary under

section 17(3) Income- tax Act, 1961

- - -

2 Stock Option - - -

3 Sweat Equity - - -

30

4 Commission

- as % of profit

- others, specify…

- - -

5 Others, medical expense

- - -

Total (A)

0 0 0

Ceiling as per the Act

B. Remuneration to other directors

SN. Particulars of

Remuneration

Name of Directors Total

Amount

1 Independent Directors AkhileshAgarwal Mr. U G Bhat Mr. G Raghavan Mr. N.

Subramnian

Fee for attending board

committee meetings

50,000 50,000 50,000 60,000 2,10,000

Commission - - - - - -

Others, please specify - - - - - -

Total (1) 50,000 50,000 50,000 60,000 2,10,000

2 Nominee Directors

Fee for attending board

committee meetings

Commission - - - - - -

Others, please specify - - - - - -

Total (2)

3 Other Non-Executive

Directors

Mr. S. Giridhar(Till

11.01.2018)

Mr. S.

Subramaniam

Mrs. E.

Kamalam

Mrs.

RajeeRajkumar

Fee for attending board

committee meetings - 20,000 -

20,000 - 40,000

Commission - - - - -

Others, please specify - - - - -

Total (3) - 20,000 - 20000 - 40,000

Total (B)=(1+2+3) 50,000 70,000 50,000 80,000 2,50,000

Total Managerial Remuneration (A+B) 2,50,000

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) of the Income-tax Act,

1961

NA - 3.60 3.60

(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) Income-tax Act, 1961 NA NA NA NA

2 Stock Option NA NA NA NA

31

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 3.60 3.60

XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief Description

Details of Penalty / Punishment/ Compounding fees imposed

Authority [RD / NCLT/ COURT]

Appeal made, if any (give Details)

A. COMPANY

Penalty Nil Nil Nil Nil Nil

Punishment Nil Nil Nil Nil Nil

Compounding Nil Nil Nil Nil Nil

B. DIRECTORS

Penalty Nil Nil Nil Nil Nil

Punishment Nil Nil Nil Nil Nil

Compounding Nil Nil Nil Nil Nil

C. OTHER OFFICERS IN DEFAULT

Penalty Nil Nil Nil Nil Nil

Punishment Nil Nil Nil Nil Nil

Compounding Nil Nil Nil Nil Nil

32

Annexure II

FORM 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 in

sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

Financial Year 2017-18

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

SL. No. Particulars Details

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

b) Nature of contracts/arrangements/transaction Nil

c) Duration of the contracts/arrangements/transaction Nil

d) Salient terms of the contracts or arrangements or transaction including the

value, if any

Nil

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

f) Date of approval by the Board Nil

g) Amount paid as advances, if any Nil

h) Date on which the special resolution was passed in General meeting as

required under first proviso to section 188

Nil

2. Details of contracts or arrangements or transactions at Arm’s length basis.

SL. No. Particulars Details

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

Nature of contracts/arrangements/transaction Unsecured Loan

Duration of the contracts/arrangements/transaction Annual

Salient terms of the contracts or arrangements or transaction including

the value, if any

Unsecured Loan – (Rs. 229.96 Lakhs)

2 Name (s) of the related party & nature of relationship SreeGiriPackagings Limited, Company in

which Directors hold more than 2%

interest

Nature of contracts/arrangements/transaction Sale of goods

Duration of the contracts/arrangements/transaction Annual

Salient terms of the contracts or arrangements or transaction including

the value, if any

Sale of goods – Rs. 6.99 lakhs

33

10 Name (s) of the related party & nature of relationship Aditya Papers-Firm in which Directors

hold more than 2% interest

Nature of contracts/arrangements/transaction Sale of Finished goods

Duration of the contracts/arrangements/transaction Annual

Salient terms of the contracts or arrangements or transaction including

the value, if any

Rs. 31.34Lakhs

11 Name (s) of the related party & nature of relationship Carto Packs, Firm of which Mr. S

Rajkumar is the Managing Partner.

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

Sale of Paper

Duration of the contracts/arrangements/transaction Annual

Salient terms of the contracts or arrangements or transaction including

the value, if any

Sale of Finished goods –Rs.0.38 Lakhs

12 Date of approval by the Board

13 Amount paid as advances, if any Nil

14 Date on which the special resolution was passed in general meeting (if

any)

29-12-2017

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/-

Chennai- 17 S RAJKUMAR 13-08-2018 (MANAGING DIRECTOR)

34

Annexure - III

ANNEXURES TO THE DIRECTORS’ REPORT

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

(A) CONSERVATION OF ENERGY

(i) Energy conservation measures taken:

At Kraft Paper Units

During the year, your Company has not taken any energy conservation measures as the manufacturing

units were forced to close down in June, 2016.

At Duplex Board Unit - NIL

(The factory remained closed)

(ii) Additional Investments and proposals, if any, being implemented for reduction of consumption of

Energy: NIL

(B) Technology absorption

(i) The efforts made towards technology absorption: NIL

(ii) Benefits derived Production improvement: NIL

Cost Reduction: NIL

Product development or import substitution: NIL

(iii) Imported Technology: NIL

(iv) Expenditure incurred on Research & Development: NIL

(C) Foreign exchange earnings and outgo:

2017-18 2016-17

Earnings in Foreign Exchange:

NIL

NIL

Expenditure in Foreign Exchange: NIL

NIL

35

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry

It is fact that paper is inevitable for the development of human race,

and the economy of country. The paper sector has witnessed a

supply glut on account of significant capacity addition in the writing,

printing and paper segment over 2013-16. Demand, on the other

hand, has not increased as expected. Performance of the industry is

constrained due to high cost of production caused by inadequate

availability, high cost of raw materials, power cost and concentration

of mills in one particular area. Paper industry in India is still

considered a smoke stack industry, environmentally hazardous,

lacking glamorous high technology compared to developed world.

The magnitude of pollution is still a challenging problem before

industry.

Opportunities and Threats

Our Companywas incorporated in the year 1991 with an installed

capacity to produce 15 tonnes of kraft paper per day. The company

went for gradual expansion and upgradations and established three

Factories at an installed capacity of more than 100,000 MT per

annum. For setting up the last Unit , the company mobilized funds

through public issue of shares and was successful in implementing

the project within the scheduled time frame. The company reached

the position of leading manufacturers of kraft paper in South India.

The Company was doing good business and employed over 300

people with more indirect employment continuously. The company

has gone for expansion in the year 2011-12 for technology

upgradation and installation of power plant of 2 mega wattcapacity

with Investment of Rs.35 Crores. Post expansion, the company has

gone through rough patch & suffered losses due to various reasons

such as Increase in the cost of raw materials and finance cost,

Availability of cheaper paper from the imported sources and Cut

throat competition from new mills in Tamil Nadu. Kerala being

situated in the southern most part of the country, the freight cost to

the customers particularly in northern India is very high. Normally

Customers prefer to purchase from nearby mils to save on

transportation cost.

New stringent pollution control norms and local interferences by

vested interests is making it difficult to run the mill operations. The

mill was forced to close down in June, 2016 due to local interference

in the pretext of pollution & ultimately withdrawal of pollution

clearances.

The management is seriously considering various options of

diversifications with the maximum utilization of the available

resources. In view of the increased environment sensitivity of the

country and the state in particular, the company is wary of moving

into any industry involving water, power, environmental clearances

and controls. After conducting various studies in this regard, we

have arrived at a conclusion of diversifying into Dry Chill Cold

Storage (Logistics business).

Logistics business today is not mere warehousing. It is an end to end

solution for making the goods available from the manufacturing

point to the end user. The gambit of logistics involves today various

activities such as Storage, Just in time inventory maintenance,

Assembling, Import, Finishing, Billing, Delivery, Post clearance

shipping / airlifting services. . It is very evident that the

development of logistics industry is utmost important for the

industrial growth of a region. Our industry is situated close to ICT

terminal in Cochin and located on the fringes of the seaport- airport

road with a high potential to be a big player in the logistic industry

providing local employment and generate sufficient revenue for the

state.

Logistics Industry

The Indian Logistics sector has been instrumental in shaping the

nation’s growth over the last several years. It has evolved into

specialized sector and is becoming a key differentiator for all

progressive businesses. The slowdown in the led to an overall

decline in the movement of goods and cargo across sectors such as

auto, heavy engineering and capital goods. Nonetheless Pharma,

FMCG, Retail and other sectors compensated for the decline.

The industry is expected to witness a healthy growth and with the

implementation of uniform tax structure of Goods and Service Tax

(GST), there would be increased demand for hub and spoke

movements, large scale warehousing and specialized logistics

services.

36

Annexure – IV

REPORT ON CORPORATE GOVERNANCE

1. Corporate Governance Philosophy

The Management believes that corporate growth, goals, transparency and enhanced stakeholder value are to be achieved only through good

Corporate Governance.

2. a) Board of Directors

The Board of Directors of the Company as on 31 March, 2018 comprised of:

Sl.

No

Name Designation Executive/

Non Executive

Director

Promoter/

Independent

Director

No. of other

Companies

in which he is a

Director

Committee

in which he is a

Member /Chairman

1 Dr. S. Rajkumar

ManagingDirec

tor & Vice

Chairman

Executive Promoter 06 01/3

2 Mrs. RajeeRajkumar(w.e.f.

02.02.2018)

Additional

Director Executive Non Independent 01 Nil/Nil

3 Mr.S.Subramoniam Director Non Executive Non-Independent 04 Nil/Nil

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

5 Mr.U.GururajaBhat Director Non Executive Independent 02 4/1

6 Mr. G. Raghavan Director Non Executive Independent 01 3/1

7 Mr. N. Subramanian Director Non Executive Independent 03 5/1

8 Mr.AkhileshAgarwal (w.e.f.

24.06.2017) Director Non Executive Non-Independent 08 1/1

During the Year, Mr. A Padmanabhan, Director, Mr. S Giridhar,

Director were resigned from the Board.

Dr. S Rajkumar and S Subramaniam are sons of Mrs.EKamalam and

Mrs.RajeeRajkumar is wife of Mr. S Rajkumar and none of the other

Directors of your Company are inter-se related to each other.

PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE

DIRECTORS:

During the year, there were no pecuniary relationships or

transactions between the Company and any of its Non-Executive

Directors apart from sitting fees.

2b) Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013, the Board

has carried out the annual Performance Evaluation 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 the Board and its Committees,

Board Culture, execution and performance of specific duties,

obligations and governance.

A separate exercise was carried out to evaluate the performance of

individual Directors including the Chairman of the Board, who wer

37

e evaluated on parameters such as level ofengagement and contrib

ution, independence of judgment,safeguarding the interest of the C

ompany and its minority shareholders etc.

The performance evaluation of the Independent Directors was carri

ed out by the entire Board. The performance evaluation of the Chai

rman and the Non Independent Directors was carried out by the In

dependent Directors. The Directors expressed their satisfaction wit

h the evaluation process.

3. Board Meetings and Annual General Meeting & Directors’

Attendance

During the year 2017-18, Six Board Meetings were held on 3rd

April,

2017, 24th

June, 2017, 27th

September 2017, 29th

December, 2017,

02th

February, 2018 and 12th

February 2018. The Annual General

Meeting was held on 29th

December, 2017.

Attendance of each director, at the Board Meetings held during the

year 2017- 18 and at the last Annual General Meeting is as follows:

Sl.

No.

Name Board Meetings

Last AGM

Held Attended Attended

1 Dr. S. Rajkumar 6 6 Yes

2 Mr. A. Padmanabhan 4 1 No

3 Mr.S.Giridhar 4 0 No

4 Mr.S.Subramoniam 6 2 No

5 Mrs.E.Kamalam 6 1 No

6 Mr.U.GururajaBhat 6 5 Yes

7

Mr. G Raghavan

6 5 Yes

8

Mr. N. Subramanian

6 6

Yes

9 RajeeRajkumar 2 2 Yes

4. Audit Committee

By constituting an independent and qualified Audit Committee, the

Company has complied with the requirements of Section 177 of the

Companies Act, 2013 and Regulation 18 of the SEBI (Listing

Obligation & Disclosure Requirements) Regulation, 2015 relating to

the composition of the Audit Committee. The Committee reviews:

the financial reporting by ensuring compliance with Accounting

Standards and review Financial Policies of the Company; review

and monitor the auditor’s independence and performance, and

effectiveness of audit process; recommend the appointment of

Statutory Auditors/ internal auditors and fix their remuneration;

approval or any subsequent modification of transactions of the

company with related parties; scrutiny of inter-corporate loans and

investments; valuation of undertakings or assets of the company,

wherever it is necessary;evaluation of internal financial controls

and risk management systems and monitoring the end use of funds

raised through public offers and related matters.

The Audit Committee consists of the following members:

38

Sl.

No.

Name Designation Independent / Non

Independent

No. of Meeting

Attended

1 Mr. U. GururajaBhat Member Independent 4

2 Mr. G Raghavan Member (w.e.f. 24.06.2017) Independent

4

3 Mr. N. Subramanian Chairman (w.e.f

24.06.2017) Independent

4

During the year 2016-17, Four Audit Committee Meetings were held 24th

June, 2017, 27th

September 2017, 29th

December, 2017 and 12th

February 2018

5. Nomination & Remuneration Committee

Nomination & Remuneration Committee consists of the following members:

Sl.

No.

Name Designation Independent / Non

Independent

No. of Meeting

Attended

1 Mr. U. GururajaBhat Member Independent 1

2 Mr. G Raghavan Chairman (w.e.f.

24.06.2017) Independent 1

3 Mr. N. Subramanian Member (w.e.f. 24.06.2017) Independent 1

During the year 2017-18, Two Nomination and Remuneration Committee Meeting was held.

5a) Remuneration to Directors

Remuneration to Managing Director/ Whole-time Director as

recommended by the Nomination and Remuneration Committee is

approved by the Board of Directors within the ceiling prescribed

under Schedule V to the Companies Act, 2013. The same is also

approved by the Members of the Company in General Meeting. 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 Directors of 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 the Directors are given in

Extract of Annual Return in Form MGT – 9 at Annexure I.

6. Shareholders Relationship Committee

The Shareholders Relationship Committee’s composition and the

terms of reference meet with the requirements ofprovisions of the

Companies Act, 2013.

It is primarily responsible to consider and review all matters

connected with the Company’s transfer of securities and redressal

of shareholders/ investors/ security holders’ complaints and

resolve the grievances of security holders of the Company.

The Shareholders Relationship Committee consists of the following

members:

39

Sl.

No.

Name Designation Independent / Non Independent

1 Dr S. Rajkumar

Chairman Non-Independent

2 Mr. U. GururajaBhat

Member Independent

3 Mr. N Subramanian

Member Independent

7. Status of Investor Grievances

Name & designation of compliance officer Mr.R. Ponnambalam, Company Secretary

Number of shareholders complaints received during 2017-18 Nil

Number of complaints resolved to the satisfaction of shareholders Nil

Number of pending complaints as on 31.03.2018. Nil

8. Risk Management Committee.

Our risk Management Committee comprises the following Members:

Sl.

No.

Name Designation Independent / Non Independent

1 Mr. U. GururajaBhat Chairman Independent

2 Mr. G Raghavan Member Independent

3 Mr. N Subramanian Member Non Independent

The purpose of the committee is to assist the Board in fulfilling its

corporate governance duties by overseeing the responsibilities

with regard to the identification, evaluation and mitigation of

operational, strategic and

environmental risks. The committee has the overall responsibility

of monitoring and approving the risk policies and associated

practices of the Company.

The Company’s Risk Management Policy is placed in the Company’s

website www.sreekailas.com

40

9. Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee consists of the following members:

Sl.

No.

Name Designation Independent / Non

Independent

1

Mr. AkhileshAgarwal

Member Non Independent

2

Dr. S Rajkumar

Chairman Non Independent

3

Mr. N Subramanian

Member Independent

10. Share Issue / Transfer Committee

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

Sl.

No.

Name Designation Independent / Non Independent

1 Dr S. Rajkumar

Chairman

Non-Independent

2 Mr. G Raghavan

Member Independent

3 Mr.N Subramanian Member Independent

During the year 2017-18, One Share Issue/Transfer Committee Meeting was held.

11. Machinery Disposal Committee

The Machinery Disposal meeting consists of the following members:

Sl.

No.

Name Designation Independent / Non Independent

1 Dr S. Rajkumar

Chairman

Non-Independent

2 Mr. G Raghavan

Member Independent

41

3 Mr.N Subramanian Member Independent

During the year 2017-18, Three Machinery Disposal Committee Meeting was held.

12. Project Finance Committee

A Project Finance Committee was constituted during the financial

year 2007-08 for implementation of new diversified projects. The

Committee consists of Dr. S. Rajkumar and Mr. S. Subramoniam. No

meeting of the committee was held during the year under review.

13. Code of Conduct

The code of Conduct for all the members of the Board and senior

management of the Company has been posted on the website of

the Company: www.sreekailas.com. All Board members and senior

management personnel (as per Regulation 26(3) of the Listing

Regulations) have affirmed compliance with the applicable Code of

Conduct. A declaration to this effect forms part of this Report.

13a. Disclosures on materially significant related party

transactions i.e. transactions of the Company of material nature

with its promoters, the directors or the management, their

relatives, etc. that have 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 in Notes on Accounts

forming part of the Annual Report. All related party transactions

are negotiated on arms length basis and are only intended to

further the interests of the Company. Companies Policy on Related

Party is uploaded in the Company Website www.sreekailas.com.

13b. Details of non-compliance by the Company, penalties,

strictures imposed on the Company by the Stock Exchange or SEBI

or any other statutory authority, on any matter related to the

capital markets, during the last three years.

There has been no instance of non-compliance by the Company on

any matter related to Capital Markets during the last three years

and hence no penalties or strictures have been imposed on the

Company by the Stock Exchange or SEBI or any other Statutory

Authority.

13c. Disclosures on Accounting Treatment

Disclosures of accounting treatment wherever applicable have

been made in the Audited Financial Accounts for the year ended

31st March, 2018

13d. Board Disclosures – Risk Management

The Company has laid down procedures to inform the Board

Members about the risk assessment and minimization procedures

and they are being reviewed periodically. The Risk Management

Policy is uploaded in 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 of their knowledge

and belief:

(i) These statements do not contain any materially untrue

statement or omit any material fact or contain statements

that might be misleading;

(ii) these statements together present a true and fair view

of the company’s affairs and are in compliance with 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 during the 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 evaluated the

effectiveness of the internal control systems of the company

and they have disclosed to the auditors and the Audit

Committee, deficiencies in the design or operation of internal

controls, if any, of which they are 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 in the notes to

the financial statements; and

(iii) They have not come across any instances of significant

fraud and involvement therein, if any, of the

management or an employee having a significant role in

the company’s internal control system.

Particulars of Employees

None of the employees of the company fall under the provisions of

section 197(12) of the Companies Act, 2103, read with Rule 5(1) of

the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014.

42

Following statement containing the details of the Remuneration of

Directors, KMPs and Employees as required under Section 197(12)

of the Act, read with Rule 5 of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014.

Information pursuant to Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules 2014

1) Ratio of the remuneration of each Director / KMP to the median remuneration of all the employees of the Company in the FY 2017-18

Median remuneration of all the employees of the Company

for the Financial Year 2017-18

NIL

Percentage increase in the median remuneration of the

employees in the Financial year 2017-18

NIL

Number of permanent employees on the rolls of the Company

as on 31st March 2018

12

2) The percentage of increase in remuneration of the Non-executive Chairman, President and CEO , Sr. Vice President, CFO and Company

Secretary

# Name of the

Director / KMP

Designation Remuneration

during the FY

2017-18

% increase in

Remuneration

during FY 2017-18

1 V N Sridharan CFO 3,60,000 0%

2 R Ponambalam Company Secretary 0 0%

3) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: There were no change in the salary of both the employees and KMP

43

4) The remuneration is as per the remuneration policy of the Company.

Sr. No Name Designation Remuneration

Received (Per annum)

Nature of

employment -

whether

contractual or

otherwise

Qualification Experience (No.

of Years)

Date of

commencement of

employment

Age (in

years)

Last Employment

and Designation

% of equity shares

held by the

employee in the

company

Whether any such

employee is a

relative of any

director or

manager of the

company and if

so, name of such

director or

manager

1 RATHEESH K PAI

Sr. manager

(Electrical) 389,917.00 Permanent

Diploma

Electrical) 21 01/03/1993 54

Employment

started in Sree

sakthi paper Mills

Ltd - no

2 AYYAPPAN PILLAI S

Chief Commerical

officer 357,500.00 Permanent BA 2 10/01/2017 65

Sree giri Packaging

Ltd. , Manager - no

3 VINODKUMAR V DGM 340,220.00 Permanent BA, LLB 22 02/02/1996 56

Employment

started in Sree

sakthi paper Mills

Ltd - no

4 SRIDHARAN V N CFO 321,500.00 Permanent

Chartered

Accountant 40 01/10/2016 66

Hindustan

Newsprint Ltd,

Director and CEO - no

5 PARVATHY P

Sr.Manager- Finance

& Accounts 316,052.00 Permanent Mcom 25 04/01/1993 55

Employment

started in Sree

sakthi paper Mills

Ltd - no

6 JAYAKUMAR . M Dy.General Manager 279,860.00 Permanent Bcom 25 18/03/1993 53

Employment

started in Sree

sakthi paper Mills

Ltd - no

7 SARANYA . N.M Company secretary 238,000.00 Permanent

Company

Secretary 1 01/02/2017 28

Employment

started in Sree

sakthi paper Mills

Ltd - no

8 LATHEEF K.K Security in charge 231,088.00 Permanent BA 7 07/02/2011 47

Employment

started in Sree

sakthi paper Mills

Ltd - no

9 LIYA JOSHI Sr.Executive 204,417.00 Permanent Msc 3 14/05/2015 44

Employment

started in Sree

sakthi paper Mills

Ltd - no

10 BETSI RANI T.B

Sr.Executive

accounts 192,810.00 Permanent Mcom. 13 21/11/2005 39

VM Santhosh &

Co,Executive - no

44

15. Annual General Meetings

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

Year Location Date Time Special Resolution

2015

Hotel Abad Plaza

M.G.Road, Ernakulam

Cochin – 35

Wednesday

30.09.2015

2.00PM

1. Appointment of Mr. A. R. K. Rao as an Independent Director.

2. Approval of Related Party Transaction.

3. Re-appoint Dr. S. Rajkumar as Managing Director.

4. Re-appointment of Mr. N. PurushothamaPrabhu as Whole Time

Director and fixing his remuneration.

5. Re-appointment of Mr. A. Padmanabhan as Executive Director

of the Company and fixation of remuneration.

2016

Hotel Abad Plaza

M.G.Road, Ernakulam

Cochin – 35

Friday

30.12.2016

2.00PM

1. Appointment of Mr. VenkataMangeswaraRaoVarrey (DIN

0630043) Additional Director and as a Whole time Director and

fixing his remuneration.

2. Approval of Related Party Transaction.

3. Re-appoint Dr. S. Rajkumar as Managing Director.

2017

Hotel Abad Plaza

M.G.Road, Ernakulam

Cochin – 35

Friday

29.12.2017

2.00PM

1. Change in name of the Company

2. Appointment of G Raghavan as an Independent Director

3. Appointment of N Subramanian as an Independent Director

4. Appointment of AkhileshAgarwal as an Independent Director

5. Approval of Related Party Transaction.

6. Re appointment of S Rajkumar as Managing Director

There was one resolution passed by the Company’s members through Postal Ballot during last year.

Year

Declaration date

Resolutions

2017-18

24.06.2017

1. Authorizing the Board to sell immovable assets

2. Alteration of Object clause of MOA

3. Issuance of11.25% non convertible cumulative redeemable preference shares

45

2017-18 12.02.2018 1. Authorizing the Board to sell Plant and Machinery

2. Issuance of11.25% non convertible cumulative redeemable preference shares

2017-18 24.03.2018 1. To approve the revised terms of existing loan borrowed by the Company in accordance with

Sec.62(3) and other applicable provision if any of the Companies Act, 2013including proviso to

convert into shares.

2. To Convert Rs. 3 Crores loan of Mr.SRajkumar into shares and consider issue of convertible

warrants at a price of Rs.11

3. Change the name of the Company

16. Means of Communication:

The Company’s corporate website, www.sreekailas.com provides comprehensive information to the Shareholders.The Financial Results are

generally published in ‘Business Standard’, in English and in ‘Mangalam’, in Malayalam. The Results are also placed on the Company’s Web Site,

www.sreekailas.com. The Company also usually sending shareholders letters along with copy of results directly to the investor on quarterly basis

as part of good corporate governance measure.

17. General Shareholder Information:

AGM: Date, time & venue : Saturday, 29 September, 2018, 2.00P.M at Hotel Abad Plaza, M.G.Road Cochin – 35

Financial Year

:

April 01 to March 31

Financial Calendar(tentative and

subjectto change)

: June 2018 Audited results for 2017-18

August 2018 First Quarter Results for 2018-19

September 2018 Annual General Meeting for 2017-18

November 2018 Second Quarter Results for 2018-19

February 2019 Third Quarter Results for 2018-19

March 2019 Review of performance 2018-19

May 2019 Audited results for 2018-19

September 2019 Annual General Meeting for 2018-19

Date of Book closure : 20.09.2018 to 29.09.2018 (both days inclusive)

Dividend Payment Date : No Dividend Declared

Listing on Stock Exchanges

: The Stock Exchange, Mumbai PhirozeJeejeebhoy Towers Dalal Street Mumbai 400 001 Ph:

(91)(22)2272 1233 - 1234 (General) 2272 1121 - 1122, 2272 2375 (Corporate Relations

Department) Web Site: www.bseindia.com E-mail: isc@bseindia.com Fax: (91)(22)2272 1919,

2272 3027 (General) 2272 3719, 2272 2039, 2272 2061 2272 3121, 2272 2037, 2272 2041

(Corporate Relations Department)

46

Payment of Annual Listing Fees to the

Stock Exchange

:

Listing Fee has been paid to the Stock Exchange, in which the Company’s Equity Shares are

listed, uptoMarch 31, 2019

Stock Code

: Under Demat System the ISIN allotted to the Company’s Equity Shares is : INE266H01014 The

Company’s Stock Code is 532701

Market Price Data (BSE)

Month Open High Low Close * Spread

H-L C-O

Apr-17 6.95 8.5 6.04 7.12 2.46 0.17

May-17 7.03 7.81 5.5 5.93 2.31 -1.1

Jun-17 6.35 6.35 4.05 4.99 2.3 -1.36

Jul-17 5.23 5.23 3.9 4.17 1.33 -1.06

Aug-17 4.1 4.9 3.27 3.98 1.63 -0.12

Sep-17 3.5 4.81 3.45 4.1 1.36 0.6

Oct-17 3.91 4.7 3.7 4.45 1 0.54

Nov-17 4.03 5.9 3.55 4.88 2.35 0.85

Dec-17 4.02 8.63 4.01 8.63 4.62 4.61

Jan-18 9.06 11.65 8.05 8.49 3.6 -0.57

Feb-18 8.9 11.03 8.8 11.03 2.23 2.13

Mar-18 11.55 11.58 7.55 7.55 4.03 -4

47

Registrar and Transfer Agents and Share transfer System

: M/s. Bigshare Services Private Limited, E/2, Ansa Industrial Estate, 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 and Transfer Agents. The shares of the Company are under compulsory demat mode.

Distribution of Shareholding as on 31

st March 2018

: Distribution No. of share Holder

% of share Holders

No. of shares % of share holding

1 – 5000

6894 80.83 12965870 7.89

5001-10000

842 9.87 6594110 4.01

10001-20000

347 4.07 5472670 3.33

20001-30000

109 1.28 2834260 1.72

30001-40000

74 0.87 2655700 1.62

40001-50000

57 0.67 2720200 1.4225

50001-100000

91 1.07 6439620 4.3216

100001 & above

115 1.35 13327970 75.86

TOTAL

8529

100.00

17296217

100.00

Shareholding pattern as on 31

st March, 2018

: Category No. of share

Holder

No. of shares held

% of share holding

A. Promoters Holdings Promoter & promoter group B. Non Promoters Holding Public Corporate Bodies NRI NBFC’s registered with RBI Clearing Member Directors & Relatives

8303378 8992839 7507908

578202 883212

200 7301

16016

48.01 51.99 43.41

3.34 5.11 0.00 0.04 0.09

Grand Total

17296217

100.00

Name and number of shares held and percentage share holding of entities / persons holding more than 1% shares of the Company as on 31.03.2018

Name No. of shares held

% of share

holding

Category

S RAJKUMAR 5530114 31.973 PROMOTERS - RESIDENT INDIANS

AYYAPPAN PADMANABHAN 1294658 7.485 DIRECTORS - RESIDENT INDIANS

RAJA RAM 717689 4.149

NON RESIDENT INDIAN - NON-

RESIDENT INDIANS (NON-

REPATRIABLE)

S GIRIDHAR 713223 4.124 PROMOTERS - RESIDENT INDIANS

Anand Mohan 334000 1.931 PUBLIC - RESIDENT INDIANS

RAJEE RAJKUMAR 285544 1.651 RELATIVES OF DIRECTOR - RESIDENT

48

INDIANS

SUBRAMANIAM SIVATHANU

PILLAI 232840 1.346 PUBLIC - RESIDENT INDIANS

PARANJOTHI SUNDARAM 221455 1.28 PUBLIC - RESIDENT INDIANS

BALRAM BHARWANI 200000 1.156 PUBLIC - RESIDENT INDIANS

TOTAL

9529523

55.06

Dematerialization of shares and liquidity

: Break up of Shares as on 31/03/2018 a) In dematerialized mode NSDL - 13788321 CDSL - 3496048 b) In Physical mode 11848 Total - 17296217 100% of Shares of Promotor and Promoters group were dematerialized pursuant to SEBI Circular No: ISD /3/2011 dt. 17.06.2011.

Outstanding GDRs / ADRs /Warrants or any Convertible instruments, conversion date and likely impact on equity

: Nil

Plant Locations

: Kraft Paper Unit I Industrial Development Area, Muppathadom, Edayar, Aluva - 682 102, Kerala; Kraft Paper Unit II Industrial Development Area, Muppathadom, Edayar, Aluva - 683 102, Kerala;

Address for correspondence : SreeSakthi Paper Mills Limited 57/2993, “Sree Kailas”, Paliam Road, Ernakulam, Cochin - 682 016, Kerala Tel: 0484 -3002000 Email: secretary@sreekailas.com, Web: www.sreekailas.com

DECLARATION-

All the members of the Board of Directors of the Company and Senior Management of the Company have affirmed compliance of the Code of

conduct for the year ended 31st

March 2018. The Code of Conduct laid down for all Board members and Senior Management of the Company is

posted on the website of the Company.

Chennai – 17

13-08-2018

Sd/-

Dr. S. Rajkumar

Managing Director

49

ANNEXURE - V

SECRETARIAL AUDIT REPORT FOR THE FINANCAL YEAR ENDED

31.03.2018

[Pursuant to section 204(1) of the Companies Act, 2013 and

rule No.9 of the Companies (Appointment and Remuneration

Personnel) Rules, 2014]

To

The Members

SREE SAKTHI PAPER MILLS LIMITED

We have conducted the secretarial audit of the compliance of

applicable statutory provisions and the adherence to good

corporate practices by SreeSakthi Paper Mills Limited

(hereinafter called the company). Secretarial Audit was

conducted in a manner that provided us a reasonable basis for

evaluating the corporate conducts/statutory compliances and

expressing our opinion thereon.

Based on our verification of the Company’s books, papers,

minute books, forms and returns filed and other records

maintained by the company and also the information provided

by the Company, its officers, agents and authorized

representatives during the conduct of secretarial audit, We

hereby report that in our opinion, the company has, during the

audit period covering the financial year ended on 31st March,

2018, complied with the statutory provisions listed hereunder

and also that the Company has proper Board-processes and

compliance-mechanism in place to the extent, in the manner

and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and

returns filed and other records maintained by SreeSakthi Paper

Mills Limited (“the Company”) for the financial year ended on

31st March, 2018 according to the provisions as applicable to

the Company during the period of audit:

(i) The Companies Act, 2013 (the Act) and the rules

made thereunder;

(ii) The Depositories Act, 1996 and the Regulations and

Bye-laws framed thereunder to the extent of

Regulation 55A;

(iii) The following Regulations and Guidelines prescribed

under 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,

2015;

(c) The Securities and Exchange Board of India

(Registrars to an Issue and Share Transfer

Agents) Regulations, 1993 regarding the

Companies Act, 2013 and dealing with

client.

(i) The Securities Exchange Board of India

(Listing Obligations and Disclosure

Requirements) Regulation, 2015

We have also examined compliance with the applicable clauses

of the following:

i. Secretarial Standards issued by The Institute of

Company Secretaries of India

ii. The SEBI (LODR) 2015 entered into by the

Company, where the equity shares of the

Company are listed.

iii. The below mentioned are the laws/ Regulations

(as amended from time to time), as informed

and certified by the management of the

Company which are specifically applicable to the

Company based on their industry;

• 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.

• Employees Provident Fund and

Miscellaneous Provisions Act, 1952

• Employees' State Insurance Act, 1948

• The Contract Labour (Regulation &

Abolition) Act, 1970

• The Factories Act, 1948

• The Industrial Disputes Act, 1947

• The Workmen’s Compensation Act, 1923

& Rules

50

• Payment of Gratuity Act 1972 & Rules

• The Payment of Bonus Act, 1965

• The Minimum Wages Act, 1948

• The Maternity Benefit Act, 1961

• Apprentices Act, 1961

During the period under review, the Company has complied

with the provisions of the Act, Rules, Regulations, Guidelines,

Standards, etc., mentioned except (iii) above;

1. Delay in filing forms and returns with ROC and also

few instances of delay in complying with the

provisions of SEBI (LODR).

2. Non compliance of the provisions of Section 126 of

the Companies Act, 2013 due to technical

reconciliation of bank account by RTC

3. Penalties paid for delay in filing audited and

unaudited financial statement to Stock Exchange for

the quarter ended 30th

June 2017, 30 September

2017 and 31 March 2018.

Further report that there were no actions/events occurred in

the pursuance of

i. The Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations,

2009;

ii. The Securities and Exchange Board of India (Share

Based employee Benefits) Regulations, 2014;

iii. The Securities Exchange Board of India (Issue and

Listing of Debt Securities) Regulation, 2008

iv. The Securities Exchange Board of India (Delisting of

Equity Shares) Regulation, 2009

v. The Securities Exchange Board of India (Buyback of

Securities) Regulation, 1998

vi. Foreign Exchange Management Act, 1999 and the

rules and regulations made thereunder requiring

compliance thereof by the Company during the

Financial Year under review.

We further report that, since the factory is closed the above

Laws mentioned in (iii) was not complied due to the non

operational status of the Company.

We further report, that the compliance by the Company of

applicable 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 and other

designated professionals.

We further report that

The Board of Directors of the Company is constituted with a

balance of Executive Directors, Non-Executive Directors and

Independent Directors. The changes in the composition of the

Board of Directors that took place during the period under

review were carried out in compliance with the provisions of

the Act.

Notices were given to all directors to schedule the Board

Meetings, Committee Meetings, agenda (except delay from due

date) and detailed notes on agenda were delivered and a

system exists for seeking and obtaining further information and

clarifications on the agenda items before the meeting and for

meaningful participation at the meeting.All decisions at Board

Meetings and Committee Meetings are carried out

unanimously as recorded in the minutes of the meetings of the

Board of Directors or Committee of the Board, as the case may

be.

We further report thatduring the audit period the company has

no specific events / actions having a major bearing on the

company’s affairs in pursuance of the above referred laws,

rules, regulations, guidelines, standards, etc. referred to above.

except:

1. The company has Redeemed its 11.25% Non-

convertible Cumulative Preference shares face value

of Rs.10/-each by fresh issue of shares upto

10,00,000 shares through postal ballot dated

23.06.2017

2. The Company has diversified its business and also

altered the Memorandum of Association accordingly

through postal ballot dated 23.06.2017.

3. Factory situated at Chalakudy has been sold after

obtaining approval through postal ballot dated

23.06.2017

4. All the main plant items except co generation plant

(Power boiler and generator) situated at Edayar

have been sold through postal ballot dated

27.09.2017.

5. A demand notice under Insolvency and Bankruptcy

Code, 2016 in form 3 was served on the Company on

7th

March 2018 for non-payment of dues upto 13.92

Lacs, which the Company has agreed to settle before

NCLT on 27.07.2018 Sd/- Place: Chennai N. Srividhya

Date:13th

August 2018 Mem No:34428

C.P.NO. 14058

51

“Annexure A”

(To the Secretarial Audit Report of M/s. SreeSakthi Paper Mills

Limited for the financial year ended 31.03.2018)

To

The Members

Sree Sakthi Paper Mills Limited

Our Secretarial Audit Report for the financial year ended

31.3.2018 is to be read along with this Annexure A.

1. Maintenance of Secretarial record is the responsibility

of the management of the Company. Our

responsibility is to express an opinion on these

secretarial records based on our audit.

2. We have followed the audit practices and the

processes as were appropriate to obtain reasonable

assurance about the correctness of the contents of

the secretarial records. The verification was done on

test basic to ensure that correct facts are reflected in

secretarial records. We believe that the processes

and practices we followed provide a reasonable basic

for our opinion.

3. We have not verified the correctness and

appropriateness of financial records and Books of

Accounts of the Company.

4. Where ever required, we have obtained the

Management representation about the compliance

and law, rules and regulation and happening of

events etc.

5. The compliance of the provisions of Corporate and

other applicable laws, rules, regulation, standards is

the responsibility of the management. Our

examination was limited to the verification of

procedure on test basic.

6. The Secretarial Audit report is neither an assurance as

to the future viability of the Company nor of the

effectiveness with which the management has

conducted the affairs of the Company. Sd/- Place: Chennai N. Srividhya

Date:13th

August 2018 Mem No:34428

C.P.NO. 14058

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

, 2018 as stipulated in chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015 pursuant to the Listing Agreement of the said Company with stock exchanges.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and

implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an

audit nor an expression of opinion on the financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, subject to the following:

(i) No Independent Director on Board has been appointed as a Director on Board of Unlisted Material subsidiaries. (ii) Submission of the Audited standalone financial results for the financial year and quarterly standalone financial results in the first two

quarters was delayed beyond the permitted due date. (iii) No internal audit was conducted during the year

we certify that the company has complied with the conditions of Corporate Governance as stipulated in the provisions as specified in 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 the efficiency or effectiveness with

which the management has conducted the affairs of the Company.

For KPR & Co

Chartered Accountants

FRN: 5326S

Sd/-

Deepa Praveen, ACA

Kochi -11 Memb No: 232410

13.06.2018 Partner

52

Annexure VI

ANNUAL REPORT ON CSR ACTIVITIES FOR THE FINANCIAL YEAR 2017-18

[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 be

undertaken with web-link to CSR policy and

projects or programs

NIL

2

Composition of the CSR

Committee.

Dr. S Rajkumar, Managing Director, Mr. N Subramanian, Independent Director and Mr.

AkhileshAgarwal, Director

3

Average Net profits of the company for the last

three financial year

(Loss Rs. 2040.17 lakhs)

4

Prescribed CSR expenditure (Two percent of

the amount in item no. 3 above)

NIL

5

Details of CSR Spent during the Financial Year

Amount budgeted for the year 2017-18 : Nil

Amount spent upto 31.03.2018 : Nil

Amount Unspent if any : Nil

Manner in which the amount was spent during the financial year ended 31.03.2018

CSR

project

activity

Sector in

which

the project

is

covered

Projects or

programs (1) local area or

other (2) specify the state &

district where projects or

programs were

undertaken

Amount

Outlay (budget)

project or

programs wise

Amount spent on

the projects or

programs sub-

heads: (1) Direct

expenditure on

projects or

programs (2) over

heads

Cumulative

expenditure

up to

the reporting

period

Amount

spent

Direct or

through

implementi

ng

53

agency

NIL NIL NIL

NIL NIL NIL NIL

Sd/-

Dr. S. Rajkumar

Managing Director

54

Independent Auditor’s Report

To

The Members of M/s.Sree Sakthi Paper Mills, Kochi.

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of M/s. Sree Sakthi Paper Mills, Kochi, [CIN:

L21012KL1991PLC006207] which comprises of:-

(a) The Balance Sheet as at 31st March, 2018

(b) The Statement of Profit and Loss for the year (including other comprehensive income) ended 31st March, 2018

(c) Statement of Changes in Equity for the year ended 31st March, 2018

(d) Cash Flow Statement for the year ended 31st March, 2018; and

(e) A Summary of Significant Accounting Policies and other explanatory information.

Management’s responsibility for the financial statements

The Company’s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act 2013(“the Act”) with

respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial

performance including other comprehensive income, cash flows and changes in equity of the company in accordance with the Indian

Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,

2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for

safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of

appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and

maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the

accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free

from material misstatement, whether due to fraud or error.

55

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions

of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions

of the Act and the Rules made there under and the order passed under Section 143(11) of the Act. We conducted our audit in

accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements

are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement

of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal

financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the

company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such

controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting

estimates made by Company’s Directors, as well as evaluating the overall presentation of the standalone financial statements. We

believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone

financial statements

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial

statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the

accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2018; and its LOSS, total

comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Emphasis of Matter

We invite the attention of the users to –

(a) Note No. 2(e) of the Significant Accounting Policies regarding the validity of Going Concern assumption for the company in

preparation of the standalone financial statements;

(b) Note No. 13 of the Significant Accounting Policies regarding lack of external confirmation of balances for receivables and payables

including balances due to / from group concerns.

Our report is not qualified in respect of the above matters.

Report on other legal and regulatory requirements

1) As required by the Companies (Auditor’s Report) Order, 2016 (“The Order”) issued by the Central Government of India in terms of

sub-section 11 of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the

Order to the extent applicable.

1) As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our

examination of those books.

c) The Balance Sheet, Statement of Profit and Loss including other comprehensive income, Statement of changes in Equity,

and Cash Flow Statement dealt with by this Report are in agreement with the books of account

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under section 133

of the Companies Act, 2013, read with Rule 7 of Companies (Accounts), Rules 2014

56

e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board

of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of sub-

section (2) of section 164 of the Act.

f) The report on internal financial control as required under clause (i) of sub section 3 of section 143 of the Companies Act

2013 is attached as Annexure B.

g) With respect to other matters to be included in the Auditors Report in accordance with Rule 11 of Companies (Audit and

Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The company has disclosed the impact of pending litigations on its financial position in its financial

statements.

ii) The company has made provisions, as required under any law or accounting standard, for material

foreseeable losses, if any, on long term contracts including derivative contracts.

iii) iii) The company has not transferred the equity shares corresponding to Unpaid dividend where the

specified period under 124 (5) has been completed, within the due date of 31st October 2017. However

there has been no delay in transferring such unpaid dividends to Investor Education and Protection fund

by the company.

For KPR & Co

Chartered Accountants

FRN: 5326S

Sd/-

Deepa Praveen, ACA

Kochi -11 Memb No: 232410

13.06.2018 Partner

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi -16 (2017-18)

Annexure A: Referred to in paragraph 1 of ‘Report on other Legal and Regulatory requirements’ of our report of even date-

(i) In respect of the fixed assets –

(a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at reasonable intervals and the discrepancies noticed have

been properly dealt with in the books of accounts.

(c) According to the information and explanation given to us, the title deeds of immovable properties of the Company are held in

the name of the Company, except for 1.75 acres of industrial land in the possession of the Company at Edayar, purchased in

financial year 2012-13. We are informed that the company has paid the entire purchase consideration and is waiting for final

clearance for effecting legal transfer of ownership.

(ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is

reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have

been properly dealt with in the books of account.

(iii) (a) The Company has not granted any loans, secured or unsecured, to Companies, firms, LLPs, or other parties covered in the

register maintained under Section 189 of the Companies Act, 2013, except for unsecured loans Rs. 5.36 lakhs, Rs.5.36 lakhs and Rs. 7.11

lakhs advanced to the subsidiary companies M/s Sree Adisakthi Mukkuttathode Hydropower Limited, M/s Jalashaayi Alamparathodu

Hydro power Limited and M/s Sree Kailas Palchuram Hydro power Limited respectively prior to 2013.

However the above loans were repaid by the respective borrowing companies during the year.

(b) The terms and conditions of the above loans granted are not prejudicial to the interest of the company.

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

57

(iv) In our opinion and according to the explanations given to us, the Company has complied with the provisions of the Sections 185 and

186 of the Act in respect of the grant of loans, making investments and providing guarantees and securities made by it.

The company had granted loans/advances to subsidiary companies as given in iii(a) above, which we were informed by the company

that the provisions of section 185 and 186 are not applicable as the were made before 12th September 2013 being the effective

date of Sec 185 of Companies Act 2013.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits during

the year.

Therefore, the provisions of clause 3 (v) of the Companies (Auditor’s Report) Order, 2016, are not applicable to the Company.

(vi) We have broadly reviewed the books and records maintained by the company pursuant to the order of the Central Government 148 (1)

of the Companies Act 2013 and are of the opinion that prima facie the prescribed accounts and records have been made and

maintained. We have however not made a detailed examination of the records with a view to determining whether these records

are accurate or complete.

(vii) (a) According to the information given to us and on the basis of the checks conducted by us we report that the company has not

been regular in depositing undisputed statutory dues including Provident fund, Employees state insurance, Income Tax,

Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value added tax, Cess and other statutory dues with appropriate

authorities. The extend of arrears of Statutory dues as at the last day of the financial year concerned outstanding for a

period of more than six months as at 31.3.2018, from the date they became payable are income tax of Rs. 71.71 lakhs and

TDS of Rs.4.82 lakhs, Service Tax Rs 3.23 lakhs, Excise duty of Rs 46.39 lakhs, VAT of Rs 6.75 lakhs andCSTofRs.1.25lakhs.

(b) According to the information and explanations given to us, and based on the records of the company examined by us,

the particulars of dues towards income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added

tax and cess as at 31st March 2018, which have not been deposited on account of any dispute are furnished as:

Sl. No.

Name of the statute

Nature of Dues Amount of tax disputed (Rs. In

lakhs)

Period to which the dispute relates.

Forum where the Dispute is pending.

1 Income Tax Act Income Tax 22.18 AY 2014-15 CIT(Appeals), Kochi

2 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 and explanation given to us, the Company has not defaulted in repayment of loans

or borrowings to financial institutions, banks and Government except for temporary delays occurred in the repayment details of which

are given in Annexure C.

There were no debenture holders at any time during the year.

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

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud by the

Company or any fraud on the company by its officers or employees during the year was noticed or reported, nor were we informed of

such case by the management.

(xi) In our opinion, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by

the provisions of Section 19 read with Schedule V to the Companies Act 2013.

(xii)In our opinion, the Company is not a Nidhi Company. 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 related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where

applicable and the details have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us, the Company has made preferential allotment of shares during the

58

year under review in accordance with the requirements of Section 42 of the Companies Act 2013 and the amount raised has been used

for the purposes for which the funds were raised.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non cash

transactions with directors or persons connected with him for which provisions of section 192 are applicable.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under

Section 45–IA of the Reserve Bank of India Act, 1934.

For KPR & Co

Chartered Accountants

FRN: 5326S

Sd/-

Deepa Praveen, ACA

Kochi -11 Memb No: 232410

13.06.2018 Partner

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SREE

SAKTHI PAPER MILLS LIMITED

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 financial reporting of Sree Sakthi Paper Mills Ltd (the company) as of 31st

March,

2018 in conjunction with our audit of the standalone financial statements of the company for the year ended on that date.

Management’s responsibility for Internal Financial Controls

The company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over

financial reporting criteria established by the company considering the essential components of internal control stated in the guidance

note on audit of internal financial controls over financial reporting issued by the Institute of Chartered Accountants of India. These

responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating

effectively for ensuring the orderly and efficient conduct of its business including adherence to company’s policies, the safeguarding of

its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely

preparation of reliable financial information as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We

conducted our audit in accordance with the guidance note on audit of internal financial controls over financial reporting (the Guidance

Note) and the standards on auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013 to

the extent 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 we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over

financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain Audit evidence about the adequacy of the internal financial controls system over

financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining

an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing

and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend

on the auditor’s judgment including the assessment of 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 audit opinion on the

company’s internal financial control systems over financial reporting.

59

Meaning of internal financial controls over financial reporting

A company’s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally

accepted accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of the records that, in reasonable detail, accurately and fairy reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that the transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that the receipts and expenditures

of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide

reasonable assurance regarding the prevention or timely deduction of unauthorized acquisition, use, or disposition of the company’s

assets that could have a material effect on the financial statements .

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion of

improper management override of controls, material misstatements due to error or fraud may occur and not be deducted. Also,

projections of any evaluation of the internal financial controls over the financial reporting to future periods are subject to the risk that

the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.

Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been

revealed as at March 31, 2018:

The internal control system established by the company for recording of financial transactions in time was not operating effectively due

to which there was considerable delay in recording, reconciling and reporting the financial information on a timely basis. Further no

internal audit was conducted during the year.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that

there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be

prevented or detected on a timely basis.

In our opinion, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives

of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting

and such internal financial controls over financial reporting were operating effectively as of March 31, 2018, based on the internal

control over the financial reporting criteria established by the Company considering the essential components of internal control stated

in the Guidance Note on Audit of internal Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests

applied in our audit of the March 31, 2018 financial statements of the Company, and these material weaknesses does not affect our

opinion on the financial statements of the Company.

For KPR & Co

Chartered Accountants

FRN: 5326S

Sd/-

Deepa Praveen, ACA

Kochi -11 Memb No: 232410

13.06.2018 Partner

60

ANNEXURE C TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SREE

SAKTHI PAPER MILLS LIMITED

Details of delays occurred in repayment of loans referred in clause (viii) of Annexure A.

Loan Amount Due date of payment Date of payment No. of days of delay

Axis Bank Car Loan

11,044 15.04.2017 21.04.2017 6

11,044 15.05.2017 26.05.2017 11

11,044 15.06.2017 28.07.2017 43

11,044 15.07.2017 28.07.2017 13

11,044 15.08.2017 27.09.2017 43

11,044 15.09.2017 27.09.2017 12

11,044 15.10.2017 30.10.2017 15

11,044 15.11.2017 30.11.2017 15

11,044 15.12.2017 27.12.2017 12

11,044 15.01.2018 03.02.2018 19

11,044 15.02.2018 07.03.2018 20

11,044 15.03.2018 31.03.2018 16

Term Loan (SBT Panampilly Nagar)

13,58,000 11.04.2017 28.04.2017 17

13,75,000 11.05.2017 31.05.2017 20

13,58,000 11.06.2017 30.06.2017 19

34,95,000 11.07.2017 27.07.2017 16

12,90,000 11.08.2017 30.08.2017 19

4,66,18,010 11.09.2017 28.09.2017 17

Term Loan (Punjab National Bank)

5,00,000 28.05.2017 31.05.2017 3

4,68,000 28.06.2017 30.06.2017 2

5,10,000 28.08.2017 30.08.2017 2

61

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Balance Sheet as at March 31, 2018 (₹ in Lakh)

As at As at As at

Particulars Note March 31, 2018 March 31, 2017 April 1, 2016

I. Assets

1 Non-current assets

- Property,Plant & Equipment 4 770.11 965.80 5,502.65

- Capital work-in progress 5 - - 22.92

- Other Intagible Assets 6 - 0.16 0.16

- Financial Assets

Investments 7A 16.39 16.45 57.70

Loans 7B 0.06 - 111.26

- Deferred tax assets (net)

- Other non­current assets 8 13.59 40.69 40.25

2 Current Assets

- Inventories 9 - 91.11 886.36

- Financial Assets

Trade receivables 10A 179.15 334.38 1,664.34

Cash and cash equivalents 10B 24.77 16.75 353.34

Loans 10C - - 10.95

- Other current assets 11 322.32 339.84 587.42

- Assets held for sale 374.00 2,410.36 112.15

TOTAL 1,700.38 4,215.54 9,349.51

II. Equity & Liabilities

1 Equity

- Equity share capital 12 1,729.62 1,643.62 1,643.62

- Other equity 13 (4,431.65) (3,908.86) (244.21)

2 Liabilities

Non-Current Liabilities

- Financial Liabilities

Borrowings 16A 1,090.82 1,770.25 1,906.51

- Provisions 17 8.43 8.06 65.78

- Deferred tax liabilities (Net) 18 27.78 311.22 898.02

- Other non­current liabilities 19 1.43 1.43 1.43

3 Current Liabilities

- Financial Liabilities

Borrowings 16B 2,259.52 3,391.02 2,270.11

Trade payables 20 380.34 495.83 1,810.16

Other financial liabilities 21 7.18 183.75 164.87

- Other Current Liabilities 22 555.19 257.03 752.77

- Provisions 17 71.71 62.20 80.44

TOTAL 1,700.38 4,215.54 9,349.51

Summary of significant accounting policies 1,2,3

The accompanying notes form an integral part of the financial statements

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S

Sd/- Sd/- Sd/-

Deepa Praveen, ACA R.Ponnambalam S.Rajkumar,

Company Secretary Vice Chairman &

M. No.232410 Managing Director

Partner

Cochin -16 Sd/- Sd/-

13.06.2018 V.N.Sridharan N. Subramanian

Chief Financial Officer Director

62

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Statement of profit and loss for the period ended March 31, 2018 (₹ in Lakh)

For period ended For period ended

Note March 31, 2018 March 31, 2017

I Revenue From Operations 23 162.79 2,893.72

II Other income 24 993.68 111.74

III Total Income 1,156.48 3,005.47

IV Expenses

- Cost Of Material Consumed 25 - 1,726.81

- Purchase of stock-in-Trade 221.64

- Changes In Inventory 26 26.92 296.88

- Excise Duty 0.36 111.41

- Employee Benefit Expenses 27 78.94 356.46

- Finance costs 28 213.97 570.47

- Depreciation and ammortisation expenses 29 73.07 138.48

- Impairment loss Property,Plant & Equipment 88.00 2,080.76

- Other Expenses 30 130.53 1,773.40

Total expenses(IV) 611.79 7,276.32

V Profit/(Loss) before, exceptional items and tax (I-II) 544.69 (4,270.85)

VI Exceptional Items [(expense) / income] 31 (1,584.50) -

VII Profit/(Loss) before tax (1,039.82) (4,270.85)

VIII Tax expense

- Current income tax - -

- Tax adjustments for previous year 32 11.05 -

- Deffered Tax 32 (283.44) (586.80)

(272.39) (586.80)

IX (767.43) (3,684.05)

X Other comprehensive income

- Items that will not be reclassified to Profit or Loss 33 0.63 19.40

- Income tax relating to items that will not be reclassified to Profit or Loss 33 - -

XI Total comprehensive income for the period(IX+X) (766.79) (3,664.65)

XII Earnings per Equity shares (of continuing operations) of Rs. 10/- each

- Basic 15 (5.49) (23.24)

- Diluted 15 (5.43) (23.24)

Summary of significant accounting policies 1,2,3

The accompanying notes form an integral part of the financial statements

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner Sd/- Sd/-

Cochin -16 V.N.Sridharan N. Subramanian

13.06.2018 Chief Financial Officer Director

Particulars

Profit/(Loss) for the period from continuing operations(VIII+IX)

63

SREE SAKTHI PAPER MILLS LIMITED

CIN: L93000KL1991PLC006207

Annexure to Notes on Financial Statements for the Year ended March 31, 2018

Note 1 – Reporting Entity

Sree Sakthi Paper Mills Limited (the ‘Company’) is a company incorporated in India as a Limited Company on 3rd October, 1991,

under the provisions of Companies Act, with the main objective of manufacturing of paper and paperboards.

Note 2 – Basis of Preparation

a. Statement of Compliance These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the

Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the ‘Act’)

and the relevant provisions of the Act.

The Company’s financial statements up to and for the year ended 31 March 2017 were prepared in accordance with the

Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of

the Act.

As these are the Company’s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS),

Ind AS 101, First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to

Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is

provided in the Notes. The transition date is April 1, 2016.

b. Functional and presentation currency These financial statements are presented in Indian Rupees (‘INR’), which is also the Company’s functional currency. All

amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

c. Basis of Measurement The financial statements have been prepared on the historical cost basis as a going concern on accrual basis except for

the following items:

Item Measurement Basis

Certain financial assets and liabilities Fair value

Net defined benefit Liability Present value of defined benefit obligations

d. Basis Of accounting a) Income from Sale of own products is accounted net of Excise Duty, Cess, Sales Tax and Discounts.

e. Use of Estimate and Judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the

application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results

may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognized prospectively.

The Pollution Control Board (PCB) required the company to make drastic changes / modification to the existing waste /

effluent water disposal system installed by the company at its Kraft Paper Units I & II at Edayar. The company discussed

the financial and commercial viability of the requirements proposed by the PCB and found it to be financially as well as

commercially ‘non- viable’ considering the present productivity and profitability of the operation. Consequently, PCB

issued closure notice [Notice No. (PCB / ESC / CO – 99 /07)] to both the Kraft Paper on 05.05.2016. Even though the

company approached the Hon. High Court of Kerala for staying the order issued by the PCB, it restrained from

interfering / staying the order issued by the PCB.

64

The company was required to close down both the units at Edayar w.e.f 27.06.2016 and the entire paper manufacturing

operations were discontinued. As a result of it, the entire business were terminated for the remaining part of the year,

except for selling and realizing the remaining inventory of raw materials and finished goods, stock, stores and spares

and fixed assets.

As a part of revival plans proposed for the company, the Board of Directors, in its meeting held on 23.02.2017,

discussed about venturing into the ‘logistics business’ by making use of the existing infrastructure consisting 9.75 acres

of land and building at Edayar. After discussing and analysing the financial and commercial viability and feasibility of

such a plan, the management decided to amend the Memorandum of Association (MoA) of the company to insert

necessary object clause for the above proposal. The process of postal ballot has been already initiated and the results

will be finalized before approval of the financial statements.

The company proposes to raise necessary funds for the new project by selling the lands at its Chalakudy Unit and the

plant and machineries at Edayar Units. The company has already obtained ‘in-principle’ approval from the Government

of Kerala for utilizing the existing allotted lands at Edayar for setting up a logistics business.

In view of the above developments and based on the analysis of the present market, the management of the company

has come into a conclusion that the ‘going concern’ assumption of the company is still holding good and therefore,

revaluation of assets and liabilities stated at historical cost is not warranted.

However, as a matter of prudence, the company has already provided for the possible ‘impairment loss’ accrued on its

entire plant and machineries at Edayar Units. The current assets have been revalued at its realizable value thereby

eliminating any probable loss on account of non-realisation.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the

amounts recognized in the financial statements is included in the concerned notes.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material

adjustment in the year ended 31 March 2018 is included in the concerned notes.

f. Measurement of Fair Values A number of the company’s accounting policies and disclosures require measurement of fair values, for both financial

and non-financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The Company

regularly reviews significant unobservable inputs and valuation adjustments. If third party information is required, the

Company assesses the evidence obtained by the third parties to support the conclusions that these valuations meet the

requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation

techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If

the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy,

then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest

level input that is significant to the entire measurement.

65

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during

which the change has occurred.

Note 3 – Accounting Policies

1. Foreign currency i. Foreign Currency Transactions

Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at

the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the

exchange rate at the reporting date.

2. Income tax Income tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to an item

recognized directly in equity or in other comprehensive income.

I. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any

adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best

estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income

taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized

amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.

II. Deferred Tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized

in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against

which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be

available. Therefore, in case of a history of recent losses, the Company recognizes a deferred tax asset only to the

extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable

profit will be available against which such deferred tax asset can be realized. Deferred tax assets – unrecognized or

recognized, are reviewed at each reporting date and are recognized/ reduced to the extent that it is probable/ no

longer probable respectively that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the

liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group

expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and

assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax

entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be

realized simultaneously.

3. Borrowing Cost Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the

extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of fund.

66

Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of

time to get ready for their intended use are capitalized as part of the cost of that asset. Other borrowing costs are

recognized as an expense in the period in which they are incurred.

4. Cash flow statement Cash flow statements are prepared under Indirect Method whereby profit or loss is adjusted for the effects of transactions

of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income

or expense associated with investing or financing cash flows. Cash and cash equivalents comprise of cash in hand, current

and other accounts (including fixed deposits) held with banks.

5. Events occurring after the balance sheet date Assets and liabilities are adjusted for events occurring after the reporting period that provides additional evidence to assist

the estimation of amounts relating to conditions existing at the end of the reporting period.

6. Property, Plant and equipment a. Recognition and Measurement

Land is capitalized on the basis of actual cost of acquisition, including establishment charges of land acquisition agency

and legal expenses incurred for acquisition.

b. Capitalization of Assets and Charging of Depreciation

i) Fixed Assets are stated at cost. The cost of acquisition of Fixed Assets is inclusive of freight, duties, taxes, incidental expenses and the cost of installation/erection as applicable.

ii) Depreciation is in accordance with the provisions of Schedule II to the Companies Act, 2013. In the case of assets added /sold/discarded/transferred depreciation is charged on pro-rata basis.

iii) Impairment of Property, Plant and Equipment (PPE) The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset’s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the PPE.

iv) Determination of the estimated useful lives Useful lives of all PPE are based on the estimation done by the Management which is in line with the useful lives as prescribed in Part ‘C’ of Schedule II to the Act. In cases, where the useful lives are different from those prescribed in Schedule II and in case of intangible assets, they are estimated by management based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers’ warranties and maintenance support.

v) Fixed Assets identified for disposal are stated at Net Block Value or Net Realizable value whichever is lower and are shown separately in the financial statements as asset held for sale.

vi) Cost of Machinery Spares which can be used only in connection with an item of fixed asset and the use of which is expected to be irregular is allocated to the fixed assets and depreciated to the extent of 95% within a period not exceeding the useful life of the respective fixed asset. Individual spare parts having significant values are capitalized.

vii) Borrowing cost relating to the acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. The qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

viii) Subsequent Expenditures are capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

67

7. Intangible Assets :

a. Recognition, Measurement and Amortisation:

Intangible Assets are amortised over the useful life of the respective assets. Subsequent expenditure is capitalized only

when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure

is recognized in profit or loss as incurred.

b. Transition to IND AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets

recognized as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of

such intangible assets.

8. Valuation of investments: i. Financial instruments

a. Recognition and initial measurement All financial assets and financial liabilities are initially recognized when the Company becomes a party to the

contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus,

for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its

acquisition or issue.

b. Classification and subsequent measurement Financial assets

On initial recognition, a financial asset is classified as measured at

• amortized cost;

• Fair Value through Other Comprehensive Income (FVOCI) – equity investment; or

• Fair Value Through Profit and Loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company

changes its business model for managing financial assets.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as

at FVTPL:

• the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to

present subsequent changes in the investment’s fair value in OCI. (designated as FVOCI – equity investment). This

election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at

FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a

financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if

doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis

are measured at FVTPL.

68

Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost

These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or loss.

Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss. Other net gains and losses are recognized in OCI and are not reclassified to profit or loss.

Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it

is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at

FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or

loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest

expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also

recognized in profit or loss.

c. De-recognition Financial assets

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset

expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the

risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor

retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the

company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or

substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified

terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair

value. The difference between the carrying amount of the financial liability extinguished and the new financial liability

with modified terms is recognized in profit or loss.

9. Valuation of Current Assets: a) Stores, Spares, Materials under Inspection, Materials in Transit, Materials Issued on Loan and Raw Materials

are accounted for at lower of the cost on Weighted Average Method or Net Realisable Value.

b) Finished Goods are accounted for at lower of the cost on FIFO Method or Net Realisable Value.

c) Semi-finished Goods (Work-in-Process) are valued at variable cost on Weighted Average Method.

10. Non-current assets held for sale

Non-current assets comprising assets and liabilities are classified as held for sale if it is highly probable that they

will be recovered primarily through sale rather than through continuing use.

69

Such assets are generally measured at the lower of their carrying amount and fair value less costs to sell. Losses on

initial classification as held for sale and subsequent gains and losses on re-measurement are recognized in profit or

loss.

Once classified as held-for-sale, intangible assets, property, plant and equipment and investment properties are no

longer amortized or depreciated.

11. Retirement/Terminal Benefits/Bonus/Leave encashment a) Company’s liability towards employee benefits such as gratuity and leave encashment are provided for on the

basis of actuarial valuation.

b) Expenditure incurred on short term employee benefits including bonus, production incentive, medical benefits and other perquisites etc. are charged to the Profit and Loss Account at un-discounted amounts in the year in which services are rendered.

c) Expenditure on employee benefits in the nature of contributions to Provident Fund, Employees State Insurance, Labour Welfare Fund etc. are charged to the Profit and Loss Account as and when contributions to the respective funds are due.

d) Liability for bonus is provided for as per the provisions of the Payment of Bonus Act 1965.

e) Actuarial gains or losses, as the case may be, in respect of valuation of employee benefits are charged to the Profit and Loss Account.

f) Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses are recognized in OCI.

12. Provisions, Contingent Liabilities and Contingent Assets a) Provisions (other than trade payables and accruals) as mentioned in the Ind As 37 issued by the Institute of

Chartered Accountants of India are accounted for and disclosed to the extent practicable in the manner laid down in the said Accounting Standard.

b) Contingent Liabilities disclosed in the Notes forming part of the Accounts comply with Ind As 37 to the extent practicable.

c) Company has not recognized any Contingent Asset.

13. Additional Disclosures a) As the Company had terminated its business operations, the management is in the process of ascertaining

and reconciling, wherever necessary, the realizable value of entire receivables of the company. As a matter of prudence, the company has already provided an amount of Rs 721.04 lakhs as provision

towards ‘bad and doubtful debts / receivables’. In the opinion of the management, the above provision is

sufficient to cover the entire doubtful debts of the company.

As negotiations are going on with the debtors and creditors of the company for settlement of dues, we

have not obtained the confirmation of balances as at the year end. Any additional liability required based

on the reconciliations / settlement made with the debtors and creditors, will be provided in the due

course.

b) Compliance on transfer of Unpaid Dividend and Unclaimed Shares to IEPF Account Sec 124(5) of the Companies Act, 2013 read with Rule 6 of Investor Education and Protection Fund

Authority (Accounting, Audit, Transfer and Refund) Rule, 2017, requires every company to transfer any

unpaid dividend along with the corresponding equity shares outstanding for more than the period

prescribed under Act to the Investor Education and Protection Fund (IEPF) Account.

The Ministry of Corporate Affairs (MCA) vide General Circular No. 12/2017 dated 16.10.2017 had notified the

due date to transfer the equity shares where the specified period has completed.

The company has not transferred such equity shares .The Company is taking necessary steps to identify

such equity shares and comply with the provisions of the Act.

70

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Statement of changes in equity for the period ended March 31, 2018

A. Equity share capital (₹ in Lakh)

Opening balance

as at 1 Apr 2016

Changes in equity

share capital during

the year

Closing balance

as at 31 Mar 2017

Changes in equity

share capital during

the year

Closing balance

as at 31 Mar 2018

1,643.62 - 1,643.62 86.00 1,729.62

1,643.62 - 1,643.62 86.00 1,729.62

B. Other Equity (₹ in Lakh)

ParticularsOpening balance

as at 1 Apr 2016

Changes in

accounting policy/

prior period errors

Restated balance

as at 1 Apr 2016

Total comprehensive

income for the yearDividends

Transfer to retained

earnings

Tax on other

comprehensive

income

Closing balance

as at 31 Mar 2017

(i) Capital Reserve 36.68 - 36.68 - - - - 36.68

(ii) General Reserve 533.00 - 533.00 - - - - 533.00

(iii) Retained earnings (2,422.25) (28.12) (2,450.37) (3,684.05) - - (6,134.42)

(iv) Securities premium 1,667.24 - 1,667.24 - - - - 1,667.24

(v) Money received against share warrants - - - - - - -

(vi) Other comperhensive income

- Actuarial gain/(loss) on defined

benefit obligation - - - (9.36) - - - (9.36)

- Equity instrunment through other

comperhensive income - (30.76) (30.76) 28.76 - - - (2.00)

Total reserves (185.33) (58.88) (244.21) (3,664.65) - - - (3,908.86)

(₹ in Lakh)

ParticularsOpening balance

as at 1 Apr 2017

Changes in

accounting policy/

prior period errors

Restated balance

as at 1 Apr 2017

Total comprehensive

income for the yearDividends

Transfer to retained

earnings

Tax on other

comprehensive

income

Closing balance

as at 31 Mar 2018

(i) Capital Reserve 36.68 - 36.68 - - - - 36.68

(ii) General Reserve 533.00 - 533.00 - - - - 533.00

(iii) Retained earnings (6,134.42) - (6,134.42) (767.43) - - - (6,901.85)

(iv) Securities premium 1,667.24 - 1,667.24 8.60 - - - 1,675.84

(v) Money received against share warrants - - - 235.40 - - - 235.40

(vi) Other comperhensive income -

- Actuarial gain/(loss) on defined

benefit obligation (9.36) - (9.36) 0.69 - - - (8.67)

- Equity instrunment through other

comperhensive income (2.00) - (2.00) (0.06) - - - (2.06)

Total reserves (3,908.86) - (3,908.86) (522.80) - - - (4,431.66)

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner

Cochin -16 Sd/- Sd/-

13.06.2018 V.N.Sridharan N. Subramanian

Chief Financial Officer Director

Particulars

Equity shares of Rs.10 each

Total

71

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 4

Land BuildingFurniture and

fixturesPlant and machinery Vehicle Office equipments Total

Year ended 31 March, 2017

Gross Carrying Amount

Deemed Cost as at 1 April 2016 233.27 744.12 18.20 4,469.08 26.79 11.19 5,502.65

Exchange differences - - - - - - -

Additions - - - - - - -

Disposals - - - 4,382.48 15.69 0.22 4,398.39

233.27 744.12 18.20 86.60 11.10 10.97 1,104.26

Accumulated Depreciation

Depreciation charge during the year - 59.73 4.29 62.80 6.71 4.94 138.48

Impairment loss - - - 2,080.76 - - 2,080.76

Exchange differences - - - - - - -

Disposals - - - 2,080.76 - - 2,080.76

- 59.73 4.29 62.80 6.71 4.94 138.48

233.27 684.39 13.91 23.80 4.39 6.03 965.81

Year ended 31 March, 2018

Gross Carrying Amount

Opening Gross carrying amont 233.27 744.12 18.20 86.60 11.10 10.97 1,104.26

Exchange differences - - - - - - -

Additions - - - - - - -

Disposals 34.75 34.75

198.52 744.12 18.20 86.60 11.10 10.97 1,069.51

Accumulated Depreciation and Impairment

Opening accumulated depreciation - 59.73 4.29 62.80 6.71 4.94 138.48

Depreciation charge during the year - 64.67 3.95 1.85 0.31 2.29 73.07

Impairment loss - 83.59 0.45 - 3.43 0.37 87.84

Exchange differences - - - - - - -

Disposals - - - - - - -

- 207.98 8.69 64.65 10.45 7.61 299.39

198.52 536.14 9.51 21.95 0.65 3.36 770.11

(i)

(ii)

(iii)

Property,Plant & Equipment

Particulars

Closing Gross Carrying Amount

Closing Accumulated Depreciation

Net Carrying Amount

Closing Gross Carrying Amount

Closing Accumulated Depreciation

Net Carrying Amount

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016 measured as per the previous GAAP and use that

carrying value as the deemed cost of the property, plant and equipment.

Borrowing costs capitalized during this year – Rs Nil Lakhs (2016‐17 – Nil Lakhs )

The Company has paid entire value for 1.76 Acres of industrial land and has taken the posseession of the same at Edayar. Company has started using the land entirely by the beginning of 2013. Final clearance is

awaited for effecting legal transfer of ownership. In view of the above and in accordance with subsatance and economic reality, this amount has been accounted as Land under Fixed Assets.

72

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 5- CWIP (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Expenditure During Construction Period - -

- -

Details of Expenditure During Construction Period

Opening Balance - 22.92

Add: Expenditure during the year: - -

- Employees' Remuneration & Benefits - -

- Project Management fee - -

- Interest During Construction - -

Total - 22.92

Total Expenditure - 22.92

Less: Transfer to Property, Plant & Equipment 22.92 Closing balance - -

NOTE 6- Other Intangible Assets

Particulars

Year ended 31 March, 2017

Gross Carrying Amount

Deemed Cost as at 1 April 2016 0.16 0.16

Additions - -

Closing Gross Carrying Amount 0.16 0.16

Accumulated Amortisation

Amortisation charge during the year - -

Closing Accumulated Depreciation - -

Net Carrying Amount 0.16 0.16

Year ended 31 March, 2018

Gross Carrying Amount

Opening Gross carrying amont 0.16 0.16

Additions - -

Closing Gross Carrying Amount 0.16 0.16

Accumulated Depreciation

Opening accumulated depreciation - -

Amortisation charge during the year - -

Impairment charge 0.16 0.16

Closing Accumulated Depreciation 0.16 0.16

Net Carrying Amount - -

Transition to Ind AS

(₹ in Lakh)

Computer

software Total

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Intangible assets

recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the

Other Intangible Assets.

73

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 7 : Non Current Financial Assets

NOTE 7A -Investment (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Investment carried at fair value through other comprehensive income

Quoted

- Equity Instruments 1.50 1.56 1.51

- Mutual Funds - - 41.37

Unquoted

- Equity Instruments 0.79 0.79 0.72

A 2.29 2.35 43.60

Investment carried at amortized cost

- Investments in Subsidiaries 14.10 14.10 14.10

B 14.10 14.10 14.10

Total investment C = (A+B) 16.39 16.45 57.70

There are no financial investments measured at fair value through profit and loss

* Details of investment (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Quoted Non-Trade Investments:

Investment in Equity Instruments

- 2,080 Equity shares of I.D.B.I.Ltd of Rs 10 each fully paid up 1.50 1.56 1.51

In Mutual Funds

- 1,30,597 units of ICICI Prudential Infrastructure fund - - 15.53

- 1,25,646 units of L&T Oppurtunities Fund - - 19.22

- 23,286 units of UTI Master Growth Unit Scheme - - 6.62

1.50 1.56 42.88

Unquoted Non-Trade Investments:

Investment in Equity Instruments

Investments in Subsidiaries

- Jala Shaayi Alamparathodu Hydro Power Ltd 4.70 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 4.70

(47,001 Equity Shares Of Rs 10 Each Fully Paid Up)

- Sree Adi Sakthi Mukkuttathode Hydro Power Ltd 4.70 4.70 4.70

(47,001 Equity Shares Of Rs 10 Each Fully Paid Up)

Investment In Others

- Kerala Enviro Infrastructure Ltd 0.79 0.79 0.72

(10,000 Equity Shares Of Rs 10 Each Fully Paid Up)

- Cochin Waste 2 Energy P Ltd - - -

(30,000 Equity Shares Of Rs 10 Each Fully Paid Up)

- - -

14.89 14.89 14.82

74

NOTE 7B -Loans (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Unsecured considered good

- Security Deposits - - 111.26

Unsecured Considered Doubtful

- Security Deposits 24.60 24.54 8.16

24.60 24.54 119.42

- Provision for doubtful deposits (24.54) (24.54) (8.16)

0.06 - 111.26

NOTE 8 : Other Non Current Assets (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Unsecured,considered good

- Advance to related parties 13.59 40.69 35.94

- Capital Advances - - 4.31

Unsecured,considered doubtful- Capital Advances 83.12 83.12 83.12

less : provision for doubtful advance (83.12) (83.12) (83.12)

13.59 40.69 40.25

* Details of Advance to related parties

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Jalashaayi Alamparathode Hydro Power Ltd. - 9.94 8.62

Sree Kailas Palchuram Hydro Power Ltd 12.97 20.26 18.22

Sree Adisakthi Mukkuttathode Hydro Power Ltd 0.62 10.49 9.10

13.59 40.69 35.94

NOTE 9 : Inventories (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

At lower of cost and net realisable value

- Raw Material - - 175.28

- Packing material - -

- work-in-progress - - 15.16

- Finished goods - 26.92 308.64

- Stores, spares & fuels - 63.79 386.25

- Renewable energy certificate - 0.40 1.03

- 91.11 886.36

* Inventory includes : (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

In transit

- Raw materials - - 47.73

- - 47.73

75

Mode of valuation:

(i)

(ii)

NOTE 10: Current Financial Assets

NOTE 10A :Trade Receivables (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Secured

- More than six months from the date they became due - - -

Unsecured

- Considered Good

(i) Exceeding Six Months From They become Due 179.15 148.62 516.44

(ii) Others - 185.76 1,147.90

- Considered Doubtful 721.04 783.00 235.41

Provision for doubtful debts (721.04) (783.00) (235.41)

179.15 334.38 1,664.34

A. Details of debts due by related party (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Directors - - -

Officers - - -

Firms in which any director is a partner

- Carto Packs - 30.53 75.09

- Aditya Paper - 2.92 -

Private Companies in which any Director is a director or member - - -

- 33.45 75.09

NOTE 10B :Cash and cash equivalents (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Balance with Banks

- In Current Accounts 22.32 3.81 12.92

- In Deposit Accounts 1.05 12.85 338.46

Cash in Hand 1.40 0.08 1.96

24.77 16.75 353.34

* Details of deposit account (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Bank of India - - 79.48

Federal Bank Ltd 1.05 0.97 154.89

Industrial Development Bank of India - 11.89 104.09

1.05 12.85 338.46

NOTE 10C : Short term Loans (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Security deposit

- Unsecured considered good 27.60 27.60 29.70

provision for doubtful deposits (27.60) (27.60) (18.75)

- - 10.95

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method.

Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of

material, labour and other direct expenses.

Stock-in-process is valued 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 on Accounting for Self

Generated Emission Reductions issued by ICAI. Accordingly, RECs are recognised on approval of certificate from respective authority, which are

valued at lower of cost or net realisable value. Cost comprises of cost incurred for certification of REC and NRV is the floor price fixed by Central

Electricity Regulatory Commission.

76

NOTE 11 : Other Current Assets (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Advances income tax 20.64 311.40 326.07

Cenvat Credit - 4.19 99.78

Earmarked balance with bank 6.85 10.90 10.95

Interest accrued on deposits - 0.02 8.68

other receivable 294.83 13.33 141.94

322.32 339.84 587.42

NOTE 12 :Equity share capital

A. Authorised (₹ and Nos in Lakh)

Particulars Shares Amount Shares Amount

As at April 2016 250.00 2,500.00 250.00 2,500.00

- Increase during the year - - - -

As at 31 March 2017 250.00 2,500.00 250.00 2,500.00

- Increase during the year - - - -

As at 31 March 2018 250.00 2,500.00 250.00 2,500.00

B. Issued, Subscribed & fully Paid Up

Particulars No. of shares Amount No. of shares Amount No. of shares Amount

164.36 1,643.62 164.36 1,643.62 164.36 1,643.62

8.60 86.00 - - - -

172.96 1,729.62 164.36 1,643.62 164.36 1,643.62

Rights, Preferences and Restrictions attached to equity Shares

1

2

3

4

5

6

7

8

(Nos in Lakh)

No of Shares % of holding No of Shares % of holding No of Shares % of holding

S.Rajkumar 55.40 32.03% 46.80 28.47% 46.80 28.47%A.Padmanabhan 12.95 7.49% 12.95 7.88% 13.18 8.02%Gopinathan CK 10.06 5.82% 10.06 6.12% 10.00 6.08%S.Giridhar 7.13 4.12% 7.13 4.34% 8.50 5.16%

NOTE 13 :Other equity (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Capital Reserve 36.68 36.68 36.68

General Reserve 533.00 533.00 533.00

Retained earnings (6,901.85) (6,134.42) (2,450.37)

Securities premium 1,675.84 1,667.24 1,667.24

Money received against share warrants 235.40 - -

Other comperhensive income

- Actuarial gain/(loss) on defined benefit obligation (8.67) (9.36) -

- Equity instrunment through other comperhensive income (2.06) (2.00) (30.76)

(4,431.65) (3,908.86) (244.21)

Equity shares Preference shares

As at March 31, 2017 As at March 31, 2016

The Company has only one class of shares referred to as Equity Shares having a par value of Rs.10/- per share. Each holder of Equity Shares is

entitled to one vote per share.

The company declares and pays dividend in Indian Rupees. The dividend when proposed by the Board of Directors is subject to the approval of the

shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company the holders of equity shares shall be entitled to receive any of the remaining assets of the company

after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the

number of equity shares held by the shareholders.

As at March 31, 2018

At the beginning

of the periodIssued during the

periodOutstanding at

the end of the

During the last 5 years ,the company has not issued any shares pursuant to any contract without payment being received in , cash as bonus shares

or has not brought back any shares.

The following shareholders hold more than 5% of the shares:

Name As at 31-03-2018 As at 31-03-2017 As at 01-04-2016

Out of the total share capital issued and called up, no calls are outstanding as unpaid.

No shares have been forfeited till date.

The Company has not issued any securities convertible into Equity or Preference Shares.

77

NOTE 14 : Analysis of items of other comprehensive income(OCI),net of tax

Defined benefit

plans

Eqity instrunment

through OCI

As at 1st april 2016 - (30.76) Remeasurements (9.36) - Remeasurements utilized during the year 28.76 As at 31st march 2017 (9.36) (2.00)

Remeasurements 0.69 (0.06) Remeasurements utilized during the year - - As at 31st march 2018 (8.67) (2.06)

NOTE 15 : Earning per share

Basic and diluted earning per share

i. Profit (loss) attributable to equity shareholders (basic and diluted) (₹ in Lakh)

For period ended For period ended

March 31, 2018 March 31, 2017

(767.43) (3,684.05)

less: Cumulative preference dividend not provided 135.40 135.40

(902.83) (3,819.45)

ii. Weighted average number of equity shares (Basic EPS)

For period ended For period ended

March 31, 2018 March 31, 2017

164.36 164.36

0.07 -

164.43 164.36

(5.49) (23.24)

iii. Weighted average number of equity shares (Diluted EPS)

For period ended For period ended

March 31, 2018 March 31, 2017

164.36 164.36

0.07 -

1.93 -

166.37 164.36

(5.43) (23.24)

NOTE 16 : Financial Liabilities

NOTE 16A: Non Current Borrowings (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Non-current Borrowings

Secured Term loans

- From Banks - 703.86 856.91

Preference share 1,090.82 1,066.39 1,049.60

1,090.82 1,770.25 1,906.51

NOTE 16B: Current Borrowings

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Secured Loans from Banks

Cash Credit 711.68 1,326.48 1,521.55

Short Term loan

Sub-Total 711.68 1,326.48 1,521.55

Unsecured Loans

Buyers credit facility - 13.16 723.26

Intercorporate Loan 712.00 - -

Related parties 835.84 2,051.38 25.30

Sub-Total 1,547.84 2,064.54 748.56

Total 2,259.52 3,391.02 2,270.11

Particulars

Opening Balance

Effect of fresh issue of shares

Weighted average number of equity shares for the year

Earning Per Share (EPS) - (Rs.)

Particulars

The calculations of profit attributable to equity shareholders and weighted average number of equity shares outstanding for purposes of basic

earnings per share calculation are as follows:

Particulars

Profit (loss) for the year

Profit (loss) for the year, attributable to the equity holders

The Secured loan represents cash credit facility from banks creating 1st charge on entire current assets and second charge on entire fixed assets of the

company.

Particulars

Opening Balance

Effect of fresh issue of shares

Effect of fresh issue of shares warrants

Weighted average number of equity shares for the year

Earning Per Share (EPS) - (Rs.)

78

* Secured Term Loans (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

(i) Federal Bank Ltd - 145.50 164.47 (ii) SBT panampilly nagar (TLI) - 512.72 592.32 (iii) Punjab National bank - 216.70 247.53 (iv) Vehicle loanAxis Bank (Loan no: 3) 0.33 - 2.65 (v) Vehicle loanAxis Bank (Loan no: 4) - 1.74 3.86

Total 0.33 876.66 1,010.83 Less:Current maturities of long term debts 0.33 172.80 153.92

- 703.86 856.91

(i)

* Preference share

(i)

(ii)

(iii)

(iv)

No of Shares % of holding No of Shares % of holding No of Shares % of holding

60.00 60.00% 100.00 100.00% 100.00 100.00%

40.00 40.00% - 0.00% - 0.00%

* Current Borrowings - Secured (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Cash Credit

- Industrial Development Bank of India Ltd 209.20 383.90 291.37

- Federal Bank Ltd 502.48 704.40 925.32

- Bank of India - 238.18 304.86

711.68 1,326.48 1,521.55

Discription Repayment term Limit sanctioned

- Industrial Development Bank of India Ltd On demand 30,000,000

- Federal Bank Ltd On demand 92,500,000

- Bank of India On demand 30,000,000

* Current Borrowings - Unsecured (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Buyer's Credit

- IDBI - Dubai - 13.16 357.50

- Bank of India - Tokyo - - 109.29

- Federal Bank - - 256.47

- 13.16 723.26

Related parties

- Loan from Directors 656.94 1,222.53 25.30

- Loan from Group Companies 178.90 116.85 -

- Inter-corporate Loan - 712.00 -

835.84 2,051.38 25.30

(i)

(ii)

Vehicle loan from Axis bank is repayable in 60 monthly instalments of Rs.0.16 lakhs each.

The Company has only one class of Preference Shares (non-convertible cumulative redeemable ) having a face value of Rs.10/- per share.

Preference shares carries a dividend at the rate of 11.25%

The company shall redeem the preference share at par in 4 annual installment of Rs. 2.5 crore each.

Buyer,s credit availed by bank and loan from related parties are repayable on demand.

Details of shares held by each shareholder holding more than 5% shares: (Nos in Lakh)

Name As at 31-03-2018 As at 31-03-2017 As at 01-04-2016

Kerala State

Industrial

Development

S.Rajkumar

There is no continuing default/default as on the date of balance sheet in repayment of loans and interest.

79

NOTE 17 :Provisions (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Non-Current Provisions

Provision for Employee benefits

- Gratuity 8.43 8.06 65.78

8.43 8.06 65.78

Current Provisions

Provision for Employee Benefits- Leave encashment - 1.54 4.78 Income tax Provision 71.71 60.66 75.66

71.71 62.20 80.44

1

2

3

4

Reconciliation of the net defined benefit liability

Gratuity Leave plan

63.75 6.81

- -

4.48 0.51

0.49 1.05

Actuarial loss/(gain) on obligation 16.19 (6.83)

Employer contribution to plan assets - -

Net effect of benefit payments (76.85) -

As at 31 March 2017 8.06 1.54

Expected return on plan assets - -

Interest Cost 0.61 -

Current service cost 0.46 -

Actuarial loss/(gain) on obligation (0.00) -

Employer contribution to plan assets - -

Net effect of benefit payments - -

As at 31 March 2018 9.13 -

Expense recognised in profit or loss

Gratuity Leave plan

- -

4.48 0.51

0.49 1.04

-

- -

Total amount recognised in profit or loss 4.97 1.55

For the period ended 31 March 2018

Expected return on plan assets - -

Interest Cost 0.61 -

Current service cost 0.46 -

Actuarial loss/(gain) on obligation - -

Employer contribution to plan assets recognised in P/L - -

Total amount recognised in profit or loss 1.07 -

The Provisions for Gratuity and Leave Encashment are made based on the actuarial valuation on 31.03.2018.

The laibility for Gratuity has been calculated on the basis of current ceiling of ₹10 lakh. The proposed enhancement of ceiling to ₹ 20 lakh has not

been considered as the related amendment in The Payment of Gratutiy Act is yet to be notified.Acturial valuation of gratuity is presently based on the retirement age of 55 years. The Union has filed a case before Kerala High Court for

increasing the retirement age to 58. Impact on provision for gratuity, if the case is decided against the Company,has not been ascertained.

Current service cost

ParticularsTYPE OF PLAN

For the period ended 31 March 2017

Expected return on plan assets

Interest Cost

Since the valuation is done by a professional actuary, the assumprions taken is considered reliable and hence sensitivity analysis is not done.

ParticularsTYPE OF PLAN

As at 1 April 2016

Expected return on plan assets

Interest Cost

Current service cost

Actuarial loss/(gain) on obligation

Claims received w.r.t previous years

80

Remeasurements recognized in other comprehensive income

31-03-18 31-03-17 31-03-18 31-03-17

(0.69) 16.19 - (6.83)

(0.00) 16.19 - (6.83)

Significant Estimates- The Significant actuarial valuation applicable for the plans are as below:

NOTE 18 :Deferred tax liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Deferred Tax Liabilities

- Property,Plant & Equipment 152.65 436.56 1,112.17 Deferred Tax Asset

- Provision for unrecognised expense 32.43 32.43 119.60 - Provision for Production Incentive 19.70 20.17 21.80 - Provision for Doubtful Debts/Claims 72.74 72.74 72.74

Net Deferred Tax Liabilities 27.78 311.22 898.02

* Movement in deferred tax liabilities

Property,Plant &

Equipment

Provision for

unrecognised

expense

Provision for

Production

Incentive

Provision for

Doubtful

Debts/Claims 1,112.17 119.60 21.80 72.74

(675.60) (87.17) (1.63) -

- - - -

436.56 32.43 20.17 72.74

(283.90) - (0.47) -

152.65 32.43 19.70 72.74

NOTE 19 : Other non­current liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Security deposits 1.43 1.43 1.43

1.43 1.43 1.43

NOTE 20 :Trade Payables (₹ in Lakh)As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Payable to Micro Small & Medium Enterprises 0.65 0.65 0.76

Other Trade Payables

- Supplies 327.66 428.35 1,721.85

- Stores & Spares 52.04 66.83 87.55

380.34 495.83 1,810.16

(i)

(ii)

(iii)

Actuarial loss/(gain) on obligation

Balance as at the end of the year

Particulars 31-03-18 31-03-17

Mortality tableIndian Assured Lives Mortality (2006-08) Indian Assured Lives Mortality (1994-96)

Ultimate

Particulars

TYPE OF PLAN

Gratuity Leave plan

Expected rate of return on plan assets Not Applicable Not Applicable

Particulars

At 1 April 2016Charged/(credited)

Discount Rate 7.54% 7.00%

Salary escalation rate 5.00% 5.00%p.a

At 31 March 2018

Disclosure under Micro, Small and Medium Enterprises Development Act:

The above balances are subject to confirmation from the respective parties

Amount due to Micro, Small and Medium enterprises included under Trade payables is ₹ 0.65 (Previous year ₹ 0.65 lakh). This amount is identified

by the Management and relied upon by the Auditors.

Interest of Rs 0.20 lakhs (Previous year ₹ 0.18 lakh) had become payable under Section 16 of the Micro, Small and Medium Enterprises

Development Act, 2006 .

-to profit or loss

-to other comprehensive income

At 31 March 2017

Charged/(credited)

-to profit or loss

-to other comprehensive income

81

NOTE 21 : Other current financial liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Current maturities of long term debts

- Federal Bank Ltd - 30.00 18.00

- SBT panampilly nagar - 106.06 90.96

- Punjab National Bank - 35.00 41.70

- Vehicle loan Axis Bank - - 1.33

- Vehicle loan Axis Bank 0.33000 1.74 1.93

Dividend payable 6.85057 10.95 10.95

7.18057 183.75 164.87

NOTE 22 : Other Current Liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Interest Accrued and due

- Interest on buyers credit - - 2.40

- Interest on secured Loan - 16.80 -

- Advance from subsidary 0.34 - -

Other liabilities

- Salaries and Other Benefits 225.51 127.11 62.05

- Statutory Dues Payable 239.28 71.35 167.56

- Advance for scrap Asset 42.76 - -

- Other Payables 47.30 41.76 520.76

555.18977 257.03 752.77

NOTE 23 :Sale of Products (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

(i) Sale of products:

- own products 26.89 2,289.26

add: excise duty 0.36 111.41

(ii) Other operating income

- Traded products - 374.85

- Scrap product 35.88 39.34

- Process waste income 1.13

- Sales of renewable energy certificate 99.67 77.73

162.79 2,893.72

NOTE 24 : Other Income (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

(i) Interest income:

- On deposits with banks [Tax Deducted at Source Rs 0.12 Lakhs (Previous year Rs1.82 Lakhs)] 1.67 18.58

- On Advances 1.51 3.11

(ii) Dividend income from Long-term investment -

(iii) Sale Of Scrapped Fixed Assets 965.00 -

(iv) Other non-operating income 25.50 90.05

993.68 111.74

Details of Other non-operating income (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Emd Forfeited Account - 25.00

Insurance Collected (Income) 4.95 0.66

Loss/Gain On Sale Of Fixed Asset - 8.69

Commission Received - 2.80

Miscellaneous income 20.55 52.91

25.50 90.05

82

NOTE 25 : Cost of Materials Consumed (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Raw materials - 1,692.63

packing materials - 34.18

- 1,726.81

NOTE 25A : Item Wise Breakup Of Raw Material Consumed (₹ in Lakh)

Particulars ₹ ( In lakhs) % ₹ ( In lakhs) %

(i) Value of Raw materials consumed

- Indigenous - - 434.82 25.69%

- Imported - - 1,134.89 67.05%

- - 1,569.71 92.74%

(ii) Value of Chemicals consumed

- Indigenous - - 122.92 7.26%

- Imported - - - 0.00%

- - 122.92 7.26%

- - 1,692.63 100%

NOTE 26 : Changes in Inventory (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Stock as on 1st April

Finished Goods 26.92 308.64

Work in Process - 15.16

Total opening balance 26.92 323.80

Stock as on 31st March

Finished Goods - 26.92

Work in Process - -

Total Closing Balance - 26.92

Changes in Inventory 26.92 296.88

NOTE 27 : Employee Benfit Expenses (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Salaries, Wages & Allowances 59.03 206.29

Remuneration to Managerial persons - 25.24

Gratuity 1.07 6.07

Bonus - 4.50

Leave Encashment - 1.56

Staff Welfare Expenses 8.02 14.08

Employer's Contribution to PF 1.79 6.52

Employer's Contribution to ESI 0.90 4.34

Coolie charges - contract - 57.15

Allowances and expenses to contract workers - 22.8

Others 8.13 7.91

78.94 356.46

NOTE 28 : Finance Cost (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Interest Cost on Financial liabilities carried at amortised cost

- Interest expense 189.54 451.31

- Other borrowing cost - 75.55

- Exchange fluctuation - 26.82

- Loss on fair valuation of preference shares 24.43 16.79

213.97 570.47

NOTE 29 : Depreciation and ammortisation expenses (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Depreciation Property,Plant & Equipment 73.07 138.48

Ammortisation of intangible assets - -

73.07 138.48

As at 31-3-2018 As at 31-3-2017

83

NOTE 30 : Other Expenses (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Payment to auditor 2.09 2.87

Stores and Spares Consumed - 271.40

Power and fuel 6.09 426.29

Rent 4.86 39.43

Repairs and maintenance

-Plant & Machinery - 34.85

-Buildings - 18.22

-Others 2.32

Insurance charges 5.43 16.80

Rates and Taxes 35.69 12.51

Discount 9.65 27.85

Stock Written Off - -

Provision for doubtful debt - 531.17

Provision for advance - 82.95

Freight outwards 0.39 45.15

Miscellaneous expenses 64.01 263.91

130.53 1,773.40

NOTE 30A : Payment to auditor

As at As at

Particulars March 31, 2018 March 31, 2017

Statutory Audit Fee 0.75 0.50

Tax Audit Fee 0.25 0.25

Auditors Out of pocket Expense 0.30 0.29

Fee for other services 0.75 0.30

Audit fee for certfication 0.04 1.53

2.09 2.87

NOTE 30B : Stores and Spares Consumed

Particulars ₹ ( In lakhs) % ₹ ( In lakhs) %

Indigenous - 271.40 100%

Imported - - 0.00%

- 0.00% 271.40 100.00%

NOTE 31 : Exceptional Items [expense / (income)] (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Retrenchment Compensation 98.82

Profit on sale of land (915.25)

Loss on sale of asset held for sale 2,100.55

Mat Credit Expense 300.38

1,584.50 -

NOTE 32 : Tax Expense (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Tax adjustments for previous year 11.05 -

Deferred Tax (283.44) (586.80)

(272.39) (586.80)

Income tax recognized in other income

Before tax

Tax (expense)

benefit Net of tax Before tax

Tax (expense)

benefit Net of tax

0.69 - 0.69 (9.36) - (9.36)

(0.06) - (0.06) 28.76 - 28.76

As at 31-3-2018 As at 31-3-2017

Particulars

For the year ended 31/03/2018 For the year ended 31/03/2017

Remeasurement

of defined benefit

liability

Remeasurement

of Equity

instrunment

through OCI

84

Reconciliation of effective tax rate

-

(₹ in Lakh)

ParticularsFor the year ended

31/03/2018

For the year ended

31/03/2017

Profit from continuing operations before income tax expense (1,039.18) (4,251.45)

Tax at the Indian Tax Rate of (previous year 30.9%) (298.76) (1,313.70)

Permanent disallowances - -

Permanent allowances - -

Temporary differences (283.44) (586.80)

Tax in respect of earlier years 11.05 -

Tax losses for which no deferred tax was recognised 298.76 1,313.70

Total income tax expense/(credit) (272.39) (586.80)

Effective tax rate 26.21% 13.80%

-

NOTE 33 : Other comprehensive income (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Actuarial gain/(loss) on defined benefit obligation 0.69 (9.36) Equity instrunment through other comperhensive income (0.06) 28.76

Tax effect of the above - - 0.63 19.40

NOTE 34 : Fair Value Hierarchy

Particulars

Level 1 Level 3 Level 1 Level 3 Level 1 Level 3

1.50 1.56 1.51

- - 15.53

- - 19.22

- - 6.62

0.79 0.79 0.72

4.70 4.70 4.70

4.70 4.70 4.70

4.70 4.70 4.70

1,090.82 1,066.39 1,049.60

Preference Shares

The value of the preference shares are based on the leding rate avaliable

A reconciliation of the income tax expenses to the amount computed by applying the statutory income tax rate to the profit before income taxes

is summarized below:

Investment in

Unquoted

instrunmentsKerala Enviro

Infrastructure

Limited

Financial Assets

Investment in

Quoted

instrunments

Sree Adi Sakthi

Mukkuttathode

Hydro Power Ltd

Financial

Liabilities

Preference shares

Jala Shaayi

Alamparathodu

Hydro Power LtdSree Kailas

Palchuram Hydro

Power Ltd

Tax computation for 2017-18 was not finalized during the time of preparation. The above reconciliation is on the assumption that there won't any

allowances or disallowances other than the ones taken for deferred tax computation.

The management has assessed that its financial assets and liabilities like cash and cash equivalents, trade receivables, trade payables, cash credits,

buyers credit and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Unquoted Equity Shares of Other Companies:

ICICI Prudential

Infrastructure L&T

Oppurtunities

FundUTI Master

Growth

31.03.2018 31.03.2017 01.04.2016

Significant observable inputs Significant observable inputs Significant observable inputs

I.D.B.I.Ltd

The fair values of the unquoted equity shares have been estimated using NAV model.

Quoted Equity Instrunment and Mutual Funds:

The fair values of the unquoted equity shares measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted

85

NOTE 35 : Contingent liabilities and Commitments (₹ in Lakh)As at As at

Particulars March 31, 2018 March 31, 2017

Unexpired Contracts for Capital Expenditure 260.61 260.61

Amount of Income tax liabilities disputed in appeal 22.18 38.21 Guarantee given on behalf of the Company - 94.00 Excise duty disputed under appeal 350.79 350.79 Claim towards water charge raised by Kerala Water Authority 78.42 78.42 Customs duty liability under EPCG claim 58.79 58.79 Arrears of non - convertible cumulative preference dividend 537.70 402.30

1,308.49 1,283.12

NOTE 36 : Additional InformationI Information on Imports, Exports & Foreign Currency / Exch. Transactions. (₹ in Lakh)

As at As atParticulars March 31, 2018 March 31, 2017

a) Value of Imports on CIF Basisi) Raw Materials & Consumables NIL 989.80 ii) Components and Spare Parts NIL NILiii) Capital Goods NIL NIL

NIL 989.80

b) Other Expenditure in Foreign Currencies (on cash basis)i) Expenses on Foreign travel NIL NILii) Books, Periodicals, & Subscriptions NIL NILiii) Expenses towards Technical Services NIL NIL

NIL NIL

c) Value of Exports on FOB Basis NIL NIL

II Details of Provisions Pursuant to Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets

Sundry Debtors Income tax Gratuity & Leave

encashment

Capital Advances Deposits

235.41 75.66 70.56 83.00 28.67

547.59 - (60.96) 4.34 23.47

- (15.00) - - -

783.00 60.66 9.60 87.34 52.14

- 11.05 - - -

(61.96) - (1.17) - -

721.04 71.71 8.43 87.34 52.14

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner

Sd/- Sd/-

Cochin -16 V.N.Sridharan N. Subramanian

13.06.2018 Chief Financial Officer Director

Provision made during the year

Provision utilized during the year

As at 31st march 2018

Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds

that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing

price as at the reporting period. The mutual funds are valued using the closing NAV.

The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined

using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant

inputs required to fair value an instrument are observable, the instrument is included in Level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case for unlisted equity

securities, contingent consideration and indemnification asset included in Level 3.

Particulars

As at 1st april 2016

Provision made during the year

Provision utilized during the year

As at 31st march 2017

86

III

Name of Related party Nature of Relationship

2017-18 2016-17

8.85

(246.37) 931.10

7.40

94.60 -

235.40 -

2 13.58 -

0.10 -

3 Mr Vignesh Rajkumar No transaction - -

4 Mr Visakh Rajkumar No transaction - -

5 Mrs E Kamalam - 0.10

0.20 0.50

Sales of Fixed Asset - 8.00

Rent - 2.08

7 Mr. A Ganesh Rent - 2.76

Unsecured Loan - 208.75

- 0.90

- 8.00

(2.73) 49.83

Sale of fixed asset - 3.00

- 0.24

- 8.39

- 712.00

- 32.61

12Sreeniketana Logistics

Limited- 68.95

13SreeKailash Logistics

Chennai Limited 4.065

- -

0.38 48.88

31.34 33.37

14 - 18.67

(1.50) 116.85

- 11.26

- 30.31

- 400.85

- 11.50

11.20 -

6.99 11.00

Sale of Goods - 4.66

Purchase of Raw Material - 191.94

18Sree Kashyap Surya Energy

Equipments Pvt LtdNo transaction - -

Unsecured Loan 62.05 -

Advance for Scrap Sale 14.20 -

Interest on advance 0.11 0.75

Investment in subsidiary

company4.70 4.70

Advance (10.28) 0.57

Interest on advance 1.15 1.56

Investment in subsidiary

company4.70 4.70

Advance (7.29) 0.48

Interest on advance 0.24 0.79

Investment in subsidiary

company4.70 4.70

9.87 0.60

1 Mr S Raj KumarKey Management Personnel(Vice Chairman &

Managing Director)

Managerial Remuneration

Unsecured Loan

Rent

Issue Of Share Capital including Share Premium

Issue of Share Warrant

Details in respect of related parties pursuant to IND AS 24

Details of Transactions

Nature of TransactionsAmount (Rs in Lakhs)

MrsRajeeRajkumar

Relative of Key Management Personnel

unsecured Loan

Sitting Fees

Sitting Fees

6 Mr. S. Subramaniam

Sitting Fees

8 Mr. S GiridharSitting Fees

9 Mr A.PadmanabhanKey Management Personnel (Executive

Director)

Remuneration and Allowances

Unsecured Loan

Rent

11ShriKailash Logistics

Limited

Enterprises over which any person mentioned in

1 to 6 above is able to exercise significant

influence

Unsecured Loan

Interest on Unsecured Loan

Freight Charges

Sale of Scrap

12 Carto Packs

Purchase of Raw Material

Sale of Finished Goods

13 Aditya PapersSale of Goods

SreeSakthi Constructions

and Infrastructure (P) Ltd

10 VVM RaoKey Management Personnel (Director

Operations) Remuneration and Allowances

Civil work

15Maharaja Continental

Trades Ltd

Unsecured Loan

Reimbursement of expenses

Sales Commission

Sale of Finished Goods

17Very Same Industrial Aids

Ltd

19 Visakh Homes

16 Sree Giri Packagings

Purchase of Raw Material

Reimbursement of expenses

Advance given

Note: Shri Kailash Logistics Limited was a related party as per Ind AS 24, till 30.12.2016

22Sree Kailas Palchuram

Hydro Power Ltd.

23

Sree Adi Sakthi

Mukkuttathode Hydro

Power Ltd.Advance

21JalaShaayi Alamparathodu

Hydro Power Ltd.

Subsidiary

87

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 37 : Explanation to transition to Ind AS

A

1 Property plant and equipment, intangible assets and investment properties

A

1

2 Classification and measurement of financial assets

Optional exemptions availed

As stated in Note 2 (a), these are the Company’s first financial statements prepared in accordance with Ind AS. For the year

ended 31 March 2016, the Company had prepared its financial statements in accordance with Companies (Accounting

Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).

The accounting policies set out in Note 3 have been applied in preparing these financial statements for the year ended 31

March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on

the date of transition i.e. 1 April 2016.

In preparing its Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31

March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with

previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements

prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s

financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions:

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory

exceptions.

Estimates

As per Ind AS 101 an entity may elect to:i. measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its

deemed cost at that dateii. use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed

cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:

a. fair value;

b. or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific priceThe elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38,

Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the

existence of an active market).iii. use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of

transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to

decommissioning liabilities prescribed under Ind AS 101).

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the

property, plant and equipment. The same election has been made in respect of intangible assets and investment property also.

Mandatory exceptions

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the

comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with

estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those

estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under

previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing

opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the

date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts

and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on

the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively except

where the same is impracticable.

88

Reconciliation of Equity

(₹ in Lakh)

PreviousGAAP Adjustments Ind AS

I. Assets

1 Non-current assets

Property,Plant & Equipment 5,502.65 - 5,502.65

Capital work-in progress 22.92 - 22.92

Goodwill

Other Intagible Assets 0.16 - 0.16

Intagible Assets under development

Financial Assets

Investments 66.98 (9.28) 57.70

Trade receivables

Loans 151.51 (40.25) 111.26

Deferred tax assets (net)

Other non­current assets - 40.25 40.25

2 Current Assets

Inventories 998.51 (112.15) 886.36

Financial Assets

Investments

Trade receivables 1,664.34 - 1,664.34

Cash and cash equivalents 364.29 (10.95) 353.34

Bank balances other than (iii) above

Loans 571.74 (560.79) 10.95

Others (to be specified)

Tax Assets (Net) - - -

Other current assets 15.68 571.74 587.42

Asset held for sale - 112.15 112.15

TOTAL 9,358.78 (9.28) 9,349.50

II. Equity & Liabilities

1 Equity

Equity share capital 2,643.62 (1,000.00) 1,643.62

Other equity (185.33) (58.88) (244.21)

2 Liabilities

Non-Current Liabilities

Financial Liabilities

Borrowings 856.91 1,049.60 1,906.51

Trade Payables

Other financial liabilities

Provisions 65.78 - 65.78

Deferred tax liabilities (Net) 898.02 - 898.02

Other non­current liabilities 1.43 - 1.43

3 Current Liabilities

Financial Liabilities

Borrowings 2,270.11 - 2,270.11

Trade payables 1,810.16 - 1,810.16

Other financial liabilities - 164.87 164.87

Other Current Liabilities 917.64 (164.87) 752.77

Provisions 80.44 - 80.44

Current Tax Liabilities

TOTAL 9,358.78 (9.28) 9,349.50

ParticularsAs at April 1, 2016

89

(₹ in Lakh)

PreviousGAAP Adjustments Ind AS

I. Assets

1 Non-current assets

Property,Plant & Equipment 965.80 0.00 965.80

Capital work-in progress - - -

Goodwill

Other Intagible Assets 0.16 - 0.16

Intagible Assets under development

Financial Assets

Investments 15.45 1.00 16.45

Trade receivables

Loans 40.69 (40.69) -

Deferred tax assets (net)

Other non­current assets - 40.69 40.69

2 Current Assets

Inventories 2,501.47 (2,410.36) 91.11

Financial Assets

Investments

Trade receivables 334.38 - 334.38

Cash and cash equivalents 27.65 (10.90) 16.75

Bank balances other than (iii) above

Loans 328.92 (328.92) -

Others (to be specified)

Tax Assets (Net) - - -

Other current assets 0.02 339.82 339.84

Asset held for sale - 2,410.36 2,410.36

TOTAL 4,214.54 1.00 4,215.54

II. Equity & Liabilities

1 Equity

Equity share capital 2,643.62 (1,000.00) 1,643.62

Other equity (3,843.47) (65.39) (3,908.86)

2 Liabilities

Non-Current Liabilities

Financial Liabilities

Borrowings 703.86 1,066.39 1,770.25

Trade Payables

Other financial liabilities

Provisions 8.06 - 8.06

Deferred tax liabilities (Net) 311.22 (0.00) 311.22

Other non­current liabilities 1.43 0.00 1.43

3 Current Liabilities

Financial Liabilities

Borrowings 3,391.02 (0.00) 3,391.02

Trade payables 495.83 (0.00) 495.83

Other financial liabilities - 183.75 183.75

Other Current Liabilities 440.77 (183.74) 257.03

Provisions 62.20 (0.00) 62.20

Current Tax Liabilities

TOTAL 4,214.54 1.00 4,215.54

* Previous GAAP figures have been reclassified to conform to IND AS presentation requirements for the purpose of the note.

ParticularsAs at 31 March, 2017

90

Reconciliation of total comprehensive income for the year ended 31-March -2016

(₹ in Lakh)

PreviousGAAP Adjustments Ind AS

I Revenue From Operations 2,782.31 111.41 2,893.72

II Other income 111.74 0.00 111.74

III Total Income 2,894.05 111.42 3,005.47

IV Expenses

Cost Of Material Consumed 1,726.81 0.00 1,726.81

Purchase of stock-in-Trade 221.64 - 221.64

Changes In Inventory 296.88 0.00 296.88

Excise Duty - 111.41 111.41

Employee Benefit Expenses 365.82 (9.36) 356.46

Finance costs 553.68 16.79 570.47

Depreciation and ammortisation expenses 138.48 (0.00) 138.48

Other Expenses 1,730.92 42.48 1,773.40

Total expenses(IV) 5,034.23 161.33 5,195.56

V Profit/(Loss) before, exceptional items and tax (I-II) (2,140.18) (49.91) (2,190.09)

VI Exceptional Items [(expense) / income]

VII Extraordinary items

- Impairment 2,080.76 (2,080.76) -

- Cost of waste removel by pollution control board 24.00 (24.00) -

VII Profit/(Loss) before tax (4,244.94) 2,054.85 (2,190.09)

VIII Tax expense

Current income tax - - -

Tax adjustments for previous year - - -

Deffered Tax (586.80) (0.00) (586.80)

(586.80) (0.00) (586.80)

IX(3,658.14) 2,054.85 (1,603.29)

X Other comprehensive income

(i) Items that will not be reclassified to P/L - 19.40 19.40

- - -

XI Total comprehensive income for the period(IX+X) (3,658.14) 2,074.25 (1,583.89)

(ii) Income tax relating to items that will not be

reclassified to P/L

ParticularsFor the year 31 March, 2017

Profit/(Loss) for the period from continuing

operations(VIII+IX)

* Previous GAAP figures have been reclassified to conform to IND AS presentation requirements for the purpose of the note.

a) Re-measurement of defined benefit liabilityUnder Ind AS, re-measurement of defined benefit liability are recognized under other comprehensive income. Under previous

GAAP the Company recognized actuarial gains and losses in profit or loss. However, this has no impact on the total

comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.

b) Excise dutyUnder previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from

sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense.

This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total

comprehensive income for the year ended and equity as at 31 March 2018 has remained unchanged.

c) Other Comprehensive IncomeUnder Ind AS, All items of income and expense recognized in a period should be included in profit and loss account, unless a

standard requires or permits otherwise. Items of income and expenses that are not recognized in profit or loss but are shown in

the profit or loss as “other comprehensive income” includes re‐measurements of define benefit plan.

91

On transition to Ind AS prior period items and extra-ordinary items are classified to the corresponding income/expenses in the

year of recognition itself for recognition of prior period and extra-ordinary items are not permitted in Ind AS.However, this has

no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.

d) Prior period and Extra-ordinary assets

The provisions of Ind-AS 8 requires that an entity will correct prior period errors retrospectively in the first set of the financial

statements approved for issue after their discovery by restating the comparative amounts for the prior period(s) presented in

which the error occurred. If the error occurred before the earliest prior period presented, it will restate the opening balance of

assets, liabilities and equity for the earliest prior period presented.

However, as per the provisions of section 131 of the Companies Act, 2013 if it appears to the Company that any change is

required to the financial statements, they may prepare a revised financial statements only after obtaining the prior approval of

the Tribunal. Given that the provisions of Ind-AS 8 which require revision of the figures of the previous financial years are not in

sync with section 131 of the Companies Act, 2013, the Company is of the view that all such items of income and expenses

relating to the prior periods in FY 2015-16 be adjusted in the financial statements for the FY 2015-16.

e) Preference shares

Under previous GAAP, redeemable preference shares were classified as part of total equity. However, under Ind AS, financial

instruments are classified as a liability or equity according to the substance of the contractual arrangement and not it's legal

form. These preference shares do not contain any equity component and hence, have been classified in their entirely as a

financial liability under Ind AS

f) Fair value of investmentIn accordance with Ind AS, financial assets representing investment in equity shares have been fair valued. The Company has

designated these investments at fair value through other comprehensive income as permitted by Ind AS 109. Under the

previous GAAP, the application of the relevant accounting standard resulted in all these investments being carried at cost.

g) Earmarked depositUnder previous GAAP, earmarked deposit with bank were classified as part of cash and cash equivalents. However, under Ind

AS, earmarked deposit are grouped under other current assets.

92

SREE SAKTHI PAPER MILLS LIMITED

CIN : L93000KL1991PLC006207

Statement of Cash Flow for the period ended March 31, 2018 (₹ in Lakh)

For period ended For period ended

Particulars March 31, 2018 March 31, 2017

A CASH FLOW FROM OPERATING ACTIVITIES

Total Comprehensive Income (766.79) (3,664.65)

Adjustments for :

Provision for Income-tax (272.39) (586.80)

Depreciation, amortisation and impairment 161.08 2,242.09

Interest Income (3.18) (21.69)

(Profit)/Loss on write off/ sale of Fixed Assets (915.25) (8.69)

(Profit)/Loss on write off/ sale of investment - (4.98)

Fair value change in investment through OCI (0.06)

Mat credit written off 300.38

Finance Cost 213.97 570.47

Operating Profit before working capital changes (1,282.24) (1,474.26)

Decrease(Increase) in Inventories 91.11 795.25

Decrease(Increase) in Trade receivable 155.23 1,329.96

Decrease(Increase) in Loans and Advances (0.06) 122.21

Decrease(Increase) in other non current assets 27.11 (0.44)

Decrease(Increase) in other current

assets & assets held for sale1,763.11 247.58

Increase(Decrease) in Trade payable (115.49) (1,314.33)

Increase(Decrease) in Current Liabilities 296.77 (513.99)

Increase(Decrease) in Other Non Current Liabilities 0.38 (57.72)

Cash from Operations 935.92 (865.74)

Income Tax paid (9.62) -

Cash from Operating before exceptional Items 926.30 (865.74)

Exceptional Items - -

Cash from Operating Activities 926.30 (865.74)

B CASH FLOW FROM INVESTING ACTIVITIES

Proceeds on Sale of Fixed Assets 950.00 28.05

Proceeds on Sale of investment - 46.35

Interest Income 3.18 21.69

Net Cash from Investing Activities 953.18 96.09

C CASH FLOW FROM FINANCING ACTIVITIES

Net Proceeds from

- Issue of shares 94.60 -

- Issue of shares warrants 235.40 -

- Borrowings (1,372.69) 1,198.59

Interest paid (213.97) (570.47)

Net Cash from Financing Activities (1,256.66) 628.12

D

622.82 (141.52)

Cash and cash equivalents at the beginning of the year (1,309.73) (1,168.21)

Cash and cash equivalents at the end of the year (686.91) (1,309.73)

Components of cash and cash equivalents

Balance with Banks

In Current Accounts 22.32 3.81

In Deposit Accounts 1.05 12.85

Cash in Hand 1.40 0.08

Cash Credit (711.68) (1,326.48)

Total cash and cash equivalents (686.91) (1,309.73)

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner Sd/- Sd/-

Cochin -16 V.N.Sridharan N. Subramanian

13.06.2018 Chief Financial Officer Director

TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

DURING THE YEAR (A+B+C)

93

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 Details Details

1 Name of the subsidiary Sree Kailas Palchuram Hydro Power Ltd

Sree Adisakthi Mukkuttathode Hydro Power Ltd

Jalashaayi

Alamparathode

Hydro Power Ltd

Reporting period for the

subsidiary concerned, if different

from the holding company’s

reporting period

01.04.2017 to 31.03.2018

01.04.2017 to 31.03.2018

01.04.2017 to 31.03.2018

Reporting currency and Exchange

rate as on the last date of the

relevant Financial year in the case

of foreign subsidiaries

No Foreign Subsidiary No Foreign Subsidiary No Foreign Subsidiary

Share capital

10,00,000.00 10,00,000.00 10,00,000.00

Reserves & surplus

(3,22,457.00) 1,62,221.00 2,70,209.00

Total assets

4,221.00 - -

Total Liabilities

13,63,328.00 1,30,969.00 61,389.00

Investments

- - -

Turnover

- - -

Profit before taxation

-52,181.00 72,782.00 24,300.00

Provision for taxation

-29,494.00 28,771.00 28,989.00

Profit after taxation

-81,645.00 44,011.00 -4,689.00

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 Ltd b) Sree Adisakthi Mukkuttathode Hydro Power Ltd c) Jalashaayi Alamparathode Hydro Power Ltd

2. Names of subsidiaries which have been liquidated or sold during the year: Nil

94

Part “B”: Associates and Joint Ventures Statement 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. i. No. ii. Amount of Investment in Associates/Joint Venture iii. Extend of Holding%

Nil

Nil Nil 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 is to be certified in the same manner in which the Balance Sheet is to be certified.

For and on behalf of the Board

Sd/-

Sd/-

R.Ponnambalam S.Rajkumar

Company Secretary Vice Chairman & Managing Director

Sd/-

Sd/-

V.N. Sridharan

N. Subramanian

Chief Financial Officer

Director

95

Independent Auditor’s Report on Consolidated Financial Statements

To the Members of M/s. Sree Sakthi Paper Mills Limited, Kochi.

Report on the Consolidated Financial Statements

We have audited the accompanying Consolidated Financial Statements of M/s. Sree Sakthi Paper Mills Limited, Kochi (herein after referred to as

“the Holding Company”) and its subsidiaries – Sree Adi Sakthi Mukuttathodu Hydro Power limited, Sree Kailas Palchuram Hydro Power Limited

and Jalashaayi Alamparathodu Hydro Power Limited (the Holding Company and its Subsidiaries together referred to as “the Group” which

comprises of:-

The Consolidated Balance Sheet as at 31st

March, 2018.

(a) The Consolidated Statement of Profit and Loss (including other comprehensive income) for the year ended 31st March 2018.

(b) The Consolidated Cash Flow Statement for the year ended 31st

March 2018.

(c) The Consolidated statement of changes in equity for the year ended 31st

March 2018.

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

(hereinafter referred to as “the consolidated financial statements”)

Management’s responsibility for the Consolidated financial statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the

requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial

position, consolidated financial performance (including other comprehensive income), consolidated cash flows and consolidated statement

of changes in equity of the group in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read

with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. The

respective Board of Directors of the companies included in the Group is responsible for maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other

irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and

prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring

the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated financial

statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for

the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have

taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit

report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that

we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated Financial

Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated Financial Statements.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Consolidated

Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to

the Holding Company’s preparation of the Consolidated financial statements that give a true and fair view in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal

financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Directors, as

well as evaluating the overall presentation of the Consolidated Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated

Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Consolidated financial statements

give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles

96

generally accepted in India, of the consolidated state of affairs (financial position) of the Group as at 31st

March, 2018; and its consolidated LOSS

and its consolidated cash flows for the year ended on that date.

Emphasis of Matter

We invite the attention of the users to –

(a) Note No. 2(e) of the Significant Accounting Policies regarding the validity of Going

Concern assumption for the company in preparation of the consolidated financial statements;

(b) Note No. 13 of the Significant Accounting Policies regarding lack of external confirmation of balances for receivables and payables

including balances due to / from group concerns.

Our report is not qualified in respect of the above matters.

.Report on other legal and regulatory requirements

1. As required by section 143(3) of the Act, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the

purpose of our audit of the aforesaid consolidated financial statements.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those

books.

c) The Consolidated Balance Sheet, Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement, and Consolidated

Statement of changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of the

consolidated financial statements.

d) In our opinion, the aforesaid Consolidated financial statements comply with the Accounting Standards specified under section 133 of the Act,

read with Rule 7 of Companies (Accounts), Rules 2014/ /Indian Accounting Standards specified under Section 133 of the Act.

e) On the basis of written representations received from the directors of the Holding Company as on 31st March 2018, taken on record by the

Board of Directors of the Holding Company, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in

terms of sub-section (2) of section 164 of the Companies Act, 2013.

f) The report on internal financial control as required under clause (i) of sub section 3 of section 143 of the Companies Act 2013 is attached as

Annexure A.

g) With respect to other matters to be included in the Auditors Report in accordance with Rule 11 of Companies (Audit and Auditors) Rules, 2014,

in our opinion and to the best of our information and according to the explanations given to us:

i. The Group has disclosed the impact of pending litigations on its financial position in its Consolidated financial statements.

ii. The Group has made provisions, as required under any law or accounting standard, for material foreseeable losses.

iii. The Group has not transferred the equity shares corresponding to Unpaid dividend where the specified period under 124(5) has been

completed, within the due date of 31st

October 2017. However there has been no delay in transferring such Unpaid dividends to

Investor Education and Protection Fund by the Group.

For KPR & Co

Chartered Accountants

FRN: 5326S

Sd/-

Deepa Praveen, ACA

Kochi -11 Memb No: 232410

13.06.2018 Partner

97

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF SREE

SAKTHI PAPER MILLS LIMITED

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 financial reporting of Sree Sakthi Paper Mills Ltd (the company) as of 31st

March,

2018 in conjunction with our audit of the consolidated financial statements of the company for the year ended on that date.

Management’s responsibility for Internal Financial Controls

The company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over

financial reporting criteria established by the company considering the essential components of internal control stated in the guidance

note on audit of internal financial controls over financial reporting issued by the Institute of Chartered Accountants of India. These

responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating

effectively for ensuring the orderly and efficient conduct of its business including adherence to company’s policies, the safeguarding of

its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely

preparation of reliable financial information as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We

conducted our audit in accordance with the guidance note on audit of internal financial controls over financial reporting (the Guidance

Note) and the standards on auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013 to

the extent 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 we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over

financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain Audit evidence about the adequacy of the internal financial controls system over

financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining

an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing

and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend

on the auditor’s judgment including the assessment of 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 audit opinion on the

company’s internal financial control systems over financial reporting.

Meaning of internal financial controls over financial reporting

A company’s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally

accepted accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures

that (1) [pertain to the maintenance of the records that, in reasonable detail, accurately and fairy reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that the transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that the receipts and expenditures

of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide

reasonable assurance regarding the prevention or timely deduction of unauthorized acquisition, use, or disposition of the company’s

assets that could have a material effect on the Consolidated financial statements .

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion of

improper management override of controls, material misstatements due to error or fraud may occur and not be deducted. Also,

projections of any evaluation of the internal financial controls over the financial reporting to future periods are subject to the risk that

the internal financial control over financial reporting may become inadequate because of changes in conditions , or that the degree of

compliance with the policies or procedures may deteriorate.

98

Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been

revealed as at March 31, 2018:

The internal control system and the internal audit system established by the company for recording of financial transactions in time was

not operating effectively due to which there was considerable delay in recording, reconciling and reporting the financial information on a

timely basis.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that

there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be

prevented or detected on a timely basis.

In our opinion, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives

of the control criteria, the Company hasmaintained, in all material respects, adequate internal financial controls over financial reporting

and such internal financial controls over financial reporting were operating effectively as of March 31, 2018, based on the internal

control over the financial reporting criteria established by the Company considering the essential components of internal control stated

in the Guidance Note on Audit of internal Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature, timing, and extent of audit tests

applied in our audit of the March 31, 2018 financial statements of the Company, and these material weaknesses does not affectour

opinion on the financial statements of the Company.

For KPR & Co

Chartered Accountants

FRN: 5326S

Sd/-

Deepa Praveen, ACA

Kochi -11 Memb No: 232410

13.06.2018 Partner

99

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Consolidated Balance Sheet as at March 31, 2018 (₹ in Lakh)

As at As at As at

Particulars Note March 31, 2018 March 31, 2017 April 1, 2016

I. Assets

1 Non-current assets

- Property,Plant & Equipment 4 770.15 965.82 5,502.69

- Capital work-in progress 5 - - 22.92

- Other Intangible Assets 6 - 0.16 0.16

- Financial Assets

Investments 7A 2.29 2.35 43.60

Loans 7B 0.06 - 111.26

- Deferred tax assets (net)

- Other non­current assets 8 - - 4.31

2 Current Assets

- Inventories 9 - 91.11 886.36

- Financial Assets

Trade receivables 10A 179.15 334.38 1,664.34

Cash and cash equivalents 10B 63.07 84.66 416.77

Loans 10C 5.00 5.00 15.95

- Other current assets 11 325.29 349.02 587.90

- Assets held for sale 374.00 2,410.36 112.16

TOTAL 1,719.02 4,242.86 9,368.42

II. Equity & Liabilities

1 Equity

- Equity share capital 12 1,729.62 1,643.62 1,643.62

- Other equity 13 (4,431.74) (3,908.14) (243.88)

- Non-controlling interests 17.06 16.70 16.28

2 Liabilities

Non-Current Liabilities

- Financial Liabilities

Borrowings 16A 1,090.82 1,770.24 1,906.51

- Provisions 17 8.43 8.06 65.78

- Deferred tax liabilities (Net) 18 27.86 311.26 898.06

- Other non­current liabilities 19 1.43 1.43 1.43

3 Current Liabilities

- Financial Liabilities

Borrowings 16B 2,259.52 3,391.02 2,270.11

Trade payables 20 380.34 495.83 1,810.16

Other financial liabilities 21 7.18 183.75 164.87

- Other Current Liabilities 22 555.91 266.12 753.56

- Provisions 17 72.58 62.97 81.91

TOTAL 1,719.02 4,242.86 9,368.42

Summary of significant accounting policies 1,2,3

The accompanying notes form an integral part of the financial statements

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S

Sd/- Sd/- Sd/-

Deepa Praveen, ACA R.Ponnambalam S.Rajkumar,

Company Secretary Vice Chairman &

M. No.232410 Managing Director

Partner

Cochin -16 Sd/- Sd/-

13.06.2018 V.N.Sridharan N. Subramanian

Chief Financial Officer Director

100

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Consolidated profit and loss for the period ended March 31, 2018 (₹ in Lakh)

For period ended For period ended

Note March 31, 2018 March 31, 2017

I Revenue From Operations 23 162.79 2,893.72

II Other income 24 994.76 113.93

III Total Income 1,157.55 3,007.65

IV Expenses

- Cost Of Material Consumed 25 - 1,726.81

- Purchase of stock-in-Trade - 221.64

- Changes In Inventory 26 26.92 296.88

- Excise Duty 0.36 111.41

- Employee Benefit Expenses 27 78.94 356.46

- Finance costs 28 213.97 570.71

- Depreciation and ammortisation expenses 29 73.07 138.48

- Impairment loss Property,Plant & Equipment 88.00 2,080.76

- Other Expenses 30 131.19 1,774.12

Total expenses(IV) 612.45 7,277.28

V Profit/(Loss) before, exceptional items and tax (I-II) 545.10 (4,269.64)

VI Exceptional Items [(expense) / income] 31 (1,584.50) -

VII Profit/(Loss) before tax (1,039.41) (4,269.64)

VIII Tax expense

- Current income tax 0.87 -

- Tax adjustments for previous year 32 11.05 -

- Deffered Tax 32 (283.44) (586.40)

(271.52) (586.40)

IX (767.88) (3,683.23)

Attributable to:

Equity holders of the parent (768.24) (3,683.66)

Non-controlling interests 0.35 0.43

X Other comprehensive income

- Items that will not be reclassified to Profit or Loss 33 0.63 19.40

- Income tax relating to items that will not be reclassified to Profit or Loss 33 - -

XI Total comprehensive income for the period(IX+X) (767.26) (3,663.83)

XII Earnings per Equity shares (of continuing operations) of Rs. 10/- each

- Basic 17 (5.49) (23.23)

- Diluted 17 (5.43) (23.23)

Summary of significant accounting policies 1,2,3

The accompanying notes form an integral part of the financial statements

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner Sd/- Sd/-

Cochin -16 V.N.Sridharan N. Subramanian

13.06.2018 Chief Financial Officer Director

Particulars

Profit/(Loss) for the period from continuing operations(VIII+IX)

101

SREE SAKTHI PAPER MILLS LIMITED

AND ITS SUBSIDIARIES

CIN: L93000KL1991PLC006207

Annexure to Notes on Financial Statements for the Year ended March 31, 2018

Note 1 – Reporting Entity

Sree Sakthi Paper Mills Limited (the ‘Company’) is a company incorporated in India as a Limited Company on 3rd

October, 1991, under

the provisions of Companies Act, with the main objective of manufacturing of paper and paperboards.

Note 2 –

A statement of significant accounting policies:

A. Basis of preparation These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies

(Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the ‘Act’) and the relevant

provisions of the Act.

The Company’s financial statements up to and for the year ended 31 March 2017 were prepared in accordance with the

Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS

101, First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has

affected the previously reported financial position, financial performance and cash flows of the Company is provided in the Notes.

The transition date is April 1, 2016.

B. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities (including structured

entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

a) has power over the investee; b) has the ability to use its power to affect its return; c) is exposed, or has rights, to variable returns from its involvement with the investee. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to

one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company

loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are

included in the consolidated statement of profit and loss from the date the Company gains control until the date when the

Company ceases to control the subsidiary.

Adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's

accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the

Group are eliminated in full on consolidation.

102

Following subsidiary company has been considered in the preparation of the consolidated financial statements:

Name of the entity Relationship % of Holding and

voting power

held directly

SREE ADISAKTHI MUKKUTTATHODE HYDRO POWER LIMITED Subsidiary 47%

JALASHAAYI ALAMPARATHODU HYDRO POWER LIMITED Subsidiary 47%

SREE KAILAS PALCHURAM HYDRO POWER LTD Subsidiary 47%

C. Functional and presentation currency These financial statements are presented in Indian Rupees (‘INR’), which is also the Company’s functional currency. All

amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

D. Basis of Measurement The financial statements have been prepared on the historical cost basis as a going concern on accrual basis except for the

following items:

Item Measurement Basis

Certain financial assets and liabilities Fair value

Net defined benefit Liability Present value of defined benefit obligations

E. Basis Of accounting a) Income from Sale of own products is accounted net of Excise Duty, Cess, Sales Tax and Discounts.

g. Use of Estimate and Judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the

application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may

differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized

prospectively.

The Pollution Control Board (PCB) required the company to make drastic changes / modification to the existing waste /

effluent water disposal system installed by the company at its Kraft Paper Units I & II at Edayar. The company discussed the

financial and commercial viability of the requirements proposed by the PCB and found it to be financially as well as

commercially ‘non- viable’ considering the present productivity and profitability of the operation. Consequently, PCB issued

closure notice [Notice No. (PCB / ESC / CO – 99 /07)] to both the Kraft Paper on 05.05.2016. Even though the company

approached the Hon. High Court of Kerala for staying the order issued by the PCB, it restrained from interfering / staying the

order issued by the PCB.

The company was required to close down both the units at Edayar w.e.f 27.06.2016 and the entire paper manufacturing

operations were discontinued. As a result of it, the entire business were terminated for the remaining part of the year, except

for selling and realizing the remaining inventory of raw materials and finished goods, stock, stores and spares and fixed assets.

As a part of revival plans proposed for the company, the Board of Directors, in its meeting held on 23.02.2017, discussed about

venturing into the ‘logistics business’ by making use of the existing infrastructure consisting 9.75 acres of land and building at

Edayar. After discussing and analysing the financial and commercial viability and feasibility of such a plan, the management

decided to amend the Memorandum of Association (MoA) of the company to insert necessary object clause for the above

103

proposal. The process of postal ballot has been already initiated and the results will be finalized before approval of the

financial statements.

The company proposes to raise necessary funds for the new project by selling the lands at its Chalakudy Unit and the plant and

machineries at Edayar Units. The company has already obtained ‘in-principle’ approval from the Government of Kerala for

utilizing the existing allotted lands at Edayar for setting up a logistics business.

In view of the above developments and based on the analysis of the present market, the management of the company has

come into a conclusion that the ‘going concern’ assumption of the company is still holding good and therefore, revaluation of

assets and liabilities stated at historical cost is not warranted.

However, as a matter of prudence, the company has already provided for the possible ‘impairment loss’ accrued on its entire

plant and machineries at Edayar Units. The current assets have been revalued at its realizable value thereby eliminating any

probable loss on account of non-realisation.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts

recognized in the financial statements is included in the concerned notes.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment

in the year ended 31 March 2018 is included in the concerned notes.

h. Measurement of Fair Values A number of the company’s accounting policies and disclosures require measurement of fair values, for both financial and

non-financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The Company regularly

reviews significant unobservable inputs and valuation adjustments. If third party information is required, the Company

assesses the evidence obtained by the third parties to support the conclusions that these valuations meet the requirements of

Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques

as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the

inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair

value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is

significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which

the change has occurred.

Note 3 – Accounting Policies

7. Foreign currency i. Foreign Currency Transactions

Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the date

of the transaction.

104

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange

rate at the reporting date.

8. Income tax Income tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to an item

recognized directly in equity or in other comprehensive income.

I. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to

the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax

amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using

tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it

is intended to realize the asset and settle the liability on a net basis or simultaneously.

II. Deferred Tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in

respect of carried forward tax losses and tax credits.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which

they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available.

Therefore, in case of a history of recent losses, the Company recognizes a deferred tax asset only to the extent that it has

sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available

against which such deferred tax asset can be realized. Deferred tax assets – unrecognized or recognized, are reviewed at each

reporting date and are recognized/ reduced to the extent that it is probable/ no longer probable respectively that the related

tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is

settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group

expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and

they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they

intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

9. Borrowing Cost Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent

that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of fund. Borrowing costs

directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for

their intended use are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the

period in which they are incurred.

10. Cash flow statement Cash flow statements are prepared under Indirect Method whereby profit or loss is adjusted for the effects of transactions of a

non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense

associated with investing or financing cash flows. Cash and cash equivalents comprise of cash in hand, current and other accounts

(including fixed deposits) held with banks.

105

11. Events occurring after the balance sheet date Assets and liabilities are adjusted for events occurring after the reporting period that provides additional evidence to assist the

estimation of amounts relating to conditions existing at the end of the reporting period.

12. Property, Plant and equipment a. Recognition and Measurement

Land is capitalized on the basis of actual cost of acquisition, including establishment charges of land acquisition agency and

legal expenses incurred for acquisition.

b. Capitalization of Assets and Charging of Depreciation

i) Fixed Assets are stated at cost. The cost of acquisition of Fixed Assets is inclusive of freight, duties, taxes, incidental expenses and the cost of installation/erection as applicable.

iv) Depreciation is in accordance with the provisions of Schedule II to the Companies Act, 2013. In the case of

assets added /sold/discarded/transferred depreciation is charged on pro-rata basis.

v) Impairment of Property, Plant and Equipment (PPE) The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset’s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the PPE.

2) Determination of the estimated useful lives Useful lives of all PPE are based on the estimation done by the Management which is in line with the useful lives as prescribed in Part ‘C’ of Schedule II to the Act. In cases, where the useful lives are different from those prescribed in Schedule II and in case of intangible assets, they are estimated by management based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers’ warranties and maintenance support.

3) Fixed Assets identified for disposal are stated at Net Block Value or Net Realizable value whichever is lower and are shown separately in the financial statements as asset held for sale.

4) Cost of Machinery Spares which can be used only in connection with an item of fixed asset and the use of which is expected to be irregular is allocated to the fixed assets and depreciated to the extent of 95% within a period not exceeding the useful life of the respective fixed asset. Individual spare parts having significant values are capitalized.

5) Borrowing cost relating to the acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. The qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

6) Subsequent Expenditures are capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

7. Intangible Assets :

a. Recognition, Measurement and Amortisation:

Intangible Assets are amortised over the useful life of the respective assets. Subsequent expenditure is capitalized only when

it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized

in profit or loss as incurred.

106

b. Transition to IND AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognized

as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible

assets.

8. Valuation of investments: i. Financial instruments

a. Recognition and initial measurement All financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual

provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at

fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

b. Classification and subsequent measurement Financial assets

On initial recognition, a financial asset is classified as measured at

• amortized cost;

• Fair Value through Other Comprehensive Income (FVOCI) – equity investment; or

• Fair Value Through Profit and Loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company

changes its business model for managing financial assets.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at

FVTPL:

• the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present

subsequent changes in the investment’s fair value in OCI. (designated as FVOCI – equity investment). This election is made

on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This

includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that

otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or

significantly reduces an accounting mismatch that would otherwise arise.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are

measured at FVTPL.

Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost

These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or loss.

Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss. Other net gains and losses are recognized in OCI and are not reclassified to profit or loss.

107

Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is

classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL

are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other

financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and

foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized in profit

or loss.

ii. De-recognition Financial assets

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it

transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of

ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the

risks and rewards of ownership and does not retain control of the financial asset. If the company enters into transactions

whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of

the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The

Company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified terms are

substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The

difference between the carrying amount of the financial liability extinguished and the new financial liability with modified

terms is recognized in profit or loss.

9. Valuation of Current Assets: a) Stores, Spares, Materials under Inspection, Materials in Transit, Materials Issued on Loan and Raw Materials are

accounted for at lower of the cost on Weighted Average Method or Net Realisable Value.

b) Finished Goods are accounted for at lower of the cost on FIFO Method or Net Realisable Value.

c) Semi-finished Goods (Work-in-Process) are valued at variable cost on Weighted Average Method.

10. Non-current assets held for sale Non-current assets comprising assets and liabilities are classified as held for sale if it is highly probable that they will be

recovered primarily through sale rather than through continuing use.

Such assets are generally measured at the lower of their carrying amount and fair value less costs to sell. Losses on initial

classification as held for sale and subsequent gains and losses on re-measurement are recognized in profit or loss.

Once classified as held-for-sale, intangible assets, property, plant and equipment and investment properties are no longer

amortized or depreciated.

11. Retirement/Terminal Benefits/Bonus/Leave encashment a) Company’s liability towards employee benefits such as gratuity and leave encashment are provided for on the basis of

actuarial valuation. b) Expenditure incurred on short term employee benefits including bonus, production incentive, medical benefits and other

perquisites etc. are charged to the Profit and Loss Account at un-discounted amounts in the year in which services are rendered.

c) Expenditure on employee benefits in the nature of contributions to Provident Fund, Employees State Insurance, Labour

Welfare Fund etc. are charged to the Profit and Loss Account as and when contributions to the respective funds are due. d) Liability for bonus is provided for as per the provisions of the Payment of Bonus Act 1965. e) Actuarial gains or losses, as the case may be, in respect of valuation of employee benefits are charged to the Profit and

Loss Account. f) Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses are recognized in OCI.

108

12. Provisions, Contingent Liabilities and Contingent Assets a) Provisions (other than trade payables and accruals) as mentioned in the Ind As 37 issued by the Institute of Chartered

Accountants of India are accounted for and disclosed to the extent practicable in the manner laid down in the said Accounting Standard.

b) Contingent Liabilities disclosed in the Notes forming part of the Accounts comply with Ind As 37 to the extent practicable.

c) Company has not recognized any Contingent Asset.

13. Additional Disclosures a) As the Company had terminated its business operations, the management is in the process of ascertaining and reconciling,

wherever necessary, the realizable value of entire receivables of the company. b) As a matter of prudence, the company has already provided an amount of Rs 721.04 lakhs as provision towards ‘bad and

doubtful debts / receivables’. In the opinion of the management, the above provision is sufficient to cover the entire doubtful

debts of the company.

c) As negotiations are going on with the debtors and creditors of the company for settlement of dues, we have not obtained the

confirmation of balances as at the year end. Any additional liability required based on the reconciliations / settlement made

with the debtors and creditors, will be provided in the due course.

d) Compliance on transfer of Unpaid Dividend and Unclaimed Shares to IEPF Account

Sec 124(5) of the Companies Act, 2013 read with Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit,

Transfer and Refund) Rule, 2017, requires every company to transfer any unpaid dividend along with the corresponding equity shares

outstanding for more than the period prescribed under Act to the Investor Education and Protection Fund (IEPF) Account.

The Ministry of Corporate Affairs (MCA) vide General Circular No. 12/2017 dated 16.10.2017 had notified the due date to transfer the

equity shares where the specified period has completed.

The company has not transferred such equity shares .The Company is taking necessary steps to identify such equity shares and comply

with the provisions of the Act.

109

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Statement of changes in equity for the period ended March 31, 2018

A. Equity share capital (₹ in Lakh)

Opening balance

as at 1 Apr 2016

Changes in equity

share capital during

the year

Closing balance

as at 31 Mar 2017

Changes in equity

share capital during

the year

Closing balance

as at 31 Mar 2018

1,643.62 - 1,643.62 86.00 1,729.62

1,643.62 - 1,643.62 86.00 1,729.62

B. Other Equity (₹ in Lakh)

ParticularsOpening balance

as at 1 Apr 2016

Changes in

accounting policy/

prior period errors

Restated balance

as at 1 Apr 2016

Total comprehensive

income for the yearDividends

Transfer to retained

earnings

Tax on other

comprehensive

income

Closing balance

as at 31 Mar 2017

(i) Capital Reserve 36.68 - 36.68 - - - - 36.68

(ii) General Reserve 533.00 - 533.00 - - - - 533.00

(iii) Retained earnings (2,421.92) (28.12) (2,450.04) (3,683.66) - - - (6,133.70)

(iv) Securities premium 1,667.24 - 1,667.24 - - - - 1,667.24

(v) Money received against share warrants - - - - - - -

(vi) Other comperhensive income

- Actuarial gain/(loss) on defined

benefit obligation - - - (9.36) - - - (9.36)

- Equity instrunment through other

comperhensive income - (30.76) (30.76) 28.76 - - - (2.00)

Total reserves (185.00) (58.88) (243.88) (3,664.26) - - - (3,908.14)

(₹ in Lakh)

ParticularsOpening balance

as at 1 Apr 2017

Changes in

accounting policy/

prior period errors

Restated balance

as at 1 Apr 2017

Total comprehensive

income for the yearDividends

Transfer to retained

earnings

Tax on other

comprehensive

income

Closing balance

as at 31 Mar 2018

(i) Capital Reserve 36.68 - 36.68 - - - - 36.68

(ii) General Reserve 533.00 - 533.00 - - - - 533.00

(iii) Retained earnings (6,133.70) - (6,133.70) (768.24) - - - (6,901.93)

(iv) Securities premium 1,667.24 - 1,667.24 8.60 - - - 1,675.84

(v) Money received against share warrants - - - 235.40 - - - 235.40

(vi) Other comperhensive income -

- Actuarial gain/(loss) on defined

benefit obligation (9.36) - (9.36) 0.69 - - - (8.67)

- Equity instrunment through other

comperhensive income (2.00) - (2.00) (0.06) - - - (2.06)

Total reserves (3,908.14) - (3,908.14) (523.61) - - - (4,431.74)

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner

Cochin -16 Sd/- Sd/-

13.06.2018 V.N.Sridharan N. Subramanian

Chief Financial Officer Director

Particulars

Equity shares of Rs.10 each

Total

110

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 4

Land BuildingFurniture and

fixtures

Plant and

machineryVehicle Office equipments Total

Year ended 31 March, 2017

Gross Carrying Amount

Deemed Cost as at 1 April 2016 233.27 744.12 18.20 4,469.12 26.79 11.19 5,502.69

Exchange differences - - - - - - -

Additions - - - - - - -

Disposals - - - 4,382.48 15.69 0.22 4,398.39

233.27 744.12 18.20 86.64 11.10 10.97 1,104.30

Accumulated Depreciation

Depreciation charge during the year - 59.73 4.29 62.80 6.71 4.94 138.48

Impairment loss - - - 2,080.76 - - 2,080.76

Exchange differences - - - - - - -

Disposals - - - 2,080.76 - - 2,080.76

- 59.73 4.29 62.80 6.71 4.94 138.48

233.27 684.39 13.91 23.84 4.39 6.03 965.82

Year ended 31 March, 2018

Gross Carrying Amount

Opening Gross carrying amont 233.27 744.12 18.20 86.64 11.10 10.97 1,104.30

Exchange differences - - - - - - -

Additions - - - - - - -

Disposals 34.75 34.75

198.52 744.12 18.20 86.64 11.10 10.97 1,069.55

Accumulated Depreciation and Impairment

Opening accumulated depreciation - 59.73 4.29 62.80 6.71 4.94 138.48

Depreciation charge during the year - 64.67 3.95 1.85 0.31 2.29 73.07

Impairment loss - 83.59 0.45 - 3.43 0.37 87.84

Exchange differences - - - - - - -

Disposals - - - - - - -

- 207.98 8.69 64.65 10.45 7.61 299.39

198.52 536.14 9.51 21.99 0.65 3.36 770.15

(i)

(ii)

(iii)

Property,Plant & Equipment

Particulars

Closing Gross Carrying Amount

Closing Accumulated Depreciation

Net Carrying Amount

Closing Gross Carrying Amount

Closing Accumulated Depreciation

Net Carrying Amount

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016 measured as per the previous

GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Borrowing costs capitalized during this year – Rs Nil Lakhs (2016-17 – Nil Lakhs )

The Company has paid entire value for 1.76 Acres of industrial land and has taken the posseession of the same at Edayar. Company has started using the land entirely by the beginning

of 2013. Final clearance is awaited for effecting legal transfer of ownership. In view of the above and in accordance with subsatance and economic reality, this amount has been

accounted as Land under Fixed Assets.

111

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 5- CWIP (₹ in Lakh)

As at As at

Particulars March 31, 2018March 31, 2017

Expenditure During Construction Period - -

- -

Details of Expenditure During Construction Period

Opening Balance - 22.92

Add: Expenditure during the year: - -

- Employees' Remuneration & Benefits - -

- Project Management fee - -

- Interest During Construction - -

Total - 22.92

Total Expenditure - 22.92

Less: Transfer to Property, Plant & Equipment 22.92

Closing balance - -

NOTE 6- Other Intangible Assets

Particulars

Year ended 31 March, 2017

Gross Carrying Amount

Deemed Cost as at 1 April 2016 0.16 0.16

Additions - -

Closing Gross Carrying Amount 0.16 0.16

Accumulated Amortisation

Amortisation charge during the year - -

Closing Accumulated Depreciation - -

Net Carrying Amount 0.16 0.16

Year ended 31 March, 2018

Gross Carrying Amount

Opening Gross carrying amont 0.16 0.16

Additions - -

Closing Gross Carrying Amount 0.16 0.16

Accumulated Depreciation

Opening accumulated depreciation - -

Amortisation charge during the year - -

Impairment charge 0.16 0.16

Closing Accumulated Depreciation 0.16 0.16

Net Carrying Amount - -

Transition to Ind AS

(₹ in Lakh)

Computer

software Total

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Intangible

assets recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the

deemed cost of the Other Intangible Assets.

112

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 7 : Non Current Financial Assets

NOTE 7A -Investment (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Investment carried at fair value through other comprehensive income

Quoted

- Equity Instruments 1.50 1.56 1.51

- Mutual Funds - - 41.37

Unquoted

- Equity Instruments 0.79 0.79 0.72

A 2.29 2.35 43.60

Total investment 2.29 2.35 43.60

There are no financial investments measured at fair value through profit and loss

* Details of investment (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Quoted Non-Trade Investments:

Investment in Equity Instruments

- 2,080 Equity shares of I.D.B.I.Ltd of Rs 10 each fully paid up 1.50 1.56 1.51

In Mutual Funds

- 1,30,597 units of ICICI Prudential Infrastructure fund - - 15.53

- 1,25,646 units of L&T Oppurtunities Fund - - 19.22

- 23,286 units of UTI Master Growth Unit Scheme - - 6.62

1.50 1.56 42.88

Unquoted Non-Trade Investments:

Investment in Equity Instruments

Investment In Others

- Kerala Enviro Infrastructure Ltd 0.79 0.79 0.72

(10,000 Equity Shares Of Rs 10 Each Fully Paid Up)

- Cochin Waste 2 Energy P Ltd - - -

(30,000 Equity Shares Of Rs 10 Each Fully Paid Up)

- - -

0.79 0.79 0.72

NOTE 7B -Loans (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Unsecured considered good

- Security Deposits - - 111.26

Unsecured Considered Doubtful

- Security Deposits 24.60 24.54 8.16

24.60 24.54 119.42

- Provision for doubtful deposits (24.54) (24.54) (8.16)

0.06 - 111.26

NOTE 8 : Other Non Current Assets (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Unsecured,considered good

- Capital Advances - - 4.31

Unsecured,considered doubtful

- Capital Advances 83.12 83.12 83.12

less : provision for doubtful advance (83.12) (83.12) (83.12)

- - 4.31

113

NOTE 9 : Inventories (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

At lower of cost and net realisable value

- Raw Material - - 175.28

- Packing material - -

- work-in-progress - - 15.16

- Finished goods - 26.92 308.64

- Stores, spares & fuels 63.79 386.25

- Renewable energy certificate - 0.40 1.03

- 91.11 886.36

* Inventory includes : (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

In transit

- Raw materials - - 47.73

- - 47.73

Mode of valuation:

(i)

(ii)

NOTE 10: Current Financial Assets

NOTE 10A :Trade Receivables (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Secured

- More than six months from the date they became due - - -

Unsecured

- Considered Good

(i) Exceeding Six Months From They become Due 179.15 148.62 516.44

(ii) Others - 185.76 1,147.90

- Considered Doubtful 721.04 783.00 235.41

Provision for doubtful debts (721.04) (783.00) (235.41)

179.15 334.38 1,664.34

A. Details of debts due by related party (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Directors - - -

Officers - - -

Firms in which any director is a partner

- Carto Packs - 30.53 75.09

- Aditya Paper - 2.92 -

Private Companies in which any Director is a director or member - - -

- 33.45 75.09

NOTE 10B :Cash and cash equivalents (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Balance with Banks

- In Current Accounts 22.62 4.58 13.97

- In Deposit Accounts 39.05 80.00 400.84

Cash in Hand 1.41 0.08 1.96

63.07 84.66 416.77

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method.

Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods

includes cost of material, labour and other direct expenses.

Stock-in-process is valued 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 on

Accounting for Self Generated Emission Reductions issued by ICAI. Accordingly, RECs are recognised on approval of certificate

from respective authority, which are valued at lower of cost or net realisable value. Cost comprises of cost incurred for certification

of REC and NRV is the floor price fixed by Central Electricity Regulatory Commission.

114

z

* Details of deposit account (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Bank of India - - 79.48

Margin money against bank guarantee 38.00 - -

Federal Bank Ltd 1.05 68.11 217.27

Industrial Development Bank of India - 11.89 104.09

39.05 80.00 400.84

NOTE 10C : Short term Loans (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Security deposit

- Unsecured considered good 27.60 27.60 29.70

Other Advance 5.00 5.00 5.00

provision for doubtful deposits (27.60) (27.60) (18.75)

5.00 5.00 15.95

NOTE 11 : Other Current Assets (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Advances income tax 20.93 311.40 326.07

Cenvat Credit - 12.37 99.78

Earmarked balance with bank 6.85 10.90 10.95

Interest accrued on deposits 2.02 1.02 9.16

other receivable 295.49 13.33 141.94

325.29 349.02 587.90

NOTE 12 :Equity share capital

A. Authorised (₹ and Nos in Lakh)

Particulars Shares Amount Shares Amount

As at April 2016 250.00 2,500.00 250.00 2,500.00

- Increase during the year - -

As at 31 March 2017 250.00 2,500.00 250.00 2,500.00

- Increase during the year - -

As at 31 March 2018 250.00 2,500.00 250.00 2,500.00

B. Issued, Subscribed & fully Paid Up

Particulars No. of shares Amount No. of shares Amount No. of shares Amount

164.36 1,643.62 164.36 1,643.62 164.36 1,643.62

8.60 86.00 - - - -

172.96 1,729.62 164.36 1,643.62 164.36 1,643.62

Rights, Preferences and Restrictions attached to equity Shares

1

2

3

4

5

6

7

8

(Nos in Lakh)

No of Shares % of holding No of Shares % of holding No of Shares % of holding

S.Rajkumar 55.40 32.03% 46.80 28.47% 46.80 28.47%

A.Padmanabhan 12.95 7.49% 12.95 7.88% 13.18 8.02%

Gopinathan CK 10.06 5.82% 10.06 6.12% 10.00 6.08%S.Giridhar 7.13 4.12% 7.13 4.34% 8.50 5.16%

Outstanding at

the end of the

The Company has only one class of shares referred to as Equity Shares having a par value of Rs.10/- per share. Each holder of

Equity Shares is entitled to one vote per share.

The company declares and pays dividend in Indian Rupees. The dividend when proposed by the Board of Directors is subject to

the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company the holders of equity shares shall be entitled to receive any of the remaining assets of

the company after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution

will be in proportion to the number of equity shares held by the shareholders.

The Company has not issued any securities convertible into Equity or Preference Shares.

No shares have been forfeited till date.

Out of the total share capital issued and called up, no calls are outstanding as unpaid.

Equity shares Preference shares

As at March 31, 2017 As at March 31, 2016As at March 31, 2018

At the

beginning of Issued during

the period

During the last 5 years ,the company has not issued any shares pursuant to any contract without payment being received in ,

cash as bonus shares or has not brought back any shares.

The following shareholders hold more than 5% of the shares:

Name As at 31-03-2018 As at 31-03-2017 As at 01-04-2016

115

NOTE 13 :Other equity (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Capital Reserve 36.68 36.68 36.68

General Reserve 533.00 533.00 533.00

Retained earnings (6,901.93) (6,133.70) (2,450.04)

Securities premium 1,675.84 1,667.24 1,667.24

Money received against share warrants 235.40 - -

Other comperhensive income

- Actuarial gain/(loss) on defined benefit obligation (8.67) (9.36) -

- Equity instrunment through other comperhensive income (2.06) (2.00) (30.76)

(4,431.74) (3,908.14) (243.88)

NOTE 14 : Analysis of items of other comprehensive income(OCI),net of tax

Defined benefit

plans

Eqity

instrunment

through OCI

As at 1st april 2016 - (30.76)

Remeasurements (9.36) -

Remeasurements utilized during the year 28.76

As at 31st march 2017 (9.36) (2.00)

Remeasurements 0.69 (0.06)

Remeasurements utilized during the year - -

As at 31st march 2018 (8.67) (2.06)

NOTE 15 : Earning per share

Basic and diluted earning per share

i. Profit (loss) attributable to equity shareholders (basic and diluted) (₹ in Lakh)

For period endedFor period ended

March 31, 2018 March 31, 2017

(767.88) (3,683.23)

less: Cumulative preference dividend not provided 135.40 135.40

(903.28) (3,818.63)

ii. Weighted average number of equity shares (Basic EPS)

For period endedFor period ended

March 31, 2018 March 31, 2017

164.36 164.36

0.07 -

164.43 164.36

(5.49) (23.23)

iii. Weighted average number of equity shares (Diluted EPS)

For period endedFor period ended

March 31, 2018 March 31, 2017

164.36 164.36

0.07 -

1.93

166.37 164.36

(5.43) (23.23)

NOTE 16 : Financial Liabilities

NOTE 16A: Non Current Borrowings (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Non-current Borrowings

Secured Term loans

- From Banks - 703.86 856.91

Preference share 1,090.82 1,066.39 1,049.60

1,090.82 1,770.24 1,906.51

Weighted average number of equity shares for the year

Earning Per Share (EPS) - (Rs.)

Particulars

The calculations of profit attributable to equity shareholders and weighted average number of equity shares outstanding for

purposes of basic earnings per share calculation are as follows:

Particulars

Profit (loss) for the year

Profit (loss) for the year, attributable to the equity holders

Particulars

Opening Balance

Effect of fresh issue of shares

Particulars

Opening Balance

Effect of fresh issue of shares

Effect of fresh issue of shares warrants

Weighted average number of equity shares for the year

Earning Per Share (EPS) - (Rs.)

116

NOTE 16B: Current Borrowings

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Secured Loans from Banks

Cash Credit 711.68 1,326.48 1,521.55

Short Term loan

Sub-Total 711.68 1,326.48 1,521.55

Unsecured Loans

Buyers credit facility - 13.16 723.26

Intercorporate Loan 712.00 - -

Related parties 835.84 2,051.38 25.30

Sub-Total 1,547.84 2,064.54 748.56

Total 2,259.52 3,391.02 2,270.11

* Secured Term Loans (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

(i) Federal Bank Ltd - 145.50 164.47 (ii) SBT panampilly nagar (TLI) - 512.72 592.32 (iii) Punjab National bank - 216.70 247.53 (iv) Vehicle loanAxis Bank (Loan no: 3) 0.33 - 2.65 (v) Vehicle loanAxis Bank (Loan no: 4) - 1.74 3.86

Total 0.33 876.66 1,010.83

Less:Current maturities of long term debts 0.33 172.80 153.92

- 703.86 856.91

(i)

* Preference share

(i)

(ii)

(iii)

(iv)

No of Shares % of holding No of Shares % of holding No of Shares % of holding

60.00 60.00% 100.00 100.00% 100.00 100.00%

40.00 40.00% - 0.00% - 0.00%

* Current Borrowings - Secured (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Cash Credit

- Industrial Development Bank of India Ltd 209.20 383.90 291.37

- Federal Bank Ltd 502.48 704.40 925.32

- Bank of India - 238.18 304.86

711.68 1,326.48 1,521.55

Discription Repayment term Limit sanctioned

- Industrial Development Bank of India Ltd On demand 30,000,000

- Federal Bank Ltd On demand 92,500,000

- Bank of India On demand 30,000,000

The Secured loan represents cash credit facility from banks creating 1st charge on entire current assets and second charge on entire

fixed assets of the company.

Vehicle loan from Axis bank is repayable in 60 monthly instalments of Rs 0.16 lakhs each.

The Company has only one class of Preference Shares (non-convertible cumulative redeemable ) having a face value of Rs.10/-

Preference shares carries a dividend at the rate of 11.25%

The company shall redeem the preference share at par in 4 annual installment of Rs. 2.5 crore each.

Details of shares held by each shareholder holding more than 5% shares:

Name As at 31-03-2018 As at 31-03-2017 As at 01-04-2016

Kerala State

Industrial

Development

S.Rajkumar

117

* Current Borrowings - Unsecured (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Buyer's Credit

- IDBI - Dubai - 13.16 357.50

- Bank of India - Tokyo - - 109.29

- Federal Bank - - 256.47

- 13.16 723.26

Related parties

- Loan from Directors 656.94 1,222.53 25.30

- Loan from Group Companies 178.90 116.85 -

- Inter-corporate Loan - 712.00 -

835.84 2,051.38 25.30

(i)

(ii)

NOTE 17 :Provisions (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Non-Current Provisions

Provision for Employee benefits

- Gratuity 8.43 8.06 65.78

8.43 8.06 65.78

Current Provisions

Provision for Employee Benefits- Leave encashment - 1.54 4.78 Income tax Provision 72.58 61.43 77.13

72.58 62.97 81.91

1

2

3

4

Reconciliation of the net defined benefit liability

Gratuity Leave plan

63.75 6.81

- -

4.48 0.51

0.49 1.05

Actuarial loss/(gain) on obligation 16.19 (6.83)

Employer contribution to plan assets - -

Net effect of benefit payments (76.85) -

As at 31 March 2017 8.06 1.54

Expected return on plan assets - -

Interest Cost 0.61 -

Current service cost 0.46 -

Actuarial loss/(gain) on obligation (0.69) -

Employer contribution to plan assets - -

Net effect of benefit payments - -

As at 31 March 2018 8.44 -

Expense recognised in profit or loss

Gratuity Leave plan

- -

4.48 0.51

0.49 1.04

-

- -

Total amount recognised in profit or loss 4.97 1.55

For the period ended 31 March 2018

Expected return on plan assets - -

Interest Cost 0.61 -

Current service cost 0.46 -

Actuarial loss/(gain) on obligation - -

Employer contribution to plan assets recognised in P/L - -

Total amount recognised in profit or loss 1.07 -

Since the valuation is done by a professional actuary, the assumprions taken is considered reliable and hence sensitivity analysis

ParticularsTYPE OF PLAN

As at 1 April 2016

Expected return on plan assets

Interest Cost

Buyer,s credit availed by bank and loan from related parties are repayable on demand.

The Provisions for Gratuity and Leave Encashment are made based on the actuarial valuation on 31.03.2018.

The laibility for Gratuity has been calculated on the basis of current ceiling of ₹10 lakh. The proposed enhancement of ceiling to ₹

20 lakh has not been considered as the related amendment in The Payment of Gratutiy Act is yet to be notified.

Acturial valuation of gratuity is presently based on the retirement age of 55 years. The Union has filed a case before Kerala High

Court for increasing the retirement age to 58. Impact on provision for gratuity, if the case is decided against the Company,has

There is no continuing default/default as on the date of balance sheet in repayment of loans and interest.

Current service cost

Actuarial loss/(gain) on obligation

Claims received w.r.t previous years

Current service cost

ParticularsTYPE OF PLAN

For the period ended 31 March 2017

Expected return on plan assets

Interest Cost

118

Remeasurements recognized in other comprehensive income

31-03-18 31-03-17 31-03-18 31-03-17

(68,753.00) 16.19 - (6.83)

(0.69) 16.19 - (6.83)

Significant Estimates- The Significant actuarial valuation applicable for the plans are as below:

NOTE 18 :Deferred tax liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Deferred Tax Liabilities

- Property,Plant & Equipment 152.69 436.61 1,112.21 Deferred Tax Asset

- Provision for unrecognised expense 32.39 32.43 119.60

- Provision for Production Incentive 19.70 20.17 21.81

- Provision for Doubtful Debts/Claims 72.74 72.75 72.74 Net Deferred Tax Liabilities 27.86 311.26 898.06

* Movement in deferred tax liabilities

Property,Plant &

Equipment

Provision for

unrecognised

expense

Provision for

Production

Incentive

Provision for

Doubtful

Debts/Claims

1,112.21 119.60 21.81 72.74

(675.60) (87.17) (1.64) -

- - - -

436.61 32.43 20.17 72.74

(283.92) - (0.47) -

152.69 32.39 19.70 72.74

NOTE 19 : Other non­current liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Security deposits 1.43 1.43 1.43

1.43 1.43 1.43

NOTE 20 :Trade Payables (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Payable to Micro Small & Medium Enterprises 0.65 0.65 0.76

Other Trade Payables

- Supplies 327.66 428.35 1,721.85

- Stores & Spares 52.04 66.83 87.55

380.34 495.83 1,810.16

(i)

(ii)

(iii)

Particulars

TYPE OF PLAN

Gratuity Leave plan

Discount Rate 7.54% 7.00%

Salary escalation rate 5.00% 5.00%p.a

Actuarial loss/(gain) on obligation

Balance as at the end of the year

Particulars 31-03-18 31-03-17

Mortality table

Indian Assured Lives Mortality (2006-

08)Indian Assured Lives Mortality (1994-

96) Ultimate

-to profit or loss

-to other comprehensive income

At 31 March 2017

Charged/(credited)

-to profit or loss

-to other comprehensive income

Expected rate of return on plan assets Not Applicable Not Applicable

Particulars

At 1 April 2016

Charged/(credited)

At 31 March 2018

Disclosure under Micro, Small and Medium Enterprises Development Act:

The above balances are subject to confirmation from the respective parties

Amount due to Micro, Small and Medium enterprises included under Trade payables is ₹ NIL (Previous year ₹ 0.65 lakh). This

amount is identified by the Management and relied upon by the Auditors.

Interest of Rs 0.20 lakhs had become payable either in the current year or in the previous year under Section 16 of the Micro,

Small and Medium Enterprises Development Act, 2006 or under any contractual obligation.

119

NOTE 21 : Other current financial liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Current maturities of long term debts

- Federal Bank Ltd - 30.00 18.00

- SBT panampilly nagar - 106.06 90.96

- Punjab National Bank - 35.00 41.70

- Vehicle loan Axis Bank - - 1.33

- Vehicle loan Axis Bank 0.33 1.74 1.93

Dividend payable 6.85 10.95 10.95

7.18 183.75 164.87

NOTE 22 : Other Current Liabilities (₹ in Lakh)

As at As at As at

Particulars March 31, 2018 March 31, 2017 April 1, 2016

Interest Accrued and due

- Interest on buyers credit - - 2.40

- Interest on secured Loan - 16.80 -

Other liabilities

- Salaries and Other Benefits 225.51 127.11 62.05

- Statutory Dues Payable 239.28 79.52 167.56

- Advance for scrap Asset 42.76 - -

- Other Payables 48.36 42.69 521.55

555.91 266.12 753.56

NOTE 23 :Sale of Products (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

(i) Sale of products:

- own products 26.89 2,289.26

add: excise duty 0.36 111.41

(ii) Other operating income

- Traded products - 374.85

- Scrap product 35.88 39.34

- Process waste income 1.13

- Sales of renewable energy certificate 99.67 77.73

162.79 2,893.72

NOTE 24 : Other Income (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

(i) Interest income:

- On deposits with banks [Tax Deducted at Source Rs 0.41 Lakhs (Previous year Rs2.38 Lakhs)] 4.26 23.88

- On Advances - -

(ii) Dividend income from Long-term investment -

(iii) Sale Of Scrapped Fixed Assets 965.00 -

(iv) Loan and interest on loan forfeited account -

(v) Other non-operating income 25.50 90.05

994.76 113.93

Details of Other non-operating income (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Emd Forfeited Account - 25.00

Insurance Collected (Income) 4.95 0.66

Loss/Gain On Sale Of Fixed Asset - 8.69

Commission Received - 2.80

Miscellaneous income 20.55 52.91

25.50 90.05

NOTE 25 : Cost of Materials Consumed (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Raw materials - 1,692.63

packing materials - 34.18

- 1,726.81

NOTE 25A : Item Wise Breakup Of Raw Material Consumed (₹ in Lakh)

Particulars ₹ ( In lakhs) % ₹ ( In lakhs) %

(i) Value of Raw materials consumed

- Indigenous - - 434.82 25.69%

- Imported - - 1,134.89 67.05%

- - 1,569.71 92.74%

(ii) Value of Chemicals consumed

- Indigenous - - 122.92 7.26%

- Imported - - - 0.00%

- - 122.92 7.26%

- - 1,692.63 100%

As at 31-3-2018 As at 31-3-2017

120

NOTE 26 : Changes in Inventory (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Stock as on 1st

April

Finished Goods 26.92 308.64

Work in Process - 15.16

Total opening balance 26.92 323.80

Stock as on 31st

March

Finished Goods - 26.92

Work in Process - -

Total Closing Balance - 26.92

Changes in Inventory 26.92 296.88

NOTE 27 : Employee Benfit Expenses (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Salaries, Wages & Allowances 59.03 206.29

Remuneration to Managerial persons - 25.24

Gratuity 1.07 6.07

Bonus - 4.50

Leave Encashment - 1.56

Staff Welfare Expenses 8.02 14.08

Employer's Contribution to PF 1.79 6.52

Employer's Contribution to ESI 0.90 4.34

Coolie charges - contract - 57.15

Allowances and expenses to contract workers - 22.8

Others 8.13 7.91

78.94 356.46

NOTE 28 : Finance Cost (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Interest Cost on Financial liabilities carried at amortised cost

- Interest expense 189.54 451.56

- Other borrowing cost - 75.55

- Exchange fluctuation - 26.82

- Loss on fair valuation of preference shares 24.43 16.79

213.97 570.71

NOTE 29 : Depreciation and ammortisation expenses (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Depreciation Property,Plant & Equipment 73.07 138.48

Ammortisation of intangible assets - -

73.07 138.48

NOTE 30 : Other Expenses (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Payment to auditor 2.23 3.01

Stores and Spares Consumed - 271.40

Power and fuel 6.09 426.29

Rent 4.86 39.43

Repairs and maintenance

-Plant & Machinery - 34.85

-Buildings - 18.22

-Others 2.32

Insurance charges 5.43 16.80

Rates and Taxes 35.79 12.51

Discount 9.65 27.85

Stock Written Off - -

Provision for doubtful debt - 531.17

Provision for advance - 82.95

Freight outwards 0.39 45.15

Miscellaneous expenses 64.44 264.49

131.19 1,774.12

121

NOTE 30A : Payment to auditor

As at As at

Particulars March 31, 2018 March 31, 2017

Statutory Audit Fee 0.89 0.89

Tax Audit Fee 0.25

Auditors Out of pocket Expense 0.30 0.29

Fee for other services 0.75 0.30

Audit fee for certfication 0.04 1.53

2.23 3.01

NOTE 30B : Stores and Spares Consumed

Particulars ₹ ( In lakhs) % ₹ ( In lakhs) %

Indigenous - 271.40 100%

Imported - - 0.00%

- 0.00% 271.40 100.00%

NOTE 31 : Exceptional Items [expense / (income)] (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Retrenchment Compensation 98.82

Loss on sale of asset held for sale 2,100.55

Mat Credit Expense 300.38

Profit on sale of land (915.25)

1,584.50 -

NOTE 32 : Tax Expense (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Tax adjustments for previous year 11.05 -

Deferred Tax (283.44) (586.40)

(272.39) (586.40)

Income tax recognized in other income

Before tax

Tax (expense)

benefit Net of tax Before tax

Tax (expense)

benefit Net of tax

0.69 - 0.69 (9.36) - (9.36)

(0.06) - (0.06) 28.76 - 28.76

Reconciliation of effective tax rate

-

(₹ in Lakh)

Particulars

For the year

ended

31/03/2018

For the year

ended

31/03/2017

Profit from continuing operations before income tax expense (1,039.64) (4,250.23)

Tax at the Indian Tax Rate of 30.9% (321.25) (1,313.32)

Permanent disallowances - -

Permanent allowances - -

Temporary differences (283.44) (586.40)

Tax in respect of earlier years 11.05 -

Tax losses for which no deferred tax was recognised 321.25 1,313.32

Total income tax expense/(credit) (272.39) (586.40)

Effective tax rate 26.20% 13.80%

-

NOTE 33 : Other comprehensive income (₹ in Lakh)

As at As at

Particulars March 31, 2018 March 31, 2017

Actuarial gain/(loss) on defined benefit obligation 0.69 (9.36)

Equity instrunment through other comperhensive income (0.06) 28.76

Tax effect of the above - - 0.63 19.40

NOTE 34 : Fair Value Hierarchy

Particulars

Level 1 Level 3 Level 1 Level 3 Level 1 Level 3

1.50 1.56 1.51

- - 15.53

- - 19.22

- - 6.62

0.79 0.79 0.72

1,090.82 1,066.39 1,049.60

As at 31-3-2018 As at 31-3-2017

Particulars

For the year ended 31/03/2018 For the year ended 31/03/2017

Remeasuremen

t of defined

benefit liability

Remeasuremen

t of Equity

instrunment

through OCI

Tax computation for 2017-18 was not finalized during the time of preparation. The above reconciliation is on the assumption that

there won't any allowances or disallowances other than the ones taken for deferred tax computation.

The management has assessed that its financial assets and liabilities like cash and cash equivalents, trade receivables, trade

payables, cash credits, buyers credit and other current liabilities approximate their carrying amounts largely due to the short-term

maturities of these instruments.

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Unquoted Equity Shares of Other Companies:

ICICI Prudential

Infrastructure

L&T

Oppurtunities

Fund

UTI Master

Growth

31.03.2018 31.03.2017 01.04.2016

Significant observable inputs Significant observable inputs Significant observable inputs

I.D.B.I.Ltd

The fair values of the unquoted equity shares have been estimated using NAV model.

Quoted Equity Instrunment and Mutual Funds:

The fair values of the unquoted equity shares measured using quoted prices. This includes listed equity instruments and mutual funds

Preference Shares

The value of the preference shares are based on the leding rate avaliable

A reconciliation of the income tax expenses to the amount computed by applying the statutory income tax rate to the profit before

income taxes is summarized below:

Investment in

Unquoted

instrunments

Kerala Enviro

Infrastructure

Limited

Financial

Assets

Investment in

Quoted

instrunments

Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds

and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock

exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter

derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible

on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in

Level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case

for unlisted equity securities, contingent consideration and indemnification asset included in Level 3.

Financial

Liabilities

Preference

shares

122

NOTE 35 : Contingent liabilities and Commitments (₹ in Lakh)

As at As atParticulars March 31, 2018 March 31, 2017

Unexpired Contracts for Capital Expenditure 260.61 260.61

Amount of Income tax liabilities disputed in appeal 22.18 38.21

Guarantee given on behalf of the Company 38.00 94.00 Excise duty disputed under appeal 350.79 350.79

Claim towards water charge raised by Kerala Water Authority 78.42 78.42

Customs duty liability under EPCG claim 58.79 58.79

Arrears of non - convertible cumulative preference dividend 537.70 402.30 1,346.49 1,283.12

NOTE 36 : Additional Information

I Information on Imports, Exports & Foreign Currency / Exch. Transactions. (₹ in Lakh)

As at As atParticulars March 31, 2018 March 31, 2017

a) Value of Imports on CIF Basis

i) Raw Materials & Consumables NIL 989.80

ii) Components and Spare Parts NIL NIL

iii) Capital Goods NIL NILNIL 989.80

b) Other Expenditure in Foreign Currencies (on cash basis)

i) Expenses on Foreign travel NIL NIL

ii) Books, Periodicals, & Subscriptions NIL NIL

iii) Expenses towards Technical Services NIL NILNIL NIL

c) Value of Exports on FOB Basis NIL NIL

II Details of Provisions Pursuant to Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets

Sundry Debtors Income tax Gratuity & Leave

encashment

Capital

Advances

Deposits

235.41 75.66 70.56 83.00 28.67

547.59 - (60.96) 4.34 23.47

- (15.00) - - -

783.00 60.66 9.60 87.34 52.14

- 11.05 - - -

(61.96) - (1.17) - -

721.04 71.71 8.43 87.34 52.14

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary

Vice Chairman &

Managing Director

M. No.232410

Partner

Sd/- Sd/-

Cochin -16 V.N.Sridharan N. Subramanian

13.06.2018 Chief Financial Officer Director

Particulars

As at 1st april 2016

Provision made during the year

Provision utilized during the year

As at 31st march 2017

Provision made during the year

Provision utilized during the year

As at 31st march 2018

123

III

Name of Related party Nature of Relationship

2017-18 2016-17

- 8.85

(246.37) 931.10

- 7.40

94.60 -

235.40 -

2 13.58 -

0.10 -

3 Mr Vignesh Rajkumar No transaction - -

4 Mr Visakh Rajkumar No transaction - -

5 Mrs E Kamalam - 0.10

0.20 0.50

Sales of Fixed Asset - 8.00

Rent - 2.08

7 Mr. A Ganesh Rent - 2.76

Unsecured Loan - 208.75

- 0.90

- 8.00

(2.73) 49.83

Sale of fixed asset - 3.00

- 0.24

- 8.39

- 712.00

- 32.61

12Sreeniketana Logistics

Limited- 68.95

13SreeKailash Logistics

Chennai Limited 4.065

- -

0.38 48.88

31.34 33.37

14 - 18.67

(1.50) 116.85

- 11.26

- 30.31

- 400.85

- 11.50

11.20 -

6.99 11.00

Sale of Goods - 4.66

Purchase of Raw Material - 191.94

18

Sree Kashyap Surya

Energy Equipments

Pvt Ltd

No transaction - -

Unsecured Loan 62.05 -

Advance for Scrap Sale 14.20 -

1 Mr S Raj KumarKey Management Personnel(Vice

Chairman & Managing Director)

Managerial Remuneration

Unsecured Loan

Rent

Issue Of Share Capital including Share Premium

Issue of Share Warrant

Details in respect of related parties pursuant to IND AS 24

Details of Transactions

Nature of TransactionsAmount (Rs in Lakhs)

MrsRajeeRajkumar

Relative of Key Management Personnel

Unsecured Loan

Sitting Fees

Sitting Fees

6 Mr. S. Subramaniam

Sitting Fees

8 Mr. S GiridharSitting Fees

9 Mr A.PadmanabhanKey Management Personnel (Executive

Director)

Remuneration and Allowances

Unsecured Loan

Rent

11ShriKailash Logistics

Limited

Enterprises over which any person

mentioned in 1 to 6 above is able to

exercise significant influence

Unsecured Loan

Interest on Unsecured Loan

Freight Charges

Sale of Scrap

12 Carto Packs

Purchase of Raw Material

Sale of Finished Goods

13 Aditya PapersSale of Goods

SreeSakthi

Constructions and

Infrastructure (P) Ltd

10 VVM RaoKey Management Personnel (Director

Operations) Remuneration and Allowances

Civil work

15Maharaja Continental

Trades Ltd

Unsecured Loan

Reimbursement of expenses

Sales Commission

Note: Shri Kailash Logistics Limited was a related party as per Ind AS 24, till 30.12.2016

Sale of Finished Goods

17Very Same Industrial

Aids Ltd

19 Visakh Homes

16 Sree Giri Packagings

Purchase of Raw Material

Reimbursement of expenses

Advance given

124

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Notes forming part of the Financial Statements

NOTE 36 : Explanation to transition to Ind AS

A

1 Property plant and equipment, intangible assets and investment properties

A

1

2 Classification and measurement of financial assets

Optional exemptions availed

As stated in Note 2 (a), these are the Company’s first financial statements prepared in accordance with Ind AS. For the year

ended 31 March 2016, the Company had prepared its financial statements in accordance with Companies (Accounting

Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).The accounting policies set out in Note 3 have been applied in preparing these financial statements for the year ended 31

March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on

the date of transition i.e. 1 April 2016.In preparing its Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31

March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with

previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements

prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s

financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions:In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory

exceptions.

Estimates

As per Ind AS 101 an entity may elect to:i. measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its

deemed cost at that dateii. use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed

cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:

a. fair value;

b. or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific priceThe elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38,

Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the

existence of an active market).iii. use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of

transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to

decommissioning liabilities prescribed under Ind AS 101).

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the

property, plant and equipment. The same election has been made in respect of intangible assets and investment property also.

Mandatory exceptions

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the

comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with

estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those

estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under

previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing

opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the

date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts

and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on

the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively except

where the same is impracticable.

125

Reconciliation of Equity

(₹ in Lakh)

PreviousGAAP Adjustments Ind AS

I. Assets

1 Non-current assets

Property,Plant & Equipment 5,502.69 - 5,502.69

Capital work-in progress 22.92 - 22.92

Goodwill

Other Intagible Assets 0.16 - 0.16

Intagible Assets under development

Financial Assets

Investments 52.88 (9.28) 43.60

Trade receivables

Loans 115.57 (4.31) 111.26

Deferred tax assets (net)

Other non­current assets - 4.31 4.31

2 Current Assets

Inventories 998.51 (112.15) 886.36

Financial Assets

Investments

Trade receivables 1,664.34 - 1,664.34

Cash and cash equivalents 427.72 (10.95) 416.77

Bank balances other than (iii) above

Loans 576.74 (560.79) 15.95

Others (to be specified)

Tax Assets (Net) - - -

Other current assets 16.16 571.74 587.90

Asset held for sale - 112.16 112.16

TOTAL 9,377.69 (9.27) 9,368.42

II. Equity & Liabilities

1 Equity

Equity share capital 2,643.62 (1,000.00) 1,643.62

Other equity (185.00) (58.88) (243.88)

Minority interest 16.28 - 16.28

2 Liabilities

Non-Current Liabilities

Financial Liabilities

Borrowings 856.91 1,049.60 1,906.51

Trade Payables

Other financial liabilities

Provisions 65.78 - 65.78

Deferred tax liabilities (Net) 898.06 - 898.06

Other non­current liabilities 1.43 - 1.43

3 Current Liabilities

Financial Liabilities

Borrowings 2,270.11 - 2,270.11

Trade payables 1,810.16 - 1,810.16

Other financial liabilities - 164.87 164.87

Other Current Liabilities 918.43 (164.87) 753.56

Provisions 81.91 - 81.91

Current Tax Liabilities

TOTAL 9,377.69 (9.27) 9,368.42

ParticularsAs at April 1, 2016

126

(₹ in Lakh)

PreviousGAAP Adjustments Ind AS

I. Assets

1 Non-current assets

Property,Plant & Equipment 965.82 0.00 965.82

Capital work-in progress - - -

Goodwill

Other Intagible Assets 0.16 - 0.16

Intagible Assets under development

Financial Assets

Investments 1.35 1.00 2.35

Trade receivables

Loans - - -

Deferred tax assets (net)

Other non­current assets - - -

2 Current Assets

Inventories 2,501.47 (2,410.36) 91.11

Financial Assets

Investments

Trade receivables 334.38 - 334.38

Cash and cash equivalents 95.56 (10.90) 84.66

Bank balances other than (iii) above

Loans 342.10 (337.10) 5.00

Others (to be specified)

Tax Assets (Net) - - -

Other current assets 1.02 348.00 349.02

Asset held for sale - 2,410.36 2,410.36

TOTAL 4,241.86 1.00 4,242.86

II. Equity & Liabilities

1 Equity

Equity share capital 2,643.62 (1,000.00) 1,643.62

Other equity (3,842.75) (65.39) (3,908.14)

Minority interest 16.70 - 16.70

2 Liabilities

Non-Current Liabilities

Financial Liabilities

Borrowings 703.85 1,066.39 1,770.24

Trade Payables

Other financial liabilities

Provisions 8.06 0.00 8.06

Deferred tax liabilities (Net) 311.26 0.00 311.26

Other non­current liabilities 1.43 0.00 1.43

3 Current Liabilities

Financial Liabilities

Borrowings 3,391.02 (0.00) 3,391.02

Trade payables 495.83 (0.00) 495.83

Other financial liabilities - 183.75 183.75

Other Current Liabilities 449.87 (183.75) 266.12

Provisions 62.97 (0.00) 62.97

Current Tax Liabilities

TOTAL 4,241.86 1.00 4,242.86

* Previous GAAP figures have been reclassified to conform to IND AS presentation requirements for the purpose of the note.

ParticularsAs at 31 March, 2017

127

Reconciliation of total comprehensive income for the year ended 31-March -2016

(₹ in Lakh)

PreviousGAAP Adjustments Ind AS

I Revenue From Operations 2,782.31 111.41 2,893.72

II Other income 113.93 - 113.93

III Total Income 2,896.24 111.41 3,007.65

IV Expenses

Cost Of Material Consumed 1,726.81 0.00 1,726.81

Purchase of stock-in-Trade 221.64 - 221.64

Changes In Inventory 296.88 0.00 296.88

Excise Duty - 111.41 111.41

Employee Benefit Expenses 365.82 (9.36) 356.46

Finance costs 553.93 16.78 570.71

Depreciation and ammortisation expenses 138.48 (0.00) 138.48

Other Expenses 1,731.66 42.46 1,774.12

Total expenses(IV) 5,035.22 161.30 5,196.52

V Profit/(Loss) before, exceptional items and tax (I-II) (2,138.98) (49.89) (2,188.87)

VI Exceptional Items [(expense) / income]

VII Extraordinary items

- Impairment 2,080.76 (2,080.76) -

- Cost of waste removel by pollution control board 24.00 (24.00) -

VII Profit/(Loss) before tax (4,243.74) 2,054.87 (2,188.87)

VIII Tax expense

Current income tax - - -

Tax adjustments for previous year - - -

Deffered Tax (586.80) 0.40 (586.40)

(586.80) 0.40 (586.40)

IX(3,656.94) 2,054.47 (1,602.47)

X Other comprehensive income

(i) Items that will not be reclassified to P/L - 19.40 19.40

- - -

XI Total comprehensive income for the period(IX+X) (3,656.94) 2,073.87 (1,583.07)

(ii) Income tax relating to items that will not be

reclassified to P/L

ParticularsFor the year 31 March, 2017

Profit/(Loss) for the period from continuing

operations(VIII+IX)

On transition to Ind AS prior period items and extra-ordinary items are classified to the corresponding income/expenses in the

year of recognition itself for recognition of prior period and extra-ordinary items are not permitted in Ind AS.However, this has

no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.

* Previous GAAP figures have been reclassified to conform to IND AS presentation requirements for the purpose of the note.

a) Re-measurement of defined benefit liabilityUnder Ind AS, re-measurement of defined benefit liability are recognized under other comprehensive income. Under previous

GAAP the Company recognized actuarial gains and losses in profit or loss. However, this has no impact on the total

comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.

b) Excise dutyUnder previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from

sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense.

This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total

comprehensive income for the year ended and equity as at 31 March 2018 has remained unchanged.

c) Other Comprehensive IncomeUnder Ind AS, All items of income and expense recognized in a period should be included in profit and loss account, unless a

standard requires or permits otherwise. Items of income and expenses that are not recognized in profit or loss but are shown in

the profit or loss as “other comprehensive income” includes re‐measurements of define benefit plan.

d) Prior period and Extra-ordinary assets

The provisions of Ind-AS 8 requires that an entity will correct prior period errors retrospectively in the first set of the financial

statements approved for issue after their discovery by restating the comparative amounts for the prior period(s) presented in

which the error occurred. If the error occurred before the earliest prior period presented, it will restate the opening balance of

assets, liabilities and equity for the earliest prior period presented.However, as per the provisions of section 131 of the Companies Act, 2013 if it appears to the Company that any change is

required to the financial statements, they may prepare a revised financial statements only after obtaining the prior approval of

the Tribunal. Given that the provisions of Ind-AS 8 which require revision of the figures of the previous financial years are not in

sync with section 131 of the Companies Act, 2013, the Company is of the view that all such items of income and expenses

relating to the prior periods in FY 2015-16 be adjusted in the financial statements for the FY 2015-16.

e) Preference sharesUnder previous GAAP, redeemable preference shares were classified as part of total equity. However, under Ind AS, financial

instruments are classified as a liability or equity according to the substance of the contractual arrangement and not it's legal

form. These preference shares do not contain any equity component and hence, have been classified in their entirely as a

financial liability under Ind AS

f) Fair value of investmentIn accordance with Ind AS, financial assets representing investment in equity shares have been fair valued. The Company has

designated these investments at fair value through other comprehensive income as permitted by Ind AS 109. Under the

previous GAAP, the application of the relevant accounting standard resulted in all these investments being carried at cost.

g) Earmarked depositUnder previous GAAP, earmarked deposit with bank were classified as part of cash and cash equivalents. However, under Ind

AS, earmarked deposit are grouped under other current assets.

128

IV

Name of the entity

As % of

consolidate

d net

assets

Amount As % of

consolidate

d

profit or loss

Amount As % of

consolidated

other

comprehensive

income

Amount consolidated

other

comprehensive

income

Amount

Sree Sakthi Paper Mills

Limited 101% (2,702.03) 100% (767.43) 100% 0.63 100% (766.79)

SUBSIDIARIES

- IndianJala Shaayi

Alamparathodu Hydro 0% (2,702.03) 0% (0.10) 0.00% - 0% (0.10)

Sree Kailas Palchuram

Hydro Power Ltd -1% (2,702.03) 0% 0.23 0.00% - 0% 0.23

Sree Adi Sakthi

Mukkuttathode Hydro

Power Ltd 0% (2,702.03) 0% 0.53 0.00% - 0% 0.53 Non-controlling Interests

in all subsidiaries -1% (2,702.03) 0% 0.35 0.00% 0% 0.35

Additional information, as required to Consolidated Financial Statements to Schedule III to the Companies Act, 2013, of enterprises consolidated

as Subsidiary / Associates / Joint Ventures for the financial year 2017-2018

Net assets, i.e., total

assets minus

total liabilities

Share of profit or loss Share in other

comprehensive income

Share of profit or loss

129

SREE SAKTHI PAPER MILLS LIMITED AND ITS SUBSIDIARIES

CIN : L93000KL1991PLC006207

Consolidated Cash Flow for the period ended March 31, 2018 (₹ in Lakh)

For period ended For period ended

Particulars March 31, 2018 March 31, 2017

A CASH FLOW FROM OPERATING ACTIVITIES

Total Comprehensive Income (767.26) (3,663.83)

Adjustments for :

Provision for Income-tax (271.52) (586.40)

Depreciation and amortisation 161.08 2,241.70

Interest Income (4.26) (23.88)

(Profit)/Loss on write off/ sale of Fixed Assets (915.25) (8.69)

(Profit)/Loss on write off/ sale of investment - (4.98)

Fair value change in investment through OCI (0.06)

Mat credit written off 300.38

Finance Cost 213.97 570.71

Operating Profit before working capital changes (1,282.91) (1,475.37)

Decrease(Increase) in Inventories 91.11 795.25

Decrease(Increase) in Trade receivable 155.23 1,329.96

Decrease(Increase) in Loans and Advances (0.06) 122.21

Decrease(Increase) in Other non current asset - 4.31

Decrease(Increase) in other current

assets & assets held for sale1,769.62 238.88

Increase(Decrease) in Trade payable (115.49) (1,314.33)

Increase(Decrease) in Current Liabilities 287.64 (506.38)

Increase(Decrease) in Other Non Current Liabilities 0.38 (57.72)

Cash from Operations 905.52 (863.19)

Income Tax paid (9.91)

Cash from Operating before exceptional Items 895.61 (863.19)

Exceptional Items - -

Cash from Operating Activities 895.61 (863.19)

B CASH FLOW FROM INVESTING ACTIVITIES

Proceeds on Sale of Fixed Assets 950.00 28.05

Proceeds on Sale of investment - 46.35

Interest Income 4.26 23.88

Net Cash from Investing Activities 954.26 98.28

C CASH FLOW FROM FINANCING ACTIVITIES

Net Proceeds from

- Issue of shares 94.60 -

- Issue of shares warrants 235.40 -

- Borrowings (1,372.69) 1,198.59

Interest paid (213.97) (570.71)

Net Cash from Financing Activities (1,256.65) 627.87

D593.21 (137.04)

Cash and cash equivalents at the beginning of the year (1,241.82) (1,104.78)

Cash and cash equivalents at the end of the year (648.61) (1,241.82)

Components of cash and cash equivalents

Balance with Banks

In Current Accounts 22.62 4.58

In Deposit Accounts 39.05 80.00

Cash in Hand 1.41 0.08

Cash Credit (711.68) (1,326.48)

Total cash and cash equivalents (648.61) (1,241.82)

For KPR & Co For and on behalf of the Board

Chartered Accountants

FRN: 05326S Sd/- Sd/-

Sd/- R.Ponnambalam S.Rajkumar,

Deepa Praveen, ACA Company Secretary Vice Chairman &

Managing Director

M. No.232410

Partner Sd/- Sd/-

Cochin -16 V.N.Sridharan N. Subramanian

13.06.2018 Chief Financial Officer Director

TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

DURING THE YEAR (A+B+C)

130

SREE SAKTHI PAPER MILLS LTD.

CIN: L93000KL1991PLC006207, Regd Office: Sree Kailas, 57/2993

Paliam Road, Cochin – 682016

www.sreekailas.com, E-mail:secretary@sreekailas.com

ATTENDANCE SLIP

TO BE HANDED OVER AT THE ENTRANCE OF THE MEETING HALL

NAME OF SHAREHOLDER (IN BLOCK LETTERS) : MEMEBR’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 27th Annual General Meeting of the members of Sree Sakthi Paper Mills Limited held on 29 th September,

2018 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.

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131

SREE SAKTHI PAPER MILLS LTD. CIN: L93000KL1991PLC006207,

Regd Office: Sree Kailas, 57/2993, Paliam Road, Cochin – 682016

www.sreekailas.com, E-mail:secretary@sreekailas.com

PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration ) Rules,

2014]

Name of the Member (s):

Registered Address:

E-mail Id:

Folio No. / Client Id:

DP ID:

I/ We, being a Member (s) of ………………………………shares of the above named company, hereby appoint 1. Name: 2. Name: Address: Address: Email Id: E-mail Id: Signature:…………………………………or failing Signature:…………………………………or failing 3. Name: Address: Email Id: Signature:…………………………………or failing As my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 27

th Annual General

Meeting, to be held on Saturday, 29th September, 2018 at 2.00 p.m. at Hotel bad Plaza, M.G. Road, Cochin – 35

and at any adjournment thereof in respect of such resolutions as are indicated below:

S.No Description of Resolution I/We assent to the Resolution (FOR)

I/We dissent to the Resolution (AGAINST)

1 To receive, consider and adopt the audited financial statements (both standalone and consolidated financial statements) for the financial year ended 31st March, 2018 and the Report of the Board of Directors and Auditors thereon.

2 Re –appointment of of Mr. Subramoniam Sivathanupillai (DIN-01790968), Director who retires by rotation

3. Regularisation of Mrs. Rajee Rajkumar (DIN: 363280) as Director of the Company

4. Approval of Related Party Transaction

5. To change the name of the Company

6. Re-appointment Dr. S. Rajkumar (DIN: 01790870) as Managing Director

7. To appoint Mr Uliar Gururaja Bhat as Independent Director Place:

Date:

Signature of shareholder

Affix Rupee 1/- Revenue Stamp

If undelivered please return to

SREE SAKTHI PAPER MILLS LTD.

Regd.office: Sree Kailas, 57/2993, Paliam Road, Cochin- 682016