Seshasayee Paper & Boards Ltd Directors Report.

The Board of Directors hereby present their 62nd Annual Report and the Audited Accounts, for the financial year ended March 31, 2022.

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18, as mandated. Accordingly, the financial statements for current year, including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein, as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit and Loss, there is and would be periodical impact for "Other Comprehensive Income" in measuring and restating investments at fair value.

WORKING RESULTS
2021-22 2020-21
(in tonnes) (in tonnes)
Production 2 12 086 1 70 138
Sales 2 20 344 1 39 005
(Rs crores) (Rs crores)
Revenue from
Operations 1354.93 781.79
Other Income 16.65 19.32
Total Income 1371.58 801.11
Profit before interest, depreciation, exceptional item and tax 182.24 126.87
Finance Cost 2.87 2.91
Depreciation 40.83 37.60
Profit before tax 138.54 86.36
Provision for current tax 34.55 18.44
Transfer to / (from)
Deferred Tax 0.89 (-) 32.35
Net Profit 103.10 100.27

DIVIDEND

The Board of Directors recommend payment of Dividend at Rs 2.50 (Rupees Two and fifty paise only) per Equity Share of Rs 2 each, absorbing a sum of Rs 15.76 crores.

As per the provisions of the Income tax Act, 1961, as amended by the Finance Act, 2020, Dividend Distribution Tax is not applicable in respect of Dividends declared, distributed or paid by the Company after March 31, 2020. The same will be taxed in the hands of the shareholders.

As per Ind AS 10, Events after the reporting period, Proposed Dividend on Equity Shares, being a non-adjusting event at the Balance Sheet date, is not recognised as a liability in the accounts for the financial year ended March 31, 2022. The same will be recognised in the year of payment, viz., financial year ending March 31, 2023.

APPROPRIATIONS

2021-22
( Rs crores)
Net profit for the year 103.10
Add:
Income from SPB
Equity Shares Trust 1.11
Add:
Surplus brought forward from the previous year 176.89
Add:
Re-measurement of defined benefit Plans (net of tax) 0.80
281.90
Less:
Dividend paid during the year (For Financial Year 2020-21) 15.76
Tax on Dividend distribution
Transfer to General Reserve 100.00
Balance carried forward 166.14

OPERATIONS

Gradually coming out of Covid-19 lockdown and restrictions, the Company had registered the following key landmarks during the FY 2021-22. Highest ever annual production at 2.12 lakh tonnes.

Highest ever annual sales at 2.20 lakh tonnes. Highest ever Total Income at Rs 1371.58 crores.

Highest ever annual Exports at 57010 tonnes (representing over 25% of FY 2021-22 volumes).

The Company could achieve these landmarks in the current financial year, in-spite of the following:

Weak demand situation amidst Closure of Schools and educational institutions for most part of the 1st half of FY 2021-22.

Shuts availed in Paper Machines, Pulp Mill and Recovery Operations during the FY 2021-22 for upgradation works under the Project Mill Development Plan - III.

Global political and economic situations resulting in highly vulnerable and uncertain logistics situation, non-availability and high cost of containers for sourcing imported input materials and in exporting finished products.

PRODUCTION

(Tonnage)

Unit FY FY Growth
2021-22 2020-21 (%)
Erode 1,41,707 1,12,489 26 %
Tirunelveli 70,379 57,649 22 %
Total 2,12,086 1,70,138 25 %

During the FY 2021-22, the production at Unit : Erode was 1,41,707 tonnes of paper, as compared to 1,12,489 tonnes, produced in the previous year. The production during the year included 11,025 tonnes of Pulp Board production. (Previous Year - 16,226 tonnes).

Accordingly paper production at Unit : Erode was higher by 34,419 tonnes, compared to the previous year.

The Company completed upgradation works on Paper Machine - 1 and Paper Machine - 5 in FY 2020-21 as part of project Mill Development Plan - III (MDP-III).

As part of the second phase of the project, the Company completed the upgradation works in Paper Machine - 2, Paper Machine - 4, Pulp Mill and Recovery Boiler during the Financial Year 2021-22.

Completion of these projects helped the Company to ramp up production during FY 2021-22 and helped the Erode unit to achieve its highest ever annual production & sales, despite tough demand situation and shuts availed in machines for upgradation works under the project.

With the completion of most critical parts of the Project MDP-III, the annual installed capacity of Paper for Unit : Erode reached 1,65,000 tonnes. The annual capacity of Unit : Tirunelveli remains at 90,000 tonnes. Accordingly, the total installed capacity of the Company currently stands at 2,55,000 tonnes per annum.

Unit : Erode also produced 29,552 tonnes of Wet Lap Pulp during FY 2021- 22, (Previous Year 32,569 tonnes) to augment the Pulp requirements of Unit : Tirunelveli.

Unit : Tirunelveli produced 70,379 tonnes of Paper during the FY 2021-22, as compared to 57,649 tonnes, produced in the previous year. Production recorded was higher mainly due to significant increase in the volume of export orders during the FY 2021-22.

Overall Production for the Company was 2,12,086 tonnes of Paper and Boards for the year, as compared to 1,70,138 tonnes produced in the previous year.

SALES

(Tonnage)

Unit FY FY Growth
2021-22 2020-21 (%)
Erode 1,42,500 86,309 65%
Tirunelveli 77,844 52,696 48%
Total 2,20,344 1,39,005 59%

During the FY 2021-22, Company registered an overall sales of 2,20,344 tonnes of Paper (Previous year : 1,39,005 tonnes).

In addition, as part of its trading activity, the Company sold during FY 2021-22, petroleum products valued at Rs 26.34 crores (Previous Year : Rs 21.75 crores) and Note Books valued at Rs 0.80 crores (Previous Year : Rs 3.61 crores).

Unit : Tirunelveli achieved Zero Stock of Finished Goods as on March 31, 2022 (Stock as on March 31, 2021 - 7490 tonnes).

Unit : Erode had a Finished Goods Inventory of only 2337 tonnes as on March 31, 2022 (Stock as on March 31, 2021 - 27735 tonnes).

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs 1354.93 crores, as against Rs 781.79 crores, in the previous year.

Profit before interest, depreciation, exceptional item and tax was Rs 182.24 crores, for the Company as a whole, compared to Rs 126.87 crores, in the previous year.

After absorbing interest and depreciation of

Rs 2.87 crores and Rs 40.83 crores respectively, the Profit before tax (PBT) was Rs 138.54 crores in FY 2021-22, as compared to Rs 86.36 crores, in the previous year.

The higher PBT is mainly on account of higher volumes, manufactured and sold during the FY 2021-22 compared to the previous year.

It is to be highlighted that the healthy profitability of the Company in FY 2021-22 is despite the significant impact of use of costlier pulp and power during the 45 days shut of pulp mill & recovery operations, for upgradation works under MDP-III.

The Companys strategy of using the Covid-19 related downtimes, during the last 2 years, to manufacture and stock pulp board paid rich dividends during FY 2021-22 and effectively contained the impact, of above mentioned 45 days planned shut of pulp mill & recovery operations, to manageable levels. For the financial year ended March 31, 2022, current tax liability works out to Rs 34.55 crores, as against a liability of Rs 18.44 crores in the previous year. The Deferred Tax liability amounted to Rs 0.89 crores for the financial year ended March 31, 2022, as against Rs (-) 32.35 crores in the previous year. The Company had migrated to effective income-tax rate of 25.17% w.e.f FY 2021-22 and accordingly the Company had restated the deferred tax assets & liabilities at the effective income tax rate of 25.17% as on March 31, 2021. The restatement involved a deferred tax provision reversal of Rs 43.67 crores and MAT credit entitlement adjustment of Rs 7.28 crores, net adjustment amounting to Rs 36.39 crores during the previous financial year ended March 31, 2021.

As a result, profit after tax for the financial year ended March 31, 2022 was Rs 103.10 crores, as compared to Rs 100.27 crores in the previous financial year.

FINANCE

The Company reports NIL debt position as on March 31, 2022 (Debt Position as on March 31, 2021 was also NIL).

The Company did not have any instalments of Term Loans and interest (on Working Capital borrowings), due for payment during the year.

Availment of Fund Based Working Capital limits remained NIL throughout the FY 2021-22.

As against Rs 82.5 crores of Term Loan sanctioned by the Bankers (State Bank of India and HDFC Bank) for the project MDP-III, the Company had availed a Term Loan of Rs 11.16 crores only during the year and the same had been prepaid, along with accrued interest, during the year. The Company had also surrendered the un-availed portion of the Term Loan. Accordingly, the Term Loan outstanding as of March 31, 2022 stands NIL.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs 4.03 crores during the year and the balance outstanding as on March 31, 2022 was Rs 4.37 crores.

MARKET CONDITIONS

Q-I 2021-22 : FY 2021-22 started with a positive note, as the market sentiments and demand at the beginning of this year was good. Good market conditions and demand helped the Paper Mills to announce price increases in April21. However this did not last long, due to the onset of Covid 2nd wave from May21. With more Government restriction from May21 and closure of schools and colleges, the demand and market conditions started deteriorating. In May21, Paper Mills withdrew the price increases announced in April21.

Q-II 2021-22 : The market conditions showed signs of improvement from August21 as the schools and colleges were reopened. This improved the sentiments in the market and the Paper mills announced Price increases, amidst extraordinary levels of cost push. Though the market was not buoyant, the fear of price increase in the subsequent months forced the customers to buy the material in advance. Our Company also started marketing various new products, particularly in the Boards Segment, aggressively. The order flow for the new products was good and unaffected by the poor market conditions that prevailed for writing and printing segments. These new products complemented the existing products and contributed to improved sale in this quarter for the Company.

Q-III 2021-22 : Cost of all key input materials (Coal, Wood, Chemicals) continued to see significant increase during the quarter and the Paper Mills announced series of price increases during the quarter. End of the quarter witnessed sluggishness in demand, particularly for Printing and Writing Paper, owing to various uncertainties in the market and fear of Omicron.

Q-IV 2021-22 : Towards the end of January 22, the market sentiments improved as the fear of Omicron started fading. The demand for printing and writing grades started improving significantly especially from the educational sector, as the schools and colleges were reopened for conducting physical classes. The sudden surge in demand helped most Paper Mills announce further Price Increases, as the industry witnessed unseen levels of cost push. The mills particularly dependent on Imported Coal, had seen severe contraction in their margins. High demand and good market conditions prevailed from second half of January 22 and this helped the Paper Mills to announce further round of Price Increases to pass on the cost push on account of continued rise in cost of most key input materials.

OUTLOOK : Outlook for the 1st quarter of FY 2022-23 is expected to be positive with continued higher pent-up demand for printing and writing grade papers. Demand for Boards is expected to remain strong throughout the financial year. Paper Mills have already announced next round of Price Increases and the Company has followed suit. However, the global political situations, macro-economic indicators & global supply chain constraints will have a strong bearing on the healthy order inflow, both from Domestic and Global markets.

EXPORT PERFORMANCE

(Tonnage)

Unit FY FY Growth
2021-22 2020-21 (%)
Erode 28,129 11,802 138 %
Tirunelveli 28,881 16,181 78 %
Total 57,010 27,983 104 %

The Company exported 57,010 tonnes of paper during the FY 2021-22, as compared to 27,983 tonnes exported during FY 2020-21. The export volumes during the FY 2021-22 represented 25% of the volumes sold by the Company during the year.

The export proceeds in Foreign Currency for the year 2021-22 amounted to US $ 47.96 Mn (Previous Year Exports - US $ 19.0 Mn).

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as bare-rooted Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had provided clones of Melia-Dubia to interested farmers, a high yielding fast growing species, suitable for Pulp production.

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, through a Collaborative Research Project.

In accordance with the Companys vision to achieve wood positive status, over fourteen crore Seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available during the year, to farmers at subsidised rates for planting in about 20,042 acres of land. (Previous Year : 19,105 acres).

ISO 9001 / ISO 14001 ACCREDITATION

The Companys Quality Management Systems and Environment Management Systems continue to be covered under ISO 9001 and ISO 14001 Accreditations. Both ISO 9001 and ISO 14001 standards have undergone revision to 2015 standards which lays emphasis on role of top management, adoption of risk management and change management. All these changes are to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL? (FSC?) CERTIFICATION

The Company continue to be certified under four Standards of FSC, viz. FSC-STD-40-004, FSC-STD-40-005, FSC-STD-40-003 and FSC-STD-50-001. By this, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC 100% and FSC Mix Products in the domestic and international markets.

AWARDS

The Company received the following Awards and recognitions during the year : CII - National Award for Excellence in Energy Management, in the year 2021. a) Excellence in Energy Management - for the past 4 consecutive years.

b) National Energy Leader - 2nd time in row. c) Innovation award- For Digester modification to enhance pulp production and green energy.

Paper Mill of the year award for FY 2019-20, awarded by Indian Paper Manufacturers Association.

AEE award - Regional Corporate Energy award 2021 by Association of Energy Engineers, US.

EXPORT HOUSE STATUS

The Company continues to be accredited with "Star Export House" Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2022, 16,347 Shareholders are holding Shares in Demat form and 5,00,68,026 shares have been dematerialised, representing 79.39% of the total Equity Share Capital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT PLAN

In the FY 2020-21, the Company had embarked on a Mill Development Plan - III (MDP - III) at Unit : Erode at a Cost of Rs 315 crores.

The MDP - III at Unit : Erode consist of :

Upgradation and Modernisation of the Paper Machines to increase the Capacity from

1 32 000 tonnes per annum to 1 65 000 tonnes per annum.

Upgradation and Modernisation of the RDH Pulp Mill to increase the Capacity to 1 54 000 tonnes per annum.

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

However, in March 2020, while we were taking steps for placing orders for major equipment, Covid-19 pandemic broke out resulting in nationwide / global lockdowns. During the Covid-19 pandemic period, most of the schools / colleges / offices, courts etc were shut, resulting in huge dent in the consumption of printing and writing paper, which is a major grade manufactured by our Company.

This situation had resulted in huge build-up of unsold stocks. Manufacturing of "Stocks without Orders" resulted in huge pressure on Sales and poor collection of money from market. With a view to ensure that the normal operations are not affected by adverse funds situation, it was considered prudent to trim the project to focus on essential equipment and to defer items of equipment that can be conveniently installed after return of normalcy.

The shareholders may also recall that during this pandemic period, there was a serious stand-off between India and China. As retaliatory measures, the Indian Customs had resorted to delayed clearance of Chinese shipments, etc. Also the Chinese suppliers were not able to depute their engineers for installation jobs in India, since Indian embassy was not issuing visas to Chinese nationals. Fearing undue delay in receipt of equipment and lack of installation support, if orders were to be placed on Chinese suppliers, it was thought prudent to shift the sourcing of some of the equipment to India / non-china sources.

Also, during this time, Packaging Industry witnessed unprecedented growth opportunities and as part of de-risking strategy, our Company decided to get equipped with facilities to manufacture multi-layer products like Kraft Liner Boards, Cup Stock, Carton Boards, etc.

All these had resulted in altered scope of equipment than originally envisaged in the

Project documents. The above exercise however was undertaken with utmost care to ensure that the critical objectives of the project were not diluted. Accordingly, the Project Cost has been revised and the revised Cost of implementation of Project MDP-III is now estimated at Rs 288.0 crores. The project is nearing completion with major upgradation works in Chemical Recovery Plant, Wood Pulp Mill, Paper Machine - 5, Paper Machine - 2 and Paper Machine - 4 having been successfully completed.

The Company has achieved the following objectives successfully and has started realising the benefits from the project, in the Erode unit. a) Paper Capacity has been increased to 1,65,000 tonnes p.a. b) Pulp Capacity has been increased to 1,54,000 tonnes p.a. c) Recovery Island has been upgraded d) Successful foray in to multi-layer boards Segment, by altering 2 machines to manufacture Boards.

The Company has spent Rs 220 crores as on March 31, 2022 for the project MDP-III and the balance Rs 68 crores is expected to be spent on a staggered basis over the next 12 - 15 months.

Considering the global uncertainties & extraordinary cost push, it was considered prudent to spend only on those projects which will add immediate value to the business. Other items will be taken up for installation only on requirement basis and after normalcy returns in Indian and Global markets. In this background, the Company had also prepaid the Term Loan of Rs 11.16 availed for the project and have also surrendered the balance unavailed portion of the Term Loan, sanctioned for the project by the Companys bankers. Effectively, the entire project cost is met out of internal accruals only.

COST PUSH

The Company is facing unprecedented increase in costs amidst the current global scenarios. The global supply chain, which was first hampered by Covid-19 pandemic, is now suffering from the consequences of the Russia-Ukraine war. The Oil prices have reached unprecedented levels. Coal prices are now at 3 times the pre-covid levels. Cost of most chemicals / other input materials have increased significantly.

All these have resulted in significant pressure on margins, with Price increases in Paper not meeting the impact of cost push in full.

CURRENT YEAR (2022-23)

FY 2022-23 has begun with strong demand resulting in good order inflow, both for printing and writing grades and boards segments. Margins continue to be an area of concern, amidst unprecedented increase in the cost of all input materials. In Unit : Erode, the Production during April 2022 was 13,051 tonnes, as compared to 10,683 tonnes, produced during April 2021. In Unit : Tirunelveli, the Production was 6,003 tonnes in April 2022, as against 6,003 tonnes in April 2021. The overall Production for the Company, for the month of April 2022, was 19,054 tonnes. Total Value of Production, during April 2022 amounted to Rs 110.93 crores, compared to Rs 77.75 crores during April 2021.

During April 2022, 1072 tonnes of paper, valued at Rs 8.84 crores were exported.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers, Lime kiln and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the Pollution Control norms, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Additional treatment facilities have been proposed for waste water under the Mill Development Plan - III.

Unit : Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. As part of the Mill Expansion Plan, the Waste Water Treatment Plant has been augmented with a Dissolved Air Flotation Cell and Anaerobic Digester.

MANAGEMENTS DISCUSSIONS AND ANALYSIS REPORT

The Report covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in "Management Discussion and Analysis Report" in terms of Regulation 34 of the Listing Regulations, that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Companys Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II. The Corporate Governance Report also includes contents and disclosures required under Section 134(3) of the Companies Act, 2013 at relevant places that forms an integral part of this report.

BUSINESS RESPONSIBILITY REPORT

Consequent to mandatory reporting of its responsibility initiatives under the Listing

Regulations, the Company had formulated a consolidated policy on Business Responsibility which lays down the broad principles guiding the Company in delivering its various responsibilities to its stakeholders. The policy is intended to ensure that the Company adopts responsible business practices in the interest of the social set-up and the environment so that it contributes beyond financial and operational performance. A copy of the policy is available at https://www.spbltd.com/investor-info/policy/ index.html and the Business Responsibility Report for the year ended March 31, 2022 in terms of Regulation 34(2) of the SEBI (LODR) Regulations is annexed to this report as

Annexure - III.

DISCLOSURE REQUIREMENTS UNDER SECTION 134 OF THE COMPANIES ACT, 2013

In deference to Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, disclosures / confirmations are made as below :

(i) THE ANNUAL RETURN

A copy of the annual return for FY 2021-22 will be placed on the website of the Company (https://www.spbltd.com/investor-info/annual-return/index.html) after conclusion of the 62nd Annual General Meeting.

(ii) DIRECTORS RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following: Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the said period.

The Directors have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

The Directors have prepared the annual accounts on a "going concern" basis.

The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(iii) PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the financial year ended March 31, 2022, the Company did not extend any Loan or Guarantee or provided any security or make investment covered under Section 186 of the Companies Act, 2013.

(iv) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

(v) MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year. There are no other material changes and commitments in the business operations of the Company since the close of the financial year on 31st March 2022 to the date of this Report.

(vi) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - V.

(vii) CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every Company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, it has constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

(viii) PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in

Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review. The five year wage / salary agreement with labour unions / staff association, which expired on March 31, 2019, has been finalised and a formal agreement, valid until March 31, 2024 had been entered into by the Company, during April / May 2022.

DIRECTORS

During the FY 2021-22, Tamilnadu Industrial Investment Corporation (TIIC) withdrew the nomination of Tmt. Sigy Thomas Vaidhyan, IAS and in her place nominated Sri Hans Raj Verma, IAS (Chairman and Managing Director, TIIC) as its Nominee Director on the Board of our Company. Sri Hans Raj Verma, IAS, was appointed as an Additional Director on the Board of the Company on June 15, 2021 by a Circular Resolution. He was later appointed by the Shareholders of the Company, in the Annual General Meeting held on July 24, 2021, as a Nominee Director not liable to retire by rotation.

Also, during the year, Tamilnadu Government withdrew the nomination of Dr. Shekhar Kumar Niraj, IFS and in his place nominated Sri K Rajkumar, IFS, the Special Secretary to Government, Environment, Climate change and Forests Department, as its Nominee Director on the Board of our Company. Sri K Rajkumar, IFS, was appointed as an Additional Director on the Board of the Company on October 23, 2021. He was later appointed by the Shareholders of the Company, vide Postal Ballot on December 7, 2021, as Nominee Director liable to retire by rotation. Your Directors place on record the valuable services rendered by Tmt. Sigy Thomas Vaidhyan, IAS and Dr. Shekhar Kumar Niraj, IFS, during their tenure as Directors of the Company.

All the Independent Directors have given the declaration that they meet the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board

Meeting held on March 26, 2021. The Board, on the basis of such performance evaluation determined to continue the term of appointment of all Independent Directors.

AUDITORS

M/s Maharaj N R Suresh & Co LLP and M/s R Subramanian and Company LLP Chartered Accountants were the Statutory Auditors of the Company for FY 2021-22. However, the 5 year tenure of M/s R Subramanian and Company LLP gets over with the conclusion of this annual general meeting and the Board of Directors have approved and recommended continuation of M/s Maharaj N R Suresh & Co LLP as the sole statutory auditor of the Company for FY 2022-23.

Your Directors place on record the valuable services rendered by M/s R Subramanian and Company LLP during their tenure as Joint Statutory Auditors of the Company.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results, in a year of great challenges. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Indentors, Customers, Farmers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board
Chennai N GOPALARATNAM
May 7, 2022 Chairman