board of directors - bombay stock exchange€¦ · ordinary business 1. to receive, consider and...

Sree Sakthi Paper Mills Limited

1

BOARD OF DIRECTORS

Mr.S.Sivathanu Pillai (Chairman)

Mr.S.Rajkumar (Vice Chairman & Managing Director)

Mr.A.Padmanabhan (Whole Time Director –Operations)

Mr.A.S.Unni

Mr.N.Ravindranathan

Mr.S.Subramoniam

Mr.S.Giridhar

Mrs.E.Kamalam

Mr.U.Gururaja Bhat

Mr.Deveshwer Kumar Kapila

Dr.A.R.K.Rao

Mr.N.Sreekumar

COMPANY SECRETARY

Mr.Binu Alex.V

AUDITORS

M/s.Balan & Co.Ernakulam, Cochin -11

BANKERS

Federal Bank Limited

Industrial Development Bank of India LimitedBank of India

REGISTERED OFFICE

57/2993, “Sree Kailas”

Paliam Road, Ernakulam, Cochin -16, KeralaTel: 0484-2373230, 2382182Fax: 0484-2370395

E-mail: [email protected]: www.sreekailas.com

FACTORIES

Kraft Paper Unit 1 and 2

Industrial Development AreaMuppathadom, Edayar, Aluva-683 102,Tel: 0484 -2540622,2555451

Duplex Board Unit

Kanjirapilly, Pariyaram, Chalakudy,Thrissur-680 721Tel: 0487 –2746229, 2747527

C O N T E N T S

Corporate Information 01

Financial Highlights 02

Notice 03 to 05

Directors’ Report 06 to 21

Auditor’s Report 22 to 24

Balance Sheet 25

Profit & Loss Account 26

Schedules 27 to 39

Cash Flow Statement 40

Statement pursuant to Section

212 (1) (e) of the Companies Act,1956 41

Balance Sheet Abstract 42

Consolidated Financial Statements 43 to 59

Annual Reports of Subsidiary Companies 60 to 102

Sree S

ak

thi P

ap

er Mills L

imited

2

FINANCIAL HIGHLIGHTS (7 YEARS)

(Rs. in Lakhs)

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-2010

Sales (Gross) 4751.21 4963.80 6390.68 6782.46 11624.81 14416.14 14753.18

Sales (Net) 4219.82 4447.82 5761.54 6116.50 10638.30 13708.63 14152.04

Total Income 4253.70 4554.34 5841.12 6324.94 10729.89 13928.84 14325.32

Profit before tax 86.21 187.82 237.53 354.56 456.23 483.66 706.96

Profit after tax 53.20 102.85 170.73 200.10 302.46 331.79 464.43

Earnings Per Share (Rs.) 2.63 5.08 1.04 1.22 1.84 2.02 2.83

Dividend Rate (%) 8 10 5 10 15 15 18

Reserve & Retained Earnings 606.02 685.96 1822.72 1830.53 1844.55 1887.90 2010.77

Share Capital 202.50 202.50 1643.62 1643.62 1643.62 1643.62 1643.62

Shareholders’ Funds 808.52 888.46 3466.34 3474.15 3488.17 3531.52 3654.39

Fixed Assets (Gross Block) 2181.58 2720.27 2923.57 4992.14 5756.44 6543.26 6918.93

Fixed Assets (Net Block) 1386.95 1811.32 1877.09 3792.04 4293.61 4772.94 4826.66


3

NOTICE

Notice is hereby given that the 19th Annual General

Meeting of the Members of Sree Sakthi Paper Mills Lim-ited will be held on Thursday, 9th September 2010, at3.00 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 BalanceSheet as at 31st March 2010, and the Profit and LossAccount for the year ended on that date and the

Reports of the Board of Directors and Auditorsthereon.

2. To declare a dividend.

3. To appoint a Director in place of Mr.S.Giridhar, whoretires by rotation according to Article 83 of theArticles of Association of the Company and who,

being eligible, offers himself for reappointment.

4. To appoint a Director in place of Mr.U.Gururaj Bhat,who retires by rotation according to Article 83 of

the Articles of Association of the Company and who,being eligible, offers himself for reappointment.

5. To appoint a Director in place of Mrs.E.Kamalam,

who retires by rotation according to Article 83 ofthe Articles of Association of the Company and who,being eligible, offers himself for reappointment.

6. To appoint Auditors to hold office from the conclusionof the meeting until the conclusion of the next Annual

General Meeting of the Company and to fix their re-muneration and in this connection, to consider and, ifthought fit, to pass with or without modification, the

following resolution as an Ordinary Resolution:

“RESOLVED that M/s. Balan & Co. CharteredAccountants be and are hereby re-appointed as Au-

ditors of the Company to hold office from conclu-sion of this meeting until the conclusion of the nextAnnual General Meeting at remuneration to be

determined by the Board exclusive of travel andother out of pocket expenses that may be incurredby them in conducting the audit”.

By Order of the BoardFor Sree Sakthi Paper Mills Limited

Sd/-

Place : Cochin-16 Binu Alex V.

Date : 31.07.2010 (Company Secretary)

NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE

AT THE MEETING IS ENTITLED TO APPOINT

ONE OR MORE PROXIES TO ATTEND AND

VOTE ON A POLL INSTEAD OF HIMSELF AND

SUCH PROXY NEED NOT BE A MEMBER OF

THE COMPANY.

2. PROXIES IN ORDER TO BE EFFECTIVE MUST

BE RECEIVED BY THE COMPANY AT THE REG-

ISTERED OFFICE NOT LESS THAN FORTY-

EIGHT HOURS BEFORE THE COMMENCE-

MENT OF THE MEETING.

3. Register of Members and Share Transfer Books of theCompany will remain closed from 3rd September 2010to 9th September 2010 (both days inclusive).

4. The dividend when approved will be payable to thosemembers of the Company whose names appear on the

Register of Members of the Company on 9th September2010. In respect of the shares held in dematerializedform, the dividend will be paid on the basis of the

beneficial ownership as per details to be furnished forthis purpose by the Depositories.

5. For payment of dividend through ECS, (a) Members

holding shares in physical form are advised to submitparticulars of their bank account viz, Name and ad-dress of the branch of the Bank, 9 digit MICR Code of

the Branch, type of account and account number latestby 2nd September 2010 to the Company’s Registrar andShare Transfer Agents and (b) Members holding shares

in demat are advised to inform their particulars to theirrespective Depository Participants.

6. Members are hereby informed that Dividend which re-

mains unclaimed/ un encashed over a period of sevenyears, has to be transferred as per the provisions ofSection 205A of the Companies Act,1956 by the

Company to “The Investor Education and ProtectionFund” constituted by the Central Government underSection 205C of the Companies Act,1956. It may please

be noted that once unclaimed/un-encashed dividend istransferred to “The Investor Education and ProtectionFund” as above, no claims shall lie in respect of such

amount by the shareholder.

7. All the Members are requested to forward the sharetransfers deed(s) and other communications directly to

Registrar and Share Transfer Agents of the Company inthe following address;


4

M/s. Bigshare Services Private Limited, E/2, Ansa Indus-

trial Estate, Saki Vihar Road, Sakinaka, Andheri (E),Mumbai–400 072, Tel: 022-28470652, Fax: 022-28475207".

8. Members holding shares in physical form are requestedto notify, promptly, any change in their address, to theRegistrar and Share Transfer Agents of the Company,

M/s Bigshare Services Private Limited, Mumbai, quotingtheir Membership Number, besides changes, if any, inthe Dividend Mandates given by them and those

holding shares in Electronic Form, may communicatethe above information to their respective DepositoryParticipants.

9. Members may avail nomination facility as providedunder section 109A of the Companies Act,1956.

10. Members attending the meeting are requested to bringthe attendance slip as well as their copy of the AnnualReport. Members holding shares in DEMAT form are

requested to incorporate the DP ID Number andClient ID Number in the Attendance Slip / Proxy Form,for easy identification of attendance at the meeting

11. Members desirous of obtaining any information con-cerning accounts of the Company are requested to ad-

dress their questions to the Company, so as to reach at

least 7 days before the date of the meeting, to enablethe information required to be made available at themeeting.

12. The Company is having agreements with NSDL & CDSLand Bigshare Services Private Limited (for connectivitywith NSDL & CDSL) to enable the shareholders to have

the option of holding and dealing in the shares of theCompany in electronic form.

The ISIN of the equity shares of the Company is

INE266H01014.

Members who are holding shares in physical segment

are requested to dematerialize the same considering theadvantages in eliminating several problems involved inthe scrip based systems viz., bad deliveries, fraudulent

transfers, fake certificates, thefts in postal transit, delayin transfers, long settlement cycles, mutilation of sharecertificates etc.

13. As per requirement of Clause 49 of the Listing Agree-ment on Corporate Governance for appointment of theDirectors/ re-appointment of the retiring Directors, a

statement containing details of the concerned Direc-tors are given below;

(in pursuance of Clause 49 of the Listing Agreement)

Name of Director QualificationDate of

Birth

Date of

Appoint-

mentExperience

Share

holding

in the

Company

(Nos)

Mr. S. Giridhar More than twenty (20) years experiencein business. Managing the transportoperations of “Sree Kailas” Group forthe past 15 years. As the ManagingDirector of Shri Kailash Logistics Ltd.,he has achieved the group targets forthe transport division. This operationhas transported more than 10 lakh tonsof goods during the year 2009-10.Under the management ofMr. S. Giridhar, the company has takensteps to extend its activities intowarehousing operations in the year2009-10 under the brand name“Logicity”. The Logicity will be con-structed in 32 acres of land meetinginternational standards and will providea total solution for the ware housingneeds of its customers.

15.11.64 28.08.91 Graduation 1090328


5

Name of Director QualificationDate of

Birth

Date of

Appoint-

mentExperience

Share

holding

in the

Company

(Nos)

Mrs. E. Kamalam More than 15 years experience incement business. She was director ofthe company since 1995

10.11.33 03.08.95 17868

Mr. U. Gururaja Bhat About fortyfive (45) years of Experience

- Twenty (20) years experience inPaper Mill Maintenance, Projectscovering Development Activities andExpansion of the mill involvingEngineering, procurement and con-struction activities

- Twenty five (25) years experience inManaging large scale projects involv-ing co-ordination of all phases of en-gineering, procurement, construction,start up and commencing activities ofpulp & paper Mills in India.

15.04.38 29.08.05 Graduate inScience &Mathematicsand Degreein MechanicalEngineering

50

Details of other Directorship and relationship between directors inter-se

Mr. S. Giridhar

Name of Director

Status in other

Board

Committees of

the company

Relationships

between directors

inter-se

Details of Directorship in other companies

Son of Mr. S.Sivathanupillai andMrs. E. Kamalam andbrother of Mr. S.Rajkumar and Mr. S.Subramoniam, Direc-tors of the Company

NilShri Kailash Logistics Ltd.Sree Sakthi Constructions & Infrastructure (P) Ltd.Jalashaayi Alamparathodu Hydro Power Ltd.Sree Adi Sakthi Mukkuttathodu Hydro Power Ltd.Sree Kailas Palchuram Hydro Power Ltd.

Mr. U. Gururaja Bhat Not related to anyother directors of thecompany

Remunerationcommitteemember

Emami Paper Mills Ltd.SPB Projects & Consultants Limited

Mrs. E. Kamalam Wife of Mr. S.Sivathanupillai andmother of Mr. S.Rajkumar, Mr. S.Subramoniam, Mr. S.Giridhar, Directorsof the Company

NilSree Sakthi Ganapathy Packagings (P) Ltd.

By Order of the BoardFor Sree Sakthi Paper Mills Limited

Sd/-Place : Cochin -16 Binu Alex V.

Date : 31.07.2010 (Company Secretary)

Metriculation


6

DIRECTORS’ REPORT

Your Directors have pleasure in presenting their 19th

Annual Report and the Audited Financial Statements ofthe Company for the year ended 31st March 2010.

REVIEW OF OPERATIONS 2009-2010

During the year, the company’s production increased byabout 5%, from 68692 MT to 71926 MT on account ofour continuous modernization efforts. Capacity utiliza-tion improved from 81% to 85%.

The gross turnover was Rs.14753.18 lacs for the yearunder review, as compared to Rs.14416.14 lacs in theprevious year. The increase of about 2% in turnoveris on account of improvement in sales volume. Theaverage sales realization was less due to competitivepressures, especially in the first half of the year. How-ever the prices improved and stabilized by second halfand enabled the company to achieve higher turnover.

The Earnings before interest, depreciation and tax wasRs.1564.61 lacs, as against Rs.1255.46 lacs in the previousyear – a significant improvement of 25% over the previ-ous year. EBITDA Margin strengthened by 190 basispoints. Major factors that contributed to higher profit-ability were reduction in the price of imported rawmaterials and change in the raw materials consumptionpattern. The average price of imported raw materialsdeclined about 21% and consumption of imported rawmaterials during the year increased by 3%. Further, theadverse impact on account of foreign exchange fluctua-tion was less this year as compared to the previous year.

After absorbing interest/financing charges and deprecia-tion of Rs.515.14 lacs and Rs.342.51 lacs respectively,the profit before tax was Rs.706.96 lacs as compared toRs.483.66 lacs in the previous year. Tax provision forthe year under review was Rs.242.31 lacs as againstRs.153.28 lacs in the previous year. There was no MATcredit entitlement during the year as compared toRs.60.80 lacs in the previous year. Profit after Tax of thecompany for the year ended March 2010 rose sharply,by 40%, to reach Rs.464.43 lacs as compared toRs.331.79 lacs in the previous year, reflecting animprovement of 87 basis points in Net Profit Margin.Return of capital employed improved by 44% andReturn on Net worth increased by 35%.

Capital expenditure incurred by the Company duringthe year under review was Rs.406.26 lacs. ProductiveAssets (Gross Block) increased by about 6% on accountof modernization.

The operational efficiency of the company also improved

by way of better working capital management, which wasreflected by shorter debtor turnaround time, vastimprovement in cash flows, significant rise in net cash

generation and significant reduction of working capitalborrowings despite higher turnover in FY 2009-10.

FINANCIAL PERFORMANCE(Rs./Lacs)

For the For the

year ended year ended

Particulars 31.03.2010 31.03.2009

Sales (Gross) 14753.18 14416.14

Less : Excise Duty 601.14 707.51

Sales ( Net) 14152.04 13708.63

Operating Profit 1564.61 1255.46

Interest and Finance 515.14 464.31

Depreciation 342.51 307.49

Profit before tax 706.96 483.66

Provision for tax 242.31 153.28

Income Tax provisionw/off / (w/back) 0.22 (1.41)

Profit after tax 464.43 331.79

Balance of profitbrought forward 100.98 74.63

Amount availablefor appropriation 565.41 406.42

Appropriation

General Reserve 100.00 17.00

Proposed dividend& tax on dividend 341.56 288.44

Retained profit carriedto Balance sheet 123.85 100.98

FINANCIAL HIGHLIGHTS

PARAMETERS 2009-10 2008-09

EBITDA Margin (%) 11.1 9.1

Net Profit Margin (%) 3.3 2.4

Return on Investment (%) 7.0 4.9

Return on Equity (%) 12.7 9.4

Gross Block (Rs./Lacs) 6918.93 6543.26

Debtor Days 49 58

Net cash from operations(Rs./Lacs) 1528.99 679.76

Dividend (%) 18 15


7

FINANCE

All the repayment and interest commitments were metas per terms of arrangement with the Banks.

DIVIDEND

For the first time in the company’s history an interimdividend of 9% was paid during the year. With the pro-

posed final dividend of another 9%, total dividend amountsto Rs 1.80 per share. This yields an impressive return of10% on the average price of the company’s share (Rs

18) during the financial year. In accordance with theprovisions of the Income Tax Act, no tax will be de-ducted at source on the dividend but your company will

absorb Rs.45.71 lacs towards tax on distributed profits.

DEVELOPMENTAL PLANS

a. Expansion-cum-Modernization: As indicated in

the previous year’s Report, the company has sched-uled its expansion-cum-modernization plans in aphased manner. As a result of modernization com-

pleted at the Duplex Board Unit in the previous year,the company was able to manufacture high qualitypaper to cater to the needs of high-end segment.

Kraft paper Unit 1

Kraft Paper Unit 1 has already been modernized and

its capacity has been upgraded to 80 tpd by addingmore dryers and installing second wire. Installationof second wire was completed in August 2010. The

Unit manufactures kraft paper conforming to 14 -20bf (bursting factor) and 100 to 150 gsm quality, themodernization program enabled the Unit to upgraded

the quality to 18 -28 bf with a gsm range of 120 to250 gsm and helped the company to retain the cus-tomers in medium segment.

Kraft paper Unit 2

Your company plans to modernize the Kraft PaperUnit 2, by adding dryers and by installing Third Wire.

At present Kraft paper Unit-2 has two wires involvedin the manufacture of kraft paper conforming 18-30bf and 80 to 300 gsm quality. With the installation

of the third wire, the company would be able to up-grade the quality to 22-34 bf and 80-450 gsm. Withthe third wire, the company would be able to cater

to the needs of high-end segment, whose demand ishuge.

Fiber treatment at kraft Paper Unit-2

Your company has proposed to install KrimaDisperser Unit, which is meant for dispersing con-

taminants like wax, bitumen, ink spots, stickies, etc.in the pulp in the stock preparation process. Theequipment has already been ordered and it is

expected to be commissioned by October 2010.

Captive power – Co-generation Plant

Your company has also decided to install a 25 tone

high pressure boiler with 2 MW back pressureturbine. The project will be helpful to the companyto meet its entire steam requirement and will also

cater to about 30 - 40% power requirement.

The modernization program of Kraft Paper Units

involves an outlay of about Rs.20 crore. This isbeing met partly through debt and partly by internalaccruals.

The expansion plans are designed in a scientific waythat one Unit can cater the needs of medium seg-ment and the other unit would take care of the high-

end customers. Further with the planned expansion,the company could be able to cut down the produc-tion cost, expand product range, retain its strong-

hold on medium segment customers and offer itsproducts to high-end customers. Moreover, with theplanned expansion the company would be able to

scale up its production upto 1,00,000 MT per an-num. The expansion-cum-modernization of your com-pany is scheduled to be completed by October 2010.

b. Carbon credit through Methane Recovery

Project

Your company’s project titled - “Methane recovery

from wastewater generated at Paper manufacturingunit of Sree Sakthi Paper Mills Ltd., Kerala” was reg-istered under CDM of UNFCC on October 01, 2009.

The estimated emission reduction is 3923 metrictones of C02 equivalent per annum. The detailedengineering of the Project is entrusted with

M/s.KITCO, a leading engineering consultancy orga-nization at Cochin and is in progress.

c. Small Hydro Projects

As reported in the previous year’s Report, Your com-pany is pursuing with Government of Kerala for as-

sistance in connection with the land acquisition forthe hydro-electric projects. The TEFR approval forthe Palchuram Project is yet to be received.


8

EXPORT PERFORMANCE

Your company exported 744 MT of paper and paper

boards during the year as compared to 8862 MT duringthe previous year. The export amounted Rs.147.61 lacsas against Rs 1764.87 lacs in the previous year. The

Company scaled down its exports due to un-remunera-tive prices prevailing in international markets.

AWARDS - EXPORT HOUSE STATUS

Your company is granted with the Status Certificate of

Export House by Government of India, Ministry of Com-merce, Director General of Foreign Trade (DGFT). Thecertification is valid from April 01, 2009 to March 31,

2014. As such the Company is eligible for all the ben-efits of status holder as per EXIM Policy.

SUBSIDIARY C0MPANIES

As of 31st March 2010 the company had 3 subsidiariesviz. Sree Kailas Palchuram Hydro Power Limited, Sree

Adisakthi Mukkuttathode Hydro Power Limited andJalashaayi Alamparathode Hydro Power Limited by vir-tue of the Company having control on the Board of these

companies. The reports as required under section 212of the Companies Act, 1956 and consolidated financialstatement as required by the Listing agreement is also

attached with the Annual Reports of the Company.

INDUSTRIAL RELATIONS

The industrial relations remained cordial and satisfac-tory during the year under review.

INTERNAL CONTROL SYSTEM

Your Company has adequate internal control and internal

check system to ensure that the assets are safeguardedand transactions are authenticated and correctly recordedand reported. During the year the company appointed

M/s.Peethambaran & Company, Cochin, as InternalAuditor to review and strengthen the internal controlsin the company.

BOARD OF DIRECTORS

In accordance with Article 83 of the Articles of Associa-

tion of the Company, Mr.S. Giridhar, Mr..U. GururajaBhat, and Smt. E. Kamalam, directors of the Companyretire on rotation, and they being eligible offer them-

selves for re-appointment.

AUDIT COMMITTEE

The Audit Committee of the Board consists of four mem-bers and all of them are Non Executive Directors, viz.,

Mr.A.S.Unni, Mr.D.K.Kapila, Mr.N.Ravidranathan and

Mr.S.Sivathanupillai. Mr.A.S.Unni is the Chairman of theAudit Committee.

AUDITORS

M/s Balan & Co. Chartered Accountants, the present

Auditors of the Company retire and are eligible for re-appointment and the proposal has been placed beforeyou. Necessary certificate has been obtained from the

Auditors as per section 224(1) of the Companies Act, 1956.

FOREIGN EXCHANGE EARNINGS

AND OUT-GO

During the year under review, foreign exchange earned bythe Company by way of exports proceeds is Rs.117.13 Lacs.The foreign exchange outgo for the company were for

import purchases - Rs. 3606.40 lacs, Export Commission -Rs.14.42 lacs and Export Claim - Rs.6.79 lacs.

PARTICULARS UNDER SECTION 217

Conservation of Energy, Technology Absorption

Statement of particulars under section 217(1) (e) of theCompanies Act, 1956 are annexed as Annexure -I

Particulars of Employees

Statement of particulars under section 217(2A) of theCompanies Act,1956 are annexed as Annexure -II

CORPORATE GOVERNANCE

The Company’s Equity Shares are listed with BombayStock Exchange. The Company has implemented all the

mandatory provisions of Clause 49 of the Listing Agree-ment relating to the Corporate Governance. The Reporton Management’s Discussion and Analysis and Report

on Corporate Governance are forming part of Direc-tors’ Report and are annexed as Annexure -III and An-nexure – IV. As required by the Listing Agreement, an

Auditors’ Certificate on Corporate Governance and aDeclaration by the Vice Chairman and Managing Direc-tor with regard to Code of Conduct are attached to the

said Report. Further, as required by Clause 49 of theListing Agreement, a Certificate, duly signed by the Vice-Chairman and Managing Director and General Manager–

Finance , was submitted to the Board of Directors on thefinancial statements and cash flow statement of theCompany for the year ended March 31, 2010 at the

Meeting held on May 29, 2010.

Initial application for Listing of shares with National Stock

Exchange (NSE) has been submitted and approval fromNSE is awaited.


9

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA)

of the Companies Act, 1956 Directors report that

1. In the preparation of the annual accounts for thefinancial year ended 31st March 2010 the applicable

accounting standards had been followed along withproper explanation relating to material departures.

2. The directors had selected such accounting poli-cies and applied them consistently and made judg-ment and estimates that were reasonable and pru-

dent so as to give a true and fair view of the state ofaffairs of the Company at the end of the financialyear and of the profit of the company for the year

under review.

3. The Directors had taken proper and sufficient carefor the maintenance of adequate accounting records

in accordance with the provisions of the Act, for

safeguarding the assets of the company and for pre-

venting and detecting fraud and other irregularities.

4. The directors had prepared the Annual Accountsfor the financial year ended 31st March 2010 on a

‘going concern’ basis.

ACKNOWLEDGEMENT

Your directors wish to thank the Government authori-ties, Banks, Shareholders customers, dealers, suppliersand employess of the company for their continued co-

operation and support.

By and on behalf of the

Board of Directors

Sd/-

Place: Cochin -16 S. Sivathanu Pillai

Date : 31.07.2010 CHAIRMAN

ANNEXURES TO THE DIRECTORS’ REPORT

ANNEXURE-1

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

CONSERVATION OF ENERGY :

(a) Energy conservation measures taken:

At Duplex Board Unit

• Reduced 135 hp of electrical power in various equipments

• Installed capacitors in the 420 volts systems to improve the system power factor

• Thickener was installed for back liner pulp. There was reduction in refining power and improved storage.

• Protective layer primary centri cleaner pump was changed

At Kraft Paper Units

• Installed 150 KV additional capacitors and increased the power factor from 0.93 to 0.96

• Changed incoming feeder from 66 KV to 110 KV which reduced power interruptions

• Coupled the transformers for improved efficiency and minimized the energy loss

• Fixed 40 W tube lights near the machine side and reduced the usage of 4000 W mercury vapour lamps

• Installed Hood over M.G in Paper Machine

• Installed control valve in place of PRV to reduce steam consumption

• Made flash steam recovery from condensate tank.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

• Invested Rs.6.00 Lakh for capacitor panel board in the FY 2009-10 at its Duplex Board unit.

• The company also decided to install a 25 ton high pressure boiler with 2 MW back pressure turbine at Kraft paperunits. This will helpful to the company to meet its entire steam requirement and also cater to about 30-40% ofpower requirement.

• Steam & Condensate audit of paper machine was carried through M/s. Kadant Johnson, England.

(c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact

on the cost of production of goods:

• Reduction in running time of different layers processing.

• The overall measures and efforts taken by the company helped to reduce the power cost by Rs.201 per tone of paper.


10

FORM - A (See Rule 2)

ii) Through steam

turbine/generator – –

2 Coal – –

3 Furnace Oil – –

4 Others/Internal generation – –

B. Consumption per unit

of production

Electricity (kwh) 458 430

Furnace Oil – –

Coal – –

Others – –

Current year Previous Year

31.03.10 31.03.09

1. Electricity

a. Purchased

Unit 32905350 29538482

Total Amount 126090524 134255472

Rate/Unit 3.83 4.55

b. Own Generation

i) Through Diesel

Generator

Unit 19687 24439

Unit per Ltr.of

diesel oil 2.50 2.40

Cost/Unit 14.42 14.59

Current year Previous Year

31.03.10 31.03.09

A. Power and Fuel consumption

FORM - B (See Rule 2)

DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

A RESEARCH AND DEVELOPMENT (R&D)

1. Specific Areas in which (R& D) : Existing mould spare cylinders altered to suit the new formers.

Purchase cost of new spare cylinder around 4.00 lakhs saved.

Johnson vibrating screen SS3O4 plates were replace by synthetic

nylon plates.

All leaky PAC pumps were replaced by diaphragm pumps. Spillages

were arrested.

several special application have been developed and successfully

introduced during the year to cater customer specific

requirements.

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

3. Future plan of action : The company would undertake appropriateR&D activities depending upon future requirements

4. Expenditure on R&D : N.A.

B TECHNOLOGY ABSORPTION, : The process of improvement is a continuous one andADAPTION INNOVATION the Company is experimenting with use of new raw

materials, fuels etc. to improve productivity further.

Particulars of imported technology : No Technology has been imported.

Information as per Section 217 (2A) (b)(ii) read with the Companies (Particulars of Employees)

Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March 2010

Name Age Designation

Date of

commencement

of employment

Remuneration

received/

receivableQualification

Total

Experience

(Years)

Particulars of

Previous Experience

S.Rajkumar 52 Vice Chairman & 03.10.1991 35.40 lakhs M.Com 29 Finance Executive in Poysha

Managing Director during the years 1981-82 and

Started his own Carton Unit

during the year 1983.

ANNEXURE-II


11

ECONOMIC REVIEW

GLOBAL TREND

Economies around the world were adversely affected by

the financial crisis and slump in activity in Fiscal 2009.While the US economy suffered the most from intensi-fied financial strains, Western Europe and advanced Asia

were also hit hard by the collapse in global trade as wellas by rising financial problems of their own economies.

However, since the second half of calendar year 2009,

the economic growth has solidified and was off to a stron-ger start than anticipated earlier, though it is proceedingat different speeds in various regions.

In 2010, world output is expected to rise by 4%. In mostadvanced economies, the recovery is expected to remainsluggish by past standards, while in many emerging and

developing economies like India activity is expected tobe vigorous, largely driven by buoyant internal demand.

ANNEXURE-III

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

OVERVIEW OF THE WORLD

ECONOMIC OUTLOOK

GROWTH PROJECTION YEAR ON YEAR %

REGION 2008 2009 2010E 2011E

WORLD COMPOSITE 3.0 -0.8 3.9 4.3

ADVANCED ECONOMIES 0.5 -3.2 2.1 2.4

USA 0.4 -2.5 2.7 2.4

EURO AREA 0.6 -3.9 1.0 1.6

GERMANY 1.2 -4.8 1.5 1.9

JAPAN -1.2 -5.3 1.7 2.2

CANADA 0.4 -2.6 2.6 3.6

UK 0.5 -4.8 1.3 2.7

OTHER ADVANCEDECONOMIES 1.7 -1.3 3.3 3.6

NEWLY INDUSTRIALIZEDASIAN ECONOMIES 1.7 -1.2 4.8 4.7

EMERGING ANDDEVELOPING ECONOMIES 6.1 2.1 6.0 6.3

(Source: IMF-World Economic Outlook, January 2010)

DOMESTIC VIEW

The global financial crisis that began in 2007 led to a

significant slowdown in the growth of Indian economy in

the second half of fiscal 2009. However, a wide range of

timely policy measures abated the negative fall-out of theglobal economic slowdown in India. During the later halfof fiscal 2010, Indian economy has significantly recov-

ered displaying its fundamental strength.

The economic growth has improved despite the delayed

and severely sub-normal monsoon which had added tooverall economic uncertainty and had led to a decline of0.2% in agricultural output.

The economic growth accelerated due to a renewedmomentum in the manufacturing sector, which had seena continuous decline in the growth rate for almost eight

quarters since fiscal 2008.

The manufacturing growth has more than doubled from3.2% in fiscal 2009 to 8.9% in fiscal 2010. There has also

been a recovery in the growth rate of gross fixed capitalformation which had declined significantly during fiscal2009.

The turnaround in India’s economic growth came in thesecond quarter of fiscal 2010, when the economy grewby 7.9%. The economy has grown by 7.4% in fiscal 2010,

with the industrial and service sectors growing at 9.3%and 8.5% respectively.

Though the current inflationary pressures may challenge

policy makers, the Government and the Planning Com-mission expect the domestic economy to grow at 8.5%in fiscal 2011 and 9% in fiscal 2012.

According to some other estimates, due to the funda-mental strengths and strong advances in private con-

sumption and investment in the next two years, Indianeconomy is projected to grow at 10% by fiscal 2012.

INDUSTRY REVIEW

Structure

The paper industry is broadly classified into three seg-ments viz. Newsprint, Printing & Writing Paper and In-dustrial Paper. The industrial paper is classified into Kraft

paper, White boards, MG posters, Coated duplex boardsand grey boards.

Global Scenario

Global paper market is dominated by North America

and Europe. The global crises led to a significant con-traction in paper demand across mature markets, espe


12

cially Western Europe and North America. On the con-

trary, the emerging markets of China and India experi-enced much shorter and less contraction in demand.

Domestic Scene

Whereas the global Paper & Paperboard consumption isestimated at approximately around 402 million tonnes

in 2009-10, the Indian Paper industry accounts for onlyabout 2% of the world’s production. The domestic paperindustry with an estimated turnover of over Rs 35,000

cr contributes nearly Rs 3,000 cr to the exchequer.

Growth of Indian Paper industry has been constraint due

to high cost of production caused by inadequate avail-ability and high cost of raw materials, power cost andregional concentration.

Since the second half of fiscal 2009, the demand sce-nario was sluggish in line with the weak economic situa-tion which persisted till the end of calendar year 2009.

Domestic paper mills bore the brunt of dampening de-mand which took a toll on their overall production andrealizations.

The weak demand also coincided with new capacity ad-ditions from almost all the major paper mills which cre-ated an oversupply. Piling up of huge inventories together

with new capacities and fear of imports from China keptprices under pressure. Nevertheless, since the beginningof the current fiscal, the cycle has reversed, primarily

driven by strong demand and closure of capacities in theadvanced countries.

OPPORTUNITIES / THREATS /

RISKS / CONCERN

Your Company has a strong brand name powered byquality of its product and sound manufacturing base with

nearness to the market. The competitive strengths andthe opportunities available to the Company are:

� Growing and developing paper market.

� Availability of qualified manpower at reasonable cost.

� Availability of power at reasonable rate

� Restriction for usage in plastics and promotionof paper bags

The major external factors that can have significant bear-

ing on your company’s performance are;

� Fluctuation in selling price

� Raw material shortage and increases in raw ma-terial rates

� Enhanced paper/paper board supply in the market

� Power supply restrictions

� Escalation in power tariff

The company has made arrangements with majorsuppliers of raw materials for uninterrupted supply ofraw materials.

GROWTH DRIVERS

Fast-pace Economy

The projected robust domestic economic growth is ex-

pected to make India one of the fastest growing econo-mies. According to the London-based Economist maga-zine, India is expected to overtake China by 2018. Since

paper industry is directly linked with the economicgrowth, the projected growth in Indian economy pre-sents an exciting scenario for the paper industry.

Thrust on Education

The increasing literacy drive by the Government throughvarious programmes would contribute significantly toenhance the per capita consumption of Paper in the coun-

try.

Increasing Consumerism

The rising level of national income and the growing percapita disposable income are projected to make Indiathe fifth largest consumer market sooner than later. In-

creasing size of the population, higher level of industrialactivity and corporate spending will also boost the de-mand for paper.

CURRENT OUTLOOK

The expansion-cum-modernization of your company’splants are scheduled to be completed by October 2010.

The modernization should significantly boost the qualityand profitability. Hence, we look forward to the currentyear with increased optimism.

INVESTOR QUERIES

1. How would you rate the Fiscal 2010 perfor-

mance?

The company’s overall performance was good. It made

40% increases in PAT in spite of adverse market con-ditions especially in first half year. Vastly improvedquality of the product pushed the company up in

the value chain (the impact of the value addition isnot reflecting in the sale value due to overall reduc-tion in price of all commodities). The percentage

consumption of raw materials was reduced. Inven-tory levels have been improved, debtor-turnaround


13

improved. All the ground work for a sustained future

growth has been laid.

2. How much has the modernization benefited

the company so far?

Current modernization program helped the company

to maintain premium products and cater to the needsof high-end segments in the industry.

3. What would be the full impact of the modern-

ization in terms of Sales and Profits of the

company and when will that be realized?

Full impact of modernization will be realized in the

year 2011-12. The Company will move ahead in thevalue chain and there will be good improvement insales value and profit realization.

4. When will the company achieve the optimum

capacity production?

Hope to reach the optimum capacity in the fiscalyear 2012.

5. What are the challenges ahead? How will the

company face them?

1. Mushrooming of small mills. Your company

intends to move out of low-value Kraft papersegment, which is get crowded, and establish it-self as a quality player and maintain a premium

for the same through the current modernizationprogram.

2. Heavy Imports. Your company has evolved a

multi-pronged strategy of marketing as given be-low:

a. Strong dedicated dealership network all over

India

b. Direct corporate dealership network for bulk

customers and thereby establishing win-wincontracts

c. Exploring more exports to SAARC countries

d. The company has established a corporate cli-ent policy and tied up with all major MNCslike Hindusthan Lever, ITC, United brewer-

ies, etc. for contract supply

3. Pollution issues – The Company is of eco-friendly by using recycled fiber for manufacture

and not depends upon the wood pulp. Moreover,the company is also very keen to take eco-friendlymeasures by taking the project proposal like

Carbon credit through methane recovery.

6. How is the situation at the raw material front

in terms of availability and Price?

The Company is having dedicated arrangementfor domestic supply of raw materials. The price

of the raw material is market driven and all PeerMi l l s a re dependant upon recyc led f i b res .Considering the nature of the industry and type

of raw materials used, its price and availabilityfactors would not have much impact on thecompany.

7. Will you continue to focus on the domestic

market or are there plans to tap more export

markets?

In the present condition, domestic market is verygood. However, the company has carried good ground

work for export and it can be tapped at any time infuture depend upon the international market condi-tions. The present strategy is to limit the export.

8. How is the long term outlook for the company?

By undertaking continuous expansion-cum-modern-ization programs, the company has established it-

self as a leading Kraft Paper Company in South In-dia. The company is focusing on good quality kraftpaper by installing the disperser system and con-

verting its kraft paper units into twin wire and triplewire units.

Close proximity to the Cochin port and the upcom-

ing Vallarpadam International Terminal is an addedadvantage to the Company for import of raw mate-rial and export of finished products. The upcoming

of International terminal will help the company toreduce the import cost drastically as we can receivethe mother vessels at Cochin and thereby giving good

impetus to our prospects.

The major market for the company is outside theState, presently hampered by VAT regime. The

introduction of GST will improve the realizationsof the company as the VAT disadvantage will benullified.

9. What are immediate prospects?

The immediate prospects of the company are quite

encouraging. During the first quarter of the year2010-11, the company has posted an impressivegrowth of 43% in its bottom line. The company can

improve performance further once the moderniza-tion is completed.


14

REPORT ON CORPORATE GOVERNANCE

1. Corporate Governance Philosophy

The Management believes that corporate growth; goals, transparency and enhanced stakeholder value are to be achievedonly through good Corporate Governance.

2. Board of Directors

The Board of Directors of the Company is comprised of

4. Audit Committee

By constituting an independent and qualified Audit Committee, the Company has complied with the require-ments of Section 292A of the Companies Act, 1956 and clause 49 of the Listing Agreement relating to thecomposition of the Audit Committee. The Committee reviews the financial reporting by ensuring compliancewith Accounting Standards and also reviews Financial Policies of the Company in consultation with the manage-ment, internal auditors and statutory auditors and then ensure the correctness and adequacy of the statements.

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

During the year 2009-2010, six board Meetings were held on 30th April, 2009, 25th June,2009, 20th July, 2009, 26th

August, 2009, 31st October 2009, 30th January, 2010. The Annual General Meeting was held on 26th August, 2009.

Attendance of each director, at the Board Meetings held during the year 2009-2010 and at the last AnnualGeneral Meeting is as follows:

1. Mr.S.Sivathanu Pillai 6 6 Yes2. Mr.S.Rajkumar 6 6 Yes3. A. Padmanabhan 6 6 Yes4. Mr.A.S.Unni 6 6 Yes5. Mr.N.Ravindranathan 6 6 Yes6. Mr.S.Subramoniam 6 6 Yes7. Mr.S.Giridhar 6 6 Yes8. Mrs.E.Kamalam 6 6 Yes9. Mr.U.Gururaja Bhat 6 5 Yes

10. Mr.Deveswar Kumar Kapila 6 3 Yes11. Dr.A.R.K.Rao 6 5 Yes12. Mr.N.Sreekumar 6 2 No

Last Annual General Meetings

AttendedName

Board Meetings

Held Attended

Sl.

No.

No.of other CommitteeExecutive/ Promoter/ Companies in which he

Sl. Non Executive Independent in which he is a Member/No. Name Designation Director Director is a Director Chairman

1. Mr.S.Sivathanu Pillai Chairman Non Executive Non Independent 3 3/ 12. Mr.S.Rajkumar Vice Chairman & MD Executive Promoter 6 2/Nil3. Mr.A.Padmanabhan Whole-time Director

(Operations) Executive Non Independent 2 Nil/Nil4. Mr.A.S.Unni Director Non Executive Independent 3 4/25. Mr.N.Ravindranathan Director Non Executive Independent 1 2/Nil6. Mr.S.Subramoniam Director Non Executive Non Independent 2 1/Nil7. Mr.S.Giridhar Director Non Executive Non Independent 5 1/Nil8. Mrs.E.Kamalam Director Non Executive Non Independent 1 Nil/Nil9. Mr.U.Gururaja Bhat Director Non Executive Independent 2 1/Nil

10. Mr.Deveswar Kumar Kapila Director Non Executive Independent 3 1/Nil11. Dr.A.R.K.Rao Director Non Executive Independent Nil Nil/Nil12. Mr.N.Sreekumar Director Non Executive Independent 1 1/Nil

ANNEXURE-IV


15

The Audit Committee consists of the following members:

Sl. No. Name Designation Independent / Non independent

1. Mr.A.S.Unni Chairman Independent

2. Mr.Deveswar Kumar Kapila Member Independent

3. Mr.N.Ravindranathan Member Independent

4. Mr.S.Sivathanupillai Member Non Independent

During the year 2009-2010, five Audit Committee Meetings were held on 29th April, 2009, 25th June 2009, 20th July2009, 31st October 2009, 29th January, 2010.

5. Remuneration Committee

The Remuneration Committee consists the following Independent Non Executive directors as committee members viz,Mr.A.S.Unni, Mr.Ravidranathan and Mr.U.G.Bhat. During the financial year 2009-10, the Committee met on 20.07.2009to approve the remuneration payable to Mr.A.Padmanabhan, who had been appointed as Whole-time Director (Opera-tions) of the Company, for a period of 3 years from 01.07.2009 to 30.06.2012. All the members were presented at themeeting.

Remuneration to Non Executive Directors

The Non-Executive directors are remunerated by way of sitting fees as decided by the Board of Directors of theCompany from time to time for attending Board/Committee meetings. The fees paid for the year ended 31.03.2010 tothe Directors are as follows;

Remuneration to Vice Chairman and Managing Director / Whole time Director - Operations

Remuneration to Vice-Chairman and Managing Director/Whole-time Director is approved by the Board of Directorswithin the ceiling prescribed under Schedule XIII to the Companies Act, 1956. The same is also approved by theMembers of the Company in General Meeting. No Sitting Fee is paid to the Vice Chairman and Managing Director /Whole-time Director. Remuneration to Vice Chairman and Managing Director /Whole-time Director, for the financialyear 2009-10 is as under:

Name Designation (Rs/ Lacs)

Mr.S.Rajkumar Vice Chairman & Managing Director 35.40

Mr.A.Padmanbhan Whole Time Director –Operations 17.10

Total 52.50

The Company has not granted any stock option to any of its directors.

Sl.

No.Name of the Director Rs.

1 Mr.S.Giridhar 24000

2 Mr.S.Subramoniam 24000

3 Mr.S. Sivathanupillai 44000

4 Mr.A.S.Unni 48000

5 Mrs E.Kamalam 24000

6 Mr. N.Ravindranathan 48000

7 Mr.U.Gururaja bhatt 24000

8 Mr.Deveshwar Kumar Kapila 20000

9 Dr.A.R.K Rao 20000

10 Mr. N. Sreekumar 8000

Total 284000


16

6. Share Issue Committee / IPO Committee

A Share Issue Committee/IPO Committee was constituted during 2005-06 consisting of Mr.S.Sivathanupillai, Mr.A.S.Unni,Mr.S.Rajkumar and Mr.S.Giridhar. No meeting of the committee was held during the year under review.

7. Project Finance Committee

A Project Finance Committee was constituted during the financial year 2007-08 for implementation of newdiversified projects. The Committee consists of Mr.A.S.Unni, Mr.S.Rajkumar, Mr.S.Subramonaim andMr.N.Sreekumar. One meeting of the committee was held during the year under review.

8. Status of Investor Grievances

Name and designation of compliance officer(Company Secretary)

Mr. Binu Alex V

Number of shareholders complaintsreceived during 2009-10

The shares of the Company listed with BSE.During the year under review, there were 27Complaints from Investors. Prompt actionswere taken to redress the complaints.

Number of complaints resolved tothe satisfaction of shareholders

27

Number of pending complaints as on March 31, 2010 Nil

9. Code of Conduct

As required by the amended Clause 49 of the Listing Agreement, the Board of directors of the Company hasadopted a Code of Conduct for all Board members and senior management of the Company. The Code ofConduct has been posted on the web site www.sreekailas.com of the Company. The members of the Board of

Directors and Senior Management have affirmed compliance of the said code during the period under review.The Annual Report of the Company does contain a declaration to this effect duly signed by the CEO as requiredby the Clause 49 of the Listing Agreement.

10. a. Disclosures on materially significant related party transactions i.e. transactions of the Com-

pany 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 – Schedule 21 (Point No.28) forming part of the Annual Report.

All related party transactions are negotiated on arms length basis and are only intended to further theinterests of the Company.

10. b. 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 Marketsduring the last three years and hence no penalties or strictures have been imposed on the Company by theStock Exchange or SEBI or any other Statutory Authority.

10. c. Disclosures on Accounting Treatment

Disclosures of accounting treatment wherever applicable have been made in the Audited Financial Accountsfor the year ended 31st March 2010.


17

10. d. Board Disclosures – Risk Management

The Company has laid down procedures to inform the Board Members about the risk assessment and minimizationprocedures and they are being reviewed periodically.

11. 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 theirknowledge and belief :

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

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance withexisting 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 yearwhich 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 theeffectiveness of the internal control systems of the company and they have disclosed to the auditors and the AuditCommittee, deficiencies in the design or operation of internal controls, if any, of which they are aware and the stepsthey 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 notesto the financial statements; and

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

12. Annual General Meetings

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

Details of resolution passed by the Company’s members through postal ballot during last three years and during the periodtill this report date.

1. Consent to utilize Rs.700 lacs raised for setting up of2 MW cogeneration plant and kept in fixed deposits,part of the issue proceeds raised vide Prospectusdated 14.12.2005 for other purposes.

1. Re-appointment of Mr. S. Rajkumar as Managing Di-rector of the Company and fixation of remuneration.

2 Increasing Authorised share Capital of the Companyand amendment of Memorandum of Association ofthe Company

3. Amendment of Articles of Association of the Company.

1. Appointment of Mr. A. Padmanabhan as Whole-timeDirector (Operations) of the Company and fixationof remuneration

Year Location Date Time Special Resolution

2007 Hotel Abad Plaza Thursday 04.00M.G.Road, Ernakulam 27.09.2007 P.M.Cochin- 35

2008 Hotel Abad Plaza Wednesday 03.00M.G.Road, Ernakulam 24.09.2008 P.M.Cochin- 35

2009 Hotel Abad Plaza Wednesday 3.00M.G.Road, Ernakulam 26.08.2009 P.M.Cochin- 35

Year

2007 23.05.2008 1. Resolution under Section 17 of the Companies Act,1956 for alter theMemorandum of association

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

2008 Nil Nil

2009 Nil Nil

Declaration date Resolutions


18

AGM : Date, time and venue : Thursday, 9th Sepember 2010 at 3.00 p.m. at Hotel Abad Plaza, M.G.Road,Ernakulam, Cochin-35

Financial Year : April 1 to March 31

Financial Calendar : May 2010 Audited results for 2009-10(tentative and subject July 2010 First Quarter Results for 2010-11to change) September 2010 Annual General Meeting for 2009-10

October 2010 Second Quarter Results for 2010-11

January 2011 Third Quarter Results for 2009-10

March 2011 Review of performance 2010-11

May 2011 Audited results for 2010-11

September 2011 Annual General Meeting for 2010-11

Date of Book closure : 3rd September 2010 to 9th September 2010 (both days inclusive).

Dividend Payment Date : On or after 9th September 2010, but before the statutory time limit of 30 days,from the date of declaration.

Listing on Stock Exchanges : The Stock Exchange, Mumbai, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai400 001 Ph: (91)(22)2272 1233 - 1234 (General) 2272 1121 - 1122, 2272 2375(Corporate Relations Department) Web Site: www.bseindia.com E-mail:

[email protected] Fax: (91)(22) 2272 1919, 2272 3027 (General) 2272 3719,2272 2039, 2272 2061 2272 3121, 2272 2037, 2272 2041 (Corporate RelationsDepartment)

Payment of Annual Listing : Listing Fee has been paid to the Stock Exchange, in which the Company’sFees to the Stock Exchanges Equity Shares are listed, upto March 31, 2011

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 High Low Volume BSE BSE

(Rs.) (Rs.) (No.of shares) Sensex (High) Sensex (Low)

Apr 09 12.60 9.66 88,647 11,492.10 9,546.29

May 09 15.00 9.26 3,20,987 14,930.54 11,621.30

Jun 09 18.09 13.61 9,77,542 15,600.30 14,016.95

Jul 09 19.00 14.90 5,28,165 15,732.81 13,219.99

Aug 09 21.65 15.35 8,30,008 16,002.46 14,684.45

Sep 09 17.20 14.45 4,95,947 17,142.52 15,356.72

Oct 09 16.50 14.70 2,50,938 17,493.17 15,805.20

Nov 09 16.90 14.50 2,24,898 17,290.48 15,330.56

Dec 09 21.80 15.60 10,24,637 17,530.94 16,577.78

Jan 10 26.80 18.35 14,70,036 17,790.33 15,982.08

Feb 10 24.15 20.15 3,49,344 16,669.25 15,651.99

Mar 10 21.95 19.60 2,62,877 17,793.01 16,438.45

14. General Shareholder Information

13. Means of Communication

The Financial Results are generally published in ‘Business Standard’, in English and in ‘Mangalam, in Malayalam. TheResults are also placed on the Company’s Web Site, www.sreekailas.com. The Company also usually sending Shareholdersletters along with results copy directly to the investor on quarterly basis as part good corporate governance measure.


19

Registrar and Transfer : M/s. Bigshare Services Private Limited, E/2, Ansa Industrial Estate,Agents and Share transfer Saki Vihar Road, Sakinaka, Andheri (E), Mumbai–400 072,system Tel: 022-28470652, Fax: 022-28475207.

Both physical and demat transfers are done through the Registrar and TransferAgents. The shares of the Company are under compulsory demat mode.

Distribution ofShareholding as on31st March 2010 :

DistributionNo.of share

holders

% of share

holdersNo.of share

% of share

holding

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

1 – 500 9215 82.12 2011549 12.24

501-1000 1208 10.77 930946 5.66

1001-2000 379 3.38 600540 3.65

2001-3000 107 0.94 281810 1.72

3001-4000 67 0.60 243531 1.48

4001-5000 53 0.47 251800 1.53

5001-10000 78 0.70 571667 3.48

10001 and above 114 1.02 11544374 70.24

Total 11221 100 16436217 100

SS

PM

L S

har

e P

rice

(R

s.)


20

Shareholding pattern as on31.03.2010 :

A. Promoters Holdings

Promoter and promoter group 8585521 52.23

B. Non Promoters Holding

Institutional Investors 0 0.00

a. Mutual Funds and UTI 0 0.00

b. Banks, Financial Institutions,Insurance Companies 219010 1.33

c. Foreign Institutional Investors 0 0.00

Non –Institutional Investors

a. Corporate Bodies 735640 4.48

b. Indian Public 6652149 40.48

c. NRI 228990 1.39

d. Any other 14907 0.09

Grand Total 16436217 100

CategoryNo.of

Shares held

% of

shareholding

Name and number of sharesheld and percentageshareholding of entities / per-sons holding more than 1%shares of the Company as on31.03.2010

1. Mr.S.Rajkumar 4651792 28.30 Indian Promoter

2. Mr.S.Sivathanupillai 211240 1.29 Promoter group

3. Mr.S.Giridhar 1090328 6.63 ”

4. Mr.S.Subramoniam 333944 2.03 ”

5. Mr.A.Padmanbhan 1315703 8.00 ”

6. Mrs.Rajee Rajkumar 285544 1.74 ”

8. Corporation Bank 218357 1.33 Institutional Investors

Grand Total 8106908 49.32

Name

No.of

Shares

held

% of

share

holding

Category

Dematerialization of The Company’s shares are under Compulsory demat mode. Shares of theshares and liquidity : company as on 31.03.2010 in demat mode with NSDL is 6990544 (69.17%)

and with CDSL is 2944225 (30.62%)

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

Plant Locations : Kraft Paper Unit 1: Industrial Development Area, Muppathadom,Edayar, Aluva - 683 102, Tel : 0484-2540622, 2555451

Kraft Paper Unit 2: Industrial Development Area, Muppathadom,Edayar, Aluva - 683 102, Tel : 0484-2540622, 2555451

Duplex Board Unit: Kanjirapilly, Pariyaram, Chalakudy,

Thrissur - 680 721,Tel : 0480-2746129, 2746229,

Address for correspondence : Sree Sakthi Paper Mills Limited, 57/2993, “Sree Kailas”, Paliam Road, Ernakulam,Cochin –16, Kerala Tel: 0484 -2373230, 2382182, Fax : 0484- 2370395,Email : [email protected] Web : www.sreekailas.com


21

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 2010. The Code of Conduct laid down for allBoard members and Senior Management of the Company is posted on the website of the Company.

S.Rajkumar

Cochin -16 Sd/-

31.07.2010 Vice Chairman & Managing Director

Compliance Certificate of the Auditors

A certificate from the Auditors of the Company regarding Compliance of Conditions of Corporate Governance asstipulated under clause 49 of the listing agreement is attached to this report.

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 (thecompany) for the year ended March 31, 2010 as stipulated in clause 49 of the Listing Agreement entered into withBombay Stock Exchange.

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

ments of the company.

In our opinion and to the best of our information and according to the explanations given to us and the representa-tions made by the Directors and the Management, we certify that the company has complied with the conditions of

Corporate Governance as stipulated in the above mentioned Listing Agreement.

As per the records of the Company, no investor grievances are pending for a period exceeding one month againstthe company.

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

For Balan & Co.

Chartered Accountants

Sd/-

Place : Cochin -11 A. Mohanan

Date : 31.07.2010 Partner (M.No. 20627)


22

To the Members

M/s. Sree Sakthi Paper Mills Limited, Kochi - 16

1. We have audited the attached Balance Sheet of M/s.

Sree Sakthi Paper Mills Limited, Kochi-16, as at 31stMarch, 2010 and also Profit and Loss Account andCash Flow Statement of the Company for the year

ended on that date annexed there to. These finan-cial statements are the responsibility of the Company’sManagement. Our responsibility is to express an

opinion on these financial statements based on ouraudit.

2. We conducted our audit in accordance with audit-ing standards generally accepted in India. Those stan-dards require that we plan and perform the audit to

obtain reasonable assurance about whether the fi-nancial statements are free of material misstatements.An audit includes examining on a test basis, evidence

supporting the amounts and disclosures in the fi-nancial statements. An audit also includes assessingthe accounting principles used and significant esti-

mates made by management, as well as evaluatingthe overall financial statement presentation. Webelieve that our audit provides a reasonable basis

for our opinion.

3. As required by the Companies (Auditor’s Report)

Order, 2003, as amended by the Companies(Auditor’s Report) Amendment Order, 2004 issuedby the Government of India in terms of sub section

(4A) of section 227 of the Companies Act, 1956, weenclose in the annexure, a statement on the mattersspecified in paragraph # 4 and 5 of the said order.

4. Further to our comments in the Annexure referredabove, we report that:

a. We have obtained all the information and expla-nations, which to the best of our knowledge and

belief were necessary for the purpose of our au-dit.

b. In our opinion proper books of account as re-quired by law have been kept by the company inso far as appears from our examination of those

books.

AUDITOR’S REPORT

BALAN & CO.Chartered Accountants39/181 D, ‘Anantha’, Mahakavi ‘G’ RoadKarikkamuri, Kochi - 682 011

Phone: 0484-23606632360773

Fax: 2360773A. Mohanan : 3950630

E-mail: [email protected]

c. The Balance Sheet, Profit and Loss account and

Cash Flow statement dealt with by this reportare in agreement with the books of account.

d. The Balance Sheet, Profit and Loss account andCash Flow statement dealt with by this reportcomply with the accounting standards referred

to in sub section (3C) of section 211 of the Com-panies Act, 1956.

e. On the basis of written representations receivedfrom the directors and placed before the Board,

we report that none of the Directors is disquali-fied as on 31st March 2010 from being appointedas a Director in terms of clause (g) of sub sec-

tion (1) of section 274 of the Companies Act,1956.

f. In our opinion and to the best of our informa-tion and according to the explanations given tous, the said accounts read together with the Sig-

nificant Accounting Policies and the notesthereon give the information required by theCompanies Act, 1956, in the manner so required

and give a true and fair view in conformity withthe accounting principles generally accepted inIndia:

1. In the case of the Balance Sheet, of the ‘stateof affairs’ of the company as at 31st March

’10

2. In the case of the Profit and Loss account, of

the profit of the company for the year onthat date, and

3. In the case of Cash Flow Statement, of thecash flows for the year ended on that date.

For BALAN & CO.


Sd/-Kochi - 11 A. MOHANAN F.C.A.,DISA29.05.2010 PARTNER (M.No.20627)


23

Ref: M/s. Sree Sakthi Paper Mills Limited,

Kochi -16 (2009-10)

Referred to in paragraph 3 of our report of even

date

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

details and situation of fixed assets.

(b) The fixed assets have been physically verified bythe management at reasonable intervals and nomaterial discrepancies were noticed on such veri-

fication.

(c) No substantial part of the fixed assets was dis-

posed off during the year.

(ii) (a) The inventory has been physically verified

during the year by the management. In our opin-ion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inven-tories followed by the management are reason-able and adequate in relation to the size of the

company and the nature of its business.

(c) The company is maintaining proper records ofinventory. The discrepancies noticed on verifi-cation between the physical stocks and the bookrecords were not material and have been prop-

erly dealt with in the books of account..

(iii) (a) The Company has not granted loans topersons covered in the register maintained un-der section 301 of the Companies Act, 1956,

except advances in the ordinary course of busi-ness.

(b) The company has not taken any loans ,securedor unsecured from companies, firms or otherparties covered in the register maintained under

section 301 of the Companies Act,1956.

(iv) In our opinion and according to the information and

explanations given to us, there is adequate internalcontrol system commensurate with the size of thecompany and nature of its business for the purchase

of inventory and fixed asset and for sale of goods.There is no continuing failure to correct any majorweaknesses in internal control.

(v) (a) In our opinion and according to theexplanations given to us, all particulars of

contracts or arrangements referred to in section301 of the Act have been entered in the registerrequired to be maintained in that section.

(b) In our opinion and according to the information

and explanations given to us, the transactionsmade in pursuance of contracts or arrangementsentered in the register maintained under section

301 of the Companies Act, 1956 during the yearhave been made at prices which are reasonablehaving regard to prevailing market prices at the

relevant time.

vi) The company has not accepted deposits from thePublic. Hence provisions of Clause 4(vi) of the Or-

der are not applicable to the Company.

vii) On the basis of the test checks conducted by us andas per the explanations given to us the Company

has an internal audit system commensurate with thesize and nature of its business.

(viii) We have broadly reviewed the books and recordsmaintained by the company pursuant to the order ofthe Central Government u/s 209(1)(d) of the Com-

panies Act, 1956 and are of the opinion that prima-facie the prescribed accounts and records have beenmade and maintained. We have however not made a

detailed examination of the records with a view todetermining whether these records are accurate orcomplete.

(ix) (a) According to the information given to us andon the basis of the checks conducted by us wereport that the company has been generally regu-

lar in depositing undisputed statutory dues in-cluding Provident fund, Employees state insur-ance, Income Tax, Wealth Tax, Service Tax,

Sales Tax, Customs duty and Excise Duty, Cessand any other statutory dues with appropriateauthorities during the year.

No undisputed amounts payable in respect ofincome tax, wealth tax, service tax, sales tax,customs duty, excise duty and cess were in ar-

rears as at 31.3.2010 for a period of more thansix months from the date they became payable.

[b] Except for a sum of Rs. 20.56 lakhs being

disputed Income Tax/Penalty relat ing toA.Y.2004-05 pending in appeal before the IncomeTax Appellate Tribunal and a sum of Rs.3.89

lakhs, Rs. 8.39 lakhs and Rs 15.48 lakhs beingdisputed Sales Tax relating to A.Y. 2005-06, A.Y2006-07 and A.Y.2007-08 respectively pending

in appeal before Sales Tax Appelate Commissionand a sum of Rs 4.05 lakhs being disputed Elec


24

tricity charges pending with KSEB, no other dues

of Sales Tax/Income Tax/Custom Tax/ServicesTax/Excises Duty/Cess remains not deposited onaccount of any disputes.

(x) The Company has no accumulated losses and hasnot incurred any cash loss during the financial yearcovered by our audit and in the immediately preced-

ing financial year.

(xi) In our opinion and according to the information andexplanation given to us the Company has not de-

faulted in repayment of dues to financial institutionsand banks.

(xii)The Company has not granted loan and advance on

the basis of security by way of pledge of shares, de-bentures and other securities.

(xiii) The Company is not a chit fund or a nidhi or amutual benefit fund/Society. Therefore, provisions ofclause 4(xiii) of the Companies Auditors Report

Order 2003 are not applicable to the company.

(xiv) The Company is not dealing in or trading in shares,securities, debentures and other investments. There-

fore, provisions of clause 4(xiv) of the CompaniesAuditors Report Order 2003 are not applicable tothe company.

(xv)According to the information and explanations givento us the company has not given any guarantee forloan taken by others from banks or financial institu-

tions.

(xvi) To the best of our knowledge and belief and ac-

cording to the information and explanations givento us, we are of the opinion that, the term loansavailed by the company were prima-facie applied for

the purpose for which the loans were obtained.

(xvii) According to the information and explanations givento us and on an overall examination of the Balance

Sheet of the Company, we are of the opinion thatthe funds raised by the company on short term basishas not been used for long term investments.

(xviii) Company has not made any preferential allotmentof shares during the year.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any money by PublicIssue during the year.

(xxi) To the best of our knowledge and belief and ac-cording to the information given to us no materialfraud on or by the company was noticed or reported

during the year.

For BALAN & CO.


Sd/-Kochi - 11 A. MOHANAN F.C.A.,DISA29.05.2010 PARTNER (M.No.20627)


25

BALANCE SHEET AS AT 31ST MARCH 2010

Schedule

No.

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

SOURCES OF FUNDS

(1) Share Holders’ Funds:

(a) Capital 1 1643.62 1643.62

(b) Reserves & Surplus 2 2010.77 1887.90

3654.39 3531.52

(2) Loan Funds

(a) Secured Loans 3 2531.54 2844.59

(b) Unsecured Loans 4 429.78 443.82

2961.32 3288.41

(3) Deferred Tax Liability 5 734.72 645.06

TOTAL 7350.43 7464.99

APPLICATION OF FUNDS

(1) Fixed Assets: 6

(a) Gross Block 6918.93 6543.26

(b) Less: Depreciation 2092.27 1770.32

(c) Net Block 4826.66 4772.94

(2) Investments 7 88.46 88.46

(3) Current Assets, Loans & Advances

(a) Inventories 8 1077.17 1164.45

(b) Cash & Bank balances 9 322.09 286.26

(c) Sundry Debtors 10 1882.37 2164.87

(d) Loans & Advances 11 1008.36 1034.85

4289.99 4650.43

Less: Current Liabilities & Provisions 12

(a) Current Liabilities 1531.45 1699.97

(b) Provisions 361.50 423.40

1892.95 2123.37

Net Current Assets 2397.04 2527.06

Miscellaneous Expenditure:(To the extend not w/off)

Public Issue Expenses 38.27 76.53

TOTAL 7350.43 7464.99

Accounting Policies & Notes on Accounts 21

Subject to our report of even date

For Balan & Co.


Sd/-

A. Mohanan, B.Sc., FCA, DISA

M. No. 20627

Partner

Cochin - 11Cochin-16

29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA

GM (Finance & Accounts)

For and on behalf of the Board

Sd/-

S. Sivathanu Pillai, Chairman

Sd/-

A. S. Unni, Director

Sd/-

S. Rajkumar

Vice Chairman & Managing Director

Sd/-

A. Padmanabhan

Whole Time Director-Operations


26

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010

Year ended31. 03. 2009Rs. / Lakhs


Schedule

No.

INCOME

Sales 13 14753.18 14416.14Less:Excise Duty 601.14 707.51

14152.04 13708.63Miscellaneous Income 14 174.40 138.55Increase / (Decrease) in Stock 15 (1.12) 20.86MAT Credit Entitlement 0.00 60.80

TOTAL 14325.32 13928.84

EXPENDITURE

Manufacturing Expenses 16 11248.91 10947.82Payments to & Provision for Employees 17 692.15 590.24Administrative Expenses 18 303.40 394.51Selling & Distribution Expenses 19 516.25 740.81Interest & Finance Charges 20 515.14 464.31

TOTAL 13275.85 13137.69

Profit Before Depreciation and Tax 1049.47 791.15Depreciation 342.51 307.49Profit Before Tax 706.96 483.66Provision for Taxation - Current 152.65 72.63 - Deferred 89.66 73.45 - Fringe Benefit Tax 0.00 7.20

464.65 330.38

Income Tax Provision w/off / (w /back) 0.22 (1.41)Profit After Tax 464.43 331.79

Add: Balance brought forward from Previous year 100.98 74.63

565.41 406.42

APPROPRIATIONS

Interim Dividend 147.93 0.00Proposed Final Dividend 147.92 246.54Corporate Dividend Tax 45.71 41.90Transfer to General Reserve 100.00 17.00

441.56 305.44

Balance Carried to Balance sheet 123.85 100.98

Accounting Policies & Notes on Accounts 21Earnings per Share (Basic and Diluted) 2.83 2.02Weighted Average number of Shares 16436217 16436217


For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan



27

Schedules annexed to and forming part of the Balance Sheet as at 31st March 2010

Schedule 1SHARE CAPITALAUTHORISED3,00,00,000 Equity shares of Rs 10 each 3000.00 3000.00(Previous Year 3,00,00,000 Equity shares of Rs 10 each)1,64,36,217 Equity Shares of Rs.10/- each fully paid up 1643.62 1643.62(1,64,36,217 Equity Shares of Rs.10/- each fully paid up for previous year)(Of the above 60,70,500 shares were allotted as fully paid upway of bonus shares by capitalisation of profits transferred to General Reserve)TOTAL 1643.62 1643.62Schedule - 2RESERVES & SURPLUSi) Capital Reserve

Amount as per last Balance Sheet 36.68 36.68Add: Additions/transfers during the year 0.00 36.68 0.00 36.68

ii) Securities Premium AccountAmount as per last Balance Sheet 1667.24 1667.24Add: Additions/transfers during the year 0.00 1667.24 0.00 1,667.24

iii) General ReserveAmount as per last Balance Sheet 83.00 66.00Add: Additions/transfers during the year 100.00 183.00 17.00 83.00

iv) Profit & Loss AccountAmount as per last Balance Sheet 100.98 74.63Add: Profit during the year 122.87 43.35Less: Transfer to General Reserve 100.00 123.85 17.00 100.98TOTAL 2010.77 1887.90

Schedule - 3SECURED LOANS(i) Term Loans

a. ICICI Bank Ltd. 0.00 2.22b. Syndicate Bank Ltd. ( 049OSL41200002) 0.00 7.42c. Federal Bank Ltd. (12386900002618 & 2741) 0.00 13.74d. Industrial Development Bank of India Ltd 507.14 696.93e. Syndicate Bank Ltd. (43007220002777) 278.01 298.46f. Federal Bank Ltd. (10047100024172) 241.70 0.00

(ii) Cash Credit Loansa. Industrial Development Bank of India Ltd. 477.15 499.58b. Federal Bank Ltd. 965.81 948.28c. Bank of India. (Refer Note 20 of Schedule 21) 61.73 377.96TOTAL 2531.54 2844.59

Schedule - 4UNSECURED LOANS1. From Directors 0.00 0.002. From Banks

Bank of India - Suppliers Credit 333.30 421.71Indian Bank - Buyers Credit 0.00 22.11SBI - Canada - Buyers Credit 44.71 0.00Bank of Baroda - Buyers Credit 51.77 0.00

3. From Others 0.00 0.00TOTAL 429.78 443.82Schedule - 5DEFERRED TAX LIABILITYDeferred Tax liability 763.79 693.75Less: Deferred Tax Asset 29.07 48.69TOTAL 734.72 645.06

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Sree S

ak

thi P

ap

er Mills L

imited

28

Rs./Lakhs

NET BLOCKDEPRECIATIONGROSS BLOCK

ParticularsSl.

No. Balance as on

01.04.2009

Additionsduring the

year

Saleduring the

year

Total as on

31.03.2010

Upto

01.04.2009

For the

Year

Total as on

31.03.2010

As on

31.03.2010

As on

31.03.2009

Schedule - 6

FIXED ASSETS

1 Land 50.11 2.69 - 52.80 - - - - 52.80 50.11

2 Buildings 788.61 18.08 - 806.69 150.35 23.63 - 173.98 632.71 638.26

3 Furniture & Fixtures 28.65 0.49 - 29.14 15.02 1.29 - 16.31 12.83 13.63

4 Plant & Machinery 5623.39 379.47 30.60 5972.26 1586.69 312.87 20.55 1879.01 4093.25 4036.70

5 Office Equipments 38.00 2.47 - 40.47 14.56 1.83 - 16.39 24.08 23.44

TOTAL 6528.76 403.20 30.60 6901.36 1766.62 339.62 20.55 2085.69 4815.67 4762.14

6 Intangible Asset-Computer Software 14.50 3.06 - 17.57 3.70 2.89 - 6.58 10.99 10.80

TOTAL 6543.26 406.26 30.60 6918.93 1770.32 342.51 20.55 2092.27 4826.66 4772.94

Figures for theprevious year 5756.44 786.82 - 6543.26 1462.83 307.49 - 1770.32 4772.94 4293.61

Saleduring the

year


29

Schedule - 7

INVESTMENTS - AT COST

Quoted

Long Term, non trade

2080 Equity shares of I.D.B.I.Ltd of Rs 10 each fully paid up 2.39 0.35 0.95 0.35

130597 units of ICICI Prudential Infrastructure fund 16.04 30.01 10.43 30.01

96712 Units of L&T Oppurtunities Fund 17.71 30.00 8.30 30.00

23286 units of UTI Master Growth Unit Scheme 5.09 10.00 3.29 10.00

Un Quoted


Kerala Enviro Infrastructure Ltd 1.00 1.00

(10000 Equity Shares of Rs 10 each fully paid up)

Cochin Waste 2 Energy P Ltd 3.00 3.00


Investments in Subsidiaries

JALA SHAAYI ALAMPARATHODU HYDRO POWER LTD 4.70 4.70


SREE KAILAS PALCHURAM HYDRO POWER LTD 4.70 4.70


SREE ADI SAKTHI MUKKUTTATHODE HYDRO POWER LTD 4.70 4.70


TOTAL 88.46 88.46

Schedule - 8

INVENTORIES

1. Raw Materials & Packing Materials 394.51 653.76

2. Stock-in-Process 107.43 118.98

3. Finished Goods 23.06 12.64

4. Stores, Spares & Fuel 552.17 379.07

TOTAL 1077.17 1164.45

Schedule - 9

CASH AND BANK BALANCES

1. Cash in Hand 12.86 2.95

2. In Current Account with Scheduled banks 85.38 77.55

3. Fixed Deposits with Banks 223.85 205.76

(Refer Note No.17 of Schedule 21)

TOTAL 322.09 286.26

Market valueas on

31. 03. 2009

Market valueas on

31. 03. 2010

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs


30

Schedule - 10

SUNDRY DEBTORS

SECURED

More than six months 0.00 0.00UNSECURED

Considered Good More than six months 179.41 293.37 Others 1702.96 1,871.50Considered Doubtful 11.90 70.90Less : Provision for doubtful debts 11.90 0.00 70.90 0.00Amounts due by Enterprise under same Management: Carto PackRs. 98.02 Lakhs (Previous Year Rs 12.53 Lakhs [Maximum amountdue at any time during the year Rs 98.02 Lakhs(Previous Year Rs 15.07 Lakhs)]TOTAL 1882.37 2,164.87

Schedule - 11

LOANS AND ADVANCES

(Unsecured, considered good)I ADVANCE TO SUBSIDIARY COMPANIES

a. Jalashaayi Alamparathode Hydro Power Ltd. 5.37 5.36b. Sree Kailas Palchuram Hydro Power Ltd 13.62 7.12c. Sree Adisakthi Mukkuttathode Hydro Power Ltd 5.36 5.36

II OTHER ADVANCES

a. Prepaid Expenses 10.29 7.83b. Deposits 155.20 110.88c. Staff SalaryAdvance 4.67 4.41d. Advances to suppliers & capital goods 373.25 400.65e. Other Advances (Advances recoverable in cash or in kind

or for value to be received) 440.60 493.24TOTAL 1008.36 1034.85

Schedule - 12

CURRENT LIABILITIES & PROVISIONS

a) CURRENT LIABILITIES1. Interest Accrued but not due on unsecured Loans 0.90 0.002. Sundry Creditors

a. Due to Micro, Small and Medium Enterprises (Refer note 22 of Schedule 21) 0.00 0.00b. Others

(a) Supplies 919.81 1131.17 (b) Expenses 361.74 342.70 (c) Stores & Spares 113.07 135.82 (d) Capital Goods 5.15 0.00 (e) Deposit from Dealers/Customers 68.37 29.563. Other Liabilities 50.98 54.58Items covered under Investor Education and Protection fund:

(Refer Note 25 of Schedule 21)Dividend Payable 9.29 3.96Share Application & Brokerage Refund A/c 2.14 2.18TOTAL 1531.45 1699.97

b) PROVISIONSIncome Tax (Net of MAT Credit Entitlement) 116.67 62.00Dividend and Corporate Dividend Tax 170.78 288.44Gratuity & Leave encashment 74.05 72.96TOTAL 361.50 423.40

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs


31

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Schedules annexed to and forming part of Profit & Loss Account for the year ended 31. 03. 2010

Schedule - 13

SALES - Kraft Paper and paper boards 14753.18 14416.14

Schedule - 14

MISCELLANEOUS INCOME

Interest (Tax Deducted at Source Rs. 1.63 lakhs 27.28 20.12

Previous year Rs. 3.54 Lakhs)

DEPB Licence received 5.53 62.64

Dividend received 1.59 2.00

Exchange rate fluctuation 73.86 0.00

Others 66.14 53.79

TOTAL 174.40 138.55

Schedule - 15

INCREASE (DECREASE) IN STOCK

Closing Stock

Finished Goods 23.06 12.64

Stock in Process 107.44 130.50 118.98 131.62

Less: Opening Stock


Stock in Process 118.98 131.62 79.45 110.76

Increase (Decrease) in Stock (1.12) 20.86

Schedule - 16

MANUFACTURING EXPENSES

Raw material consumed 7687.86 7850.21

Packing material consumed 203.45 178.96

Stores & Spares consumed 404.93 329.09

Power & Fuel consumed 2177.65 2069.95

Repairs and Maintenance - Plant & Machinery 58.36 38.86

Repairs and Maintenance - Building 8.15 2.46

Cooli charges 524.08 341.13

Insurance charges 11.54 20.67

Others 172.89 116.49

TOTAL 11248.91 10947.82


32

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Schedule - 17

PAYMENTS TO AND PROVISION FOR EMPLOYEES

Salaries, Wages & Allowance 496.94 428.73Remuneration to Managerial Persons (See Schedule 21.B.1) 52.50 33.18Bonus 22.74 26.31

Gratuity 9.25 10.46Staff Welfare Expenses 65.64 48.25Employer’s Contribution to PF 19.05 17.29

Employer’s Contribution to ESI 18.50 17.85Others 7.53 8.17

TOTAL 692.15 590.24

Schedule - 18

ADMINISTRATIVE EXPENSES

Travelling Expenses 59.51 92.35Rent 19.80 26.74Professional service charges 20.29 11.43

Printing & Stationery 9.02 7.99Telephone, Postage and Telegram 25.52 19.68Repairs & Maintenance 26.02 17.71

Insurance charges 5.95 4.53Auditors Remuneration (See Schedule 21. B .2.) 5.41 5.01Directors Sitting fee 2.84 2.40

Rates & Taxes 11.77 11.04Exchange rate fluctuation 0.78 87.33Public Issue Expenses W/off 38.27 38.27

Others 78.22 70.03

TOTAL 303.40 394.51

Schedule - 19

SELLING & DISTRIBUTION EXPENSES

Freight outwards 43.41 360.81

Discount 159.48 143.43Sales Commission 210.57 156.73Sales Promotion Expenses 19.48 11.82

Provision for Bad / Doubtful debts 61.00 30.00Advertisement charges 5.60 6.81Export Claim Paid 6.79 21.32

Others 9.92 9.89

TOTAL 516.25 740.81

Schedule - 20

INTEREST AND FINANCE CHARGES

Interest - Term Loans 117.49 114.99

Interest-Other Loans 226.12 221.85Others 171.53 127.47

TOTAL 515.14 464.31


33

Schedule - 21

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting:

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

2. Revenue Recognition:

Items of income and expenditure are recognizedon accrual basis except for the following since it isnot possible to ascertain with reasonable accuracythe quantum to be provided in respect of:

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

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

c. Insurance and Other claims.

3. Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-ratabasis on straight-line method at the rates prescribedunder Schedule XIV of the Companies Act, 1956.Cost of Fixed Assets has been taken at net of CENVATavailed. Depreciation on additions/deletions iscalculated on a monthly pro-rata basis, month ofaddition is included and month of sale is excluded.

The cost of fixed assets other than those includedin the specific project comprises, its purchase priceincluding import duty and other non – refundabletaxes or levies, cost directly attributable to bringthe asset to its working condition for its intendeduse, start up and commissioning expenses on testruns and experimental production and finance costup to the date of capitalization but excludingadministration and other general overheads.

Cost of fixed assets under specific project includesall the above and directly relatable administrativeand other general overheads.

4. Investments:

Long term Investments are stated at cost lessprovision for decline in value other than temporary.Current investments are stated at lower of cost andfair market value on category of investment basis.

5. Inventory:

Inventory of raw materials and consumables arevalued at cost or net realizable value whichever islower under FIFO Method. Finished Goods arevalued at cost or net realizable value whichever islower. Cost for the purposes of valuation of finishedgoods includes cost of material, labour and other

NOTES TO BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

direct overheads. Stock-in-process is valued at rawmaterial cost plus proportionate direct cost,wherever applicable.

6. Foreign Currency Transactions:

Expenditure in foreign currency is converted intoIndian rupees at the rate of exchange prevailing onthe date of the remittance. Liability in respect offoreign exchange transactions outstanding as at theend of the year is restated at the exchange rateprevailing on that date.

7. Forward Contracts:

Premium or discount arising at the inception offorward contracts is recognized as expense or incomeover the period of contract. Any profit or loss arisingon cancellation or renewal of forward contract isrecognized as income or expense of the year.

8. Deferred tax/Income tax:

Deferred tax is accounted for, by computing thetax effect of timing differences between taxableincome and accounting income.

Provision for current tax is made on the basis ofapplicable tax laws existing in the country.

Minimum Alternative Tax and its credit areaccounted based on the Guidance notes issued bythe Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carriedforward to the extent that there is reasonablecertainly that suffifient future taxable income willbe availed against which such deferred tax assetscan be realised.

9. Intangible Assets:

Intangible asset, viz, computer software is stated atcost of acquisition less accumulated amortization.Computer software is amortized over a period of 5Years. Public issue expenses are written off over aperiod of 5 years from the year in which theproceeds are substantially utilized.

10.Borrowing Costs.

Borrowing Costs charged to Profit & Loss Accountinclude interest on short and long term bankborrowings. Borrowing costs attributable toqualifying assets up to the date of capitalizationare included in the cost of the asset.

11.Others:

i) Contingent Liabilities are not provided for andare disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability isworked out based on actuarial valuation as atthe end of the year.


34

7. Consumption of Raw Materials

Opening Stock 136 187 12.64 31.31

Production 71926 68692 14763.60 14397.47

Sales 71997 68743 14753.18 14416.14

Closing Stock 65 136 23.06 12.64

Value (Rs.in Lakhs)

31.03.09

Quantity (in MT)

31.03.10 31.03.09 31.03.10

Particulars of Paper& Paper Boards

8. Consumption of Stores & Spares (Rs. in lakhs)

9. Finished Goods

Opening 583.28 469.83 118.98 79.45

Closing 529.43 583.28 107.44 118.98

Value (Rs.in Lakhs)

31.03.09

Quantity (in MT)

31.03.10 31.03.09 31.03.10Particulars

10. Stock-in-Process

11) Sales are inclusive of Excise Duty & Cess.

12) Balances of Sundry Debtors, Sundry Creditors, Advancesand Deposits are subject to confirmation.

13) Previous year figures have been rearranged / regroupedwherever necessary.

14) Assets, Loans and advances are in realizable state in theordinary course of business.

Arising on account Total

of timing Current Up to as on

difference in Year 31.03.09 31.03.10

Deferred TaxLiability

Depreciation 70.04 693.75 763.79

Less: DeferredTax Asset

Provision for badand doubtful debt (20.05) 23.97 3.92

Provision for gratuity& leave encashments 0.44 24.72 25.20

(19.61) 48.69 29.12

Net DeferredTax Liability 89.66 645.06 734.66

Imported Waste Paper 31441.86 26321.14 3031.24 3220.41

Indigenous Waste Paper 50716.97 49419.25 3794.90 3969.04

Imported Chemicals 1.08 32.00 2.67 13.95

Indigenous Chemical 6360.75 6031.09 859.05 646.81

Total 88520.66 81803.48 7687.86 7850.21

Value (Rs.in Lakhs)

31.03.09

Quantity (in MT)

31.03.10 31.03.09 31.03.10Particulars

12.Impairment

At each of the Balance sheet date the managementreviews the carrying amount of the assets toascertain impairment, if any, to its assets and suchlosses are appropriately recognized in accounts.

B. NOTES ON ACCOUNTS

1. Managerial Remuneration (Rs. in Lakhs)

Particulars 2009-10 2008-09

Salary 37.50 22.34

House Rent Allowance 15.00 10.73

Medical Expenses (upto10.07.2008) 0.11

Total 52.50 33.18Current year figures includes an amount of Rs.17.10 lacs paid to

Whole time Director-operaitons of the company w.e.f 1.7.2009

2. Auditors Remuneration: (Rs. in lakhs)


For Audit 4.00 4.00

For Tax audit 0.50 0.50

For Taxation matters 0.45 0.15

Out of pocket Expenses 0.46 0.36

Total 5.41 5.01

3. Value of Imports calculated on C.I.F. basis.

Raw Material: Rs. 3242.08 Lakhs (Previous YearRs. 2884.55 Lakhs) Stores & Spare Parts: Rs. 31.38 Lakhs(Previous Year Rs. 12.64 Lakhs)

4. Expenditure in Foreign Currency:

Travelling Expenses: Nil (Previous Year – Rs. 6.25 Lakhs)

Export commission Rs 14.42 Lakhs (Previous year-Rs 19.51 Lakhs) Export claim Rs. 6.79 Lakhs (Previousyear- Rs. 21.32 Lakhs)

5. Earnings in Foreign Exchange

Export of goods on FOB Basis – Rs. 138.17 Lakhs(Previous year – Rs. 1595.92 Lakhs)

6. Deferred Tax Liability: (Rs in Lakhs)

7.a) Percentage Consumption of Raw materials

Imported 3033.91 3234.36 39.46 41.20

Indigenous 4653.95 4615.85 60.54 58.80

Total 7687.86 7850.21 100.00 100.00

31.03.09

Value (Rs.in Lakhs)

31.03.10 31.03.09 31.03.10Particulars

Percentage

Imported 9.70 4.60 2.40 1.40

Indigenous 395.23 324.49 97.60 98.60

Total 404.93 329.09 100.00 100.00

31.03.09

Value (Rs.in Lakhs)

31.03.10 31.03.09 31.03.10Particulars

Percentage


35

16. Capacity

17. Fixed deposits with following banks is subject to liencreated to secure the LC/BG Limit sanctioned by them.

18. Borrowing costs capitalized during this year – Rs. Nil

Lakhs (Previous Year – 5.08 Lakhs)

19. Lease Transactions:

All assets acquired under finance lease basis arecapitalized with corresponding liability, recognizing the

future liability on leases. The total minimum leasepayments as on the balance sheet date, interestembedded in such payments and present value of lease

payments are as follows :Rs. in Lakhs

2009-2010 2008-2009

Total minimumlease payments Nil 2.22

Future interestembedded in i) Nil 0.07

Present value oflease payments (i-ii) Nil 2.15

Finance charges on lease payments amounting to Nil(Previous Year Rs. 0.38 Lakhs) for the year has beendebited to profit and loss account under the headinterest and bank charges.

Lease expenses under non cancelable operating leaseduring the year amounts to Rs. NIL.

Future minimum lease payments under non cancellableoperating lease as on 31-03-2010 is as follows:

Payable within One year NIL

Payable after one year but before five years NIL

20. Secured Loans

a) Car loans from ICICI Bank Ltd is on hire purchasebasis.

b) Term loans from Syndicate Bank Ltd, Industrial

Development Bank of India Ltd and Federal BankLtd are secured by pari passu first charge on thefixed assets and pari passu second charge on

Current Assets of the Company except thoseassets otherwise specifically charged.

c) Cash Credit Loan from Federal bank Ltd, Bank of

India and Industrial Development Bank of IndiaLtd are secured by pari passu first charge on theentire inventories and receivables and further

secured by pari passu second charge on the entirefixed assets of the Company.

21) Contingent Liabilities not provided for

a) Unexpired Contracts for Capital Expenditure : Rs83.84 Lakhs (Previous year Rs 26 Lakhs)

b) Usance Letter of credit remaining unpaid as on31.03.2010 amounts to Rs.2034.36 Lakhs (Previ-ous years Rs.1442.21 Lakhs)

c) Guarantee given by bank on behalf of the Com-pany Rs. 124.60 lakhs (Previous year – Rs. 87.78Lakhs)

d) Amount of Income tax liabilities disputed in appealRs.20.56 lakhs ( Previous year Rs.20.56 Lakhs)

e) Additional claims of electricity charges disputedRs.4.05 Lakhs( Previous year Rs 4.05 lakhs)

f) Sales Tax paid disputed under appeal 2005-06 Rs3.89 Lakhs, 2006-07 Rs 8.39 Lakhs and for the year2007-08 Rs 15.48 Lakhs

22) Based on the information available with the Com-

pany as at the year-end, there are no balances

due to undertaking defined under Micro,Small

and Medium Enterprises development Act 2006

Particulars

Paper & Paper Boards

(MT)

31.03.10 31.03.09

Licensed Capacity

(Registered/Applied with S.I.A.) 100000 100000

Installed Capacity 85000 85000

Actual Production 71926 68692

Name of Bank 2009-10 2008-09

Bank of India 31,.78 41.87

Federal Bank Ltd. 109.38 116.50

Industrial Development

Bank of India Ltd. 82.69 47.39

TOTAL 223.85 205.76

(Rs.in Lakhs)


CPI (M) 62500 4500CMP 1000CONGRESS(S) 1000CONGRESS(I) 5500KERALA CONGRESS 500RSP(B) 500CPI 500 10750NCP 20750Muslim League 500Total 71500 36500

15) Details of Donations paid to Political parties


36

Particulars

The principal amount and the interest due thereon remainingunpaid to any supplier as at the end of each accounting year. Nil Nil

The amount of interest paid by the Company along with theamounts of the payment made to the supplier beyond the appointedday during the year. Nil Nil

The amount of interest due and payable for the period of delay inmaking payment (which have been paid but beyond the appointedday during the year) but without adding the interest specifiedunder this Act. Nil Nil

The amount of interest accrued and remaining unpaid at the endof the year. Nil Nil

The amount of further interest remaining due andpayable even in the succeeding years, until such date when theinterest dues as above are actually paid to the small enterprise. Nil Nil

For the year ended

31st March, 2010

For the year ended

31st March, 2009

23. Earnings per share:

The company reports basic and diluted Earnings perShare in accordance with AS 20. Basic Earnings perequity share have been computed by dividing net profitafter tax by the weighted average number of equity sharesoutstanding at the end of the year. Diluted Earnings pershare have been computed using the weighted averagenumber of equity shares and potential equity sharesoutstanding at the end of the year.

24. Current market value of the quoted investments isRs. 41.23 Lakhs (Previous Year Rs. 22.97 Lakhs)

25. There are no amounts due and outstanding to becredited to Investor Education & Protection Fund as atMarch 31, 2010)

26. Details of Employee Benefits : Disclosuresrequired under Accounting Standard 15 –Employee Benefits (Revised 2005)

a. Defined Contribution Plans : During the Year, thefollowing amounts have been recognised in theProfit and Loss account on account of definedcontribution plan.

As on

31.03.09

As on

31.03.10

Mortality Table Indian Assured Indian AssuredLives Mortality Lives Mortality(1994-96) (1994-96)Ultimate Ultimate

Attrition Rate Modified q(x) for servicevalues under less than 5above Mortality years :1 perTable thousand;

for service 5years andabove: 2 perthousand

Discount Rate 7.00%p.a 7.00% p.a

Rate of increase incompensation level 5.00%p.a 5.00%p.a

Rate of Return onPlan Assets Not Applicable N A

Expected Averageremaining working lifeof Employees (Years) 12.90 13.04

Particulars 31.3.2010 31.3.2009

Profit after tax(Rs. in Lakhs) 464.43 331.79

Weighted averagenumber of shares usedas denominator forcalculating basic anddiluted earning per share 1,64,36,217 1,64,36,217

Nominal value of shares (Rs.) 10 10

Basic and dilutedearnings per share (Rs.) 2.83 2.02

b. Defined benefit Plans- Gratuity:

i. Actuarial Assumptions:

Employers Contribution toProvident Fund 19.05 17.29

Employers Contribution toEmployee’s State Insurance 18.50 17.85

2009-10 2008-09

Rs. in Lakhs


37

As on

31.03.09

As on

31.03.10

Rs. in Lakhs

Particulars

Present value ofobligations at thebeginning of the period 54.48 50.21

Interest Cost 3.99 3.69

Current Service Cost 5.15 4.93

Benefits paid (4.92) (6.19)

Actuarial (Gain)/Loss (0.25) 1.84

Present value ofobligations at theend of the period 58.46 54.48

As on

31.03.09

As on

31.03.10Particulars

Present value ofobligations at theend of the period 58.46 54.48Fair value of plan assetsat end of the period - –Funded Status (58.46) (54.48)UnrecognisedActuarial (Gain)/Losses - –Net Asset/Liability tobe recognised inBalance Sheet 58.46 54.48

As on

31.03.09

As on

31.03.10Particulars


Past Service Cost - -


Expected Return on

Plan Assets - -

Curtailment Cost /(Credit) - -

Settlement Cost /(Credit) - -

Net Actuarial (Gain)/Loss

recognised in the period (0.25) 1.84

Expenses recognised in the

statement of Profit and

Loss Account 8..90 10.46

As on

31.03.09

As on

31.03.10


Attrition Rate Modified q(x) for servicevalues under less than 5above Mortality years :1 perTable thousand;

for service 5years andabove: 2 perthousand


Inter Valuation leave 24 days per 24 days peraccrual annum annum

Rate of increase incompensation level 5.00% p.a. 5.00% p.a.

Rate of Return onPlan Assets Not Applicable Not applicable


ii. Reconciliation of Opening and Closing balances of thepresent value of the defined benefit obligation:

As on

31.03.09

As on

31.03.10Particulars




Benefits paid - –

Actuarial (Gain)/Loss (19.47) (4.32)


Rs. in Lakhs

Rs. in Lakhs

Rs. in Lakhs


iii. Net Asset/Liability to be recognised in the Balance Sheet

iv. Expenses recognized in the Profit and Loss Account

The above disclosures are based on information furnishedby the independent actuary and relied upon by the auditors.

The estimates of future Salary increases considered in theactuarial valuation takes into account of inflation, seniority,promotion and other relevant factors, such as supply anddemand in the employment market.

c. Defined benefit Plans- Leave Plan

i. Actuarial Assumptions


38


As on

31.03.09

As on

31.03.10Particulars


Fair value of PlanAssets at the endof the period 0 0

Funded Status (15.59) (18.48)

UnrecognisedActuarial (Gain)/Losses 0 0

Net Asst/Liability tobe recognised inBalance Sheet 15.59 18.48


As on

31.03.09

As on

31.03.10Particulars


Past Service Cost 0 0


Expected Return on

Plan Assets 0 0

Curtailment Cost /(Credit) 0 0

Settlement Cost /(Credit) 0 0


recognised in the period (19.47) (4.32)

Expenses recognised in

the statement of Profit and

Loss Account (2.89) 7.90

The above disclosures are based on information furnished by the independent Actuary and relied upon by the auditors.

Closing BalanceUtilized during

the year

31.03.10 31.03.0908-0909-1008-0909-1001.04.09 01.04.08

Provision made

during the yearOpening Balance

(Rs.in Lakhs)

Sundry Debtors 70.90 40.90 61.00 30.00 120.00 0 11.90 70.90

Income tax 62.00 85.90 116.67 79.83 62.00 103.73 116.67 62.00

Proposed Dividend 246.54 246.54 147.93 246.54 246.54 246.54 147.93 246.54

Corporate Dividend tax 41.90 41.90 22.85 41.90 41.90 41.90 22.85 41.90

Gratuity & Leave encashment 72.96 60.79 6.11 18.36 5.02 6.19 74.05 72.96

27. Details of Provisions Pursuant to Accounting Standard – 29 – Provisions, Contingent Liabilities and

Contingent Assets

28. Details in respect of related parties pursuant to AS 18

Sl.

No.Name of Related Party

Nature of

Relationship

Details of Transactions

Nature of TransactionAmount (Rs. in lakhs)

2009-10 2008-09

1. Mr. S. Raj Kumar Remuneration andAllowances 35.40 33.18

Rent 2.88 4.28

2. Mrs. Rajee Rajkumar No Transaction - –

3. Mr. S. Sivathanu Pillai Sitting Fees 0.44 0.40

4. Mrs. E. Kamalam Sitting Fees 0.24 0.24

5. Mr. S. Subramoniam Sitting Fees 0.24 0.24

6. Mr. S. Giridhar Sitting fees 0.24 0.24

Relative of KeyManagementPersonnel

Rs. in LakhsRs. in Lakhs

Key ManagementPersonnel(Vice Chairman &Managing Director)


39

Sl.


Nature of

Relationship



2009-10 2008-09

7. Mr. A. Padmanabhan Key ManagementPersonnel(Whole time Director- Remunerations andOperations) Allowances 17.10 -

8. Shri Kailash Logistics Ltd. Freight Charges 166.18 191.80

9. Sree Sakthi Constructions Purchase of Fixedand Infrastructure (P) Ltd. Asset (Car) - 9.00

10. Carto Packs Purchase of Raw Material 98.90 22.49

Sale of Finished Goods 145.10 35.02

11. Sree Kailas Packagings No Transactions – –

12. Sree Ganapathy PackagingsPvt. Ltd. No Transactions – –

13. Synergy Homes Ltd. Purchase of Raw Material 318.59 -

14. Jala Shaayi Alamparathodu Unsecured Loan 5.36 5.36Hydro Power Ltd.

Investment inSubsididary Company 4.70 4.70

15. Sree Kailas Palchuram Hydro Unsecured Loan 13.62 7.12Power Ltd.


16. Sree Adi Sakthi Mukkuttathode Unsecured Loan 5.36 5.36Hydro Power Ltd.


Signatories to Schedules 1 to 21

SubsididaryCompany

Enterprises overwhich any personmentioned in 1 to 7above is able toexercise significantinfluence


For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan



40

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010

In terms of AS - 3 on Cash Flow Statement under Indirect Method

2009-10

Rs. / Lakhs

2008-09

Rs. / Lakhs

A. Cash Flow from Operating activitiesNet profit Before Taxation 706.96 483.66

Adjustment for:MAT Credit Entitlement 0.00 (60.80)Provision for Depreciation 342.51 307.49Interest on Borrowings 338.90 336.09Interest Income (27.28) (20.12)Dividend income (1.59) (2.00)Preliminary Expenses W/off 38.27 38.27Loss on sale of fixed assets 0.60 691.41 0.00 598.93

Operating profit before working capital changes 1,398.37 1,082.59

(Increase)/Decrease in Sundry Debtors 282.50 (182.36)(Increase)/Decrease in Loans & Advances 33.18 (121.35)(Increase)/Decrease in Inventories 87.26 (358.77)Increase/(Decrease) in Sundry Creditors & Other liabilities (168.52) 234.42 308.07 (354.41)Cash from operations 1,632.79 728.18

Income tax paid 103.80 (48.42)Net cash from operating activities 1,528.99 679.76

B. Cash Flow from Investing ActivitiesPurchase of Fixed assets (406.26) (781.74)Sale of Fixed assets 9.45 0.00Interest Income 27.28 20.12Purchase of Investments 0.00 (17.10)Dividend received 1.59 2.00Net cash from Investing activities (367.94) (776.72)

C. Cash Flow from Financing ActivitiesProceeds from Long term Borrowings 44.00 295.59Proceeds from Short term Borrowings 250.00 633.95Repayment of Long term Borrowings (299.69) (263.53)Repayment of Short term Borrowings (324.16) 0.00Interest on borrowings (336.16) ((338.30)Dividend & Corporate Dividend Tax paid (459.22) (288.44)Net Cash flow from Financing Activities (1125.23) 39.27

Net Increase/(Decrease) in Cash & Cash Equivalents 35.83 (57.69)

Cash & Cash Equivalents as on 31/3/09 286.26 343.95Cash & Cash Equivalents as on 31/3/10 322.09 286.26


For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan



41

STATEMENT PURSUANT TO SECTION 212(1)(e) OF THE COMPANIES ACT,1956, RELATING TO

COMPANY’S INTEREST IN SUBSIDIARY COMPANIES

Sl No. Particulars

1 Name of the Company Jalashaayi Sree Adisakthi Sree KailasAlamparathode Mukkuttathode PalchuramHydro Power Hydro Power Hydro PowerLimited Limited Limited

2 Financial Year of the Subsidiary Company ended on 31st March 2010 31st March 2010 31st March 2010

3 Extent of Holding Company’s Interest

i) Shares of the Subsidiary held by the Company 47001 Equity 47001 Equity 47001 Equityon the above date Shares of Rs 10 Shares of Rs 10 Shares of Rs 10

each each each

ii) Extent of the Holding Company’s Interest 47% of the paid up 47% of the paid up 47% of the paid upEquity Share Capital Equity Share Capital Equity Share Capital

4 The net aggregate amount of the SubsidiaryCompany’s profit/loss so far as it concerns themembers of the Holding Company

a) Not dealt with in the Holding Company’s accounts:

i) For the financial year ended 31st March 2010 Profit of Rs 0.08 Profit of Rs 0.37 Profit of Rs 0.20Lakhs Lakhs Lakhs

ii) For the previous financial years of the Profit of Rs 0.55 Profit of Rs 0.47 Loss of Rs. 0.14Subsidiary Company since it became the Lakhs Lakhs LakhsHolding Company’s subsidiary

b) Dealt with in the Holding Company’s accounts:

i) For the financial year ended 31st March 2010 Nil Nil Nil

ii) For the previous financial years of theSubsidiary Company since it became theHolding Company’s subsidiary Nil Nil Nil

Subsidiary Companies

Cochin-16

29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan



42

Information pursuant to the provisions of Part IV of Schedule VI to the Companies Act, 1956

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

a) Registration details

Registration Number L21012KL1991PLC006207State Code Number 09Balance Sheet date 31st March 2010

(Amount in Thousands)b) Capital raised during the year

Public Issue NilRight Issue NilBonus Issue NilPrivate Placement Nil

c) Position of Mobilisation and Deployment of Funds

Total Liabilities 7,35,043

Total Assets 7,35,043

Sources of funds

Paid-up Capital 1,64,362

Reserves & Surplus 2,01,077Secured Loans 2,53,154Unsecured Loans 42,978Deferred Tax Liability 73,472

Application of funds

Net Fixed Assets 4,82,666

Investments 8,846Net Current Assets 2,39,704Miscellaneous Expenditure 3,827

d) Performance of the CompanyTurn over (including other income) 14,32,532Total Expenditure 13,61,836Profit before Tax 70,696Profit after Tax 46,443Earnings per share (Rs.) 2.83Dividend rate percentage (%) 18

e) Generic names of three principle products of the Company:ITC Code No. Description1 6413 Kraft Paper from Non-Conventional raw

materials like waste paper Kraft cuttings2 48101209 Paper Board coated with china clay

using Unconventional raw materials

Cochin-16

29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan


Sree Sakthi Paper Mills Limited and its Subsidiaries

43

1. We have audited the attached Consolidated BalanceSheet of Sree Sakthi Paper Mills Limited and itssubsidiaries- Sree Adi Sakthi Mukkuttathodu Hydro

Power Limited, Sree Kailas Palchuram Hydro PowerLimited and Jalashaayi Alamparathodu Hydro PowerLimited as at 31st March 2010 and the Consolidated

Profit and Loss account for the year ended and theConsolidated Cash Flow Statement for the year ended

on that date annexed thereto.

These financial statements are the responsibility of SreeSakthi Paper Mills Limited's management and have beenprepared by the management on the basis of separatefinancial statements and other financial information

regarding components. Our responsibility is to expressan opinion on these financial statements based on ouraudit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those standards

require that we plan and perform the audit to obtainreasonable assurance about whether the financial state-ments are of material misstatements. An audit includes

examining on a test basis, evidence supporting theamounts and disclosures in the financial statements.An audit also includes assessing the accounting prin-

ciples used and significant estimates made by the man-agement, as well as evaluating the overall financial state-ment presentation. We believe that our audit provides

a reasonable basis for our opinion.

3. We report that the consolidated financial statementshave been prepared by the Sree Sakthi Paper Mills

AUDITOR’S REPORT ON CONSOLIDATED

FINANCIAL STATEMENTS


Phone: 0484-23606632360773

Fax: 2360773A. Mohanan : 3950630


Limited's management in accordance with the require-

ments of Accounting Standard (AS) 21 “ConsolidatedFinancial Statements” notified by the Central Gov-ernment of India under the Companies (Accounting

Standards) Rules, 2006. Based on our audit and onconsideration of reports of the other auditors onfinancial statements and on the other financial

information of the components, and to the best ofour information and according to the explanationgiven to us, we are of the opinion that the attached

Consolidated Financial Statements give a true andfair view in conformity with the accounting principlesgenerally accepted in India:

a) in the case of the Consolidated Balance Sheet,of the state of affairs of Sree Sakthi PaperMills Limited and its subsidiaries as at 31st

March 2010;

b) in the case of Consolidated Profit and LossAccount, of the profit for the year ended on

that date; and

c) in the case of the Consolidated Cash Flow

Statements, of the cash flows for the yearended on that date.

For BALAN & CO.


Sd/-

Place : Cochin-11 A. MOHANAN B.Sc, FCA, DISADate : 29.05.’10 Partner (M.No.20627)

44


CONSOLIDATED BALANCE SHEET AS AT 31st MARCH 2010

Schedule

No.

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

SOURCES OF FUNDS

(1) Share Holders’ Funds:

(a) Capital 1 1643.62 1643.62

(b) Reserves & Surplus 2 2011.50 1888.31

3655.12 3531.93

(2) Loan Funds:

(a) Secured Loans 3 2531.54 2844.59

(b) Unsecured Loans 4 429.78 443.82

2961.32 3288.41

(3) Minority Interest 16.71 16.37

(4) Deferred Tax Liability 5 734.85 645.14

TOTAL 7368.00 7481.85


(1) Fixed Assets: 6

(a) Gross Block 6919.66 6544.00

(b) Less: Depreciation 2092.45 1770.48

(c) Net Block 4827.21 4773.52

(2) Investments 7 74.36 74.36

(3) Current Assets, Loans & Advances

(a) Inventories 8 1077.17 1164.45

(b) Cash & Bank balances 9 363.45 320.53

(c) Sundry Debtors 10 1882.37 2164.87

(d) Loans & Advances 11 990.87 1024.15

4313.86 4674.00

Less: Current Liabilities and Provisions: 12

(a) Current Liabilities 1531.19 1700.20

(b) Provisions 362.28 424.13

1893.47 2124.33

Net Current Assets 2420.39 2549.67

(4) Miscellaneous Expenditure(to the extent not written off or adjusted ) 46.04 84.30

TOTAL 7368.00 7481.85

Accounting Policies & Notes on Accounts 21


For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan



45

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010




For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA


Schedule

No.

INCOME

Sales 13 14753.18 14416.14Less:Excise Duty 601.14 707.51

14152.04 13708.63Miscellaneous Income 14 176.92 140.70Increase / (Decrease) in Stock 15 (1.12) 20.86MAT Credit Entitlement 0.00 60.80

TOTAL 14327.84 13930.99

EXPENDITURE

Manufacturing Expenses 16 11248.91 10947.82Payments to & Provision for Employees 17 692.54 590.24Administrative Expenses 18 303.85 394.81Selling & Distribution Expenses 19 516.25 740.81Interest & Finance Charges 20 515.31 464.31

TOTAL 13276.86 13137.99

Profit Before Depreciation and Tax & Before Minority Interest 1050.98 793.00Depreciation 342.53 307.65Profit Before Tax& Before Minority Interest 708.45 485.35Provision for Taxation - Current 153.43 73.37 - Deferred 89.72 73.52 - Fringe Benefit Tax 0.00 7.20

465.30 331.26Income Tax Provision w.off / (w/back) 0.20 (1.41)Profit After Tax & Before Minority Interest 465.10 332.67

Less: Minority Interest 0.35 0.47Profit After Tax & After Minority Interest 464.75 332.20Balance brought forward from Previous year 101.39 74.63

566.14 406.83

APPROPRIATIONS

Interim Dividend 147.93 0.00Proposed Final Dividend 147.92 246.54Corporate Dividend Tax 45.71 41.90Transfer to General Reserve 100.00 17.00

441.56 305.44

Balance Carried to Balance sheet 124.58 101.39

Accounting Policies & Notes on Accounts 21Earnings per Share (Basic and Diluted) 2.83 2.02Weighted Average number of Shares 16436217 16436217


Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan


46


Schedules annexed to and forming part of the Consolidated Balance Sheet as at 31st March 2010

Schedule 1

SHARE CAPITAL

AUTHORISED

3,00,00,000 Equity shares of Rs 10 each 3000.00 3000.00

(Previous Year 3,00,00,000 Equity shares of Rs 10 each)

1,64,36,217 Equity Shares of Rs.10/- each fully paid up 1643.62 1643.62

(1,64,36,217 Equity Shares of Rs.10/- each fully paid up

for previous year)

(Of the above 60,70,500 shares were allotted as fully paid up

way of bonus shares by capitalisation of profits transferred

to General Reserve)

TOTAL 1643.62 1643.62

Schedule - 2

RESERVES & SURPLUS

i) Capital Reserve

Amount as per last Balance Sheet 36.68 36.68

Add: Additions/transfers during the year 0.00 36.68 0.00 36.68

ii) Share Premium Account



iii) General Reserve



iv) Profit & Loss Account


Add: Profit during the year 123.19 43.35

Less: Transfer to General Reserve 100.00 124.58 17.00 101.39

TOTAL 2011.50 1888.31

Schedule - 3

SECURED LOANS

(i) Term Loans

a. ICICI Bank Ltd. 0.00 2.22b. Syndicate Bank Ltd. ( 049OSL41200002) 0.00 7.42c. Federal Bank Ltd. (12386900002618 & 2741) 0.00 13.74d. Industrial Development Bank of India Ltd 507.14 696.93e. Syndicate Bank Ltd. (43007220002777) 278.01 298.46f. Federal Bank Ltd. (10047100024172) 241.70 0.00

(ii) Cash Credit Loans

a. Industrial Development Bank of India Ltd. 477.15 499.58

b. Federal Bank Ltd. 965.81 948.28

c. Bank of India. 61.73 377.96

(Refer Note 12 of Schedule 21)

TOTAL 2531.54 2844.59

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs


47

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Schedule - 4

UNSECURED LOANS

1. From Directors 0.00 0.00

2. From Banks

Bank of India - Suppliers Credit 333.30 421.71

Indian Bank - Buyers Credit 0.00 22.11

SBI - Canada - Buyers Credit 44.71 0.00

Bank of Baroda - Buyers Credit 51.77 0.00

3. From Others 0.00 0.00

TOTAL 429.78 443.82

Schedule - 5

DEFERRED TAX LIABILITY

Deferred Tax liability 763.92 693.83

Less: Deferred Tax Asset 29.07 48.69

TOTAL 734.85 645.14

Schedule - 7

INVESTMENTS - AT COST

Quoted


2080 Equity shares of I.D.B.I.Ltd of Rs 10 each fully paid up 2.39 0.35 0.95 0.35

130597 units of ICICI Prudential Infrastructure fund 16.04 30.01 10.43 30.01

96712 Units of L&T Oppurtunities Fund 17.71 30.00 8.30 30.00

23286 units of UTI Master Growth Unit Scheme 5.09 10.00 3.29 10.00

Un Quoted


Kerala Enviro Infrastructure Ltd 1.00 1.00(10000 Equity Shares of Rs 10 each fully paid up)

Cochin Waste 2 Energy P Ltd 3.00 3.00(30000 Equity Shares of Rs 10 each fully paid up)

TOTAL 74.36 74.36

Schedule - 8

INVENTORIES

1. Raw Materials & Packing Materials 394.51 653.76

2. Stock-in-Process 107.43 118.98

3. Finished Goods 23.06 12.64

4. Stores, Spares & Fuel 552.17 379.07

TOTAL 1077.17 1,164.45

Schedule - 9

CASH AND BANK BALANCES

1. Cash in Hand 12.96 3.05

2. In Current Account with Scheduled banks 88.64 80.22

3. Fixed Deposits with Banks (Refer Note No.9 of Schedule 21) 261.85 237.26

TOTAL 363.45 320.53

Market valueas on

31. 03. 2009

Market valueas on

31. 03. 2010

48

Sree S

ak

thi P

ap

er Mills L

imited

an

d its S

ubsid

iaries

Rs./Lakhs

NET BLOCKDEPRECIATIONGROSS BLOCK

ParticularsSl.

No. Balance as on

01.04.2009

Additionsduring the

year

Saleduring the

year

Total as on

31.03.2010

Upto

01.04.2009

For the

Year

Total as on

31.03.2010

As on

31.03.2010

As on

31.03.2009

Schedule - 6

FIXED ASSETS

1 Land 50.11 2.69 - 52.80 - - - - 52.80 50.11

2 Buildings 788.61 18.08 - 806.69 150.35 23.63 - 173.98 632.71 638.26

3 Furniture & Fixtures 28.65 0.49 - 29.14 15.02 1.29 - 16.31 12.83 13.63

4 Plant & Machinery 5624.13 379.47 30.60 5973.00 1586.85 312.89 20.55 1879.19 4093.81 4037.28

5 Office Equipments 38.00 2.47 - 40.47 14.56 1.83 - 16.39 24.08 23.44

TOTAL 6529.50 403.20 30.60 6902.10 1766.78 339.64 20.55 2085.87 4816.23 4762.72

6 Intangible Asset-Computer Software 14.50 3.06 - 17.56 3.70 2.89 - 6.58 10.98 10.80

TOTAL 6544.00 406.26 30.60 6919.66 1770.48 342.53 20.55 2092.45 4827.21 4773.52

Figures for theprevious year 5756.44 787.56 - 6544.00 1462.83 307.65 - 1770.48 4773.52 4293.61

Saleduring the

year


49

Schedule - 10

SUNDRY DEBTORS

SECURED

More than six months 0.00 0.00UNSECURED

Considered Good More than six months 179.41 293.37 Others 1702.96 1,871.50Considered Doubtful 11.90 70.90Less : Provision for doubtful debts 11.90 0.00 70.90 0.00Amounts due by Enterprise under same Management: Carto PackRs. 98.02 Lakhs (Previous Year Rs 12.53 Lakhs [Maximum amountdue at any time during the year Rs 98.02 Lakhs(Previous Year Rs 15.07 Lakhs)]TOTAL 1882.37 2,164.87

Schedule - 11

LOANS AND ADVANCES

(Unsecured, considered good)a. Prepaid Expenses 10.29 7.83b. Deposits 155.20 110.88c. Staff SalaryAdvance 4.67 4.41d. Advances to suppliers & capital goods 372.16 400.65e. Other Advances (Advances recoverable in cash or in kind

or for value to be received) 448.55 500.38TOTAL 990.87 1024.15

Schedule - 12

CURRENT LIABILITIES & PROVISIONS

a) CURRENT LIABILITIES1. Interest Accrued but not due on unsecured Loans 0.90 0.002. Sundry Creditors

a. Due to Micro, Small and Medium Enterprises (Refer note 14 of Schedule 21) 0.00 0.00b. Others

(a) Supplies 919.81 1,131.17 (b) Expenses 362.57 342.93 (c) Stores & Spares 113.07 135.82 (d) Capital Goods 5.15 0.00 (e) Deposit from Dealers/Customers 68.37 29.563. Other Liabilities 49.89 54.58Items covered under Investor Education and Protection fund:

Dividend Payable 9.29 3.96Share Application & Brokerage Refund A/c (Refer note 17 of Schedule 21) 2.14 2.18TOTAL 1531.19 1700.20

b) PROVISIONSIncome Tax (Net of MAT Credit Entitlement) 117.45 62.73Dividend and Corporate Dividend Tax 170.78 288.44Gratuity & Leave encashment 74.05 72.96TOTAL 362.28 424.13

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

50


31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Schedule - 13

SALES - Kraft Paper and paper boards 14753.18 14416.14

Schedule - 14

MISCELLANEOUS INCOME

Interest (Tax Deducted at Source Rs 1.88 lakhs 29.80 22.27Previous year Rs 3.75 Lakhs)

DEPB Licence received 5.53 62.64



Others 66.14 53.79

TOTAL 176.92 140.70

Schedule - 15

INCREASE (DECREASE) IN STOCK

Closing Stock


Stock in Process 107.44 130.50 118.98 131.62

Less: Opening Stock


Stock in Process 118.98 131.62 79.45 110.76

Increase (Decrease) in stock (1.12) 20.86

Schedule - 16

MANUFACTURING EXPENSES

Raw material consumed 7687.86 7850.21

Packing material consumed 203.45 178.96

Stores & Spares consumed 404.93 329.09

Power & Fuel consumed 2177.65 2069.95

Repairs and Maintenace - Plant & Machinery 58.36 38.86

Repairs and Maintenace - Building 8.15 2.46

Cooli charges 524.08 341.13


Others 172.89 116.49

TOTAL 11248.91 10947.82

Schedule - 17

PAYMENTS TO AND PROVISION FOR EMPLOYEES

Salaries, Wages & Allowance 497.32 428.71

Remuneration to Managerial persons (See Schedule 21, B.1.) 52.50 33.18

Bonus 22.74 26.31

Gratuity 9.25 10.46

Staff Welfare Expenses 65.64 48.25

Employer’s Contribution to PF 19.05 17.29

Employer’s Contribution to ESI 18.50 17.85

Others 7.54 8.19

TOTAL 692.54 590.24

Schedules annexed to and forming part of Consolidated Profit & Loss Account for the year ended 31. 03. 2010


51

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Schedule - 18

ADMINISTRATIVE EXPENSES

Travelling Expenses 59.74 92.35

Rent 19.80 26.74

Professional service charges 20.29 11.43

Printing & Stationery 9.02 7.99

Telephone, Postage and Telegram 25.52 19.68

Repairs & Maintenance 26.02 17.71


Auditors Remuneration ( See Schedule 21. B .2.) 5.53 5.12

Directors Sitting fee 2.84 2.40

Rates & Taxes 11.90 11.23


Public Issue Expenses W/off 38.27 38.27

Others 78.19 70.03

TOTAL 303.85 394.81

Schedule - 19

SELLING & DISTRIBUTION EXPENSES

Freight outwards 43.41 360.81

Discount 159.48 143.43

Sales Commission 210.57 156.73

Sales Promotion Expenses 19.48 11.82

Provision for Bad / Doubtful debts 61.00 30.00

Advertisement charges 5.60 6.81

Export Claim Paid 6.79 21.32

Others 9.92 9.89

TOTAL 516.25 740.81

Schedule - 20

INTEREST AND FINANCE CHARGES

Interest - Term Loans 117.49 114.99

Interest - Other Loans 226.12 221.85

Others 171.70 127.47

TOTAL 515.31 464.31

52


Schedule - 21

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation:

This consolidated financial statements of Sree SakthiPaper Mills Ltd and Its subsidiaries, have beenprepared in accordance with Accounting standard 21(AS 21), “Consolidated Financial Statements” Issuedby the Institute of chartered accountants of India.

2. Basis of Accounting:

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

3. Revenue Recognition:

Items of income and expenditure are recognizedon accrual basis except for the following since it isnot possible to ascertain with reasonable accuracythe quantum to be provided in respect of:

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

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

c. Insurance and Other claims.

4. Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-ratabasis on straight-line method at the rates prescribedunder Schedule XIV of the Companies Act, 1956.Cost of Fixed Assets has been taken at net of CENVATavailed. Depreciation on additions/deletions iscalculated on a monthly pro-rata basis, month ofaddition is included and month of sale is excluded.

The cost of fixed assets other than those includedin the specific project comprises, its purchase priceincluding import duty and other non – refundabletaxes or levies, cost directly attributable to bringthe asset to its working condition for its intendeduse, start up and commissioning expenses on testruns and experimental production and finance costup to the date of capitalization but excludingadministration and other general overheads.

Cost of fixed assets under specific project includesall the above and directly relatable administrativeand other general overheads.

5. Investments:

Long term Investments are stated at cost lessprovision for decline in value other than temporary.Current investments are stated at lower of cost andfair market value on category of investment basis.

NOTES TO CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

6. Inventory:

Inventory of raw materials and consumablesare valued at cost or net realizable valuewhichever is lower under FIFO Method.Finished Goods are valued at cost or netrealizable value whichever is lower. Cost forthe purposes of valuation of finished goodsincludes cost of material, labour and otherdirect overheads. Stock-in-process is valuedat raw material cost plus wherever applicable,proportionate direct cost.

7. Foreign Currency Transactions:

Expenditure in foreign currency is convertedinto Indian rupees at the rate of exchangeprevailing on the date of the remittance. Liabilityin respect of foreign exchange transactionsoutstanding as at the end of the year is restatedat the exchange rate prevailing on that date.

8. Forward Contracts:

Premium or discount arising at the inceptionof forward contracts is recognized asexpense or income over the period ofcontract. Any profit or loss arising oncancellation or renewal of forward contract isrecognized as income or expense of the year.

9. Deferred tax/Income tax:

Deferred tax is accounted for, by computingthe tax effect of timing differences.

Minimum Alternative Tax and its credit areaccounted based on the Guidance notes issuedby the Institute of Chartered Accountants of India.

10. Intangible Assets:

Intangible asset, viz, computer software is statedat cost of acquisition less accumulatedamortization. Computer software is amortized overa period of 5 Years. Public issue expenses arewritten off over a period of 5 years from the yearin which the proceeds are substantially utilized.

11. Borrowing Costs.

Borrowing Costs charged to Profit & LossAccount include interest on short and long termbank borrowings. Borrowing costs attributableto qualifying assets up to the date of capitalizationare included in the cost of the asset.

12. Others:

i) Contingent Liabilities are not provided forand are disclosed in notes to the accounts.


53

ii) Gratuity and leave encashment liability isworked out based on actuarial valuationas at the end of the year.

13. Impairment:

At each of the Balance sheet date the managementreviews the carrying amount of the assets to ascertainimpairment, if any, to its assets and such losses areappropriately recognized in accounts.

14. Preliminary and Pre operative expenses are beingwritten off over a period of five years from the year ofcommencement of commercial production.

B. NOTES ON ACCOUNTS

1. Managerial Remuneration (Rs. in Lakhs)

Particulars Current Previous

Year Year

Salary 37.50 22.34

House Rent Allowance 15.00 10.73

Medical Expenses(up to 10.07.2008) - 0.11

Total 52.50 33.18

4. Sales are inclusive of Excise Duty & Cess.

5. Balances of Sundry Debtors, Sundry Creditors,Advances and Deposits are subject to confirmation.

6. Previous year figures have been rearranged / regroupedwherever necessary.

7. Assets, Loans and advances are in realizable state inthe ordinary course of business.

8. Details of Donations paid to Political parties

9. Fixed deposits with following banks is subject

to lien created to secure the LC/BG Limit

sanctioned by them.

Arising on account Total

of timing Current Up to as on

difference in Year 31.03.09 31.03.10

Deferred TaxLIability

Depreciation 70.09 693.83 763.79

Less: DeferredTax Asset

Provision for badand doubtful debt (20.05) 23.97 3.92

Provision for gratuity& leave encashments 0.44 24.72 25.20

(19.61) 48.69 29.12

Net DeferredTax Liability 89.70 645.14 734.84


CPI (M) 62500 4500

CMP 1000

CONGRESS(S) 1000

CONGRESS(I) 5500

KERALA CONGRESS 500

RSP(B) 500

CPI 500 10750

NCP 20750

Muslim League 500

Total 71500 36500

Name of Bank 2009-10 2008-09

Bank of India 31.78 41.87

Federal Bank Ltd. 109.38 116.50

Industrial Development

Bank of India Ltd. 82.69 47.39

Federal Bank Ltd.

(FD’s of Subsidiary Companies) 38.00 31.50

TOTAL 261.85 237.26

(Rs.in Lakhs)

10. Borrowing costs capitalized during this year – Rs. Nil(Previous Year – 5.08 Lakhs)

11. Lease Transactions:

a. All assets acquired under finance lease basis arecapitalized with corresponding liability recognizingthe future liability on leases. The total minimumlease payments as on the balance sheet date, interestembedded in such payments and present value oflease payments are as follows:

Rs. in Lakhs

31.03.2010 31.03.2009(Rs. lakhs) (Rs. lakhs)

Total minimumlease payments Nil 2.22

Future interestembedded in i) Nil 0.07

Present value oflease payments (i-ii) Nil 2.15

Current year figures includes an amount of Rs.17.10 lacs paid to

Whole time Director-operaitons of the company w.e.f 1.7.2009

2. Auditors Remuneration: (Rs. in lakhs)

Particulars Current Previous

Year Year

For Audit 4.12 4.11

For Tax audit 0.50 0.50

For Taxation matters 0.45 0.15

For Certification work 0.00 0.13

Out of pocket Expenses 0.46 0.36

Total 5.53 5.25

3. Deferred Tax Liability: (Rs in Lakhs)

54


b. Finance charges on lease payments amounting toNil (Previous Year Rs. 0.38 Lkahs) for the year hasbeen debited to profit and loss account under thehead interest and bank charges.

c. Lease expenses under non cancelable operatinglease during the year amounts to Rs. NIL

d. Future minimum lease payments under noncancellableoperating lease as on 31-03-2010 is as follows

Payable within One year NIL

Payable after one year but before five years NIL

12. Secured Loans

a) Car loans from ICICI Bank Ltd is on hire purchasebasis.

b) Term loans from Syndicate Bank Ltd, IndustrialDevelopment Bank of India Ltd and Federal BankLtd are secured by pari passu first charge on thefixed assets and pari passu second charge onCurrent Assets of the Company except those assetsotherwise specifically charged.

c) Cash Credit Loan from Federal bank Ltd, Bank ofIndia and Industrial Development Bank of India Ltd

are secured by pari passu first charge on the entireinventories and receivables and further secured bypari passu second charge on the entire fixed assetsof the Company.

13. Contingent Liabilities not provided for

a) Unexpired Contracts for Capital Expenditure:Rs.83.84lakhs(Previous year Rs26Lakhs)

b) Usance Letter of credit remaining unpaid as on31.03.2010 amounts to Rs. 2034.36Lakhs (Previ-ous years.Rs.1442.21Lakhs)

c) Guarantee given by bank on behalf of the Com-pany Rs. 124.60 Lakhs (Previous year Rs. 87.78Lakhs) and on behalf of subsidiary companiesRs 38.00 Lakhs. (Previous year Rs. 31.50 Lakhs)

d) Amount of Income tax liabilities disputed in appealRs.20.56Lakhs ( Previous year Rs.20.56 Lakhs)

e) Additional claims of electricity charges disputedRs.4.05 lakhs ( Previous year Rs 4.05 lakhs)

f) Sales Tax paid disputed under appeal 2005-06 Rs3.89 Lakhs, 2006-07 Rs 8.39 Lakhs and for the year2007-08 Rs 15.48 Lakhs

14. Based on the information available with the Company as at the year-end, there are no balances due to undertakingdefined under Micro, Small and Medium Enterprises development Act 2006.


The company reports basic and diluted Earnings perShare in accordance with AS 20. Basic Earnings perequity share have been computed by dividing netprofit after tax by the weighted average number ofequity shares outstanding at the end of the year.Diluted Earnings per share have been computedusing the weighted average number of equity sharesand potential equity shares outstanding at the endof the year.

Particulars 31.3.2010 31.3.2009

Profit after tax(Rs. in Lakhs) 464.75 332.20

Weighted averagenumber of shares usedas denominator forcalculating basic anddiluted earning per share 1,64,36,217 1,64,36,217

Nominal value of shares (Rs.) 10 10

Basic and dilutedearnings per share (Rs.) 2.83 2.02

Particulars

The principal amount and the interest due thereon remainingunpaid to any supplier as at the end of each accounting year. Nil Nil

The amount of interest paid by the Company along with theamounts of the payment made to the supplier beyond the appointedday during the year. Nil Nil

The amount of interest due and payable for the period of delay inmaking payment (which have been paid but beyond the appointedday during the year) but without adding the interest specifiedunder this Act. Nil Nil

The amount of interest accrued and remaining unpaid at the endof the year. Nil Nil

The amount of further interest remaining due andpayable even in the succeeding years, until such date when theinterest dues as above are actually paid to the small enterprise. Nil Nil

For the year ended

31st March, 2010

For the year ended

31st March, 2009


55

16. Current market value of the quoted investments

Rs. 41.23 Lakhs (Previous Year Rs. 22.97 Lakhs.

17. There are no amounts due and outstanding to becredited to Investor Education & Protection Fund as atMarch 31, 2010

18. Details of Employee Benefits : Disclosures

required under Accounting Standard 15 –

Employee Benefits (Revised 2005)

a. Defined Contribution Plans : During the Year, thefollowing amounts have been recognised in theProfit and Loss account on account of definedcontribution plan.

ii. Reconciliation of Opening and Closing balances ofthe present value of the defined benefit obligation:


As on

31.03.09

As on

31.03.10Particulars


Past Service Cost - -


Expected Return on

Plan Assets - -

Curtailment Cost /(Credit) - -

Settlement Cost /(Credit) - -


recognised in the period (0.25) 1.84

Expenses recognised in the

statement of Profit and

Loss Account 8.90 10.46

Rs. in Lakhs

Employers Contribution toProvident Fund 19.05 17.29

Employers Contribution toEmployee’s State Insurance 18.50 17.85

2009-10 2008-09

Rs. in Lakhs

As on

31.03.09

As on

31.03.10


Attrition Rate Modified q(x) for servicevalues under less than 5above years :1 perMortality thousand;Table for service 5

years andabove: 2 perthousand


Rate of increase incompensation level 5.00%p.a 5.00%p.a

Rate of Return onPlan Assets Not Applicable Not Applicable


b. Defined benefit Plans- Gratuity:

i. Actuarial Assumptions:

As on

31.03.09

As on

31.03.10

Rs. in Lakhs

Particulars




Benefits paid (4.92 (6.19)

Actuarial (Gain)/Loss (0.25) 1.84


As on

31.03.09

As on

31.03.10Particulars


Fare value of plan assetsat end of the period – –


UnrecognisedActuarial (Gain)/Losses - -

Net Asst/Liability tobe recognised inBalance Sheet 58.46 54.48


Rs. in Lakhs

56


The above disclosures are based on information furnishedby the independent Actuary and relied upon by the auditors.

The estimates of future Salary increases considered in theactuarial valuation takes into account of inflation, seniority,promotion and other relevant factors, such as supply anddemand in the employment market.

c. Defined benefit Plans - Leave Plan

i. Actuarial Assumptions

As on

31.03.09

As on

31.03.10


Attrition Rate Modified q(x) 1 per 1000 forvalues under service lessabove than 5 yearsMortality and 2 perTable 1000 for more

service


Inter Valuation leave 24 days per 24 days peraccrual annum annum

Rate of increase incompensation level 5.00% p.a. 5.00% p.a.

Rate of Return onPlan Assets Not Applicable Not Applicable




As on

31.03.09

As on

31.03.10

Rs. in Lakhs

Particulars


Fair value of PlanAssets at the endof the period 0 0


UnrecognisedActuarial (Gain)/Losses 0 0

Net Asset/Liability tobe recognised inBalance Sheet 15.58 18.48


As on

31.03.09

As on

31.03.10Particulars


Past Service Cost 0 0


Expected Return on

Plan Assets 0 0

Curtailment Cost /(Credit) 0 0

Settlement Cost /(Credit) 0 0


recognised in the period (19.47) (4.32)

Expenses recognised in

the statement of Profit

and Loss Account (2.89) 7.90

The above disclosures are based on information furnishedby the independent Actuary and relied upon by theauditors.

Rs. in Lakhs

As on

31.03.09

As on

31.03.10

Rs. in Lakhs

Particulars




Benefits paid - -

Actuarial (Gain)/Loss (19.47) (4.32)



57

Signatories to Schedules 1 to 21


(Rs.in Lakhs)

19. Details of Provisions Pursuant to Accounting Standard – 29 – Provisions, Contingent Liabilities and

Contingent Assets

20. Details in respect of related parties pursuant to AS 18

Closing BalanceUtilized during

the year

31.03.10 31.03.0908-0909-1008-0909-1001.04.09 01.04.08

Provision made

during the yearOpening Balance

Sundry Debtors 70.90 40.90 61.00 30.00 120.00 0 11.90 70.90

Income tax 62.73 85.90 117.45 80.57 62.73 103.74 117.45 62.73

Proposed Dividend 246.54 246.54 147.93 246.54 246.54 246.54 147.93 246.54

Corporate Dividend tax 41.90 41.90 22.85 41.90 41.90 41.90 22.85 41.90

Gratuity & Leave encashment 72.96 60.79 6.11 18.36 5.02 6.19 74.05 72.96

For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA



Sd/-


Sd/-


Sd/-

S. Rajkumar,


Sd/-

A. Padmanabhan


Sl.


Nature of

Relationship



2009-10 2008-09

Relative of KeyManagementPersonnel

Key ManagementPersonnel(Vice Chairman &Managing Director)

1. Mr. S. Raj Kumar Remuneration andAllowances 35.40 33.18

Rent 2.88 4.28

2. Mrs. Rajee Rajkumar No Transaction - –

3. Mr. S. Sivathanu Pillai Sitting Fees 0.44 0.40

4. Mrs. E. Kamalam Sitting Fees 0.24 0.24

5. Mr. S. Subramoniam Sitting Fees 0.24 0.24

6. Mr. S. Giridhar Sitting fees 0.24 0.24

7. Mr. A. Padmanabhan Key ManagementPersonnel(Whole time Director- Remunerations andOperations) Allowances 17.10 -

8. Shri Kailash Logistics Ltd. Freight Charges 166.18 191.80

9. Sree Sakthi Constructions Purchase of Fixedand Infrastructure (P) Ltd. Asset (Car) - 9.00

10. Carto Packs Purchase of Raw Material 98.90 22.49

Sale of Finished Goods 145.10 35.02

11. Sree Kailas Packagings No Transactions – –

12. Sree Ganapathy PackagingsPvt. Ltd. No Transactions – –

13. Synergy Homes Ltd. Purchase of Raw Material 318.59 -

Enterprises overwhich any personmentioned in 1 to 7above is able toexercise significantinfluence

58


CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010


2009-10

Rs. / Lakhs

2008-09

Rs. / Lakhs


For Balan & Co.


Sd/-


M. No. 20627

Partner


29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA


A. Cash Flow from Operating activitiesNet profit Before Taxation 708.45 485.35

Adjustment for:

MAT Credit Entitlement 0.00 (60.80)

Provision for Depreciation 342.53 307.65

Interest on Borrowings 338.90 336.09

Interest Income (29.80) (22.27)

Dividend income (1.59) (2.00)

Preliminary Exp W/off 38.27 38.27

Loss on sale of fixed assets 0.60 688.91 0.00 596.94

Operating profit before working capital changes 1397.36 1082.29

(Increase)/Decrease in Sundry Debtors 282.50 (182.36)

(Increase)/Decrease in Loans & Advances 32.37 (110.64)

(Increase)/Decrease in Inventories 87.26 (358.77)

Increase/(Decrease) in Sundry Creditors & Other liabilities (168.63) 233.50 308.30 (343.47)

Cash from operations 1630.86 738.82

Income tax paid 103.80 (48.42)

Net cash from operating activities 1527.06 690.40

B. Cash Flow from Investing ActivitiesPurchase of Fixed assets (406.26) (782.47)

Sale of Fixed assets 9.45 22.27

Interest Income 29.80 (3.00)

Purchase of Investments 0.00 (7.77)


Net cash from Investing activities (365.42) (768.97)

C. Cash Flow from Financing ActivitiesProceeds from Long term Borrowings 50.50 295.59

Proceeds from Short term Borrowings 250.00 633.95

Minority Interest 0.00 15.90

Repayment of Long term Borrowings (299.69) (263.53)

Repayment of Short term Borrowings (324.16) 0.00

Interest on borrowings (336.16) (338.30)

Dividend & Corporate Dividend Tax paid (459.22) (288.44)

Net Cash flow from Financing Activities (1,118.74) 55.17

Net Increase/(Decrease) in Cash & Cash Equivalents 42.91 (23.40)

Cash & Cash Equivalents as on 31/3/09 320.53 343.95

Cash & Cash Equivalents as on 31/3/10 363.45 320.53


Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan



59

Information pursuant to the provisions of Part IV of Schedule VI to the Companies Act, 1956

CONSOLIDATED BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE


- In respect of Holding Company

Registration Number L21012KL1991PLC006207

State Code Number 09

Balance Sheet date 31st March 2010

- In respect of Subsidiary Companies

Cochin-16

29-05-2010

Sd/-

Binu Alex V., ACS

Company Secretary

Sd/-

Rajesh R., FCA


Registration Number U40100KL2008PLC022143 U40100KL2008PLC022144 U40100KL2008PLC022145

State Code Number 9 9 9

Balance Sheet date 31st March 2010 31st March 2010 31st March 2010

NameJalashaayi Alamparathodu

Hydro Power Limited

Sree Adisakthi Mukkuttathode

Hydro Power Limited

Sree Kailas Palchuram

Hydro Power Limited

(Amount in Thousands)b) Capital raised during the year

Public Issue NilRight Issue NilBonus Issue NilPrivate Placement Nil

c) Position of Mobilisation and Deployment of Funds (Amount in Thousands)

Total Liabilities 7,36,800

Total Assets 7,36,800

Sources of funds

Paid-up Capital 1,64,362

Reserves & Surplus 2,01,150

Secured Loans 2,53,154

Unsecured Loans 42,978

Minority Interest 1,671

Deferred Tax Liability 73,485


Net Fixed Assets 4,82,721

Investments 7,436

Net Current Assets 2,42,039

Miscellaneous Expenditure 4,604

d) Performance of the Company

Turn over (including other income) 14,32,784

Total Expenditure 13,61,939

Profit before Tax 70,845

Profit after Tax 46,475

Earnings per share (Rs.) 2.83

Dividend rate percentage (%) 18e) Generic names of three principle products of the Company:

ITC Code No. Description1 6413 Kraft Paper from Non-Conventional raw

materials like waste paper Kraft cuttings2 48101209 Paper Board coated with china clay

using Unconventional raw materials


Sd/-


Sd/-


Sd/-

S. Rajkumar


Sd/-

A. Padmanabhan


60

Jalashaayi Alamparathode Hydro Power Limited

DIRECTORS’ REPORT

YOUR Directors have pleasure in presenting the 2nd AnnualReport and the Audited Statement of Accounts of the

Company for the year ended 31st March 2010.

1. REVIEW OF OPERATIONS 2009-2010

As reported in the previous year's Report, the companyhad discussions with Government of Kerala for theassistance in connection with the land acquisition for

the project and survey of the lands to be acquired isgoing on. Once the survey is completed, applicationwill be submitted to the government for acquisition of

land. TEFR for the project had been already approvedand discussions are being carried with variousFinanciers / Venture Capital Fund Groups for financial

arrangements to implement the project.

2. FINANCIAL PERFORMANCE

The Company has not gone into operations, but theincome is from other sources.

Particulars

For the

year ended

31.03.2009

Interest income 98660 93503

Less : Expenses 59923 8263

Profit before tax 38737 85240

Less: Provision for tax 30500 30500

Less: Income taxprovision w/back 524 0

Profit after tax 7713 54740

Balance carried toBalance sheet 63453 54740

B. Disclosure of particulars with respect to

technology Absorption as per as per Form B

A. RESEARCH AND DEVELOPMENT (R&D)

1. Specific Areas in which ( R& D)

carried out by the Company : Nil

2. Benefit derived as a result of theabove R&D : Nil

3. Future plan of action : Nil

4. Expenditure on R&D : Nil

B TECHNOLOGY ABSORPTION, ADAPTIONINNOVATION: No technology imported andtherefore furnishing of other details does not arise.

C. Foreign exchange earnings and out-go : Nil

D. Particulars of Employees

No employee has been paid remuneration as perthe limits prescribed under section 217 (2A) of the

Act . Hence furnishing of the Report under sectionis not applicable.

4. BOARD OF DIRECTORS

In accordance with Article 84 of the Articles ofAssociation of the Company, Mr.S. Giridhar directorof the Company retire on rotation, and he being

eligible offer himself for re-appointment. Necessaryresolution in this behalf has been proposed forconsideration of members.

5. AUDITORS

M/s. Balan & Co. Chartered Accountants, the

present Auditors of the Company retire and areeligible for re-appointment and the proposalh a s b een p l a c ed be f o r e you . Nece s s a r y

certificate has been obtained from the Auditorsas per section 224(1) of the Companies Act,1956.

6. SECRETARIAL AUDIT REPORT

The Secretarial Audit Report as envisaged under

section 383 A of the Companies Act,1956,obtained from Company Secretary in Practice,Mr. N. Balasubramanian, Sree Krishna Kumara

Vihar,43/1355, St. Benedicts 3 rd Cross Road,Cochin – 682 018, Kerala is annexed as part ofDirectors’ Report.

For the

year ended

31.03.2010

3. PARTICULARS UNDER SECTION 217

A. Conservation of Energy

a) Energy conservation measures taken : Nil

b) Additional investments and proposals,if any, being implemented for reduction

of consumption of energy; : Nil

c) Impact of measures at (a) and (b)above for reduction of energy

consumption and consequent impacton the cost of production of goods; : Nil

d) Total energy consumption and energyper Unit of production in Form A : N A


61

7. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA)of the Companies Act, 1956 Directors report that

1. In the preparation of the annual accounts for thefinancial year ended 31st March 2010 the applicableaccounting 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 judgmentsand estimates that were reasonable and prudentso as to give a true and fair view of the state of

affairs of the Company at the end of the financialyear and of the profit of the company for the yearunder review.

3. The Directors had taken proper and sufficient carefor the maintenance of adequate accountingrecords in accordance with the provisions of the

Act, for safeguarding the assets of the company

Sd/- Sd/- Sd/-

S.Sivathanu Pillai S.Rajkumar S.Giridhar

Director Director Director

Cochin-16

Date : 29.05.2010

and for preventing and detecting fraud and other

irregularities.

4. The directors had prepared the Annual Accounts

for the financial year ended 31st March 2010on a ‘going concern’ basis.

8. ACKNOWLEDGEMENT

Your directors wish to thank the Governmentauthorities, Banks, Shareholders and employees of

the company for their continued co- operation andsupport.

By and on behalf of the Board of Directors

62


Registration No. of the Company : U40100KL2008PLC022143

Nominal Capital : Rs. 10 lakhs

To

The Members ofM/s. JALASHAAYI ALAMPARATHODE HYDRO POWER LIMITED57/2993, Sree Kailas, Paliam Road, Cochin – 682 016.

We have examined the registers, records, books and papers of M/s. JALASHAAYI ALAMPARATHODU HYDRO POWERLIMITED (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules madethereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for thefinancial year ended on 31st March 2010. In our opinion and to the best of our information and according to theexaminations carried out by us and explanations furnished to us by the Company, its officers and agents, we certify that inrespect of the aforesaid financial year:-

1. The Company has kept and maintained all registers as stated in Annexure “A” to this certificate, as per the provisionsand the rules made thereunder and all entries therein have been duly recorded.

2. The Company has duly filed the forms and returns as stated in Annexure “B” to this certificate, with the Registrar ofCompanies, Regional Director, Central Government, Company Law Board or other authorities within the time pre-scribed under the Act and the rules made thereunder.

3. The Company, being a public limited company, comments is not required.

4. The Board of Directors met 5 times on 25.06.2009, 26.08.2009, 25.11.2009, 25.02.2010 and 31.03.2010 in respectof which meetings proper notices were given and the proceedings were properly recorded and signed, in the MinutesBook maintained for the purpose.

5. The Company has not closed/was not required to close its Register of Members during the financial year.

6. The Annual General Meeting for the financial year ended on 31st March 2009 was held on 26th August 2009 aftergiving due notice to the members of the Company, and the resolutions passed thereat were duly recorded in MinutesBook maintained for the purpose.

7. No Extra Ordinary Meetings were held during the financial year.

8. The Company has not advanced any loans to its Directors or persons or firms or Companies referred to under Section295 of the Act, as certified by the Management.

9. The Company has not entered into any contracts falling within the purview of Section 297 of the Act, as certified bythe Management.

10. The Company has made necessary entries in the register maintained under Section 301 of the Act, as certified by theManagement.

11. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained anyapprovals from the Board of Directors, Members or Central Government, as the case may be.

12. The Company has not issued any duplicate certificates during the financial year.

13. (i) There was no allotment/ transfer/ transmission of securities during the financial year.

(ii) The Company has not deposited any amount in a separate Bank Account as no dividend was declared during thefinancial year.

(iii) The Company was not required to post warrants to any member of the company as no dividend was declaredduring the financial year.

COMPLIANCE CERTIFICATE


63

(iv) The Company was not required to transfer any amount to Investor Education and Protection Fund, during thefinancial year.

(v) The Company has duly complied with the requirements of Section 217 of the Act.

14. The Board of Directors of the Company is duly constituted. There was no appointment of additional directors,alternate directors and directors to fill casual vacancies during the year.

15. The Company has not appointed any Managing Director/ Whole-time Director/ Manger during the financial year.

16. The Company has not appointed any sole selling agents during the financial year.

17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, RegionalDirector, Registrar of Companies and/or such other authorities prescribed under the various provisions of the Act.

18. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made there under.

19. The Company has not issued any shares, debentures or other securities during the financial year.

20. The Company has not bought back any shares during the financial year.

21. There was no redemption of preference shares or debentures during the financial year.

22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares andbonus shares pending registration of transfer of shares.

23. The Company has not invited/accepted any deposits including any unsecured loans falling within the purview ofSection 58A during the financial year, as certified by the Management.

24. The Company has not made any borrowings during the financial year ending 31st March 2010.

25. The Company has not, during the financial year, made any loans or advances or given guarantees or providedsecurities to other bodies corporate and consequently no entries have been made in the register kept for the purpose,as certified by the Management.

26. The Company has not altered the provisions of the Memorandum with respect to situation of the Company's regis-tered office from one state to another during the year under scrutiny.

27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company duringthe year under scrutiny.

28. The Company has not altered the provisions of the Memorandum with respect to the name of the Company during theyear under scrutiny.

29. The Company has not altered the provisions of the Memorandum with respect to the share capital of the Companyduring the year under scrutiny.

30. The Company has not altered its articles of association during the financial year, except for change of name of theCompany.

31. There was/were no prosecutions initiated against or show cause notices received by the Company during the financialyear, for offences under the Act.

32. The Company has not received any money as security from its employees during the financial year.

33. The Company has not constituted a separate provident fund trust for its employees or class of its employees ascontemplated under Section 418 of the Act, as certified by the Management.

Place : Cochin-18Date : 29.05.2010

Sd/-

N. Balasubramanian

Company SecretaryC.P. No. 4996

64


JALASHAAYI ALAMPARATHODE HYDRO POWER LIMITED

Company No. U40100KL2008PLC022143

Secretarial Compliance Certificate for the year ended 31.03.2010

Annexure A

Registers as maintained by the Company:

Statutory Registers:

1. Register of Charges u/s 1432. Register of Members u/s 1503. Registers and Returns u/s 1634. Books of Account u/s 2095. Register of Directors, Managing Director, Manager and Secretary u/s 3036. Register of Directors' Shareholdings u/s 3077. Minutes Book of Meetings8. Register of contracts u/s 297, 299 and 301

Annexure B

Forms and returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government and

other authorities during the financial year ended on 31st March 2010.

◆ With Registrar of Companies

1. e-Form 20B with 159 Made upto P36840791 Yes N.A.Annual Return 26.08.2009 22.10.2009

attached

2. e-Form 23AC with 220 The Financial year P34897488 Yes N.A.Balance Sheet and ended 31.03.2009 24.09.2009

other annexuresattached and e-Form23ACA with Profit

and Loss Accountattached

3. e-Form 66 with 383 (A) The financial year P34893065 Yes N.A.

Compliance ended 31.03.2009 24.09.2009Certificate attached

◆ With Regional Director : NIL

◆ With Central Government or other authorities : NIL

Sl.No. Form No/Return

Filed underSection

For Date of Filing/Uploading

Whether filedwithin the

prescribed timeYes/No

If delay in filingwhether requisiteadditional fee paid

Yes/No


65

To the MembersM/s. Jalashaayi Alamparathode Hydro Power Limited


Jalashaayi Alamparathodu Hydro Power Limited, as at31st March, 2010 and also Profit and Loss Accountand Cash Flow Statement of the Company for the year

ended on that date annexed there to. These financialstatements are the responsibility of the Company'sManagement. Our responsibility is to express an opin-

ion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing

standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial state-

ments are free of material misstatements. An audit in-cludes examining on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting prin-

ciples used and significant estimates made by manage-ment, as well as evaluating the overall financial state-ment presentation. We believe that our audit pro-

vides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Or-

der, 2003, as amended by the Companies (Auditor'sReport) Amendment Order, 2004 issued by the Gov-ernment of India in terms of sub section (4A) of sec-

tion 227 of the Companies Act, 1956, we enclose inthe annexure a statement on the matters specified inparagraph # 4 and 5 of the said order.


a. We have obtained all the information and expla-nations, which to the best of our knowledge andbelief were necessary for the purpose of our audit.


books.

AUDITOR’S REPORT


Phone: 0484-23606632360773

Fax: 2360773A. Mohanan : 3950630


c. The Balance Sheet, Profit and Loss account andCash Flow statement dealt with by this report arein agreement with the books of account.

d. The Balance Sheet Profit and Loss account andCash Flow statement dealt with by this report com-

ply with the accounting standards referred to insub section (3C) of section 211 of the CompaniesAct, 1956.

e. On the basis of written representations receivedfrom the directors and placed before the Board,we report that none of the Directors is disquali-

fied as on 31st March 2010 from being appointedas a Director in terms of clause (g) of sub section(1) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our informationand according to the explanations given to us, the

said accounts read together with the SignificantAccounting Policies and the notes thereon givethe information required by the Companies Act,

1956, in the manner so required and give a trueand fair view in conformity with the accountingprinciples generally accepted in India:

1. In the case of the Balance Sheet, of the 'state ofaffairs' of the company as at 31st March '10

2. In the case of the Profit and Loss account, ofthe profit of the company for the year on thatdate, and

3. In the case of Cash Flow Statement, of the cashflows for the year ended on that date.

For BALAN & CO.


Sd/-

Place : Cochin-11 A. MOHANAN B.Sc, FCA, DISA

Date : 29.05.’10 Partner (M.No.20627)

66


Referred to in paragraph 3 of our report of even date

(i) The company has no fixed assets. Hence we are notreporting on the maintenance of records/ particulars/ physical verification / disposal of fixed assets.

(ii) The company has no inventory throughout the year.Hence we are not reporting on physical verification /procedure / records of inventory.

(iii) (a) The Company has not granted loans to personscovered in the register maintained under section301 of the Companies Act, 1956, except advances inthe ordinary course of business.

(b) The company has not taken any loans ,secured orunsecured from companies, firms, or other parties cov-ered in the register maintained under section 301 ofthe Companies Act,1956 except interest free advancereceived from the holding company terms of whichare not prejudicial to the interest of the company.

(iv) In our opinion and according to the information andexplanations given to us, there is adequate internalcontrol system commensurate with the size of thecompany and nature of its business for the purchaseof inventory and fixed asset and for sale of goods.There is no continuing failure to correct any majorweaknesses in internal control.

(v) (a) In our opinion and according to the explanationsgiven to us, all particulars of contractsor arrangements referred to in section 301 of theAct have been entered in the registerrequired to be maintained in that section.

(b) In our opinion and according to the informationand explanations given to us, the transactions madein pursuance of contracts or arrangements enteredin the register maintained under section 301 of theCompanies Act, 1956 during the year have beenmade at prices which are reasonable having regardto prevailing market prices at the relevant time.

vi) The company has not accepted deposits from thePublic. Hence provisions of Clause 4(vi) of the Orderare not applicable to the Company.

vii) On the basis of the test checks conducted by us andas per the explanations given to us the Company hasan internal audit system commensurate with the sizeand nature of its business.

(viii) The company has not yet started implementation ofthe power project. Hence we are informed that it hasnot maintained books and records pursuant to theorder of the Central Government u/s 209(1)(d) of theCompanies Act, 1956.

(ix) (a) According to the information given to us and onthe basis of the checks conducted by us we report

that the company has been generally regular indepositing undisputed statutory dues except ad-vance tax for the financial year 2009-10 amount-ing to Rs.9,248/- and income tax payable for thefinancial year 2008-09 amounting to Rs 25,332/- ,remaining unpaid for a period exceeding sixmonths as on the end of the year.

(b) No dues of Income tax remains not deposited onaccount of any disputes.

(x) The Company has no accumulated losses and has notincurred a cash loss during the financial year coveredby our audit.

(xi) In our opinion and according to the information andexplanation given to us the Company has no dues tofinancial institutions and banks.

(xii) The Company has not granted loan and advance onthe basis of security by way of pledge of shares, de-bentures and other securities.

(xiii) The Company is not a chit fund or a nidhi or a mu-tual benefit fund/Society. Therefore, provisions ofclause of the Companies Auditors Report Order 2003are not applicable to the company.

(xiv) The Company is not dealing in or trading in shares,securities, debentures and other investments. Therefore,provisions of clause (xiv) of the Companies AuditorsReport Order 2003 are not applicable to the company.

(xv) According to the information and explanations given tous the company has not given any guarantee for loantaken by others from banks or financial institutions.

(xvi) To the best of our knowledge and belief and accord-ing to the information and explanations given to us,the company has not availed any term loans.

(xvii) According to the information and explanations givento us and on an overall examination of the BalanceSheet of the Company, we are of the opinion that thecompany has not raised any funds on short term basis.

(xviii)Company has not made any preferential allotment ofshares during the year.


(xx) The company has not raised any money by public issue.

(xxi) To the best of our knowledge and belief and accord-ing to the information given to us no material fraudon or by the company was noticed or reported dur-

ing the year.

For BALAN & CO.Chartered Accountants

Sd/-



67

BALANCE SHEET AS ON 31ST MARCH 2010

Subject to our report of even date attached

Cochin-11

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-

S. Giridhar, Director

Sd/-

S. Sivathanu Pillai, Director

By the order of the Board

Sd/-

S. Rajkumar, Director

Schedule

No.

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

SOURCES OF FUNDS

Share Capital 1 1,000,000.00 1,000,000.00

Reserves & Surplus 2 62,453.00 54740.00

Secured Loans – –

Unsecured Loans 3 536,413.00 536,413.00

Total 1,598,866.00 1,591,153.00


Fixed Assests

a) Gross Block – –

b) Depreciation Block – –

c) Net Block – –

– –

Investments

Current Assests, Loans & Advanes

a) Cash & Bank Balance 4 1,374,658.00 1,369,605.00

b) Loands and Advances 5 120,752.00 92,762.00

Total Current Assests 1,495,410.00 1,462,367.00

Less : Current Liabilities & Provisions 6

Current Liabilities 29,190.00 3,860.00

Provisions 30,500.00 30,500.00

Total Current Liabilities 59,690.00 34,360.00

Net Current Assets 1,435,720.00 1,428,007.00

Miscellaneous Expenditures to the extent not Written offPre- Operative Expenses 107,989.00 107,989.00

Preliminary Expenses 55,157.00 55,157.00

Total 1,598,866.00 1,591,153.00

Notes on accounts 7

68


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2010


Cochin-11

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-




Schedule

No.

INCOME

Interest Received From Fixed Deposit 98,660.00 93,503.00

98,660.00 93,503.00

EXPENDITURE

Audit Fee 3,860.00 3,860.00

Statutory Charges 4,900.00 4,403.00

Bank Charges 6,729.00 –

Salary and Allowance 38,499.00 –

Travelling Expenses 5,935.00 –

59,923.00 8,263.00

Profit / (Loss) Before Tax 38,737.00 85,240.00

Provision for Taxation 30,500.00 30,500.00

8,237.00 54,740.00

Income Tax Provision W/off / (W/Back) 524 –

Profit / (loss) After Tax 7,713.00 54,740.00

Profit / (loss) Carried forward from earlier years 54,740.00 –

Balance Carried to Balance Sheet 62,453.00 54,740.00

Basic & Diluted Earnings Per Share 0.08 0.55


69

Schedules forming part of Balance Sheet as at 31.03.2010

(Amount in Rs.)

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

Schedule 1: SHARE CAPITAL

AUTHORISED CAPITAL

1,00,000 Equity Shares of Rs 10/- each 1,000,000.00 1,000,000.00

Total 1,000,000.00 1,000,000.00

ISSUED, SUBSCRIBED AND PAID UP CAPITAL

1,00,000 Equity Shares of Rs 10/- each (of the above 47,001Equity shares are held by the holding Company) 1,000,000.00 1,000,000.00

Total 1,000,000.00 1,000,000.00

Schedule 2: RESERVES AND SURPLUS

Profit and Loss account 62,453.00 54,740.00

Total 62,453.00 54,740.00

Schedule 3: UNSECURED LOANS

Advances from Holding Company 536,413.00 536,413.00

Total 536,413.00 536,413.00

Schedule 4: CASH AND BANK BALANCE

Cash in Hand - -

Balance with Federal Bank limited current account 174,658.00 169,605.00

Fixed Deposit with Federal Bank Ltd. 1,200,000.00 1,200,000.00

Total 1,374,658.00 1,369,605.00

Schedule 5: LOANS AND ADVANCES

Advances recoverable in Cash or In Kind(Unsecured and cosidered good) - -

Advance Tax .A.Y 2009-2010 9,940.00 9,554.00

Interest Receivable on fixed deposit 110,812.00 83,208.00Total 120,752.00 92,762.00

Schedule 6: CURRENT LIABILITIES AND PROVISIONS

a) Current Liabilities

Other Liabilities 29,190.00 3,860.00

b) Provisions

Provision for Income Tax .Ay.2009-10 – 30500.00

Provision for Income Tax .Ay.2010-11 30,500.00 –

Total 59,690.00 34,360.00

70


SCHEDULE - 7 Notes on Accounts

1. Background

The Company is engaged in the business of generation and distribution of electricity and trading in power generatingequipments and proposing to set up a hydro electric project.

2. Significant Accounting Policies

a. Basis of Accounting:

The accounts of the Company are prepared under the historical cost convention on accrual basis as a goingconcern.

b. Deferred tax / Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences.

c. Preliminary expenses:

Preliminary and pre-operative expenses standing, as on 31.03.2010 is Rs.55,157/- and Rs.107,989/- respectively.The company is writing off preliminary and pre-operative expenses over a period of five years from the year ofcommencement of commercial production.

3. Auditors Remuneration

Particulars Rs. in Lacs

For Audit 0.04

For Certification 0.04

Total 0.08


The company reports basic and diluted Earnings Per Share in accordance with AS 20. Basic Earnings per equity sharehave been computed by dividing net profit after tax by the weighted average number of equity shares outstanding atthe end of the year. Diluted Earnings per share have been computed using the weighted average number of equityshares and potential equity shares outstanding at the end of the year.

31.3.2010

Profit after tax 7713.00

Weighted average number of shares used as denominatorfor calculating basic and diluted earning per share 100,000

Nominal value of shares 10

Basic and diluted earnings per share (Rs.) 0.77

5. Based on the information available with the Company as at the year-end, there are no balances due to undertakingdefined under Micro, Small and Medium Enterprises development Act, 2006.


71

6. Fixed Deposit amounting to Rs.12,00,000/- has been given as security for guarantee given by the Bank.

7. The Company has no Deferred Tax Asset/Liability

8. Contingent Liability: Guarantee given by the Bank in favour of Government Of Kerala (Power Department) amountingto Rs.12,00,000/-

9. Details in respect of related party transactions in pursuant of AS-18

SI. No. Name Transactions As on 31.03.10

1 Holding Company, Sree Sakthi Paper Mills Ltd. Holding interest in the company 470,010/-Unsecured loan accepted 536,413/-

2 Subsidiaries Nil Nil

3 Key Managerial Persons Nil Nil

4 Relatives of Key Managerial Persons Nil Nil

5 Enterprises over which the abovepersons have substantial interest Nil Nil

ParticularsFor the year ended

31st March, 2010

The principal amount and the interest due thereon remainingunpaid to any supplier as at the end of each accounting year. Nil

The amount of interest paid by the Company along with the amountsof the payment made to the supplier beyond the appointed day during the year. Nil

The amount of interest due and payable for the period of delay in makingpayment (which have been paid but beyond the appointed day during the year)but without adding the interest specified under this Act. Nil

The amount of interest accrued and remaining unpaid at the end of the year. Nil

The amount of further interest remaining due and payable even in the succeeding years,until such date when the interest dues as above are actually paid to the small enterprise. Nil


Cochin-16

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


72


CASH FLOW STATEMENT FOR THE YEARD ENDED 31.03.2010



Cochin-11

20-06-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


2009-2010

Rs. / Lakhs

2008-2009

Rs. / Lakhs

A Cash Flow from Operating activities:

Net profit before taxation 38,737.00 85,240.00

Adjustments for:

Interest Income (98,660.00) (93,503.00)

Operating Profit before working capital changes (59,923.00) (8,263.00)

Increase In loans & Advances (27,990.00) (92,762.00)

Increase in other Liabilities (5,694.00) 3,860.00

Cash flow from Operations (93,607.00) (97,165.00)

Income tax paid 0 0.00

Net Cash from Operating activities (93,607.00) (97,165.00)

B Cash Flow from Investing Activities

Interest Income 98,660.00 93,503.00

Preliminary Expenses and preoperative expenses - (163,146.00)

Net Cash from Investing Activities 98,660.00 (69,643.00)

C Cash Flow from Financing Activities

Proceeds from Long Term Borrowings - 536,413.00

Increase in Share capital - 1,000,000.00

Net Cash from Financing activities 0.00 1,536,413.00

Net Increase/(Decrease) in Cash & Cash Equivalents 5,053.00 1,369,605.00

Cash & cash equivalents as on 01.04.09 1,369,605.00 0.00

Cash & cash equivalents as on 31.03.10 1,374,658.00 1,369,605.00


73

Information pursuant to the provisions of Part IV of Schedule VI to the

Companies Act, 1956

Balance Sheet abstract and Company’s general business profile


Registration Number U40100KL2008PLC022143

State Code Number 9


b) Capital raised during the year (Amount in thousands)

Public Issue Nil

Right Issue Nil

Bonus Issue Nil

Private Placement 1000


Total Liabilities 1598

Total Assets 1598

Sources of funds

Paid-up Capital 1000

Reserves & Surplus 62

Secured Loans

Unsecured Loans 536

Deferred Tax Liability Nil


Net Fixed Assets Nil

Investments Nil

Net Current Assets 1435

Miscellaneous Expenditure 163


Turn over (including other income) 99

Total Expenditure 60

Profit before Tax 39

Profit after Tax 8


Dividend rate percentage (%) Nil

e) Generic names of three principle products of the Company:

ITC Code No Description

4911 Electric Power Generation

Cochin-16

29-05-2010

By Order of the Board

Sd/-

S. Sivathanu Pillai

Director

Sd/-

S. Raj Kumar

Director

Sd/-

S. Giridhar

Director

74

Sree Adisakthi Mukkuttathode Hydro Power Limited

DIRECTORS’ REPORT

YOUR Directors have pleasure in presenting the 2nd AnnualReport and the Audited Statement of Accounts of theCompany for the year ended 31st March 2010.


As reported in the previous year's Report, the surveyof the land for the proposed acquisition for the project

had been completed and necessary applicationsubmitted to the Government of Kerala. The companyis following up with Government of Kerala for

assistance in connection with the land acquisition forthe project.. TEFR for the project had been alreadyapproved and discussions are being carried with various

Financiers / Venture Capital Fund Groups for financialarrangements to implement the project.






b) Additional investments and proposals,

if any, being implemented for reductionof consumption of energy; : Nil



d) Total energy consumption and energy

per Unit of production in Form A : N A




1. Specific Areas in which ( R& D)

carried out by the Company : Nil




B TECHNOLOGY ABSORPTION, ADAPTIONINNOVATION: No technology imported andtherefore furnishing of other details does not

arise.



No employee has been paid remuneration as per thelimits prescribed under section 217 (2A) of the Act.

Hence furnishing of the Report under section is notapplicable.


In accordance with Article 84 of the Articles ofAssociation of the Company, Mr. S.Giridhar

director of the Company retire on rotation, and hebeing eligible offer himself for re-appointment.Necessary resolution in this behalf has been

proposed for consideration of members.

5. AUDITORS

M/s. Balan & Co. Chartered Accountants, thepresent Auditors of the Company retire and areeligible for re-appointment and the proposal has

been placed before you. Necessary certificate hasbeen obtained from the Auditors as per section224(1) of the Companies Act, 1956.


The Secretarial Audit Report as envisaged under

sect ion 383 A of the Companies Act ,1956,obtained from Company Secretary in Practice,Mr. N. Balasubramanian, Sree Krishna Kumara

Vihar, 43/1355, St. Benedicts 3 rd Cross Road,Cochin – 682 018, Kerala is annexed as part ofDirectors’ Report.

Particulars

For the

year ended

31.03.2009





Add: Income taxprovision w/back 1976 0

Profit after tax 37491 47042

Balance carried toBalance sheet 84533 47042

For the

year ended

31.03.2010


75

Sd/- Sd/- Sd/-

S.Sivathanu Pillai S.Rajkumar S.Giridhar


Cochin-16

Date : 29.05.2010






and applied them consistently and made judgmentsand estimates that were reasonable and prudentso as to give a true and fair view of the state of





irregularities.


for the financial year ended 31st March 2010 on a‘going concern’ basis.

8. ACKNOWLEDGEMENT




76




To

The Members ofM/s. SREE ADI SAKTHI MUKKUTTATHODE HYDRO POWER LIMITED57/2993, Sree Kailas, Paliam Road, Cochin – 682 016.

We have examined the registers, records, books and papers of M/s. SREE ADI SAKTHI MUKKUTTATHODE HYDROPOWER LIMITED (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rulesmade thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for thefinancial year ended on 31st March 2010. In our opinion and to the best of our information and according to theexaminations carried out by us and explanations furnished to us by the Company, its officers and agents, we certify that inrespect of the aforesaid financial year:-

1. The Company has kept and maintained all registers as stated in Annexure “A” to this certificate, as per the provisionsand the rules made thereunder and all entries therein have been duly recorded.

2. The Company has duly filed the forms and returns as stated in Annexure “B” to this certificate, with the Registrar ofCompanies, Regional Director, Central Government, Company Law Board or other authorities within the time pre-scribed under the Act and the rules made thereunder.






8. The Company has not advanced any loans to its Directors or persons or firms or Companies referred to under Section295 of the Act, as certified by the Management.





13 (i) There was no allotment/ transfer/ transmission of securities during the financial year.

(ii) The Company has not deposited any amount in a separate Bank Account as no dividend was declared during thefinancial year.




77













24. The Company has not made any borrowings during the financial year ending 31st March 2010.

25. The Company has not, during the financial year, made any loans or advances or given guarantees or providedsecurities to other bodies corporate and consequently no entries have been made in the register kept for the purpose,as certified by the Management.

26. The Company has not altered the provisions of the Memorandum with respect to situation of the Company's regis-tered office from one state to another during the year under scrutiny.


28. The Company has not altered the provisions of the Memorandum with respect to the name of the Company during theyear under scrutiny.



31. There was/were no prosecutions initiated against or show cause notices received by the Company during the financialyear, for offences under the Act.



Place : Cochin-18Date : 29.05.2010

Sd/-

N. Balasubramanian


78


SREE ADI SAKTHI MUKKUTTATHODE HYDRO POWER LIMITED

Company No. U40100KL2008PLC022144


Annexure A



1. Register of Charges u/s 1432. Register of Members u/s 1503. Registers and Returns u/s 1634. Books of Account u/s 2095. Register of Directors, Managing Director, Manager and Secretary u/s 3036. Register of Directors' Shareholdings u/s 3077. Minutes Book of Meetings8. Register of contracts u/s 297, 299 and 301

Annexure B

Forms and returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government andother authorities during the financial year ended on 31st March 2010.





attached







Filed underSection





Yes/No

NB :- 1) The Company has produced only the above forms for my verification and reporting.

2) The above forms have been filed/uploaded using the digital signature of Director/Managing Director.


79

To the MembersM/s. Sree Adisakthi Mukkuttathode Hydro Power Limited


Sree Adisakthi Mukkuttathode Hydro Power Limited,as at 31st March, 2010 and also Profit and Loss Ac-count and Cash Flow Statement of the Company for

the year ended on that date annexed there to. Thesefinancial statements are the responsibility of theCompany's Management. Our responsibility is to ex-

press an opinion on these financial statements basedon our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain

reasonable assurance about whether the financial state-ments are free of material misstatements. An audit in-cludes examining on a test basis, evidence supportingthe amounts and disclosures in the financial statements.

An audit also includes assessing the accounting prin-ciples used and significant estimates made by manage-ment, as well as evaluating the overall financial state-

ment presentation. We believe that our audit pro-vides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Or-der, 2003, as amended by the Companies (Auditor'sReport) Amendment Order, 2004 issued by the Gov-

ernment of India in terms of sub section (4A) of sec-tion 227 of the Companies Act, 1956, we enclose inthe annexure a statement on the matters specified in

paragraph # 4 and 5 of the said order.


a. We have obtained all the information and expla-nations, 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 requiredby law have been kept by the company in so far as

appears from our examination of those books.

AUDITOR’S REPORT

BALAN & CO.

Chartered Accountants39/181 D, ‘Anantha’, Mahakavi ‘G’ RoadKarikkamuri, Kochi - 682 011

Phone: 0484-23606632360773

Fax: 2360773A. Mohanan : 3950630



Cash Flow statement dealt with by this report are

in agreement with the books of account.

d. The Balance Sheet Profit and Loss account and

Cash Flow statement dealt with by this report com-

ply with the accounting standards referred to in

sub section (3C) of section 211 of the Companies

Act, 1956.

e. On the basis of written representations received

from the directors and placed before the Board,

we report that none of the Directors is disquali-

fied as on 31st March 2010 from being appointed

as a Director in terms of clause (g) of sub section

(1) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information

and according to the explanations given to us, the

said accounts read together with the Significant

Accounting Policies and the notes thereon give

the information required by the Companies Act,

1956, in the manner so required and give a true

and fair view in conformity with the accounting

principles generally accepted in India:

1. In the case of the Balance Sheet, of the 'state of

affairs' of the company as at 31st March '10


the profit of the company for the year on that

date, and

3. In the case of Cash Flow Statement, of the cash

flows for the year ended on that date.

For BALAN & CO.


Sd/-

Place : Cochin-11 A. MOHANAN B.Sc, FCA, DISA

Date : 29.05.’10 Partner (M.No.20627)

80



(i) The company has no fixed assets. Hence we are notreporting on the maintenance of records/ particulars/ physical verification / disposal of fixed assets.



(b) The company has not taken any loans ,secured or un-secured from companies, firms, or other parties cov-ered in the register maintained under section 301 ofthe Companies Act,1956 except interest free advancereceived from the holding company terms of which arenot prejudicial to the interest of the company.

(iv) In our opinion and according to the information andexplanations given to us, there is adequate internalcontrol system commensurate with the size of thecompany and nature of its business for the purchaseof inventory and fixed asset and for sale of goods.There is no continuing failure to correct any majorweaknesses in internal control.

(v) (a) In our opinion and according to the explanationsgiven to us, all particulars of contracts or arrange-ments referred to in section 301 of the Act havebeen entered in the register required to be main-tained in that section.



vii) On the basis of the test checks conducted by us andas per the explanations given to us, the Company hasan internal audit system commensurate with the sizeand nature of its business.

(viii) The company has not yet started implementation ofthe power project. Hence we are informed that ithas not maintained the books and records pursuantto the order of the Central Government u/s 209(1)(d)of the Companies Act, 1956.

(ix) (a) According to the information given to us and onthe basis of the checks conducted by us we report

that the company has been generally regular indepositing undisputed statutory dues except ad-vance tax for the financial year 2009-10 amount-ing to Rs.9,090/- and income tax payable for thefinancial year 2008-09 amounting to Rs 21,472/-,remaining unpaid for a period exceeding sixmonths as on the end of the year.


(x) The Company has no accumulated losses and has notincurred a cash loss during the financial year coveredby our audit.











(xxi) To the best of our knowledge and belief and accord-ing to the information given to us no material fraudon or by the company was noticed or reported dur-ing the year.


Sd/-Place : Cochin-11 A. MOHANAN B.Sc, FCA, DISADate : 29.05.’10 Partner (M.No.20627)


81



Cochin-11

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


Schedule

No.

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

SOURCES OF FUNDS

Share Capital 1 1,000,000.00 1,000,000.00

Reserves & Surplus 2 84,533.00 47,042.00

Secured Loans – –

Unsecured Loans 3 536,353.00 536,353.00

Total 1,620,886.00 1,583,395.00


Fixed Assests

a) Gross Block – –

b) Depreciation Block – –

c) Net Block – –

Investments


a) Cash & Bank Balance 4 1,280,112.00 1,219,798.00

b) Loans and Advances 5 92,269.00 92,762.00




Provisions 30,000.00 33,000.00



Miscellaneous Expenditures to the extent not Written off

Pre- Operative Expenses 260,896.00 260,896.00


Total 1,620,886.00 1,583,395.00

Notes on accounts 7

82





INCOME


96,994.00 93,503.00

EXPENDITURE

Audit Fee 3,860.00 3,860.00



Ttavelling Expenses 16,890.00 –

31,479.00 13,461.00


Provision for Taxation 30000.00 33,000.00

Profit / (Loss) After Tax 35,515.00 47,042.00

Income Tax Provision W/off / (w/Back) (1,976.00) –

Profit / (Loss) After Tax 37,491.00 47042

Profit / (loss) Carried forward from earlier years 47,042.00 –

Balance Carried to Balance Sheet 84,533.00 47,042.00

Basic & Diluted Earnings Per Share 0.36 0.47


Cochin-11

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-



83

Schedules forming part of Balance Sheet as at 31.03.2010

(Amount in Rs.)

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs


Authorised Capital


Total 1,000,000.00 1,000,000.00



Total 1,000,000.00 1,000,000.00


Profit and Loss account 84,533.00 47,042.00

Total 84,533.00 47,042.00


Advances from Holding Company 536,353.00 536,353.00

Total 536,353.00 536,353.00


Cash in Hand 9,614.00 9,614.00


Fixed Deposit with Federal Bank Ltd 1,200,000.00 1,200,000.00

Total 1,280,112.00 1,219,798.00

Schedule 5: Loans and Advances

Advances recoverable in Cash or In Kind(Unsecured and cosidered good ) – –

TDS ( 2008-09) – 9,554.00

TDS ( 2009-10) 9,774.00

Interest Receivable on fixed deposit 82,495.00 83,208.00

Total 92,269.00 92,762.00


a) Current Liabilities 37,488.00 12,158.00

Other Liabilities – –

b) Provisions

Provision for Income Tax .Ay.2009-10 – 33,000.00

Provision for Income Tax .Ay.2010-11 30,000.00

Total 67,488.00 45,158.00

84



1. Background







c. Preliminary expenses:




For Audit 0.04


Total 0.08


The company reports basic and diluted Earnings Per Share in accordance with AS 20. Basic Earnings per equity sharehave been computed by dividing net profit after tax by the weighted average number of equity shares outstanding atthe end of the year. Diluted Earnings per share have been computed using the weighted average number of equityshares and potential equity shares outstanding at the end of the year.

31.3.2010

Profit after tax 37,491.00






85


7. The Company has no Deferred Tax Asset/Liability

8. Contingent Liability: Guarantee given by the Bank in favour of Government Of Kerala (Power Department) amountingto Rs.12,00,000/-

9. Details in Respect of related party transactions in pursuant of AS-18


1 Holding Company, Sree Sakthi Paper Mills Ltd. Holding interest in the company 470010/-Unsecured loan accepted 536,353/-






31st March, 2010


The amount of interest paid by the Company along with the amounts of thepayment made to the supplier beyond the appointed day during the year. Nil

The amount of interest due and payable for the period of delay in making payment(which have been paid but beyond the appointed day during the year)but without adding the interest specified under this Act. Nil




Cochin-16

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


86


CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2010



Cochin-16

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


2009-2010

Rs. / Lakhs

2008-2009

Rs. / Lakhs



Adjustments for:

Interest Income (96,994.00) (93,503.00)


Increase In loans & Advances 493.00 (92,762.00)

Increase in other Liabilities (5,694.00) 12,158.00






Preliminary Expenses and preoperative expenses 0 (315,993.00)



Proceeds from Long Term Borrowings 0 536,353.00

Increase in Share capital 0 1,000,000.00

Net Cash from Financing activities 0.00 1,536,353.00

Net Increase/(Decrease) in Cash & Cash Equivalents 60,314.00 1,219,798.00

Cash & cash equivalents as on 01.04.09 1,219,798.00 0.00

Cash & cash equivalents as on 31.03.10 1,280,112.00 1,219,798.00


87


Companies Act, 1956

Balance Sheet abstract and Company’s general business profilea) Registration details


State Code Number 9



Public Issue Nil

Right Issue Nil

Bonus Issue Nil

Private Placement Nil



Total Assets 1621

Sources of funds



Secured Loans Nil

Unsecured Loans 536

Deferred Tax Liability Nil


Net Fixed Assets Nil

Investments Nil







Profit after Tax 37


Dividend rate percentage Nil





Sd/- Sd/- Sd/-

S. Sivathanu Pillai S. Raj Kumar S. Giridhar


Cochin-16

29. 05. 2010

88

Sree Kailas Palchuram Hydro Power Limited

DIRECTORS’ REPORT

YOUR Directors have pleasure in presenting the 2nd AnnualReport and the Audited Statement of Accounts of theCompany for the year ended 31st March 2010.


As reported in the previous year's Report,implementation agreement and TEFR submitted to the

Kerala Government is yet to be approved. Steps arebeing initiated to identify the land required for theproject and discussions are being carried with various

Financiers / Venture Capital Fund Groups for financialarrangements to implement the project.






b) Additional investments and proposals,if any, being implemented for reduction

of consumption of energy; : Nil



d) Total energy consumption and energyper Unit of production in Form A : N A




1. Specific Areas in which ( R& D)carried out by the Company : Nil




B TECHNOLOGY ABSORPTION, ADAPTION

INNOVATION: No technology imported andtherefore furnishing of other details does notarise.



No employee has been paid remuneration as perthe limits prescribed under section 217 (2A) of

the Act. Hence furnishing of the Report undersection is not applicable.


In accordance with Article 84 of the Articles ofAssociation of the Company, Mr. S.Giridhardirector of the Company retire on rotation, and he

being eligible offer himself for re-appointment.Necessary resolution in this behalf has beenproposed for consideration of members.

5. AUDITORS

M/s. Balan & Co. Chartered Accountants, the

present Auditors of the Company retire and areeligible for re-appointment and the proposal hasbeen placed before you. Necessary certificate has

been obtained from the Auditors as per section224(1) of the Companies Act, 1956.


The Secretarial Audit Report as envisaged undersect ion 383 A of the Companies Act ,1956,

obtained from Company Secretary in Practice,Mr. N. Balasubramanian, Sree Krishna KumaraVihar, 43/1355, St. Benedicts 3 rd Cross Road,

Cochin – 682 018, Kerala is annexed as part ofDirectors’ Report.

Particulars

For the

year ended

31.03.2009



Less: Depreciation 2351 16080



Add: Income taxprovision w/back 682 –

Profit/(loss) after tax 20013 (13774)

Balance carried toBalance sheet 6239 (13774)

For the

year ended

31.03.2010


89

Sd/- Sd/- Sd/-S.Sivathanu Pillai S.Rajkumar S.Giridhar


Cochin-16

Date : 29. 05. 2010






and applied them consistently and made judgmentand estimates that were reasonable and prudentso as to give a true and fair view of the state of





irregularities.


for the financial year ended 31st March 2010 on a‘going concern’ basis.

8. ACKNOWLEDGEMENT




90




To

The Members ofM/s. SREE KAILAS PALCHURAM HYDRO POWER LIMITED57/2993, Sree Kailas, Paliam Road, Cochin – 682 016.

We have examined the registers, records, books and papers of M/s. SREE KAILAS PALCHURAM HYDRO POWERLIMITED (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules madethereunder and also the provisions contained in the Memorandum and Articles of Association of the Company forthe financial year ended on 31st March 2010. In our opinion and to the best of our information and according to theexaminations carried out by us and explanations furnished to us by the Company, its officers and agents, we certifythat in respect of the aforesaid financial year:-

1. The Company has kept and maintained all registers as stated in Annexure “A” to this certificate, as per theprovisions and the rules made thereunder and all entries therein have been duly recorded.

2. The Company has duly filed the forms and returns as stated in Annexure “B” to this certificate, with the Registrar ofCompanies, Regional Director, Central Government, Company Law Board or other authorities within the timeprescribed under the Act and the rules made thereunder.






8. The Company has not advanced any loans to its Directors or persons or firms or Companies referred to underSection 295 of the Act, as certified by the Management.





13. (i) There was no allotment/ transfer/ transmission of securities during the financial year.

(ii) The Company has not deposited any amount in a separate Bank Account as no dividend was declared duringthe financial year.




91

Place : Cochin-18Date : 29. 05. 2010













24. The Company has not made any borrowings during the financial year ending 31st March 2010 except unsecuredloans availed from M/s. Sree Sakthi Paper Mills Ltd.

25. The Company has not, during the financial year, made any loans or advances or given guarantees or providedsecurities to other bodies corporate and consequently no entries have been made in the register kept for thepurpose, as certified by the Management.

26. The Company has not altered the provisions of the Memorandum with respect to situation of the Company'sregistered office from one state to another during the year under scrutiny.


28. The Company has not altered the provisions of the Memorandum with respect to the name of the Company duringthe year under scrutiny.



31. There was/were no prosecutions initiated against or show cause notices received by the Company during thefinancial year, for offences under the Act.



Sd/-

N. Balasubramanian


92


SREE KAILAS PALCHURAM HYDRO POWER LIMITED

Company No. U40100KL2008PlC022145


Annexure A



1. Registere of Charges u/s 143

2. Register of Members u/s 150

3. Registers and Returns u/s 163

4. Books of Account u/s 209

5. Register of Directors, Managing Director, Manager and Secretary u/s 303

6. Register of Directors' Shareholdings u/s 307

7. Minutes Book of Meetings

8. Register of contracts u/s 297, 299 and 301

Annexure B

Forms and returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government and

other authorities during the financial year ended on 31st March 2010.





attached







Filed underSection





Yes/No


93

To the MembersM/s. Sree Kailas Palchuram Hydro Power Limited


Sree Kailas Palchuram Hydro Power Limited, as at 31stMarch, 2010 and also Profit and Loss Account andCash Flow Statement of the Company for the year

ended on that date annexed there to. These financialstatements are the responsibility of the Company'sManagement. Our responsibility is to express an opin-

ion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing

standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial state-

ments are free of material misstatements. An audit in-cludes examining on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting prin-

ciples used and significant estimates made by manage-ment, as well as evaluating the overall financial state-ment presentation. We believe that our audit pro-

vides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report)

Order, 2003, as amended by the Companies (Auditor'sReport) Amendment Order, 2004 issued by the Gov-ernment of India in terms of sub section (4A) of sec-

tion 227 of the Companies Act, 1956, we enclose inthe annexure a statement on the matters specified inparagraph # 4 and 5 of the said order.


a. We have obtained all the information and expla-nations, which to the best of our knowledge andbelief were necessary for the purpose of our audit.


books.

AUDITOR’S REPORT

BALAN & CO.

Chartered Accountants39/181 D, ‘Anantha’, Mahakavi ‘G’ RoadKarikkamuri, Kochi - 682 011

Phone: 0484-23606632360773

Fax: 2360773A. Mohanan : 3950630



Cash Flow statement dealt with by this report arein agreement with the books of account.

d. The Balance Sheet Profit and Loss account andCash Flow statement dealt with by this report com-ply with the accounting standards referred to in

sub section (3C) of section 211 of the CompaniesAct, 1956.

e. On the basis of written representations received

from the directors and placed before the Board,we report that none of the Directors is disquali-fied as on 31st March 2010 from being appointed

as a Director in terms of clause (g) of subsection (1) of section 274 of the Companies Act,1956.

f. In our opinion and to the best of our informationand according to the explanations given to us, thesaid accounts read together with the Significant

Accounting Policies and the notes thereon givethe information required by the Companies Act,1956, in the manner so required and give a true

and fair view in conformity with the accountingprinciples generally accepted in India:

1. In the case of the Balance Sheet, of the 'state ofaffairs' of the company as at 31st March '10


the profit of the company for the year on thatdate,and

3. In the case of Cash Flow Statement, of the cashflows for the year ended on that date.

For BALAN & CO.


Sd/-


94



(i) (a) The company is maintaining proper recordsshowing full particulars including quantitativedetails and situation of fixed assets.

(b) The fixed asset have been physically verified by themanagement at reasonable intervals and no materialdiscrepancies were noticed on such verification.

(c) No substantial part of the fixed assets was dis-posed off during the year.



(b) The company has not taken any loans, secured orunsecured from companies, firms, or other parties cov-ered in the register maintained under section 301 ofthe Companies Act,1956 except interest free advancereceived from the holding company terms of which arenot prejudicial to the interest of the company.

(iv) In our opinion and according to the information and expla-nations given to us, there is adequate internal control sys-tem commensurate with the size of the company and na-ture of its business for the purchase of inventory and fixedasset and for sale of goods. There is no continuing failure tocorrect any major weaknesses in internal control.

(v) (a) In our opinion and according to the explanationsgiven to us, all particulars of contracts or arrange-ments referred to in section 301 of the Act havebeen entered in the register required to be main-tained in that section.



vii) On the basis of the test checks conducted by us andas per the explanations given to us the Company hasan internal audit system commensurate with the sizeand nature of its business.

(viii) The company has not yet started implementation ofthe power project. Hence we are informed that it hasnot maintained the books and records pursuant tothe order of the Central Government u/s 209(1)(d) ofthe Companies Act, 1956.

(ix) (a) According to the information given to us and on thebasis of the checks conducted by us we report thatthe company has been generally regular in depositingundisputed statutory dues except advance tax for thefinancial year 2009-10 amounting to Rs.5,292/- andincome tax payable for the financial year 2008-09amounting to Rs 9,564/-, remaining unpaid for a pe-riod exceeding six months as on the end of the year.


(x) The Company has no accumulated loss of and hasnot incurred any cash loss during the financial yearcovered by our audit.











(xxi) To the best of our knowledge and belief and accordingto the information given to us no material fraud on or bythe company was noticed or reported during the year.


Sd/-



95



Cochin-16

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


Schedule

No.

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs

SOURCES OF FUNDS

Share Capital 1 1,000,000.00 1,000,000.00

Reserves & Surplus 2 6,238.58 -

Secured Loans - -

Unsecured Loans 3 1,361,603.00 711,603.00

Deferred Tax Liability 4 12,787.42 7,376.60

Total 2,380,629.00 1,718,979.60


Fixed Assests

a) Gross Block 5 73,500.00 73,500.00

b) Depreciation Block 18,431.00 16,080.00

c) Net Block 55,069.00 57,420.00

Investments


a) Cash & Bank Balance 6 1,480,789.00 838,596.00

b) Loands and Advances 7 581,496.00 528,134.00




Provisions 17,500.00 10,000.00



Miscellaneous Expenditures to the extent not Written off

Pre- Operative Expenses 242,818.00 242,818.00


Profit and Loss Account 13,774.60

Total 2,380,629.00 1,718,979.60

Notes on accounts 9

96




For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-




Schedule

No.

INCOME


Total 56,260.00 28,134.00

EXPENDITURE

Audit Fee 3,860.00 3,860.00


Depreciation 2,351.00 16,080.00


Total 14,018.00 24,532.00


Provision for Taxation 17500.00 10,000.00

Deferred Tax 5,410.82 7,376.60

Profit / (loss) After Tax 19,331.18 (13,774.60)

Income Tax Provision W/off / (w/back) (682.00) –

Profit / (loss) After Tax 20,013.18 (13744.60)

Profit / (loss) Carried forward from earlier years (13,774.60) –

Balance Carried to Balance Sheet 6,238.58 (13,774.60)

Basic & Diluted Earnings Per Share 0.20 (0.14)

Cochin-16

29-05-2010


97

Schedules forming part of Balance Sheet as at 31.03.2010(Amount in Rs.)

31. 03. 2010

Rs. / Lakhs

31. 03. 2009

Rs. / Lakhs


AUTHORISED CAPITAL


Total 1,000,000.00 1,000,000.00



Total 1,000,000.00 1,000,000.00


Profit and Loss account 6238.58 –

Total 6238.58 –


Advances from Holding Company 1,361,603.00 711,603.00

Total 1,361,603.00 711,603.00

Schedule 4: DEFERRED TAX LIABILITY

Balance Carried Over from previous year 7,376.60 -

Add:deferred Tax Labilty recognised during the current year 5,410.82 7,376.60

Balance As On 31.03.2010 12,787.42 7,376.60


Cash in Hand 454.00 454.00


Fixed Deposit with Federal Bank Ltd 1,400,000.00 750,000.00

Total 1,480,789.00 838,596.00

Schedule 7: LOANS AND ADVANCES

Advance - For Land Purchase 500,000.00 500,000.00

Advance Tax .A.Y 2009-2010 5,626.00 2,898.00

Interest Receivable on fixed deposit 75,870.00 25,236.00

Total 581,496.00 528,134.00


a) Current Liabilities 17,140.00 6,860.00

Other Liabilities

b) Provisions 10,000.00

Provision for Income Tax .Ay.2009-10

Provision for Income Tax .Ay.2010-11 17,500.00

Total 34,640.00 16,860.00

98

Sree Kailas Palchuram

Hydro Pow

er Limited

(Amount in Rs.)

Schedules forming part of Accounts for the year ended 31.03.2010

Schedule - 5: FIXED ASSETS

Sl. No. Particulars Gross Block Depreciation Net Block

Balanceas on

01.04.2009

Additionsduring the

year

Saleduring the

year

Totalas on

31.03.2010

Upto01.04.2009

For theyear

Saleduring the

year

Totalas on

31.03.2010

As on31.03.2010

As on31.03.2009

1 Plant & Machinery 73500.00 - - 73500.00 16,080.00 2351.00 - 18,431.00 55,069.00 57420.00

TOTAL 73500.00 - - 73500.00 16,080.00 2351.00 - 18431.00 55,069.00 57420.00

Figures for the - 73500.00 - 73500.00 - 16080.00 - 16080.00 - 57420.00

previous year


99


1. Background:







c. Fixed Assets & Depreciation:

Depreciation on fixed assets are provided on pro-rata basis on straight-line method at the rates prescribed underSchedule XIV of the Companies Act, 1956. Depreciation on additions is calculated on monthly pro-rata basis.

d. Preliminary expenses:




For Audit 0.04


Total 0.08


The company reports basic and diluted Earnings per Share in accordance with AS 20. Basic Earnings per equity sharehave been computed by dividing net profit after tax by the weighted average number of equity shares outstanding atthe end of the year. Diluted Earnings per share have been computed using the weighted average number of equityshares and potential equity shares outstanding at the end of the year.

31.3.2010

Profit after tax (in Rs.) 20,013.18





100



7. Deferred tax as per AS-22:

Particulars As at 31.03.10

Deferred Tax Liability:

As at the beginning of the year 7376.60

Add : Deferred Tax Liability on account of depreciation for the year 5410.82

Total Deferred Tax Liability for the year 12787.42

8. Contingent Liability: Guarantee given by the Bank in favour of Government of Kerala (Power Department) amountingto Rs. 14,00,000/-

9. Details in Respect of related party transactions in pursuant of AS-18


1 Holding Company. Sree Sakthi Paper Mills Ltd. Holding interest in the company 4,70,010/-Unsecured loan accepted 13,61,603/-






31st March, 2010


The amount of interest paid by the Company along with the amounts of thepayment made to the supplier beyond the appointed day during the year. Nil

The amount of interest due and payable for the period of delay in making payment(which have been paid but beyond the appointed day during the year)but without adding the interest specified under this Act. Nil




Cochin-16

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-



101

CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2010



Cochin-16

29-05-2010

For Balan & Co.


Sd/-


M. No. 20627

Partner

Sd/-


Sd/-



Sd/-


2009-2010

Rs. / Lakhs

2008-2009

Rs. / Lakhs



Adjustments for:

Depreciation 2,351.00 16,080.00

Interest Income (56,260.00) (28,134.00)


Increase In loans & Advances (53,362.00) (528,134.00)

Increase in other Liabilities 962.00 6,860.00





Purchase of Fixed Asset 0 (73,500.00)


Preliminary Expenses and preoperative expenses 0 (297,915.00)



Proceeds from Long Term Borrowings 650,000.00 711,603.00

Increase in Share capital 0 1,000,000.00

Net Cash from Financing activities 650,000.00 1,711,603.00

Net Increase/(Decrease) in Cash & Cash Equivalents 642,193.00 838,596.00

Cash & cash equivalents as on 01.04.09 838,596.00 0.00

Cash & cash equivalents as on 31.03.10 1,480,789.00 838,596.00

102



Companies Act, 1956

Balance Sheet abstract and Company’s general business profile



State Code Number 9



Public Issue Nil

Right Issue Nil

Bonus Issue Nil

Private Placement Nil



Total Assets 2381

Sources of funds



Secured Loans Nil

Unsecured Loans 1362

Deferred Tax Liability 13


Net Fixed Assets 55

Investments Nil







Profit/(loss) after Tax 20


Dividend rate percentage Nil





Sd/- Sd/- Sd/-S. Sivathanu Pillai S. Raj Kumar S. Giridhar


Cochin-16

29. 05. 2010

SREE SAKTHI PAPER MILLS LTD.Regd. Office : Sree Kailas, 57/2993

Paliam Road, Cochin - 682 016www.sreekailas.com e-mail: [email protected]

ATTENDANCE SLIP

TO BE HANDED OVER AT THE ENTRANCE OF THE MEETING HALL

NAME OF THE SHAREHOLDER (IN BLOCK LETTERS) :

MEMBER’S FOLIO/ID No. :

NAME OF THE PROXY (IN BLOCK LETTERS) :

(To be filled in if the proxy attends instead of the member) :

No. of shares held .......................................................................................

I hereby record my presence at the 19th Annual General Meeting of the members of Sree Sakthi Paper Mills Limited held

on 9th September 2010 at 3.00 p.m. at Hotel Abad Plaza, M.G. Road, Ernakulam, Cochin-35.

Member’s / Proxy Signature

Note: A member / proxy attending the meeting must complete this Attendance Slip and hand it over at the entrance

SREE SAKTHI PAPER MILLS LTD.Regd. Office : Sree Kailas, 57/2993

Paliam Road, Cochin - 682 016www.sreekailas.com e-mail: [email protected]

PROXY FORM

I / We .......................................................................................................................................................................................................

of ............................................................................................................. being a Member/Members of Sree Sakthi Paper Mills Ltd.

hereby appoint ........................................................................................................................................................................................

of ......................................................................................... or failing ............................................................... of ................................

or failing ..................................................................... of ..................................................................... as my / our proxy to attend

and vote for me/us on my/our behalf at the 19th Annual General Meeting of the Company to be held on 9th September2010 at 3.00 p.m. at Hotel Abad Plaza, M.G. Road, Ernakulam and at any adjournment thereof.

Affixfifteen paise

RevenueStamp

Signed this ...................... day of ...................... 2010

Signature ......................................................................

Note: The proxy form must be returned so as to reach the Registered Office of the Company, Sree Kailas, 57/2993, Paliam Road,

Cochin - 16 not less than forty eight hours before the time for holding the aforesaid meeting. The proxy need not be a

member of the Company.

��

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board of directors - bombay stock exchange€¦ · ordinary business 1. to receive, consider and...

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