Shree Karthik Papers Ltd Management Discussions.

Managements Discussion and Analysis

1. Industry structure and Developments

Paper industry is one among the high priority industnes. It concentrates on accelerating growth for Paper Industry. The continuous demand for increase in paper will require a considerable increase in supply from indigenous producers. Out of total paper mills in India, two thirds of the Mills use waste paper, agncuttural wastes like saw dust, as their primary fibre source. The non availability of natural resources will automatically increase the demand of product from industries using Recycled/waste paper as their raw material,

2. Opportunities and Threads

The growth rate of recycled paper industry is assumed to increase by 10% per year. There are good growth opportunities and increase in demand. The major raw matenals procurement from Mills using waste paper industry is from unrecognized sector, This accounts is for around 95% of total raw materials procurement. This affects continuous supply of raw material to the industry.

3. Outlook

The total lockdown announced by the Government in the first month of the year under review impacted the resumption of economic activities throughout the first half of the year. Howeverthe better performance of the Paper industry in the second half resulted in good demand in the market,

The scenario has continued until the sudden spurt of second wave of covid -19, The consequent restrictions and lockdowns are affecting the demand and price of the papers started nose-diving. However an early resumption of activities is expected and the performance in the second half of the year will be much better. The fast phase of vaccination is a strong indication towards this. The domestic demand may also improve. Hence the performance will improve in the later part of the year.

The cost of some intermediate inputs has risen and uncertainty about future trade relationships has ratcheted up Manufacturing firms have become more cautious about long term spending and have held back on equipment and machinery purchases, This trend is most evident in the trade and global value chain

The trend in consumption of papers and notebooks and ecofriendly papers are increasing continuously It will result in good demand for the industrial product

4. Risk Management

The Company formulated a nsk management frame work to identify, evaluate the business risks and opportunities. The main object of the framework is to minimise the adverse impact of the risks by taking effective mitigating measures to retain the business advantages, The identified nsks and mitigation measures are reviewed by the concerned Heads and all the risks identified and mitigation measures are periodically placed before the Board. The Board is of the opinion that there is no risk which affects the existence of the Company.

5. Internal control Systems and Adequacy

The Company has an adequate internal control system commensurate with its size and nature of its business. Management has overall responsibility for the Companys internal control system to safeguard the assets and to ensure reliability of financial records.

Internal audit programme covers all areas of activities and periodical reports are submitted to the Management Audit Committee reviews all financial statements and ensures adequacy of internal control systems.

Internal control systems are designed to provide adequate financial control and accounting control and to implement accounting standards.

6. Material Development in Human Resources/ Industrial Relations Front including number of employees employed

Cordial relations have been maintained in the company. The company had 43 no. of employees as on March 2021.

7. Caution

Statements in the management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be considered as ‘forward looking statements" within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. The factors that might influence the operations of the Company are demand- supply conditions, finished goods pnces, raw matenal costs & availability, change in the government regulations. WTO and natural calamities over which the Company has no control. The Company assumes no responsibility in respect of the forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events,

For and on behalf of the Board of Directors
M.S. Velu
DIN No.01682508
Place: Coimbatore Chairman and
Date: 26.06.2021 Managing Director