C O N T E N T S...ARUR CP PACAGINGS LIMITED NOTICE TO SHAREHOLDERS KARUR K. C. P. PACKKAGINGS LIMITED CIN-L21029PY1991PLC000730 Registered Office : No. 1, First Floor, Bhagath Singh

CIN : [2] 029PYl 991 ptC000730CORPORATE OFFICE : 330/I , CHINNA ANDAN KOlt ROAD, K RUR - 639 OOI . 0N) IEr : OFF : (0432 41 210063, 240669, 240323

F^x: (043241 240963 E-MAII : [email protected], URt : hflp//www.korurkcp.lnPP & FIBC DIVISION : S.F. No. 199-2011182: 2r3l1{, 21212rC, 213l18; 2r2l2lt , 2@pTRICHY MAIN ROAD, MAYANUR, KRISHNARAYAPURAM TALUK, KARUR DISIRICT.639I08

TEI- : 243330, 243303, FAX : (04323) 243277 E -MAl[ : [email protected]

KCPSE/ 201,6-2017The Corporate Relationship Department,Bombay Stock Exchange Limited,1st Floor, New Trading Ring, Rotunda Building,P.J. Towers, Dalal Street, Fort,Mumbai - 400 001.

Dear Sir,

01..03.2017

Sub: Pursuant to Reg.34(1) of SEBI( Listing Obligations and Disclosure Requirements)

Regulations, 20L5

Ref: SCRIP CODE NO - 531363

Further to our intimation dated 27'n December, 2016 and in connection with the Annual General

Meeting of the Company held on 2Jtn January, 2017 , the 26tn Annual Report of the Company is herewith

enclosed.

Kindly take it on record and acknowledge the receipt of this letter.

Thanking You,

Yours faithfully

For Karur K.C.P Packkagings Limited

-klp'V'w'

R Kavitha

Company Secretary

CHENNAI Ofllce: NO.6, (lsl FLOOR) BISHOP WALLERS AVENUE (SOUIH), (ClI COLONYI, MYLAPORE, CHENNAI 600 00442, (OLD NO.l9). SRTMAN SR|N|VASA ROAD, ALWARPET, CHENNAT - 600 018.

TEL : (044) 24991 361 , 24991367 ,24991 375 FAX : (044) 421 85009 E-moll : [email protected], OFFICE : NO. I , FIRST FLOOR, BHAGAIH SINGH SIREET, (BEHIND SIANDARD ICE FACIORY), 8I{ARATHIPURAM, PUDUCHERRY.6Os OI I .

EsK PAPER & PAPER BAG DlvlSlON : MARICHINAICKENPALAYAM, AMBARAMPAIAYAM, POLIACHI - 642 103.IEL : (042591 252000 - I 5, FAX : (04259) 253757, E-MA|L : [email protected]

C O N T E N T S

Notice ........................................................................................................................3

Financial Performance for the past five years ...........................................................11

Directors’ Report ........................................................................................................12

Statement pursuant to Section 129(3) of the Companies Act, 2013 ......................24

Secretarial Audit Report ............................................................................................25

Standalone:

1. Auditors’ Report .....................................................................................................63

2. Balance Sheet .......................................................................................................68

3. Statement of Profit and Loss .................................................................................69

4. Cash Flow Statement ............................................................................................70

5. Notes to Financial Statements...............................................................................71

Consolidated:

1. Auditors’ Report .....................................................................................................88

2. Balance Sheet .......................................................................................................91

3. Statement of Profit and Loss .................................................................................92

4. Cash Flow Statement ............................................................................................93

5. Notes to Financial Statements...............................................................................94

Proxy Form ..............................................................................................................106

Attendance Slip .......................................................................................................108

KARUR K.C.P. PACKKAGINGS LIMITED

KARUR K. C. P. PACKKAGINGS LIMITEDCIN-L21029PY1991PLC000730

Registered Office : No. 1, First Floor, Bhagath Singh Street, (Behind Standard Ice Factory), Bharathipuram, Puducherry – 605 011.

TWENTY SIXTH ANNUAL REPORT 2015 - 2016 Board of Directors : Shri K.C. Pallani Shamy, Chairman Shri K.C.P. Shivraman, Managing Director Smt. P. Annammal, Non – Executive -Women Director Shri K. Palaniappan, Independent – Non Executive Director Dr. K. Mohan, Independent – Non Executive Director Shri V.S. Murali Kriishnan, Independent – Non Executive Director Upto 1st August, 2015) Shri A. Ganeshkumar, Independent – Non Executive Director (From 7th September, 2015)

Auditors : M/s. MSS SRIRAM & Co., Chartered Accountants, Karur.

Chief Financial Officer : Shri V. Sankar

Company Secretary & Compliance Officer : Shri V. Venkatesan Bankers : 1. State Bank of India, Commercial Branch, Coimbatore. 2. Union Bank of India, Coimbatore. 3. The Karur Vysya Bank Limited, Karur. 4. IDBI Bank Limited, Madurai. 5. Canara Bank, Karur. Registrar & Share Transfer : S.K.D.C Consultants Limited, Agents Kanapathy Towers, 3rd Floor, 1391/A-1 Sathy Road, Ganapathy, Coimbatore – 641 006. Phone : +91 422 6549995, 2539835 - 836 E-mail : [email protected] Registered Office : No. 1, First Floor, Bhagath Singh Street, (Behind Standard Ice Factory), Bharathipuram, Puducherry – 605 011.

Corporate Office : 330/1, Chinna Andan Koil Road, Karur – 639 001,Tamil Nadu.

Plants : Paper Division 662/2, Marichinaickenpalayam, Pollachi – 642 103, Tamil Nadu.

Paper Bag Division 662/1,Marichinaickenpalayam, Pollachi – 642 103, Tamil Nadu.

Polypropylene Bag & FIBC Division S.F. 199-202, Trichy Main Road, Mayanur, Krishnarayapuram Taluk, Karur District – 639 108, Tamil Nadu.

Wind Mills S.F.305/2,304/1 (P), Pulankinar Village Udmalpet Taluk, Tirupur District, Tamil Nadu.

S.F. No.23, Thungavi Village, Madathukulam Taluk, Tirupur District, Tamil Nadu.

1




CORPORATE TEAM

Chairman : Shri K. C. Pallani Shamy

Chief Executive Officer : Shri K.C.P. Shivraman

Chief Financial Officer : Shri V. Sankar

Board Committees Audit Committee : Shri K. Palaniappan, Chairman Dr. K. Mohan Shri A. Ganeshkumar Stakeholders RelationshipCommittee : Shri K. Palaniappan, Chairman Shri K.C.P.Shivraman Dr. K. Mohan

CSR Committee : Shri K. Palaniappan, Chairman Shri K.C.P.Shivraman Dr. K. Mohan

Nomination and Remuneration : Shri K.Palaniappan, Committee Dr. K. Mohan Shri A. Ganeshkumar

Corporate Management Team : Shri S. Pasupathy, General Manager – Commercial

Shri K. Govindarajan, Deputy General Manager - Personnel & PurchaseChief Executives

Paper & Paper Bag Division : Shri C.Karunanithi Chief General Manager

Shri V.Sudharson General Manager – Commercial

Polypropylene Bag : Shri G. Kumar& FIBC Division General Manager – Operations

Shri R. Subramanian Deputy General Manager

KARUR K.C.P. PACKKAGINGS LIMITED TWENTY SIXTH ANNUAL REPORT 2015 - 2016

2


NOTICE TO SHAREHOLDERS



NOTICE is hereby given that the Twenty Sixth Annual General Meeting of KARUR K.C.P PACKKAGINGS LIMITED will be held on Friday, the 27th January, 2017 at 9.30 A.M. at the Registered Office of the Company situated at No:1, First Floor, Bhagath Singh Street, (Behind Standard Ice Factory), Bharathipuram, Puducherry – 605 011 to transact the following businesses:

ORDINARY BUSINESS

1. To receive, consider and adopt the financial statements of the Company for the year ended 31st March, 2016, including the audited Balance Sheet as at 31st March, 2016, the Statement of Profit & Loss for the year ended on that date and the reports of the Board of Directors and the Auditors thereon.

2. To appoint a Director in place of Smt P. Annammal who retires by rotation and being eligible, offers herself for re-appointment.

3. To ratify the appointment of Auditors and fix their remuneration.

“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force), pursuant to the recommendation of the Audit Committee and pursuant to the resolution passed by the members at the Annual General Meeting held on 30th September, 2014, the appointment of M/s. MSS SRIRAM & Co., Chartered Accountants, Karur (FRN:007909S), as the auditors of the Company to hold office till the conclusion of Twenty Seventh Annual General Meeting of the Company to be held in the calendar year 2017 (subject to ratification of the appointment by the members at every Annual General Meeting by means of an Ordinary Resolution to be held after this Annual General Meeting) be and is hereby ratified and the Board of Directors be and is hereby authorised to fix the remuneration payable to them for the financial year ending 31st March, 2017 as may be determined by the Audit Committee in consultation with the Auditors, and that such remuneration may be paid on a progressive billing basis to be agreed between the Auditors and the Board of Directors.”

SPECIAL BUSINESS

4. Ratification of remuneration of Cost Auditor

To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), Shri B.Venkateswar, Practicing Cost Accountant, (Registration No.M-27622) appointed as the Cost Auditor by the Board of Directors of the Company, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2017, be paid the remuneration amounting to Rs.60,000/- (Rupees Sixty Thousand Only) excluding applicable taxes and out of pocket expense, if any, pursuant to the recommendation of the Audit Committee and as approved by the Board.”

5. Appointment of Shri K.C.P. Shivraman (DIN 00055049) as Managing Director of the Company

To Consider and if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to recommendation of the Nomination and Remuneration Committee, and approval of the Board and subject to the provisions of Sections 196, 197, 198, 203 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification

3



or re-enactment thereof) read with Schedule V of the Companies Act, 2013 and provisions of Articles of Association of the Company, approval of the members of the Company be and is hereby accorded to the appointment of Shri K.C.P. Shivraman, as Managing Director of the Company (Designated as Managing Director / CEO) with effect from 05.12.2016 to 04.12.2021, as well as the payment of salary, commission and perquisites (hereinafter referred to as “remuneration”), upon the terms and conditions as detailed below, which is hereby approved and sanctioned with authority to the Board of Directors to alter and vary the terms and conditions of the said appointment and / or agreement in such manner as may be agreed to between the Board of Directors and Shri K.C.P. Shivraman.”

RESOLVED FURTHER THAT the remuneration payable to Shri K.C.P. Shivraman, shall not exceed the overall ceiling of the total managerial remuneration as provided under Section 197 of the Companies Act, 2013 or such other limits as may be prescribed from time to time and the remuneration proposed to be paid to him is as given below:

I. SALARY Rs. 5,00,000/- (Rupees Five Laksh) only per month

II. PERQUISITES In addition to the salary, Shri K.C.P. Shivraman shall also be entitled to the following perquisites:-

(a) Contribution to Provident, Pension, Superannuation and other Funds to the extent not taxable under the Income Tax Act, 1961,

(b) Gratuity at the rate of half a month salary for each completed year of service, and(c) Encashment of leave at the end of tenure as per the rules of the Company, if the

Company incurs a loss or its profits are inadequate, the Company shall pay to Shri K.C.P. Shivraman the above remuneration by way of salary, perquisites and other benefits as minimum remuneration subject to the limits specified under

MINIMUM REMUNERATION

Where in any financial year during the tenure of Shri K.C.P. Shivraman Section II of Part II of Schedule V of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof, for the time being in force), or such other limits as may be prescribed by the Government from time to time as minimum remuneration. If such minimum remuneration is in excess of ceiling, if any, prescribed under Schedule V of the Companies Act, 2013, the Company shall seek permission of Central Government or such other approvals, as may be necessary in accordance with the provision governing payment of remuneration in force at the relevant point of time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to vary, alter or modify the different components of the above remuneration as may be agreed to by the Board of Directors and Shri K.C.P. Shivraman and to do all such acts, deeds and things and execute all such documents, instruments and writings as may be required and to delegate all or any of its powers herein conferred to any Committee of Directors or Director(s) to give effect to the aforesaid resolution.

By order of the Board of DirectorsFor Karur K.C.P.Packkagings Limited

Sd/-Place : Karur K.C.PALLANI SHAMY Date : 27th December, 2016 Chairman

DIN: 00059741

4



Notes:

1. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, relating to special business to be transacted at the meeting, is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

3. The instrument appointing the proxy, duly completed must be deposited at the registered office of the Company at least 48 hours before the Commencement of the meeting. A blank proxy form is attached.

4. During the period beginning 24 hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, a member would be entitled to inspect the proxies lodged at any time during the business hours of the Company, provided that not less than three days of notice in writing is given to the Company.

5. Members/Proxies should bring duly filled Attendance Slip sent herewith to attend the meeting.

6. The Register of Members and the Share Transfer Books of the Company will remain closed from Friday, 20th January, 2017 to Friday, 27th January 2017 (both days inclusive) for the purpose of Annual General Meeting (AGM) for the financial year 2015-16.

7. The Register of Directors and Key Managerial Personnel and their shareholding, maintained under Section 170 of the Companies Act, 2013, will be available for inspection by the members at the AGM.

8. The relevant details as required by Regulation 36(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, of persons seeking appointment/re-appointment as Director, is provided in the annexure.

9. Corporate Members intending to send their authorised representatives to attend the meeting are requested to send to the Company, a certified true copy of the Board Resolution authorising their representative to attend and vote on their behalf at the meeting.

10. Members holding shares in dematerialised form are requested to intimate all changes pertaining to their bank details, National Electronic Clearing Service (NECS)/ Electronic Clearing Service (ECS) mandates, nominations, power of attorney, change of address, change of name and e-mail address, etc., to their Depository Participant only and not to the Company’s Registrar and Share Transfer Agent (RTA), M/s. S.K.D.C Consultants Limited, (SKDC), Coimbatore. Changes intimated to the Depository Participant will then be automatically reflected in the Company’s records which will help the Company and SKDC to provide efficient and better services.

11. Members holding shares in physical form are requested to send all correspondence with respect to the updation of their bank details, transfer of shares, change of address, conversion of physical shares into Demat form etc., to SKDC, Coimbatore.

12. Members holding shares in physical form are requested to consider converting their holding to dematerialised form to eliminate all risks associated with physical shares and for ease in portfolio management. Members can contact either the Company or SKDC, for assistance in this regard.

13. Members may visit Company’s website: www.karurkcp.in and contact us at e-mail: [email protected].

14. In compliance with Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014 as amended, and Regulation 44 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is providing a facility to its members to exercise their votes electronically through the remote e-voting facility arranged by Central Depository Services (India) Limited (CDSL) for all items of business as set out in the notice of the AGM and confirms that the business can be transacted through e-voting in pursuance of the above provisions. The facility for voting through ballot/poll paper will also be made available at the AGM and the members who have not already cast their votes by remote e-voting will be able to exercise their right at the AGM through voting by ballot/poll paper. Members who have cast their votes by remote e-voting prior to the AGM may attend the AGM but shall not be entitled to cast their votes again. The Notice of the AGM and instructions for e-voting, along with the Attendance Slip and Proxy Form, is being sent to all members by Registered Post/Speed Post.

15. The Company is concerned about the environment and utilizes the natural resources in a sustainable way. We request you to update your email address with your Depository Participant or RTA to enable us to send Annual Report, Notices and all other communications via email.

16. Members who are holding shares in more than one folio are requested to intimate to the Registrar and Share Transfer Agent, the details of all folio numbers for consolidation into a single folio.

5


17. Reserve Bank of India has initiated NECS for credit of dividend directly to the bank account of Members. Members are requested to register their Bank Account details (Core Banking Solutions enabled account number, 9 digit MICR and 11 digit IFS code), in respect of shares held in dematerialised form with their respective Depository Participants and in respect of shares held in physical form with SKDC.

18. Members desiring any information as regards the financial statements are requested to write to the Company at least seven days before the date of the AGM.

19. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN to the Company / SKDC.

20. A route map indicating the venue of the AGM and its nearest landmark is annexed to the notice for convenience of members.

21. Members are requested to check whether they have encashed Dividend Warrants for the earlier years. If the Dividend Warrants have become time-barred / lost, please apply for revalidation / fresh dividend warrant before the last dates indicated below:

Unpaid dividend for over 7 years if any will be transferred to the Investor Education and Protection Fund. Members are hereby advised that the Dividend declared up to the financial year 2012-13 amounting to Rs.3,37,561/- is lying unclaimed. The same has to be obtained from the Company or from the Company’s Registrar and Share Transfer Agents, M/s S.K.D.C.Consultants Limited.

In terms of Section 205C of the Companies Act, 1956, all dividend amounts, which remain unclaimed and unpaid for a period of seven years, will be transferred to the Investor Education & Protection Fund (IEPF). The details of shareholders who have not encashed their dividend warrants are available in Company’s website www.karurkcp.in.


6


EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No.4

The Board, on the recommendation of the Audit Committee, had approved the appointment of Shri B.Venkateswar, Practicing Cost Accountant, (Registration No.M-27622) as the Cost Auditor to conduct the audit of the cost records of the Company for the financial year ending March 31, 2017 at a remuneration of Rs.60,000/- per Annum (Rupees Sixty Thousand per annum Only) excluding applicable taxes and out of pocket expenses, if any.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company.

The Board recommends the resolution set forth in Item No.4 for the approval of the members.

None of the Directors, Key Managerial Personnel or their relatives are concerned or interested in the Resolution.

All documents referred to in the accompanying Notice and the Statement pursuant to Section 102 of the Companies Act, 2013, will be available for inspection at the Registered Office of the Company during business hours on all working days up to the date of declaration of the result of the Annual General Meeting of the Company.

Item No.5

Shri K.C.P. Shivraman was re-appointed as the Joint Managing Director (designated as Whole Time Director / CFO) of the Company w.e.f. 1st April, 2015 in accordance with the provisions of Sections 196, 197, 198, 199, 203 and Schedule V of Companies Act, 2013 for a term of 5 years. In the Board Meeting held on 05.12.2016, Shri K.C. Pallani Shamy has stepped down as Managing Director of the Company to continue as a non executive Chairman and it is proposed to appoint Shri K.C.P. Sivaraman as the Managing Director of the Company (Designated as Managing Director / CEO) w.e.f. 05.12.2016 for a period of five years.

The proposed terms of his appointment including remuneration are stated in the resolution and the details of remuneration last drawn by him are given below:

I. SALARY Rs. 5,00,000/- (Rupees Five Laksh) only per month

II. PERQUISITES In addition to the salary, Shri K.C.P. Shivraman shall also be entitled to the following perquisites:-

(a) Contribution to Provident, Pension, Superannuation and other Funds to the extent not taxable under the Income Tax Act, 1961,

(b) Gratuity at the rate of half a month salary for each completed year of service, and(c) Encashment of leave at the end of tenure as per the rules of the Company.

Keeping in view the experience and expertise of Shri K.C.P. Shivraman, the Board considers it desirable that the Company should avail the services of Shri K.C.P. Shivraman as Managing Director and accordingly recommends the resolution for approval by the members.

Except Shri K.C.P. Shivraman, Shri K.C. Pallanishamy and Smt P. Annammal, none of the Directors, Key Managerial Personnel or their relatives are concerned or interested in the proposed resolution.


Sd/-Place : Karur K.C.PALLANI SHAMY Date : 27th December, 2016 Chairman

DIN: 00059741


7


PROFILE OF THE DIRECTORS BEING RE-APPOINTED / APPOINTED

The brief resume of each of the Directors who are proposed to be appointed/re-appointed is given below:


Name of the Director Smt. P. Annammal Shri K.C.P. ShivramanDirector Identification Number (DIN) 00060871 00055049

Date of Birth and Age 29/12/1941 & 75 Years 01/01/1974 & 42 Years

Qualifications and Experience Matric B B M

Date of appointment on the Board 18.01.1991 18.01.1991

Remuneration last drawn (Annual) Rs.10,000/- ( Sitting Fees) Rs. 12,57,692/-

Membership/Chairmanship on committees of board of other Public Limited Companies

NIL NIL

Shareholding in the Company 50,800 Equity Shares 11,73,300 Equity Shares

Relationship with other directorsWife of Shri. K.C.Pallanishamy, Chairman and Mother of Shri K.C.P. Shivraman, Managing Director - CEO

Son of Shri K.C.Pallanishamy, Chairmanand Smt. P. Annammal, Director

The number of Meetings of the Board attended during the year Five Five

THE INSTRUCTIONS ELECTRONIC VOTING (E-VOTING) ARE AS UNDER:

Instructions for remote e-voting:• The remote voting period begins on Tuesday, 24th January, 2017 at 10.00 A.M. and ends on Thursday, 26th January, 2017 at

5.00 P.M. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date which has been fixed as Friday, 20th January, 2017, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

• The shareholders should log on to the e-voting website www.evotingindia.com.• Click on Shareholders.• Now Enter your User ID • For CDSL: 16 digits beneficiary ID,• For NSDL: 8 Character DP ID followed by 8 Digits Client ID, • Members holding shares in Physical Form should enter Folio Number registered with the Company.• Next enter the Image Verification as displayed and Click on Login.• If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any

company, then your existing password is to be used.• If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN

• Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)• Members who have not updated their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the 8 digits of the sequence number in the PAN field.(Sequence number has been provided as Serial Number (SL NO.) in the Address Label• In case the sequence number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with sequence number 1 then enter RA00000001 in the PAN field.

DOB • Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.

8


Dividend Bank

Details

• Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.• Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction (v).

• After entering these details appropriately, click on “SUBMIT” tab.• Members holding shares in physical form will then directly reach the Company selection screen. However, members

holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

• For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.• Click on the EVSN for KARUR K.C.P PACKKAGINGS LIMITED.• On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the

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

• Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.• After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to

confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.• Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.• You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.• If Demat account holder has forgotten the same password then Enter the User ID and the image verification code and click on

Forgot Password& enter the details as prompted by the system.

Note for Non – Individual Shareholders and Custodians

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

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

• After receiving the login details they have to create a compliance user using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.

• The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

• In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected].

General Instructions:

• The facility for voting through ballot/poll paper shall be made available at the AGM and the members attending the meeting who have not cast their vote by remote e-voting shall be able to exercise their right at the meeting through ballot paper.

• The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again.

• The remote e-voting period commences on 10.00 A.M. on Tuesday, 24th January, 2017 and ends on 5.00 P.M on Thursday, 26th January, 2017. During this period, the shareholders of the Company holding shares either in physical form or in dematerialised form, as on the cut-off date of Friday, 20th January, 2017, may cast their votes electronically. Once the vote on a resolution is cast by the shareholder, the shareholder shall not be allowed to change it subsequently.

• Any person, who acquires shares of the Company and becomes member of the Company after dispatch of the notice and holding shares as on the Cut Off date , may obtain the login ID and password by sending a request in writing at helpdesk.evoting@cdslin-


9


dia.com. Those Shareholders who receive the Annual Report and are not members on the Cut Off date should treat the Annual Report as information only as they are not eligible to vote.

• However, if you are already registered with CDSL for remote e-voting then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using “Forgot User Details/Password” option available on www.evotingindia.com.

• A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting/voting at the AGM through ballot paper.

• Shri. N. Ramanathan, Partner of M/s. S Dhanapal & Associates, Practising Company Secretaries (Membership No.FCS 6665) has been appointed as the Scrutinizer to scrutinize the voting process in a fair and transparent manner.

• The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with the assistance of scrutinizer, by use of “Ballot Paper” / “Poling Paper” for all those members who are present at the AGM but have not cast their votes by availing the remote e-voting facility.

• The Scrutinizer shall after the conclusion of voting at the general meeting, first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the Company and shall make, not later than two days of the conclusion of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of the voting forthwith.

• The voting rights of shareholders shall be in proportion to their shares of the paid-up equity share capital of the Company as on 20th January, 2017.

• The results declared along with the Scrutinizer’s Report shall be displayed on the Notice Board of the company at its Registered Office and shall be placed on the Company’s website www.karurkcp.in and on the website of the CDSL within two days of the passing of the passing of the resolutions at the Annual General Meeting of the Company, and communicated to BSE Ltd.

• Contact details of the official responsible to address the grievances connected with voting by electronic means are given below:

Mr. V VENKATESAN,Company SecretaryKarur K.C.P Packkagings Limited330/1,Chinna Andan Koil Road, Karur– 639001Phone No:04324-248016Email: [email protected]

ROUTE MAP FOR VENUE OF AGM


10


FINANCIAL PERFORMANCE FOR THE PAST 5 YEARS

Sales Growth Chart t

Profitability Growth Chart t

Shareholders’ Value t

Standalone Consolidated FINANCIAL YEARS : 2011-12 2012-13 2013-14 2014-15 2015-16 2014-15 2015-16Sales 43,703 47,152 55,936 62,221 54,157 80,044 74,552Earnings Before Depreciation, Interest and Tax (EBDIT) 4,075 6,119 6,398 6,190 6,241 7,612 7,227

Interest & Financial Charges 2,663 3,783 4,066 3,979 3,853 4,893 5,007Depreciation, Preliminary/ FCCB/ GDR Expenses written off 1,124 1,525 2,093 1,796 1,786 1,796 1,786

PBT Before Exceptional Items 288 811 239 415 602 923 434PBT 1,136 811 239 415 602 923 434PAT 861 456 112 387 400 895 232Equity Capital 1,125 1,125 1,125 1,125 1,172 1,125 1,172Earnings Per Share (₹) 7.7 4.1 1.0 3.44 3.41 7.96 1.98

Book Value Per Share (₹) 139.7 142.8 144.0 141.0 145.0 140.0 133.0

11

` in Lakhs


DIRECTORS’ REPORT TO THE SHAREHOLDERS

12

To the Members of Karur K.C.P Packkagings Limited,The Directors have great pleasure in presenting their Twenty Sixth Annual Report along with the Audited Statement of Accounts for the financial year ended March 31, 2016.

FINANCIAL RESULTS:- DESCRIPTION 2015-16 2015-16 2014-15 2014-15 (₹ in Lakhs) (₹ in Lakhs) (₹ in Lakhs) (₹ in Lakhs) (Standalone) (Consolidated) (Standalone) (Consolidated)

SALES - Domestic 42,402 42,402 48,027 48,027

- Exports 11,755 11,755 14,194 14,194

- Trading 0 20,395 0 17,824

Total 54,157 74,552 62,221 80,044Operating Profit 6,241 7,227 6,190 7,538Less:- Financial charges 3,853 5,007 3,979 4,893Profit Before Depreciation, Preliminary / FCCB & GDR Expenses W/o

2,388 2,220 2,211 2,645

Depreciation, Preliminary / FCCB & GDR Expenses W/o

1,786 1,786 1,796 1,722

Net Profit Before Tax 602 434 415 923

Less : Provision for Taxation 2 2 56 56Less : Provision for Deferred Tax 200 200 (28) (28)Profit After Tax 400 232 387 895Add : Balance brought forward 5,680 5,565 6,004 5,304Profit available for appropriation 6,080 5,704 5,680 5,565Appropriation:

Proposed Dividend - - - -

Corporate Dividend Tax - - - -

Transfer to Reserve - - - -Balance Profit carried to Balance sheet 6,080 5,704 5,680 5,565Earnings per share: (Face Value ₹ 10/-)

Basic (₹) 3.41 1.98 3.44 7.96

Diluted (₹) 2.99 1.79 3.02 6.98

PERFORMANCE OF THE COMPANY:-

Standalone Performance :

v The Turnover during the year under review was ₹ 541.57 Crores as against ₹ 622.21 Crores for the previous year, a decrease of 12.96% over the previous year.

v Profit before tax was ₹6.02 Crores as against ₹ 4.15 Crores for the previous year, a increase of 45.06% v FCC Bonds which are maturing on 26th April, 2016 carrying 5%YTM. The investors have shown interest in converting

the bonds into equity shares. The Company has already initiated discussion with Trustee for conversion. The Company is confident in converting the bonds by the due date.

v The Company is having 3.30 MW capacity Windmills and 10 MW Co-gen Power Plant, and its generation is being utilised by the Company apart from its outside energy sales.

A more detailed discussion is provided in the Management Discussion and Analysis Report.



DIVIDEND

Considering the significant expansion plans of your company which require substantial investments and the dip in Profits for the year, the Board of Directors thinks it prudent to conserve the resources. The Directors regret their inability to recommend any dividend.

SHARE CAPITAL

The share capital of the Company as of 31st March, 2016 stood at 1,17,16,666 Equity Shares of Rs.10/- each totaling to Rs.11,71,66,660/-. During the year, the Company made allotment of 4,66,666 equity shares of Rs. 10/- each on preferential / private placement basis.

TRANSFER TO RESERVES

The Company retained the entire surplus in the Profit and Loss Account and hence no transfer to General Reserve was made during the Year.

FINANCE

Cash and cash equivalent as at March 31, 2016 amounted to Rs.39,65,82,825/-.The Company continues to focus on judicious management of its working capital and has taken care to ensure that the Company borrowings are obtained at very competitive rates. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

DEPOSITS

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposit) Rules, 2014 during the year under review. There are no outstanding deposits as on March 31, 2016.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not given any loans, guarantees or security in connection with loans nor made any investments falling within the ambit of Section 186 of the Companies Act, 2013.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments and Resignations

During the year under review, Shri A. Ganesh Kumar was appointed as an Additional Director of the Company w.e.f 07.09.2015 in the casual vacancy caused by resignation of Shri V.S. Murali Kriishnan (upto 01st August, 2015). Shri A. Ganesh Kumar was appointed as a Director under the category of Non-Executive and Independent Director by the Shareholders at their 25th Annual General Meeting held on 30th September, 2015 for a term of four years, not liable to retire by rotation.

At the Board Meeting held on 05.12.2016, Shri K.C. Pallanishamy has stepped down as the Managing Director of the Company to continue as Non-Executive Chairman. In the same meeting, it is proposed to appoint Shri K.C. P. Sivaraman as the Managing Director of the Company and appointed Shri V. Sankar as the Chief Financial Officer of the company with effect from 1st December, 2016.

Re-appointments

As per provisions of the Companies Act, 2013, Smt. P.Annammal is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The Board of Directors recommends her re-appointment.

Declaration by Independent Directors

The Company has received declarations from all its Independent Directors that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the financial year ended March 31, 2016.

BOARD MEETINGS HELD DURING THE FINANCIAL YEAR

During the year 2015-16, Five Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

13



14

BOARD COMMITTEES

The primary four committees of the Board are Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders’ Relationship Committee. A detailed note on the committees is provided under the Corporate Governance Report forming part of this Board’s Report. The Composition of the Primary Committees and their meeting dates are given below:

Name of the Committee Composition as on 31.03.2016 Details of Meetings held during the year

Audit Committee • Shri K. Palaniappan, Chairman• Dr. K. Mohan• Shri A. Ganesh Kumar

Five meetings were held during the year on the following dates:-30.05.2015; 14.08.2015; 07.09.2015; 14.11.2015; 13.02.2016

Nomination and Remuneration Committee

• Shri K. Palaniappan, Chairman• Dr. K. Mohan

One meeting was held during the year on the following date:-07.09.2015

Stakeholders’ Relationship Committee

• Shri K. Palaniappan, Chairman• Shri K.C.P. Shivraman• Dr. K. Mohan

One meeting was held during the year on the following date:-13.02.2016

Corporate Social Responsibility Committee

• Shri K. Palaniappan, Chairman• Shri K.C.P. Shivraman• Dr. K. Mohan

One meeting was held during the year on following date:-13.02.2016

Details of recommendations of Audit Committee which were not accepted by the board along with reasons

The Audit Committee generally make certain recommendations to the Board of Directors of the Company during their meetings held to consider any financial results (Unaudited and Audited) and such other matters placed before the Audit Committee as per the Companies Act 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 from time to time. During the year the Board of Directors has considered all the recommendations made by the Audit Committee and has accepted and carried on the recommendations suggested by the Committee to its satisfaction. Hence there are no recommendations unaccepted by the Board of Directors of the Company during the year under review.

DETAILS OF POLICIES DEVELOPED BY THE COMPANY

(i) Nomination and Remuneration Policy

The Company has formulated the Nomination and Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Part D of Schedule II of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. The objective of this policy is to ensure

• The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

• Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance with short and long-term performance objectives appropriate to the working of the company and its goals

This policy is being governed by the Nomination and Remuneration Committee comprising of members of the Board, as stated above, all of whom are Non-Executive and Independent Directors. The policy lays down the standards to be followed by the Nomination and Remuneration Committee with respect to the appointment, remuneration and evaluation of Directors and Key Management Personnel.The policy is hosted on the website of the Company http://www.karurkcp.in

KARUR K.C.P. PACKKAGINGS LIMITED15

Affirmation that the remuneration is as per the remuneration policy of the company

The Company has formulated the Nomination and Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Part D of Schedule II of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. This policy governs the criteria for deciding the remuneration for Directors and Key Management Personnel. It is affirmed that the remuneration to Directors and Key Management Personnel is being fixed based on the criteria and parameters mentioned in above mentioned policy of the Company.

Board Diversity

The Company recognizes and values the importance of a diverse board as part of its corporate governance and success. The Company believes that a truly diverse Board will leverage differences in ideas, knowledge, thought, perspective, experience, skill sets, age, ethnicity, religion and gender which will go a long way in retaining its competitive advantage. The Board has on the recommendation of the Nomination and Remuneration Committee, adopted a Board Diversity Policy which sets out the approach to diversity of the Board of Directors.

(ii) Corporate Social Responsibility Policy (CSR)

Your Company recognizes that its business activities have wide impact on the societies in which it operates, and therefore an effective practice is required giving due consideration to the interests of its stakeholders including shareholders, customers, employees, suppliers, business partners, local communities and other organizations.

Your Company endeavors to make CSR an important agenda and is committed to its stakeholders to conduct its business in an accountable manner that creates a sustained positive impact on society. Our Company, satisfying the threshold as stipulated under Section 135 of the Companies Act, 2013, has established the CSR Committee comprising of members of the Board, as stated above, and the Chairman of the Committee is Non-Executive and Independent Director. The said Committee has formulated and approved the CSR policy for the Company with its major focus on:-

• Devising meaningful and effective strategies for carrying out CSR activities and engaging with all stakeholders towards implementation and monitoring.

• Make sustainable contributions to communities. • Identify socio-economic opportunities to perform CSR activities.• Focus on social welfare activities as envisaged in Schedule VII of Companies Act, 2013.

The Policy also focuses on the constitution of CSR Committee, roles and responsibilities of CSR Committee, CSR activities to be undertaken and allocation of funds for carrying out such CSR activities, Implementation and monitoring the execution of CSR activities for the Company. The CSR Committee shall recommend to the Board of Directors to implement the CSR activities covering any of the areas as detailed under Schedule VII of Companies Act, 2013. Annual Report on CSR activities as required under the provisions of Companies Act, 2013 is annexed herewith marked as Annexure A and forms part of this report. The policy is hosted on the website of the Company http://www.karurkcp.in

(iii) Risk Management Policy

The Board of Directors of your Company has adopted a Risk Management Policy which details the procedures to be followed by the Company with regard to risk management. The Company has formed a Risk Management Committee comprising of three members of the Board who shall evaluate and review the risk factors associated with the operations of the Company and recommend to the Board the methods to mitigate the risk and advise from time to time various measures to minimizing the risk and monitor the risk management for the Company.

The policy broadly defines the scope of the Risk Management Committee which comprises of:-

• Review and approve the Risk Management Policy and associated frameworks, processes and practices of the Company. • Ensuring that the Company is taking the appropriate measures to achieve prudent balance between risk and reward in both

ongoing and new business activities. • Evaluating significant risk exposures of the Company and assess management’s actions to mitigate the exposures in a

timely manner (including one-off initiatives, and ongoing activities such as business continuity planning and disaster recovery planning & testing).

• Coordinating its activities with the Audit Committee in instances where there is any overlap with audit activities (e.g. internal or external audit issue relating to risk management policy or practice).

• Reporting and making regular recommendations to the Board.


KARUR K.C.P. PACKKAGINGS LIMITED 16

(iv) Whistle-Blower Policy – Vigil Mechanism

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower) mechanism provides a channel to the Employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or Policy. The mechanism provides for adequate safeguards against victimization of employees and directors to avail of the mechanism and also provide for direct access to the Chairman of the Board/Chairman of the Audit Committee in exceptional cases.

In line with the statutory requirements, the Company has formulated a Whistle Blower Policy/Vigil Mechanism, which covers malpractices and events which have taken place / suspected to have taken place, misuse or abuse of authority, fraud or suspected fraud, violation of company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is or is likely to be affected and formally reported by whistle blowers concerning its employees.

The Managing Director is responsible for the administration, interpretation, application and review of this policy. The Managing Director is also empowered to bring about necessary changes to this Policy, if required at any stage with the concurrence of the Audit Committee. The mechanism also provides for access to the Chairman of the Audit Committee in required circumstances/

EVALUATION OF BOARD, COMMITTEE AND DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, an annual performance evaluation of the performance of the Board, the Directors individually as well as the evaluation of the working of the Board Committees was carried out based on the criteria and framework adopted by the Board.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering aspects of the Board’s functioning such as adequacy of the composition of the Board and its committees, execution and performance of specificduties, obligations and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board. The Directors performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc. The performance of every Director was evaluated by the Nomination and Remuneration Committee.

The Independent Directors at their separate meeting reviewed the Performance of the Board as a whole, Non independent Directors and the Chairman of the Board.

Training and familiarization program for independent directors

Every independent director on being inducted into the Board attends an orientation program. To familiarize the new directors with the strategy, operations and functions of our Company, the executive directors/ senior managerial personnel make presentations to the inductees about the Company’s strategy, operations, product offerings, organization structure, human resources, technologies, facilities and risk management.

Further, at the time of appointment of independent directors, the Company issues a formal letter of appointment outlining his/her role, functions, duties and responsibilities as a director. The Board Members are provided with all the necessary documents / reports and internal policies to enable them to familiarize with the Company’s procedures and practices. The detailed familiarization program for independent directors is hosted on the website of the Company http://www.karurkcp.in

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.&HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY DURING THE PERIOD UNDER REPORT

The Company has a Wholly Owned Subsidiary Company in the name M/s Shriudha Ventures Pte Ltd, which has been incorporated on 9th April, 2012 in Republic of Singapore for the purpose of carrying the business of importers, exporters, wholesalers and agents of Urea, Packaging materials and other general commodities. Details about the subsidiary are provided in form AOC 1 which is annexed herewith marked as Annexure B and forms part of this report.


KARUR K.C.P. PACKKAGINGS LIMITED17

AUDITORS

Statutory Auditors

At the Annual General Meeting held on 29th September, 2014, M/s. MSS SRIRAM & Co., Chartered Accountants, Karur (FRN:007909S), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the matter of appointment of the auditors shall be placed for ratification at every Annual General Meeting of the company. Accordingly, the appointment of M/s. MSS SRIRAM & Co., Chartered Accountants, Karur (FRN:007909S), as statutory auditors of the company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that their appointment if ratified by the shareholders, it would be in accordance with the provisions of Section 141.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. S Dhanapal & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2015-2016 is annexed herewith as marked as Annexure C and forms part of this report. The following qualifications were observed by the Secretarial Auditors in their Report to which the Board has the following explanations:

Qualification 1:

Maintenance of website and disclosure of information thereon,

Response 1:

The Company Is taking all effective steps to ensure proper compliance towards the maintenance of Website and disclosure of information thereon in the current year.

Qualification 2:

Compliances relating to unclaimed/unpaid dividend,

Response 2:

The Company Is taking steps to ensure proper compliance of the same in the current year and also taking steps to file the said form 5 INV and 1 INV relating to unclaimed /unpaid dividend.

Qualification 3:

Approval of policies by the Audit/Nomination & Remuneration Committee/Board,

Response 3:

The Company has since placed all the Said policies before Audit Committee / Nomination and Remuneration Committee / Board of Directors for approval, as required.

Qualification 4:

Disclosures including signing of Financial Statements / Board’s Report,

Response 4:

Directors are taking steps to ensure proper compliance of the same in the current year.

Qualification 5:

Filing of FLA return and Annual Performance Report with RBI,



Response 5:

The Company and its Directors are taking steps to ensure proper compliance of the same in the current year.

Qualification 6:

Filing of some forms and returns and disclosure of information and other compliances under the provisions of:

Companies Act, 2013 and its Rules made thereunder including filing relating to unclaimed dividend and cost audit report,

Foreign Exchange Management Act, 1999 and its Rules & Regulations,

Securities and Exchange Board of India Act, 1992 and its Rules and Regulations; and other related laws thereto.

Response 6:

The Company Is taking steps to ensure proper compliance of the same in the current year.

Qualification 7:

Company has received notices from various statutory authorities under the above laws and penalties levied, some of which yet to be rectified/addressed and pending redressal of investor grievances.

Response 7:The Company and its Directors are taking steps to ensure proper compliance of the same in the current year.

Cost Auditor

Pursuant to the provisions of clause (g) of sub-section (3) of section 141 read with sub section (3) of section 148 of the Companies Act, 2013, the Company has appointed Shri B. Venkateswar, Cost Accountant (Registration No.M-27622) as Cost Auditor of the Company to conduct the audit of the cost accounting records maintained by the Company relating to Paper and Paper Productsin respect of all the units of the Company for the financial year 2016-17.The remuneration of the Cost Auditor is subject to ratification by the member at the ensuing Annual General Meeting.

Internal Auditor

Shri E. Muthuraman, Chartered Accountant (Membership Number: 207028) had been appointed by the Company as an Internal Auditor to conduct the Internal Audit.

PARTICULARS OF EMPLOYEES AND REMUNERATION

Details as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(i) Details of top ten employees in terms of remuneration is enclosed herewith, marked as Annexure D and forms part of this report.

(ii) Details of the employees employed throughout the year and drawing remuneration which in the aggregate equals or exceeds Rupees One Crore and Two Lakhs per annum, during the financial year: - NIL

(iii) Employees employed for a part of the financial year, was in receipt of remuneration for any part of that year, which, in the aggregate equals or exceeds Rupees Eight Lakhs and Fifty Thousand per month, during the financial year: - NIL

(iv) None of the employees except Managing Director/Executive Director employed throughout the financial year or part thereof, hold by himself / herself or along with his/her spouse and dependent children, more than two per cent of the equity shares of the Company.

18



Details required as per Section 197 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Name of Director/KMPAmount of Remuneration

Per Annum(In Rs.)

% increase in remuneration during the FY

2015 - 16

Ratio of remuneration to median remuneration of

employees

Shri K.C.PallaniShamy- Chairman 12,57,692/- Nil 23.80 : 1

Shri K.C.P.Shivraman -Managing Director - CEO - KMP 12,57,692/- Nil 23.80 : 1

Smt. P. Annammal- Non - Executive - Women Director 10,000/- Nil Nil

Shri K. Palaniappan- Non-Executive - Independent Director 22,000/- Nil Nil

Dr. K Mohan - Non - Executive - Independent Director 22,000/- Nil Nil

* Shri V.S. Murali Krishnan- Non Executive- Independent Director 4,000/- Nil Nil

^ Shri A Ganesh Kumar - Non Executive - Independent Director 12,000/- Nil Nil

Shri V.Venkatesan- Company Secretary 9,75,000/- 34% 14.28 : 1

During the year, the Non-Executive Directors received only the sitting fees as remuneration.* Shri V.S Muralikriishnan resigned as a Director with effect from August 1, 2015.^ Shri A. Ganesh Kumar was appointed as an Additional - Independent Director with effect from September 7, 2015.

Percentage increase in the median remuneration of employees in the financial year: 12%

Number of permanent employees on the rolls of the company as on 31.03.2016: 1487

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average decrease in the salaries of employees other than the managerial personnel in 2015-16 was 11.85%. The Percentage increase in the managerial remuneration for the same financial year was NIL.

Key parameters for any variable component of remuneration availed by the directors:

Shri K.C.P. Shivraman, Executive Director is entitled to receive fixed remuneration as approved by the Shareholders at the time of their appointment / re-appointment. There is no variable components attached to his remuneration and his remuneration is fixed during his tenure.

Details of pecuniary relationship or transactions of the non-executive directors vis-à-vis the company

Other than the Sitting fees, non-executive directors do not have any pecuniary relationship or transactions with the Company.

Affirmation that the remuneration is as per the remuneration policy of the company

It is hereby affirmed that the remuneration paid to the Directors and Key Managerial Personnel are as per the Nomination and Remuneration Policy of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

With the introduction of Internal Financial Controls (IFC) in the Companies Act 2013, the term Internal Financial Controls has been defined as the policies and procedures adopted by the company to ensure orderly and efficient conduct of its business, including adherence to company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and the timely preparation of reliable financial information.

Your Company has adequate and robust Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board

19



and to the Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. The Audit Committee also conducts discussions about Internal Control System with the Internal and Statutory Auditors and the Management of the Company and satisfy themselves on the integrity of financial information and ensure that financial controls and systems of risk management are robust and defensible.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company has not received any complaint on sexual harassment during the financial period ended 31.03.2016.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

During the year there are no significant and Material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s operations in future.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2016 TILL THE DATE OF THIS REPORT

There are no material Changes and commitments affecting the financial position of the company which has occurred since 31.03.2016 till the date of this report.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return in form MGT-9 is annexed herewith as marked as Annexure E and forms part of this report.

RELATED PARTY TRANSACTIONS

As required under Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has developed a policy on dealing with Related Party Transactions and such policy is disclosed on the company’s website http://www.karurkcp/in

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs.

Particulars of contracts or arrangements with Related Parties referred in Section188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014.

All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of business.

During the financial year 2015-16, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for transaction with the related parties which are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis.

The particulars of Contracts or arrangements with the related parties under section 188 in Form AOC-2 is enclosed herewith marked as Annexure F and forms part of this report.

The details of Related Party Transactions are also provided in the Notes to the Accounts.

20



CORPORATE GOVERNANCE REPORTThe Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance including Management Discussion and Analysis report under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with a certificate from K.C.Pallani Shamy, Chairman confirming the compliance is annexed herewith marked as Annexure G and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOThe details on Conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed herewith as marked as Annexure H and forms part of this report.

DIRECTOR’S RESPONSIBILITY STATEMENTIn terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:i. In the preparation of the annual accounts, the applicable accounting standards have been followed.ii. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were

reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

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

iv. The directors have prepared the annual accounts on a going concern basis.v. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are

adequate and were operating effectively.vi. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system

were adequate and operating effectively.

DEPOSITORY SYSTEM As the members are aware, your Company’s shares are tradable in electronic form and the Company has established connectivity with both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).In view of the advantages of the Depository System, the members are requested to avail of the facility of dematerialisation of the Company’s shares.

INDUSTRIAL RELATIONSIndustrial relations in all the units and branches of your Company remained cordial and peaceful throughout the year.

SBLC FACILITYYour Company has availed Stand By Letter of Credit Facility with The Karur Vysys Bank Ltd., for USD 28.36 million favouring Bank of India, Dubai Branch on behalf of its Wholly Owned Subsidiary Company M/s. Shriudha Ventures Pte Ltd., Singapore, above said facility is exempt with in the purview of Section 185 and 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014.

BANKERSThe Board of Directors thank the Consortium of Bankers consisting of State Bank of India (Lead Bank), Union Bank of India, The Karur Vysya Bank Limited, IDBI Bank Limited and Canara Bank, who have supported the Company for the credit requirements.

OTHERSOn 10th May, 2016, a search in the premises of the company was conducted by the Income Tax Department. Impact on the quantum of Income and tax thereon is yet to be determined after final discussion with the Income Tax Department.

ACKNOWLEDGEMENTSThe Board of Directors takes this opportunity to place on record their appreciation for the co-operation, commitment and dedication of all the employees of the Company, and the support extended by the customers, vendors, business associates, banks, government authorities and all concerned, without which it would not have been possible to achieve all round growth of the Company. The Directors are thankful to the shareholders for their continued patronage.


Sd/-Place : Karur K.C.PALLANI SHAMY Date : 5th December, 2016 Chairman DIN: 00059741

21



Annexure A

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. Brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs.

Your Company recognizes that its business activities have wide impact on the societies in which it operates, and therefore an effective practice is required giving due consideration to the interests of its stakeholders including shareholders, customers, employees, suppliers, business partners, local communities and other organizations.

Your Company endeavors to make CSR an important agenda and is committed to its stakeholders to conduct its business in an accountable manner that creates a sustained positive impact on society. Our Company, satisfying the threshold as stipulated under Section 135 of the Companies Act, 2013, has established the CSR Committee comprising of members of the Board, as stated above, and the Chairman of the Committee is Non-Executive and Independent Director. The said Committee has formulated and approved the CSR policy for the Company with its major focus on:-

• Devising meaningful and effective strategies for carrying out CSR activities and engaging with all stakeholders towards implementation and monitoring.

• Make sustainable contributions to communities. • Identify socio-economic opportunities to perform CSR activities.• Focus on social welfare activities as envisaged in Schedule VII of Companies Act, 2013.

The CSR policy is hosted on the website of the Company http://www.karurkcp.in

2. Composition of the CSR Committee

The CSR Committee consists of Shri K. Palaniappan, Shri K.C.P.Shivraman and Dr. K. Mohan. Shri K. Palaniappan is the Chairman of the Committee.

3. Average net profit of the Company for the last three financial years: Rs.299.66 Lakhs.

4. Prescribed CSR expenditure (2% of the average net profit of the company for the last 3 financial years): Rs. 5.99 Lakhs

5. Details of CSR spent during the financial year

a) Total amount to be spent for the financial year : Rs.5.99 Lakhsb) Amount unspent, if any, : Nilc) Manner in which the amount spent during the financial year is detailed below:

22


(1) (2) (3) (4) (5) (6) (7) (8)

S. NO. CSR PROJECT OR ACTIVITY

IDENTIFIED

SECTOR IN WHICH THE PROJECT IS COVERED

PROJECTS OR PROGRAMS (1) LOCAL

AREA OR OTHER (2) SPECIFY THE STATE

AND DISTRICT WHERE PROJECTS OR

PROGRAMS WAS UNDERTAKEN

AMOUNTOUTLAY

(BUDGET)PROJECT

ORPRO-

GRAMSWISE

(In Lacs)

AMOUNT SPENT ON THE

PROJECTS ORPROGRAMS

SUBHEADS : (1) DIRECT EX-

PENDITURE ON PROJECTS OR

PROGRAMS(2) OVERHEADS:

(In Lacs)

CUMULATIVEEXPENDITURE

UPTO THEREPORTINGPERIOD (In

Lacs)

AMOUNTSPENT:DIRECT

ORTHROUGH

IMPLE-MENTINGAGENCY*

1HEALTH CARE – WATER RO SYSTEM

CLAUSE(I) OF SCHEDULE VII

Local area - KARUR, TAMILNADU 2.00 1.79 1.79 DIRECT

2 HELPING TO HANDICAPS

CLAUSE(I) OF SCHEDULE VII


3SPONSHER-SHIP OF FREE UNIFORM

CLAUSE(II) OF SCHEDULE VII


4

HELPING TO POOR STU-DENTS – PAY-MENT OF FEES

CLAUSE(II) OF SCHEDULE VII

Local & Other - KARUR, SALEM, DHARMAPURI and TRICHY, TAMILNADU

18.00 17.52 17.52 DIRECT

5 HELPING TO ORPHANAGE

CLAUSE(III) OF SCHEDULE VII

Local area - KARUR, TAMILNADU 2.60 2..51 2.51 DIRECT

6 FLOOD RELIEF CLAUSE(III) OF SCHEDULE VII

Other - CHENNAI & CUDALORE 13.50 13.20 13.20 DIRECT

7 HELPING TO TRUSTS -

CLAUSE(III) OF SCHEDULE VII


TOTAL 44.00 42.47 42.47

6. In case the company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the reasons for not spending the amount: Not Applicable

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

“The Company shall ensure that the implementation and monitoring of Corporate Social Responsibility Policy (CSR) Policy, is in compliance with CSR objectives and policy of the Company.”

Dr. K MOHAN K.C.P. SHIVRAMAN K PALANIAPPAN Member Member Chairman

23


Annexure BForm AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures

Part “A”: Subsidiaries(Information in respect of each subsidiary to be presented with amounts in Rs.)

(Rs. in Crores)

Sl. No. Particulars Details1 Sl. No. 12 Name of the subsidiary M/s Shriudha Ventures Pte Ltd3 The date since when subsidiary was acquired 09.04.2012

4 Reporting period for the subsidiary concerned, if different from the holding company’s reporting period 1st April 2015 to 31st March 2016

5 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. USD = ` 66.3329

6 Share capital 6.697 Reserves & surplus (3.75)8 Total assets 230.059 Total Liabilities 227.10

10 Investments NIL11 Turnover 203.9512 Profit before taxation (1.67)13 Provision for taxation NIL14 Profit after taxation (1.67)15 Proposed Dividend NIL16 Extent of shareholding (in percentage) 100%

Notes: The following information shall be furnished at the end of the statement:

1. Names of subsidiaries which are yet to commence operations: Not Applicable2. Names of subsidiaries which have been liquidated or sold during the year : Not Applicable

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

“ NOT APPLICABLE “ For MSS SRIRAM & Co., Chartered Accountants ICAI Firm Registration No 007909S P.R.MAHADEVAN Partner Membership Number : 007377Place : KarurDate : 05th December, 2016

24


Annexure CFORM NO. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31.03.2016

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,The Members,Karur K.C.P. Packkagings Limited,Puducherry

1. We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Karur K.C.P. Packkagings Limited, (hereinafter called the company). Secretarial Audit was conducted based on records made available to us, in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion / understanding thereon.

2. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and made available to us and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we, on strength of those records, and information so provided, hereby report that in our opinion and understandings, the Company, during the audit period covering the financial year ended on March 31, 2016, appears to have complied with the statutory provisions listed hereunder and also in our limited review, the Company has proper and required Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minutes’ book, forms and returns filed and other records maintained by the Company and made available to us, for the financial year ended on March 31, 2016 according to the applicable provisions of:

i) The Companies Act, 2013 (the Act) and the rules made thereunder and the Companies Act, 1956 and the rules made thereunder as applicable;

ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct

Investment, Overseas Direct Investment and External Commercial Borrowings to the extent applicable.v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992(‘SEBI

ACT’) to the extent applicable during the year:-a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999;e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

regarding the Companies Act and dealing with client;g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; andh) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

We have also examined compliance with the applicable clauses of the following:i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to Meetings of Board of Directors

(SS-1) and General Meetings (SS-2) made effective 1st July, 2015.ii) The Listing Agreements entered into by the Company with BSE Limited and The Securities and Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations, 2015 (effective 1st December, 2015).

During the period under review, the Company has complied in accordance with the requirements to be met with the applicable provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above to a required extent except lapses relating to • Maintenance of website and disclosure of information thereon,• Compliances relating to unclaimed/unpaid dividend,

25


• Approval of policies by the Audit/Nomination & Remuneration Committee/Board, • Disclosures including signing of Financial Statements / Board’s Report,• Filing of FLA return and Annual Performance Report with RBI,• Filing of some forms and returns and disclosure of information and other compliances under the provisions of

• Companies Act, 2013 and its Rules made thereunder including filing relating to unclaimed dividend and cost audit report,• Foreign Exchange Management Act, 1999 and its Rules & Regulations,• Securities and Exchange Board of India Act, 1992 and its Rules and Regulations; and other related laws thereto

• Company has received notices from various statutory authorities under the above laws and penalties levied, some of which yet to be rectified/addressed and pending redressal of investor grievances.

The Company has filed return of allotment for allotment of 4,66,666 shares to Mr. Manisekaran Vishnu Mahesh during the year. There are irregularities in compliances of provisions of Companies Act, FEMA and SEBI Regulations for this allotment.

We further report that, subject to the above, the related documents that we have come across depict that:

The Board of Directors of the Company is constituted as applicable with proper balance of Executive Directors, Non-Executive Directors and Independent Directors and the changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.

We further report that based on our limited review of the compliance mechanism established by the Company, there appear adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period the company has sought the approval of its members for following main events:

• Appointment of Shri K.Palaniappan as an Independent Director• Appointment of Shri A.Ganeshkumar as an Independent Director • Appointment of Shri B.Venkateshwar as Cost Accountant and fixing remuneration for the FY- 2015-16• Allotment of shares

We further report that our Audit was subjected only to verifying adequacy of systems and procedures that are in place for ensuring proper compliance by the Company and we are not responsible for any lapses in those compliances on the part of the Company.

Place : Chennai For S Dhanapal & AssociatesDate : 5th December, 2016 (A firm of Practicing Company Secretaries)

S. Dhanapal (Sr. Partner) FCS No. 6881 CP No. 7028

This Report is to be read with our testimony of even date which is annexed as Annexure A (Page No. 27) and forms an integral part of this report.

26


Annexure A

ToThe Members,Karur K.C.P. Packkagings LimitedChennai

Our report of even date it to be read along with this supplementary testimony.

Management’s Responsibility

a. Maintenance of secretarial record is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

Auditor’s Responsibility

b. Our responsibility was to express an opinion on the secretarial records, standards and procedures followed by the company with respect to secretarial compliances.

c. We believe that audit evidence and information obtained from company’s management is adequate and appropriate for us to provide a basis for our opinion.

d. Where ever required, we have obtained Management representation about the compliance of laws, rules and regulations and happenings of events etc.

Disclaimer

e. The Secretarial Audit is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management conducted the affairs of the Company.

Place : Chennai For S Dhanapal & AssociatesDate : 5th December, 2016 (A firm of Practicing Company Secretaries)

S. Dhanapal (Sr. Partner) FCS No. 6881 CP No. 7028

27


Annexure DREMUNERATION OF ALL DIRECTORS, KMP & TOP 10 EMPLOYEES FOR THE YEAR 2015-16

Sl.No. NAME STATUS SALARY

P.M

Nature of

Employ-ment

Qualifi-cation

Ex-peri-ence

Date of Employ-

mentAge

Per-cent-age of Equity Shares

Relative of any

Director or

Manager

DOB

1 Sri K.C. PALLANI SHAMY

Chair-man & Managing Director

100,000.00

Perma-nent Matric 61

Years 18-01-991 81 Years 53.53% Father of

JMD 24.04.1935

2 Sri K.C.P. SHIVRAMANJoint Managing Director

100,000.00

Perma-nent BBM 20

Years 18-01-991 42 Years 10.43% Son of

CMD 01.01.1974

3 Sri S. PASUPATHY

General Manager (Commer-cial)

100,000.00

Perma-nent B.Com 21

Years 01.08.1995 60 years Nil No 04.05.1956

4 Sri C. KARUNANIDHIChief General Manager

85,000.00

Perma-nent B.SC 19

Years 22.09.1997 63 Years Nil No 10.03.1953

5 Sri R. SUBRAMANIANDeputy General Manager

80,000.00

Perma-nent

DME & DMM

14 Years 16.05.2002 45

Years Nil No 15.07.1971

6 Sri V. VENKATESAN Company Secretary

75,000.00

Perma-nent

M.Com, MBA, FCS

8 Years 19.01.2008 50

Years Nil No 19.05.1966

7 Sri K. GOVINDARAJAN

Deputy General Manager (Pur-chase & Person-nel)

75,000.00

Perma-nent B.L 20

years 01.06.1996 52 Years Nil No 15.04.1964

8 Sri V. SUDARSHAN

General Manager (Commer-cial)

69,000.00

Perma-nent MBA 19


9 Sri R. SARAVANABHAVAN

Senior Manager Machani-cal

55,000.00

Perma-nent DME 19


10 Sri N. NAGARAJAN

Deputy General Manager (Finance & Ac-counts)

41,740.00

Perma-nent M.Com 1

Year 13.05.2015 45 Years Nil No 22.11.1971

11 Sri G. KUMAR

General Manager Opera-tions

35,000.00

Perma-nent B.L 5


For Karur K.C.P.Packkagings Limited


28


Annexure : EForm No. MGT-9

EXTRACT OF ANNUAL RETURNAs on the financial year ended on 31st March, 2016

[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration)

I. REGISTRATION AND OTHER DETAILS:

i CIN L21029PY1991PLC000730ii Registration Date 18/01/1991iii Name of the Company KARUR K.C.P PACKKAGINGS LIMITEDiv Category / Sub-Category of the Company COMPANY LIMITED BY SHARES / NON-GOVT COMPANYv Address of the Registered Office and Contact Details No. 1, First Floor, Bhagath Singh Street,

(Behind Standard Ice Factory),Bharathipuram, Puducherry – 605 011.E-Mail ID: [email protected] No : 04324-248016

vi Whether Listed Company Yesvii Name, Address and Contact details of Registrar and

Transfer Agent, if anyS.K.D.C Consultants Limited,Kanapathy Towers, 3rd Floor, 1391/A-1Sathy Road, Ganapathy, Coimbatore – 641 006. Phone : +91 422 6549995, 2539835 - 836E-mail : [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the Company shall be stated:-

Sl. No. Name and Description of Main Prod-ucts / Services NIC Code of the Product / Service % to total turnover of the

company1. PAPER 17014 43%2. PAPER BAGS 17024 30%3. POLYPROPYLENE 22203 27%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES – Company does not have any Indian Holding, Subsidiary or Associate Companies. It has a wholly owned subsidiary incorporated in Republic of Singapore, as per details given below:

S. NO. NAME AND ADDRESS OF THE COMPANY CIN/GLN HOLDING/ SUBSIDIARY/ ASSOCIATE

% of shares held

Applicable Section

1

SHRIUDHA VENTURES PTE.LTD,

1,NORTH BRIDGE ROAD,#19-04/05HIGH STREET CENTRE,SINGAPORE(179094)

201208722K Subsidiary 100% 2(87)

29


IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage to Total Equity)

i). Category-wise Share Holding:

Category of sharehold-ers

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % of change during

the yearDemat Physical Total % of Total

Shares Demat Physical Total % of Total Shares

(A) Promoters

(1) Indian

(a) Individual / HUF 7245700 0 7245700 64.406 7245700 0 7245700 61.841 2.565(b) Central Govt. 0 0 0 0.000 0 0 0 0.000 0.000

(c) State Govt (s) 0 0 0 0.000 0 0 0 0.000 0.000(d) Bodies Corp. 0 0 0 0.000 0 0 0 0.000 0.000

(e) Banks / FI 0 0 0 0.000 0 0 0 0.000 0.000

(f) Any Other… 0 0 0 0.000 0 0 0 0.000 0.000

Sub-Total (A) (1) 7245700 0 7245700 64.406 7245700 0 7245700 61.841 2.565

(2) Foreign

(a) NRIs / Individuals 0 0 0 0.000 0 0 0 0.000 0.000

(b) Other-Individ-uals 0 0 0 0.000 0 0 0 0.000 0.000

(c) Bodies Corp. 0 0 0 0.000 0 0 0 0.000 0.000

(d) Banks / FI 0 0 0 0.000 0 0 0 0.000 0.000

(e) Any Other… 0 0 0 0.000 0 0 0 0.000 0.000

Sub-Total (A) (2) 0 0 0 0.000 0 0 0 0.000 0.000

Total Sharehold-ing of Promoter(A) = (A)(1) + (A)(2)

7245700 0 7245700 64.406 7245700 0 7245700 61.841 2.565

(B) Public Shareholding(1) Institutions(a) Mutual Funds 0 0 0 0.000 0 0 0 0.000 0.000

(b) Banks / FI 0 0 0 0.000 0 0 0 0.000 0.000

(c) Central Govt. 0 0 0 0.000 0 0 0 0.000 0.000(d) State Govt (s) 0 0 0 0.000 0 0 0 0.000 0.000

(e) Venture Capital Funds

0 0 0 0.000 0 0 0 0.000 0.000

(f) Insurance Companies

0 0 0 0.000 0 0 0 0.000 0.000

(g) FIIs 0 0 0 0.000 0 0 0 0.000 0.000(h) Foreign Venture

Capital Funds0 0 0 0.000 0 0 0 0.000 0.000

(i) Others (Specify) 0 0 0 0.000 0 0 0 0.000 0.000Sub-Total (B) (1) 0 0 0 0.000 0 0 0 0.000 0.000

(2) Non-Institutions(a) Bodies Corporatei. Indian 1294666 0 1294666 11.508 1334521 0 1334521 11.389 0.119

ii. Overseas 0 0 0 0.000 0 0 0 0.000 0.000(b) Individual

30


i. Individual share-holders holding nominal share capi-tal upto Rs.1 lakh

693703 38706 732409 6.512 624679 38106 662785 5.656 -0.856

ii. Individual share-holders holding nominal share capital in excess of Rs.1 lakh

543877 0 543877 4.834 626121 0 626121 5.343 0.509

(c) Others (Specify)Directors & their relatives 2400 0 2400 0.021 2400 0 2400 0.020 -0.001

Non Resident Indians 8628 0 8628 0.077 8357 466666 475023 4.054 3.977

Clearing Members 15451 0 15451 0.137 8857 0 8857 0.075 -0.062

Hindu Undivided Families 156869 0 156869 1.394 111259 .0 111259 0.949 -0.445

Sub-Total (B) (2) 2715594 38706 2754300 24.483 2716194 504772 3220966 27.486 3.003Total Public Shareholding (B)=(B)(1)+ (B)(2)

2715594 38706 2754300 24.483 2716194 504772 3220966 27.486 3.033

(C) Shares held by custodian for GDRs & ADRs(1) Promoter and Promoter Group

(2) Public 0 1250000 1250000 11.111 0 1250000 1250000 10.669 3.003

Grand Total (A+B+C) 9961294 1288706 11250000 100.000 9961894 1754772 11716666 100.000 0.000

II) SHAREHOLDING OF PROMOTERS

Sl. No. Shareholders’ Name

Shareholding at the beginning of the year Shareholding at the end of the year% of

change during the

year No. of Shares

% of total Shares of the

Company

% of Shares Pledged /

encumbered to total shares

No. of Shares

% of total Shares of the

Company

% of Shares Pledged /

encumbered to total shares

1 K.C. PALLANI SHAMY 6021600 53.525 94.133 6021600 51.393 94.133 0.000

2 K.C.P.SHIVRAMAN 1173300 10.429 68.618 1173300 10.014 68.618 0.000

3 P.ANNAMMAL 50800 0.452 0.000 50800 0.434 0.000 0.000

Total 7245700 64.406 7245700 61.841 0.000 III) CHANGE IN PROMOTERS’ SHAREHOLDING (PLEASE SPECIFY, IF THERE IS NO CHANGE):

Sl.No. ParticularsShareholding at the beginning of the year Cumulative Shareholding during the year

No. of Shares % of total Shares of the Company No. of Shares % of total Shares of

the CompanyAt the beginning of the year

1 K.C. PALLANI SHAMY 6021600 53.525 6021600 53.525

2 K.C.P.SHIVRAMAN 1173300 10.429 7194900 63.954

3 P.ANNAMMAL 50800 0.452 7245700 64.406

DATE WISE INCREASE / DECREASE IN PROMOTERS SHARE HOLDING DURING THE YEAR SPECIFYING THE REA-SONS FOR INCREASE / DECREASE (E.G. ALLOTMENT / TRANSFER / BONUS / SWEAT EQUITY ETC):

No change during the year

31


At the end of the year

1 K.C. PALLANI SHAMY 6021600 51.393 6021600 51.393

2 K.C.P.SHIVRAMAN 1173300 10.014 7194900 61.407

3 P.ANNAMMAL 50800 0.434 7245700 61.841

IV). Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):Sl.No. Name of the Shareholder No. of Shares % of total Shares

of the CompanyCumulative No. of

Shares% of total Shares of the Company

1 THE INDIA CEMENTS LTD 996500 8.50 996500 8.50

2 S.SANGEETHA 226690 1.93 1223190 10.44

3 PINKESH A SHAH 111000 0.95 1322034 11.39

4 RAVIRAJ DEVELOPERS LTD. 98844 0.84 1385034 12,23

5 SATHYA S 95920 0.82 1428950 13.05

6 PINKESH A SHAH (HUF) 63000 0.54 1453950 13.58

7 FULGUNI PINKESH SHAH 51625 0.44 1478596 14.03

8 DILIP KUMAR LAKHI KARUNA LAKHI

43962 0.38 1499841 14.40

9 PHILLIP CAPITAL(INDIA) PRIVATE LIMITED 43916 0.37 1519365 14.78

10 SAVITHA S 40390 0.34 1537150 15.12

V). Shareholding Pattern of Directors and Key Managerial Personnel:

Sl.No. For each of the Directors and KMP No. of Shares % of total Shares of the Company

Cumulative No. of Shares

% of total Shares of the Company

At the beginning of the year

1 K.C. PALLANI SHAMY 6021600 53.525 6021600 53.525

2 K.C.P.SHIVRAMAN 1173300 10.429 7194900 63.954

3 P.ANNAMMAL 50800 0.452 7245700 64.406

Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

No change during the year

At the end of the year

1 K.C. PALLANI SHAMY 6021600 51.393 6021600 51.393

2 K.C.P.SHIVRAMAN 1173300 10.014 7194900 61.407

3 P.ANNAMMAL 50800 0.434 7245700 61.841

KARUR K.C.P. PACKKAGINGS LIMITED TRANSACTIONS OF DIRECTORS AND KMP OF THE COMPANY FROM 01.04.2015 TO 31.03.2016

BENPOS DATE FOLIO/DEMAT ID NAME PAN Opening

balance Bought Sold Closing balance

% of total shares of the

company01-04-2015 IN30108022350594 K C PALANISAMY AFQPP7907Q 6021600 6021600 53.52531-03-2016 IN30108022350594 K C PALANISAMY AFQPP7907Q 6021600 0 0 6021600 53.525 01-04-2015 IN30108022355612 K C P SIVARAMAN AAXPS4844F 1173300 1173300 10.42931-03-2016 IN30108022355612 K C P SIVARAMAN AAXPS4844F 1173300 0 0 1173300 10.429 01-04-2015 IN30108022509839 P ANNAMMAL AAHPA1324J 50800 50800 0.45231-03-2016 IN30108022509839 P ANNAMMAL AAHPA1324J 50800 0 0 50800 0.452 01-04-2015 IN30108022509847 SR SUDHA BHMPS1943L 2400 2400 0.02131-03-2016 IN30108022509847 SR SUDHA BHMPS1943L 2400 0 0 2400 0.021

32


KARUR K.C.P. PACKKAGINGS LIMITEDTRANSACTIONS OF TOP 10 SHAREHOLDERS OF THE COMPANY FROM 01.04.2015 TO 31.03.2016

BENPOS DATE FOLIO/DEMAT ID NAME PAN Opening

balance Bought Sold Closing balance

% of total shares of the

company01-04-2015 IN30009510558303 The India Cements Ltd AAACT1728P 996500 996500 8.50531-03-2016 IN30009510558303 The India Cements Ltd AAACT1728P 996500 0 0 996500 8.505 01-04-2015 IN30131320493057 SANGEETHA S AIJPS3739F 164050 164050 1.40010-04-2015 IN30131320493057 SANGEETHA S AIJPS3739F 164050 2700 166750 1.42317-04-2015 IN30131320493057 SANGEETHA S AIJPS3739F 166750 1169 167919 1.43307-08-2015 IN30131320493057 SANGEETHA S AIJPS3739F 167919 451 168370 1.43714-08-2015 IN30131320493057 SANGEETHA S AIJPS3739F 168370 2970 171340 1.46221-08-2015 IN30131320493057 SANGEETHA S AIJPS3739F 171340 1350 172690 1.47428-08-2015 IN30131320493057 SANGEETHA S AIJPS3739F 172690 2108 174798 1.49216-10-2015 IN30131320493057 SANGEETHA S AIJPS3739F 174798 2572 177370 1.51423-10-2015 IN30131320493057 SANGEETHA S AIJPS3739F 177370 900 178270 1.52230-10-2015 IN30131320493057 SANGEETHA S AIJPS3739F 178270 2340 180610 1.54106-11-2015 IN30131320493057 SANGEETHA S AIJPS3739F 180610 50 180660 1.54204-12-2015 IN30131320493057 SANGEETHA S AIJPS3739F 180660 1390 182050 1.55411-12-2015 IN30131320493057 SANGEETHA S AIJPS3739F 182050 23940 205990 1.75818-12-2015 IN30131320493057 SANGEETHA S AIJPS3739F 205990 6980 212970 1.81825-12-2015 IN30131320493057 SANGEETHA S AIJPS3739F 212970 2920 215890 1.84331-12-2015 IN30131320493057 SANGEETHA S AIJPS3739F 215890 900 216790 1.85008-01-2016 IN30131320493057 SANGEETHA S AIJPS3739F 216790 9000 225790 1.92712-02-2016 IN30131320493057 SANGEETHA S AIJPS3739F 225790 900 226690 1.93531-03-2016 IN30131320493057 SANGEETHA S AIJPS3739F 226690 0 0 226690 1.935 01-04-2015 IN30009510602472 Pinkesh A Shah AHLPS4141A 109459 109459 0.93410-04-2015 IN30009510602472 Pinkesh A Shah AHLPS4141A 109459 1000 110459 0.94317-04-2015 IN30009510602472 Pinkesh A Shah AHLPS4141A 110459 1000 109459 0.93412-06-2015 IN30009510602472 Pinkesh A Shah AHLPS4141A 109459 1541 111000 0.94731-03-2016 IN30009510602472 Pinkesh A Shah AHLPS4141A 111000 0 0 111000 0.947 01-04-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 41914 41914 0.35817-04-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 41914 35951 5963 0.05124-04-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 5963 14220 20183 0.17215-05-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 20183 4919 25102 0.21422-05-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 25102 1082 26184 0.22329-05-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 26184 200 26384 0.22526-06-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 26384 300 26684 0.22810-07-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 26684 500 26184 0.22324-07-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 26184 781 25403 0.21707-08-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 25403 22314 47717 0.40714-08-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 47717 1000 46717 0.39930-09-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 46717 1 46718 0.39923-10-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 46718 46000 718 0.00620-11-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 718 970 1688 0.01427-11-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 1688 499 1189 0.01011-12-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 1189 10215 11404 0.09718-12-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 11404 41900 53304 0.45525-12-2015 IN30292710132151 Raviraj Developers Ltd AAACR2052G 53304 1523 54827 0.46808-01-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 54827 3927 58754 0.50115-01-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 58754 3100 61854 0.52822-01-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 61854 11393 73247 0.62529-01-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 73247 12908 86155 0.73505-02-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 86155 15615 101770 0.869

33


19-02-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 101770 366 101404 0.86526-02-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 101404 1250 100154 0.85504-03-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 100154 1000 99154 0.84631-03-2016 IN30292710132151 Raviraj Developers Ltd AAACR2052G 99154 310 98844 0.844 01-04-2015 IN30131320493049 SATHYA S AIJPS2696H 35887 35887 0.30607-08-2015 IN30131320493049 SATHYA S AIJPS2696H 35887 2273 38160 0.32628-08-2015 IN30131320493049 SATHYA S AIJPS2696H 38160 1960 40120 0.34223-10-2015 IN30131320493049 SATHYA S AIJPS2696H 40120 800 40920 0.34930-10-2015 IN30131320493049 SATHYA S AIJPS2696H 40920 3117 44037 0.37620-11-2015 IN30131320493049 SATHYA S AIJPS2696H 44037 2537 46574 0.39827-11-2015 IN30131320493049 SATHYA S AIJPS2696H 46574 2807 49381 0.42104-12-2015 IN30131320493049 SATHYA S AIJPS2696H 49381 639 50020 0.42711-12-2015 IN30131320493049 SATHYA S AIJPS2696H 50020 540 50560 0.43218-12-2015 IN30131320493049 SATHYA S AIJPS2696H 50560 3830 54390 0.46425-12-2015 IN30131320493049 SATHYA S AIJPS2696H 54390 2947 57337 0.48931-12-2015 IN30131320493049 SATHYA S AIJPS2696H 57337 12425 69762 0.59508-01-2016 IN30131320493049 SATHYA S AIJPS2696H 69762 5726 75488 0.64415-01-2016 IN30131320493049 SATHYA S AIJPS2696H 75488 6914 82402 0.70305-02-2016 IN30131320493049 SATHYA S AIJPS2696H 82402 7848 90250 0.77012-02-2016 IN30131320493049 SATHYA S AIJPS2696H 90250 2700 92950 0.79331-03-2016 IN30131320493049 SATHYA S AIJPS2696H 92950 0 0 92950 0.793 01-04-2015 IN30009511287435 Pinkesh A Shah(HUF) AAEHP6645L 63000 63000 0.53831-03-2016 IN30009511287435 Pinkesh A Shah(HUF) AAEHP6645L 63000 0 0 63000 0.538 01-04-2015 IN30009511287443 Falguni Pinkesh Shah AKPPS2565R 54025 54025 0.46118-09-2015 IN30009511287443 Falguni Pinkesh Shah AKPPS2565R 54025 100 54125 0.46222-01-2016 IN30009511287443 Falguni Pinkesh Shah AKPPS2565R 54125 2500 51625 0.44105-02-2016 IN30009511287443 Falguni Pinkesh Shah AKPPS2565R 51625 500 51125 0.43631-03-2016 IN30009511287443 Falguni Pinkesh Shah AKPPS2565R 51125 500 51625 0.441 0.00001-04-2015 IN30015910026342 DILIPKUMAR LAKHI AABPL9618G 43962 43962 0.37531-03-2016 IN30015910026342 DILIPKUMAR LAKHI AABPL9618G 43962 0 0 43962 0.375

01-04-2015 IN30216410417328PHILLIPCAPITAL (INDIA) PRIVATE LIMITED

AABCR6382C 425 425 0.004


AABCR6382C 425 39693 40118 0.342


AABCR6382C 40118 3798 43916 0.375


AABCR6382C 43916 0 0 43916 0.375

01-04-2015 IN30131320493065 SAVITHA S AIJPS2695E 20013 20013 0.17104-12-2015 IN30131320493065 SAVITHA S AIJPS2695E 20013 2700 22713 0.19411-12-2015 IN30131320493065 SAVITHA S AIJPS2695E 22713 2287 25000 0.21331-12-2015 IN30131320493065 SAVITHA S AIJPS2695E 25000 4420 29420 0.25115-01-2016 IN30131320493065 SAVITHA S AIJPS2695E 29420 2306 31726 0.27126-02-2016 IN30131320493065 SAVITHA S AIJPS2695E 31726 3242 34968 0.29804-03-2016 IN30131320493065 SAVITHA S AIJPS2695E 34968 1822 36790 0.31411-03-2016 IN30131320493065 SAVITHA S AIJPS2695E 36790 3240 40030 0.34231-03-2016 IN30131320493065 SAVITHA S AIJPS2695E 40030 360 40390 0.345

34


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

PARTICULARSSECURED LOANS EX-CLUDING DEPOSITS

`

UNSECURED LOANS

`

DEPOSITS`

TOTAL INDEBTEDNESS

`

Indebtedness at the beginning of the financial year

i) Principal Amountii) Interest due but not paidiii) Interest accrued but not due

276,47,52,185

--

13,43,02,467

--

-

--

289,90,54,652

--

TOTAL ( I + II + III) 276,47,52,185 13,43,02,467 - 289,90,54,652Change in Indebtedness during the financial year

• Addition• Reduction -

18,07,35,032-

49,37,689--

-18,56,72,721

NET CHANGE (18,07,35,032) (49,37,689) - (18,56,72,721)Indebtedness at the end of the financial year

i) Principal Amountii) Interest due but not paidiii) Interest accrued but not due

258,40,17,153--

12,93,64,779--

---

271,33,81,931--

TOTAL ( I + II + III) 258,40,17,153 12,93,64,779 - 271,33,81,931

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (per Annum)

Sl. No. Particulars of Remuneration Managing Director

K.C.P.PALLANISHAMY

Joint Managing Director

K.C.P. SHIVRAMAN

TotalAmount

1. Gross salary(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961.

₹12,00,000

₹12,00,000

₹24,00,000

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

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

NIL NIL NIL

2. Stock Option NIL NIL NIL

3. Sweat Equity NIL NIL NIL

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

5. Others (Gratutity) 57,692 57,692 1,15,384

Total (A) 12,57,692 12,57,692 25,15,384

Ceiling as per the Act * * *

* Minimum Remuneration for Managing Directors.

B. REMUNERATION TO OTHER DIRECTORS:Sl. No. Particulars of Remuneration Name of the Director Total Amount1. Independent Directors

• Fee for attending board/committee meetings

• Commission• Others, please Specify

Shri. K.PalaniappanDr. K MohanV.S.Murali KriishnanA. Ganesh KumarNILNIL

₹22,00022,0004,000

12,000NILNIL

Total (1) 60,000

35


2. Other Non-Executive Directors

• Fee for attending board committee meetings• Commission• Others, please specify

Smt. P Annammal

10,000NILNIL

Total (2) 10,000

Total B - (1+2) 70,000

Total Managerial Remuneration (A + B) 25,85,384

Overall Ceiling as per act Not Applicable

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTDSl. No. Particulars of Remuneration Key Managerial

Personnel Total

Company Secretary V.Venkatesan

1. Gross salary(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

₹9,75,000

₹9,75,000

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

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

2. Stock Option NIL NIL

3. Sweat Equity NIL NIL

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

NIL NIL

5. Others, please specify NIL NIL

Total 9,75,000 9,75,000

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act Brief Description

Details of Pen-alty / Punishment/ Compounding fees

imposed

Authority (RD / NCLT / COURT)

Appeal if any (give Details)

A. COMPANYPenalty NIL NIL NIL NIL NIL

Punishment NIL NIL NIL NIL NIL

Compounding NIL NIL NIL NIL NIL

B. DIRECTORSPenalty NIL NIL NIL NIL NIL



C. OTHER OFFICERS IN DEFAULTPenalty NIL NIL NIL NIL NIL



For Karur K.C.P.Packkagings Limited


36


Annexure FFORM NO. AOC-2

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

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in Sub-Section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

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

SL. No. Particulars Detailsa) Name (s) of the related party & nature of relationship

NOT APPLICABLE

b) Nature of contracts/arrangements/transactionc) Duration of the contracts/arrangements/transactiond) Salient terms of the contracts or arrangements or transaction including the value, if anye) Justification for entering into such contracts or arrangements or transactions’f) Date of approval by the Boardg) Amount paid as advances, if any

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

2. Details of contracts or arrangements or transactions at Arm’s length basis:-(₹ IN LAKHS)

NAME (S) OF THE RELATED PARTY &

NATURE OF RELATIONSHIP

NATURE OF CONTRACTS/

ARRANGEMENTS / TRANSACTION

DURATION OF THE

CONTRACTS/ ARRANGEMENTS/

TRANSACTION

SALIENT TERMS OF THE

CONTRACTS OR ARRANGEMENTS OR TRANSACTION

INCLUDING THE VALUE, IF ANY

DATE OF APPROVAL

BY THE BOARD

AMOUNT PAID AS

ADVANCES, IF ANY

SHRI K.C.P SHIVRAMAN,NON - INDEPENDENT ANDEXECUTIVE DIRECTOR- CFO

RENT01-04-2015

to31-03-2016

4.80

30-05-201514-08-201514-11-201513-02-2016

Nil

SHRI K.C.PALLANI SHAMY CHAIRMAN AND MANAGING DIRECTOR

REMUNERATION01-04-2015

to31-03-2016

12.58

30-05-201514-08-201514-11-201513-02-2016

Nil

SHRI K.C.P SHIVRAMAN,NON - INDEPENDENT ANDEXECUTIVE DIRECTOR- CFO

REMUNERATION01-04-2015

to31-03-2016

12.58

30-05-201514-08-201514-11-201513-02-2016

Nil

SMT P.ANNAMMAL –NON EXECUTIVE WOMEN DIRECTOR

SITTING FEES01-04-2015

to31-03-2016

0.10

30-05-201514-08-201507.09.201514-11-201513-02-2016

Nil

SHRI K.PALANIAPPAN – INDEPENDENT NON EXECUTIVE DIRECTOR


to31-03-2016

0.22

30-05-201514-08-201507.09.201514-11-201513-02-2016

Nil

37


DR. K.MOHAN - INDEPENDENT NON EXECUTIVE DIRECTOR


to31-03-2016

0.22

30-05-201514-08-201507.09.201514-11-201513-02-2016

Nil

SHRI V.S. MURALI KRIISH-NAN - INDEPENDENT NON EXECUTIVE DIRECTOR


to01-08-2015

0.04 30-05-2015 Nil

SHRI A.GANESH KUMAR - INDEPENDENT NON EXECUTIVE DIRECTOR


to31-03-2016

0.1207.09.201514-11-201513-02-2016

Nil

SHRIUDHA VENTURES PTE.LTD SALES

01-04-2015 to

31-03-2016600.00

01.04.2015 to

31.03.2016Nil



38


Annexure G

REPORT ON CORPORATE GOVERNANCE

I. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

Your Company is committed to the highest standards of integrity, transparency and accountability across all levels of the Organisation in the conduct of its business. It acknowledges the importance of good corporate governance in carrying out its corporate mission of creating long-term value to its stakeholders. Our success is grounded in our value system. The Company’s Board of Directors, Management and employees commit themselves to serve the best interests of the investing public – individually and as a team. Your Directors perceive their role as a trustee to the stakeholders in particular and the society at large.

Your Company will continue to focus its resources, strengths and strategies to achieve its vision of brand building, maximising stakeholders’ return and developing people to deliver the same, while upholding the core values of excellence, integrity, responsibility, unity and understanding, which are fundamental to the running of the Company’s business.

Your Company has a strong legacy of fair, transparent and ethical governance practices. Your Company has adopted a Code of Conduct for Directors and Senior Management Personnel. These codes are available on the Company’s website. Your Company keeps its corporate governance policies under constant review to conform, where applicable, with best practices and principles. Your Company is in compliance with the requirements of the guidelines on Corporate Governance stipulated under Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

II. BOARD OF DIRECTORS

(i) As on 31st March, 2016, the Company had Six Directors with three Non-Executive and Independent Directors. The Chairman & Managing Director is an Executive and Promoter Director. The composition of the Board is in conformity with Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Shri K.C. Pallani Shamy, Chairman and Managing Director, Shri K.C.P. Shivraman, Joint Managing Director and Smt. P. Annammal are relatives in terms of Section 2(77) of the Companies Act, 2013 read with the relevant Rules made thereunder. None of the other Directors are related to each other.

(ii) None of the Directors on the Board are Members in more than 10 committees or act as Chairman of more than five committees across all Companies in which he is a Director. The Directors have disclosed to the Company about the committee positions they occupy in other Companies and have notified changes as and when they take place.

(iii) The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanships/Memberships held by them in other Companies are given herein below. Chairmanships/Memberships of Board Committees include only Audit and Stakeholders Relationship Committee (formerly known as Shareholders’/Investors’ Grievance Committees).

Table 1: Composition of Board of Directors

Name and Designation of the Director Category

Number of BoardMeetings during the year

2015-16

Whether attended last AGM

Number of Directorships in other Companies

Number of Committee positions held in other Public

Companies

Held Attended Yes / No ChairmanMember

Chairman MemberPublic Private

Shri K. C. Pallani ShamyPromoter - Executive Director

5 5 Yes NIL NIL 8 NIL NIL

Shri K. C. P. ShivramanPromoter - Executive Director


Smt. P. Annammal

Non-Executive, Promoter–Women Director


39



Shri K. Palaniappan

Non-Executive & Independent Director

5 5 Yes NIL NIL NIL NIL NIL

Dr. K. Mohan



Shri V.S. Murali Kriishnan*


1 1 No NIL NIL NIL NIL NIL

Shri A. Ganesh Kumar**



* Resigned from Directorship with effect from 1st August, 2015.** Appointed w.e.f. 07.09.2015

(iv) The meetings of the Board of Directors are normally held at the Company’s Corporate Office at Karur. Meetings are generally scheduled well in advance and the notice of each board meeting is given in writing to each director. The Board meets at least once in a quarter to review inter-alia the quarterly performance and the financial results.

The Board has met 5 (Five) times during the year and the gap between two meetings did not exceed 120 Days. The said Meetings were held on 30.05.2015; 14.08.2015; 07.09.2015; 14.11.2015 and 13.02.2016. The necessary quorum was present for all the meetings.

(v) The minimum information as required under Part A of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is made available to the board.

The Board has complete access to all information pertaining to the Company. Inter-alia, the following information is regularly

provided to the Board, whenever applicable and materially significant, either as a part of the agenda papers well in advance of the Board meetings or tabled in the course of the Board meeting or tabled before the appropriate Committees of the Board.

• Annual Operating plans & budgets and any updates thereof.

• Capital budgets and any updates thereof.

• Quarterly results of the Company, operating divisions and business segments.

• Minutes of the meetings of Audit Committee and other Committees of the Board.

• The information on recruitment and remuneration of senior officers just below the Board level, including the appointment or removal of Chief Financial Officer and Company Secretary.

• Materially important show cause, demand, prosecution notices and penalty notices.

• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.

• Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company.

• Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.

• Details of any joint venture or collaboration agreement.

40



• Transactions that involve substantial payment towards goodwill, brand equity or intellectual property.

• Significant labour problems and their proposed solutions. Any significant development in human resources/industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme etc.

• Sale of material nature, of investments, subsidiaries, assets, which is not in the normal course of business.

• Quarterly details of foreign exchange exposures and the steps taken by the management to limit the risks of adverse exchange rate movement, if material.

• Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer, etc.

The Board has established procedures to enable the Board to periodically review compliance reports of all laws applicable to the Company, prepared by the Company as well as steps taken by the Company to rectify instances of non-compliances.

Equity Shares held by Non–Executive Directors

Smt. P. Annammal holds 50,800 equity shares of the Company constituting 0.43% of the total share capital of the Company. None of the other Non-Executive Directors hold shares in the Company as on 31st March, 2016. None of the Non-Executive Directors have any material pecuniary relationship or transactions with the Company.

Risk Management

The Company has established robust risk assessment and minimisation procedures, which are reviewed by the Board periodically. The Company has a structure in place to identify and mitigate the various risks that would be faced by it from time to time. The risks are reviewed periodically, new risks if any, are identified, assessed, and control measures are designed to put in place fixed timeline for mitigating the risk.

III. AUDIT COMMITTEE

The Audit Committee plays an important role in overseeing the internal control and the financial reporting system of the Company. The Company has an independent audit committee constituted in line with the provisions of Regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013.

The Audit Committee comprises of three members of the Board, all of whom are Non-Executive and Independent Directors. During the year, the Audit Committee was reconstituted once on 14.08.2015 with the induction of Shri. A. Ganesh Kumar as Member of the Committee in place of Shri V.S. Murali Kriishnan.

The Audit Committee at present comprises of Shri K. Palaniappan, as its Chairman, Dr. K. Mohan and Shri. A. Ganesh Kumar as its Members. All the members of the Committee have excellent financial and accounting knowledge. The Company Secretary acts as the Secretary of the Committee.

The Committee met 5 (Five) times during the year on 30.05.2015; 14.08.2015; 07.09.2015; 14.11.2015 and 13.02.2016. The time gap between any two meetings was less than four months. Necessary quorum was present for all the meetings.

Table 2: Attendance record of Audit Committee

Name of the Director Category StatusNo. of Meetings during the year

Held AttendedShri K. Palaniappan Independent Chairman 5 5Dr. K. Mohan Independent Member 5 5Shri V.S.Murali Kriishnan * Independent Member 5 1Shri A. Ganesh Kumar ** Independent Member 5 3

* Resigned from Directorship with effect from 1st August, 2015.** Inducted as members of Audit Committee with effect from 14th August, 2015.

41



The functions of the Audit Committee include the following:

• Supervising of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.

• Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditors and the fixation of audit fees.

• Approval of payment to statutory auditors for any other services rendered by the statutory auditors. • Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular

reference to:

v Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Section 134 of the Companies Act, 2013.

v Changes, if any, in accounting policies and practices and reasons for the same. v Major accounting entries involving estimates based on the exercise of judgment by the management.v Significant adjustments made in the financial statements arising out of audit findings. v Compliance with listing and other legal requirements relating to financial statements. v Disclosure of any related party transactions.v Qualifications in the audit report.

• Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.

• Reviewing with the management, the statement of uses / application of funds, raised through an issue (public issue, rights issue, preferential issue, etc.) the statement of funds utilised for purposes other than those stated in the offer document/ prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

• Review and monitor of auditor’s independence and performance and effectiveness of audit process.

• Approval or any subsequent modification of transactions of the Company with the related parties, if any

• Scrutiny of inter-corporate loans and investments.

• Valuation of undertakings or assets of the Company, wherever it is necessary.

• Evaluation of internal financial controls and risk management systems.

• Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.

• Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

• Discussion with internal auditors on any significant findings and follow up thereon.

• Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

• To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

• To review the functioning of the Whistle Blower mechanism.

• Approval of appointment of Chief Financial Officer (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate.

• Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

The Audit Committee is empowered to

• Investigate any activity within its terms of reference.

• Seek information from any employee.

• Obtain outside legal or other professional advice.

• Secure attendance of outsiders with relevant expertise, if it considers necessary.

42



The Company has systems in place to ensure that the Audit Committee reviews:

• Management discussion and analysis of financial condition and results of operations.

• Statement of significant related party transactions (as defined by the audit committee), submitted by the management.

• Management letters / letters of internal control weaknesses issued by the statutory auditors.

• Internal audit reports relating to internal control weaknesses.

• The appointment, removal and terms of remuneration of the Chief Internal Auditors shall be subject to review by the Audit Committee

IV. NOMINATION AND REMUNERATION COMMITTEE (FORMERLY REMUNERATION COMMITTEE)

The Nomination and Remuneration Committee comprises of three members of the Board, all of whom are Non-Executive and Independent Directors. During the year, the Nomination and Remuneration Committee was reconstituted once on 07.09.2015 with the induction of Shri. A.Ganesh Kumar as Member of the Committee in place of Shri V.S. Murali Kriishnan. The Company Secretary acts as the Secretary of the Committee.

The role of the Remuneration Committee is

a) To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down

b) To recommend to the Board the appointment and removal of such identified persons c) To carry out evaluation of every director’s performanced) To formulate the criteria for determining qualifications, positive attribute, and independence of directore) To formulate a policy relating to remuneration for directors, key managerial personnel and other employeesf) To devise a policy on Board diversity.

The Committee has met 1 (One) times during the financial year on 07.09.2015.

Table 3: Attendance record of Nomination and Remuneration Committee

Name of the Director Category StatusNo. of Meetings during the year

Held AttendedShri K. Palaniappan Independent Chairman 1 1Dr. K. Mohan Independent Member 1 1Shri. A. Ganesh Kumar *** Independent Member

*** Inducted as members of Audit Committee with effect from 7th September, 2015.

Table 4: Remuneration paid to Executive Directors (in Rs.)

Name & Designation of the Executive Director

Salary & Allowances(Rs.)

Retirement Benefits (Gratuity Provision) (Rs.)

Other Perquisites or benefits including medical expenses reimbursed and car facility

provided (Rs.)

Total

Shri K.C. Pallani Shamy, Chairman & Managing Director 12,00,000 57,692 Nil 12,57,692

Shri K.C.P. Shivraman, Joint Managing Director 12,00,000 57,692 Nil 12,57,692

43



Note:

1. All the Executive Directors are covered under the Company’s Leave Encashment Policy and Group Gratuity Scheme along with the other employees of the Company. Contribution to Gratuity is based on the actuarial valuation made on an overall Company basis and hence individual figures for the directors are not available.

2. The remuneration of managerial persons as mentioned above is being summarized under three major groups viz., Salary and Allowances, Contribution to PF and other funds and Other perquisites and benefits.

3. The remuneration of managerial persons as mentioned above are fixed components which is in accordance with the approval of the Shareholders obtained during their appointments.

4. All the above managerial personnel hold office for a period of 5 years from the respective date of appointment by the Shareholders and shall be renewed in accordance with the provisions of Companies Act, 2013.

5. None of the above managerial personnel are entitled to any Stock options.

Compensation Philosophy in respect of compensation to Non-Executive Directors

The objective of the Compensation Philosophy is to attract and retain high calibre individuals and motivate them towards the achievement of exceptional performance that enhances the value of the Company.

At present a sitting fee of Rs.38,000/- (Rupees Thirty Eight Thousand only) is being paid to each Non-Executive Directors for attending a Board meeting. Also, a sitting fee of Rs.32,000/- (Thirty Two Thousand Only) is being paid to attend a committee meeting.

Table 5: Sitting fee paid to Non-Executive Directors

Sl. No. Name of the Director Board Meeting Audit Committee

Stakeholder Relationship Committee

Nomination and Remuneration

Committee Total

1. Smt. P. Annammal 10,000/- Nil Nil Nil 10,000/-2. Shri K. Palaniappan 10,000/- 10,000/- 1,000/- 1,000/- 22,000/-3. Dr. K. Mohan 10,000/- 10,000/- 1000/- 1,000/- 22,000/-4. Shri V.S. Murali Kriishnan 2,000/- 2,000/- Nil Nil 4,000/-

5. Shri A. Ganeshkumar 6,000/- 6,000/- Nil Nil 12,000/-

Total 38,000/- 28,000/- 2,000/- 2,000/- 70,000/-

POLICY ON SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend his / her appointment, as per Company’s Policy.

b) The Committee has authority to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the position.

c) The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years, provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution.

Remuneration:-

1) Remuneration to Managing Director / Whole-time Directors:

a) The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.

b) The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.

44



2) Remuneration to Non- Executive / Independent Directors:

a) The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.

b) All the remuneration of the Non-Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.

c) An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company.

d) Any remuneration paid to Non-Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied:

i) The Services are rendered by such Director in his capacity as the professional; and

ii) In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.

Remuneration Policy of the Company is attached with Directors Report and the same can be referred.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, an annual performance evaluation of the performance of the Board, the Directors individually as well as the evaluation of the working of the Board Committees was carried out based on the criteria and framework adopted by the Board.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering aspects of the Board’s functioning such as adequacy of the composition of the Board and its committees, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board. The Directors performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc. The performance of every Director was evaluated by the Nomination and Remuneration Committee.

The Independent Directors at their separate meeting reviewed the Performance of the Board as a whole, Non independent Directors and the Chairman of the Board.

V. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company has a Stakeholders Relationship Committee of the Board of Directors to look into the redressal of complaints of shareholders’/investors’ such as transfer or credit of shares, non-receipt of dividend/notices/annual reports, etc.

The Committee Consists of Three Directors of whom two are Non-Executive Independent Directors and the Chairman is a Non-Executive Independent Director. The Committee met one time during the year ended 31st March, 2016 on 13.02.2016 to review the shareholders correspondence including the complaints received from the Shareholders and their redressal. The details of the members of the Committee and their attendance at the above meetings are given below.

Table 6: Attendance record of the Shareholders’/Investors’ Grievance Committee

Name of the Director Category StatusNo. of Meetings

Held AttendedShri K. Palaniappan Independent Chairman 1 1Dr. K. Mohan Independent Member 1 1Shri K.C.P.Shivraman Promoter Member 1 1

45



The Committee supervises the mechanism for redressal of shareholders’/investors’ grievances and ensures cordial investor relations. The Committee takes care of the following matters:

• Redressal of Shareholders’/Investors’ complaints like transfer of shares, non-receipt of annual report, non-receipt of declared dividend etc.

• Scrutinise the performance of the Registrar & Share Transfer Agent and recommends measures for overall improvement of the quality of service.

• Any allied matter(s) out of and incidental to these functions and not here in above specifically provided for.

Details of Complaints received during the year

Number of complaints received from investors - 3Number of complaints resolved - 3Number of complaints remaining unresolved and pending - NIL

Table 7: Nature of complaints received and redressed during 2015-16

Sl. No. Nature of Complaints Received & Redressed

during the year1. Correspondence regarding demat /general 3

2. Correspondence regarding non-receipt of share certificate, transfer/transmission of shares

------

3. Revalidation of dividend warrants / non-receipt of dividend warrants/status of dividend payment

------

Compliance Officer

The Name and designation of the Compliance Officer of the Company:

Mr. V. Venkatesan, Company Secretary & Compliance OfficerCorporate Office: 330/1, Chinna Andan Koil Road, Karur – 639 001, Tamilnadu.Phone No. : 04324 248 016Fax No. : 04324 240 963E-mail ID : [email protected]

VI. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In terms of Section 135 of the Companies Act, 2013, your Company has constituted Corporate Social Responsibility Committee comprising of three members of the Board, namely, Mr. Shri. K. Palaniappan (Chairman), Dr. K. Mohan and Shri A.Ganesh Kumar The Chairman of the Committee is Non-Executive and Independent Director. The Company Secretary acts as the Secretary of the Committee.

During the year, the Committee met on 13-02-2016

The Corporate Social Responsibility Committee is formed to carry out the following duties:

a) To formulate and recommend to the Board, a Corporate Social Responsibility Policy, indicating the activities to be undertaken by the Company as specified in Schedule VII of Companies Act, 2013.

Activities relating to:—

i) eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;

ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects;

iii) promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water;

v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts;

46



vi) measures for the benefit of armed forces, veterans, war widows and their dependants;vii) training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports;viii) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for

socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;

ix) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;

x) rural development projects.

b) To recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and

c) To monitor the Corporate Social Responsibility Policy of Company from time to time.

VII. INDEPENDENT DIRECTORS MEETING:

During the year under review, the Independent Directors met once on 13.02.2016 inter alia, to discuss:

1. Evaluation of the performance of Non Independent Directors and the Board of Directors as a Whole;

2. Evaluation of the performance of the Chairman of the Company, taking into account the views of the Executive and Non Executive Directors.

3. Evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

All the independent Directors were present at the meeting.

VIII. GENERAL BODY MEETINGS

(i) Annual General Meeting

Table 8: Date, time and venue of the last three AGMs

Financial Year Date Time Venue

2012-13 Monday, 30th September, 2013 09.30 A.M. No:1, First Floor, Bhagath Singh Street, Bharathipuram, Puducherry – 605 011

2013-14 Monday, 29th September, 2014 09.30 A.M. No:1, First Floor, Bhagath Singh Street, Bharathipuram, Puducherry – 605 011

2014-15 Wednesday, 30th September, 2015 09.30 A.M. No:1, First Floor, Bhagath Singh Street, Bharathipuram, Puducherry – 605 011

(ii) Extra-Ordinary General Meeting

(iii) Special Resolutions

At the Annual General Meeting of the Company held on 29th September, 2014, 4 (Four) Special Resolutions were passed as below:

• To reappoint Shri K.C. Pallani Shamy as Managing Director of the Company.• To reappoint Shri K.C.P. Shivraman as Joint Managing Director of the Company.• To determine the overall borrowing limits of the Company as under Section 180(1) (c).• To approve the creation of charge of assets or properties of the Company both present and future, in respect of borrowing etc.,

under Section 180(1) (a).

At the Annual General Meeting of the Company held on 30th September, 2015, no Special Resolution was passed.

47



Postal Ballot:

Consent of the Shareholders was obtained by postal ballot during 2015 - 2016 for the following Special Business /Special resolution:-

• To issue and allot equity shares on private placement basis to Non Promoter Group, pursuant to provisions of Section 42 & 62 of Companies Act, 2013.

Voting pattern as per Regulation 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015-is being provided for the above special resolution passed through the postal ballot conducted during 2014-2015

The Company does not envisage passing of any special resolutions through postal ballot before the forthcoming Annual General Meeting.

IX. DISCLOSURES

(i) There are no materially significant related party transactions of the Company which may have potential conflict with the interests of the Company at large. All the Related Party transactions are disclosed in the notes to Accounts forming part of this Annual Report.

(ii) The Company has complied with all the requirement of regulatory authorities. No penalties/strictures were imposed on the Company by BSE Limited, where the shares of the Company are listed or by SEBI or by any other statutory authority on any matter related to capital market during the last three years.

(iii) Whistle-Blower Policy

The Company has adopted the Whistle Blower Policy through which employees and business associates may report unethical business practices at work place without the fear of reprisal. The Company has set up a direct contact initiative under which all employees/business associates have direct access to the Chairman of the Audit Committee and affirms that no personnel has been denied access to the Audit Committee.

The “Whistle Blower Protection Policy” aims to:

• Allow and encourage employees and business associates to bring to the management’s notice concerns about suspected unethical behaviour, malpractice, wrongful conduct, fraud, violation of policies etc.

• Ensure timely and consistent organisational response.• Build and strengthen a culture of transparency and trust.• Provide protection against victimisation.

Details of compliance of mandatory requirements:

Annual Affirmations PARTICULARS Regulation Number Compliance Status (YES / NO/ NA)

Independent director(s) have been appointed in terms of specified criteria of ‘independence’ and/or ‘eligibility’ 16 (1) (b) & 25 (6) YES

Board composition 17(1) YESMeeting of Board of directors 17(2) YESReview of Compliance Reports 17(3) YESPlans for orderly succession for appointments 17(4) YESCode of Conduct 17(5) YESFees/compensation 17(6) YESMinimum Information 17(7) YESCompliance Certificate 17(8) YESRisk Assessment & Management 17(9) YESPerformance Evaluation of Independent Directors 17(10) YESComposition of Audit Committee 18(1) YESMeeting of Audit Committee 18(2) YESComposition of nomination & remuneration committee 19(1) & (2) YESComposition of Stakeholder Relationship Committee 20(1) & (2) YES

48



Composition and role of risk management committee 21(1),(2),(3),(4) YESVigil Mechanism 22 YESPolicy for related party Transaction 23(1),(5),(6),(7) & (8) YESPrior or Omnibus approval of Audit Committee for all related party transactions 23(2), (3) YES

Approval for material related party transactions 23(4) YESComposition of Board of Directors of unlisted material Subsidiary 24(1) YES

Other Corporate Governance requirements with respect to subsidiary of listed entity 24(2),(3),(4),(5) & (6) YES

Maximum Directorship & Tenure

25(1) & (2)

YES – Our Independent Directors doesnot serve on more than seven listed entities and none of our independent directors are serving as whole time directors in any listed entity. All our Independent Directors are serving thetenure as prescribed by the CompaniesAct, 2013.

Meeting of independent directors 25(3) & (4) YESFamiliarization of independent directors 25(7) YES

(iv) The Company has fulfilled the following non-mandatory requirements as prescribed in Part E of Schedule II as mentioned under Regulation 27 (1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:

1. The Board

The Chairman of the Board is an Executive Director who is entitled to managerial remuneration as approved by the Shareholders.

2. Shareholder Rights

The Company regularly does statutory filings as required under the Listing Agreement with the Stock Exchanges and also update the website of the Company on regular basis The financial results as when approved by the Board are hosted in the investor column of the Company’s website from which any shareholder can easily access and obtain the requisite information on the Company.

3. Audit Qualifications

There are no Audit qualifications during the year under review.

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statement as referred to in Note No. 28 to the standalone financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) The company has a sum of Rs.2,05,837/- required to be transferred to the Investor Education and Protection Fund which is yet to be transferred to the said fund.

4. Separate posts of Chairman and CEO

Shri K.C. Pallanishamy is the Chairman and Shri K.C.P. Shivraman is the Managing Director and CEO of the Company

5. Reporting of Internal Auditor

The Company has appointed Internal Auditors who has full access to the Audit Committee to report any findings during their audit.

6. Share Capital Reconciliation Audit

A qualified practicing Company Secretary carried out share capital reconciliation audit to reconcile the total admitted equity share capital with the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The share capital reconciliation audit report confirms that the total issued/paid-up

49



capital is in agreement with the total number of shares in physical form and the total number of dematerialised shares held with NSDL and CDSL.

7. Code of Conduct

(i) The Board has laid down a Code of Conduct for its Members and Senior Management Personnel of the Company. The code of conduct is available on the website of the Company, www.karurkcp.in All Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct.

(ii) The CEO has affirmed to the Board that this Code of Conduct has been complied by all the Board Members and Senior Management Personnel.

8. Code for Prevention of Insider Trading Practices

SEBI vide its Circular No. LD-NRO/ GN/ 2014-15/21/85 dated 15th January,2015 has introduced SEBI (Prohibition of Insid-er Trading) Regulations, 2015, to be effective from 15th May 2015. The Regulation 8 contained under Chapter IV of SEBI (Prohibition of Insider Trading) Regulations, 2015 mandates listed companies to formulate a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (hereinafter referred to as “Code”) and the Regulation 9(1) contained under Chapter IV of SEBI (Prohibition of Insider Trading) Regulations, 2015 mandates listed companies to formulate a Code of Conduct (hereinafter referred to as “Code”) to regulate, monitor and report trading by its employees and other connected persons, towards achieving compliance with the said Regulations, adopting the minimum standards, set out in Schedule B to the Regulations. In compliance with the above SEBI regulation on Prevention of Insid-er Trading, the Company has instituted a comprehensive code of conduct and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information for its management and staff. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautioning them of the consequences of violations.

9. Disclosure of accounting treatment in preparation of financial statements

The Company has followed the guidelines of accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements.

10. Disclosure of commodity price risks and commodity hedging activities. NA

11. CEO & CFO Certification

CEO and CFO certification on the financial statements and the cash flow statement for the year is enclosed and forms part of this report.

X. MEANS OF COMMUNICATION

The Company has its own website and all vital information relating to the Company and its performance including quarterly results, quarterly shareholding pattern are posted on that website, namely www.karurkcp.in.

The quarterly, half-yearly and annual results of the Company are published in leading English and Vernacular newspapers like Trinity Mirror (English) and Makkal Kural (Tamil) Daily.

No separate presentations were made to institutional investors or to the analysts.

A Management Discussion and Analysis Report have been included and forms part of this Annual Report.

XI. GENERAL SHAREHOLDER INFORMATION

(i) Annual General Meeting

Date : 27th January, 2017Time : 09.30 A.M.Venue : No:1, First Floor, Bhagath Singh Street, Bharathipuram, Puducherry – 605 011

50



As required under Regulation 36(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, particulars of Directors seeking appointment/re-appointment at the ensuing Annual General Meeting (AGM) are given in the Annexure to the Notice of the AGM to be held on 30th September, 2016.

Financial Calendar

Financial Year : 1st April to 31st March

For the year ended 31st March, 2016, results were announced on

First Quarter : 14.08.2015Half Year : 14.11.2015Third Quarter : 13.02.2016Annual : 04.11.2016**due to the search conducted by the Income Tax Department on 10th May, 2016, annual results for the year ended 31st March, 2016 was announced beyond 60 days

For the year ending 31st March, 2017 results will be announced as follows

First Quarter : within 45 days from the end of first quarterHalf Year : within 45 days from the end of half yearThird Quarter : within 45 days from the end of third quarterAnnual : within 60 days from the end of financial year

(ii) Date of Book Closure/Record Date The date of book closure is as mentioned in the Notice of the AGM i.e., from 20th January, 2017 to 27th January, 2017 (both

days inclusive) (iii) Dividend Payment Date: NA(iv) Listing on Stock Exchanges The Company’s shares are listed in Mumbai (BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001), and

the Company’s GDR’s are listed in Luxembourg Stock Exchange. The Company has paid the Annual Listing Fees for the period 2015-2016 to Bombay Stock Exchange.

(v) Stock Code ISIN No. : INE727F01019 BSE Stock Code : 531363(vi) Market Price Data

Month & Year Open (Rs.) High (Rs.) Low (Rs.)April 2015 44.00 63.00 43.05May 2015 53.70 54.25 45.20June 2015 47.00 47.60 40.00July 2015 40.05 62.75 39.15August 2015 59.50 66.65 46.40September 2015 44.45 54.00 42.10October 2015 53.85 58.00 47.15November 2015 51.05 88.50 49.00

December 2015 92.00 95.00 77.25January 2016 92.00 100.00 80.00February 2016 87.05 92.50 61.30March 2016 81.00 84.40 75.50

51



(vii) Performance in comparison with BSE Sensex.

(viii) Registrar and Share Transfer Agent

M/s. S. K. D. C. Consultants Limited, Kanapathy Towers, 3rd Floor, 1391/A – 1, Sathy Road, Ganapathy (Post), Coimbatore – 641 006, have been appointed as Registrar and Share Transfer Agents and out of 1,17,66,666 number of shares, 99,61,894 number of shares are in dematerialized form comprising of 85.03%.

All communications relating to share transfers, share certificates, change of address, dividends and any other query relating to shares should be addressed to the above Registrar and Share Transfer Agent.

(ix) Share Transfer System

The share transfers in physical form are presently processed and the share certificates are returned within the stipulated time, subject to the documents being clear in all respects. The transfer of shares in physical mode is approved by the Share Transfer Committee.

(x) Distribution of Shareholdinga. Distribution of Shareholding as at 31st March, 2016

No. of Shares held

No. of folios/ shareholders

No. of folios/Shareholders (%) No. of Shares Shareholding (%)

Up to 5000 1412 83.16 229143 1.955001 to 10000 132 7.78 111299 0.9510001 to 20000 62 3.65 93341 0.8020001 to 30000 26 1.53 68549 0.5830001 to 40000 9 0.53 32554 0.2840001 to 50000 11 0.65 53140 0.4550001 to 100000 13 0.76 87579 0.75Above 100001 33 1.94 11041061 94.24Total 1698 100.00 11716666 100.00

b. Category of Shareholders as at 31st March, 2016

Category No. of Folios / Shareholders

No. of Shares held

Shareholding (%)

Promoters 3 7245700 61.84Director and their relatives 1 2400 0.02Bodies Corporate 54 1334521 11.39NRIs 13 1725023 14.73Others 1627 1409022 12.02Total 1698 11716666 100.00

52



(xi) Dematerialisation of shares

Out of 1,17,16,666 number of shares, 99,61,894 number of shares are in dematerialized form comprising of 85.02%. as at 31st March, 2016.

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

As on March 31, 2016, there are outstanding USD 1,00,00,000 unsecured Foreign Currency Convertible Bonds, listed on Luxembourg Stock Exchange.

(xiii) Plant Locations

a) Paper Division : Marichinaickenpalayam, Pollachi Taluk, Coimbatore District, Tamilnadu.

b) Paper Bag Division : Marichinaickenpalayam, Pollachi Taluk, Coimbatore District, Tamilnadu.

c) Polypropylene Bag : Mayanur, Karur District, Tamilnadu & FIBC Division

d) Wind Mills : Pulankinar Village, Udumelpet Taluk, Tirupur District, Tamilnadu. Thungavi Village, Madathukulam Taluk, Tirupur District, Tamilnadu.

(xiv) Address for Correspondence

Corporate Office: 330/1, Chinna Andan Koil Road, Karur – 639 001, Tamilnadu.

53



DECLARATION

REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Conduct for the members of the Board and the Senior Management Personnel and these Codes are available on the Company’s website www.karurkcp.in. I confirm that the members of the Board and the Senior Management Personnel have complied with the Code of Conduct in respect of the financial year ended March 31, 2016.



54




CEO / CFO CERTIFICATIONToThe Board of Directors,Karur K.C.P. Packkagings Limited,Karur.

Certificate under Clause 49 (v) of the Listing Agreement.

We hereby certify to the Board that:

a) We have reviewed the Financial Statements and the Cash Flow Statement for the year ended 31st March, 2016 and to the best of our knowledge and belief;

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

(ii) these statements together present a true and fair view of the Company’s Affairs and are in compliance with existing accounting standards, applicable law and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violation of the Company’s Code of conduct.

c) We accept responsibility for establishing and maintaining internal controls and we have evaluated the effectiveness of the Internal control systems of the Company and have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies if any.

d) We have indicated to the auditors and the Audit Committee;

(i) Significant changes in internal control during the year. (ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial

statements and

(iii) Instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system.

Shri V.SANKAR K.C.P.SHIVRAMANChief Financial Officer Managing Director Chief Executive officer

Place : Karur Date : 5th December, 2016

55


Annexure H

Conservation of energy, technology absorption, foreign exchange earnings and outgo

(A) Conservation of energy:

i. Steps taken or impact on conservation of energy ii. Steps taken by the company for utilising alternate sources of energy iii. Capital investment on energy conservation equipments

(B) Technology absorption:

i. Efforts made towards technology absorptionii. Benefits derived like product improvement, cost reduction, product development, import substitutioniii. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year), following:

(a) Details of technology imported. (b) Year of import. (c) Whether the technology been fully absorbed (d) If not fully absorbed, areas where absorption has not taken place, and the reasons therefor.

iv. Expenditure incurred on Research and Development Research and Development activities are carried out on an ongoing basis for improving the efficiency and also for improving

quality of products.

(C) Foreign exchange earnings and Outgo

2015-2016 2014-2015(Rupees in Lakhs)

Earnings 11,755 14,194Outgo 8,580 11,576



56




FORM – A

A. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Current year Previous Year DESCRIPTION 31st March, 2016 31st March, 2015

A. Power and Fuel Consumption

a) Electricity

Purchased (Units) 64,90,163 21,15,266

Total Amount (`) 4,59,45,531 1,53,67,595

Rate / Unit (`) 7.08 7.27

b) Own generation (Generator)

Captive Consumption (Units) 4,54,802 3,23,537

Total Amount (`) 64,95,060 54,04,053

Rate / Unit (`) 14.28 16.70

Diesel Consumed (Litres) 1,33,194 99,027

c) Own generation (Co Gen)

Captive Consumption (Units) 3,34,65,749 4,62,42,134

Total Amount (`) 23,37,58,258 29,45,81,350

Rate / Unit (`) 6.99 6.37

d) Wind Mills Generation

Captive Consumption (Units) 51,70,137 64,30,660

Total Amount (`) 3,45,13,719 3,75,25,710

Rate / Unit (`) 6.68 5.84

B. Consumption per M.T. of Production

Electricity – Units Units / M.T. Units / M.T.

- Paper & Paper bags 1,099.19 1,161.82

- PP & FIBC bags 1,274.79 1,246.42

57


B. Technology Absorption, Adaptation and Innovation

Research and Development activities are carried out on an ongoing basis for improving the efficiency and also for improving quality of products.

C. Foreign Exchange Earnings & Outgo

2015 – 16 2014 – 15 (` In Lakhs) (` In Lakhs)

a) Earnings 11,755 14,194

b) Outgo 8,580 11,576

On behalf of the Board

Place : Karur K. C. PALLANI SHAMYDate : 5th December, 2016 Chairman


58



MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Review of Karur K.C.P. Packkagings Limited’s Business

Your Company had achieved a Turnover during the year under review was ₹ 541.57 Crores as against 622.21 Crores for the previous year, a decrease of 12.96% over the previous year.

The division wise turnover of the Company is shown hereunder:-

Sl. No. Description Turnover

2015 -16Turnover 2014 - 15

Division (` In Lakhs)1. Paper 23,181 26,8912. Paper Bags 16,280 17,6173. PP Bags 2,941 3,5344. FIBC Bags 11,755 14,179

Total 54,157 62,221

Turnover of the Company for the year ended 31st March, 2016 was ₹ 54,157 Lakhs as shown in the below chart:-

We expect your Company to achieve higher growth both in terms of turnover and profit in the years to come.

59



a) Industry Scenario and Development:-

As the Company’s major products, namely, Paper bags and PP bags are supplied to Cement Industries; the growth of your Company is directly proportion to the growth of the Indian Cement industries. Due to major infrastructure developments and growth in housing sector, the Indian Cement industries are growing at 7% to 8% on year to year basis. This growth will directly help your Company too for its growth.

b) Opportunities & Threats:-

The opportunities of the Company are:-

1. Growth in export market and generation of co-gen power will help the Company for its growth.

2. With its available ESK paper production capacity your Company will be able to substitute the imported ESK Paper in Indian market. Also, the Company will have surplus ESK Paper to export to South East Asian countries.

3. Large and growing domestic paper bags market and polypropylene bags market.

4. Favorable Government policies and Public awareness about the environment will help the industry for its additional sales of paper bags.

5. Increasing demand for your Company’s products will increase the market share of the Company.

6. The better customer service to major cement industries will enable the Company’s growth.

The following are the threats to the Company:-

1. The wide fluctuation in the exchange rate, particularly against US Dollar has adversely affected the Company profitability. However, due to export earnings, the Company has a natural hedging against this fluctuation.

2. Paper manufacturing depends largely on availability of imported raw materials. Price movement of imported pulp, influenced by the local demand / supply equilibrium, is always a matter of concern.

3. The major players, alive to the fast emerging international threats, have been aggressively pursuing quality improvement programmes, coupled with cost management and capacity additions. Increasingly, more up-to-date technologies are sought to be implemented, with added focus on environmental regulations.

c) Segmental Information:-

The comparative segment-wise Production and Sales are given below:- PRODUCT 2015-16 2014-15

PAPER DIVISION:-

Production (M.T.) 30,470 36,400

Sales (M.T.) 31,423 35,807

Sales – Including Others (` In Lakhs) 23,181 26,891

PAPER BAG DIVISION :-

Production (Lakhs Bags) 893 966

Sales (Lakhs Bags) 893 966

Sales (` In Lakhs) 16,280 17,617

PP & FIBC BAG DIVISION:-

Production (M.T.) 9,482 10,270

Sales (M.T.) 9,482 10,287

Sales (` In Lakhs) 14,696 17,713

60



d) Outlook:-

The Company has a wide range of products, i.e., ESK Paper, Paper bags, PP bags and FIBC bags. This has given more flexibility to the Company for its growth.

Your Company has ventured into power sector at right time. The 10 MW Co-generation power plant helps your Company for uninterrupted operation, generate power at lower cost as against grid power and will also generate additional income by sale of power.

e) Major Risks and Concerns:-

The major risk the Company foresees is the foreign exchange fluctuation, particularly depreciation of Indian Rupee against US Dollar. As the Paper division raw materials, Wood Pulp and waste paper are being 100% imported, it will be a major concern to your Company.

f) Internal Control Systems and their adequacy:-

The Company is having adequate internal control systems to monitor the various activities of the business and to review the same periodically. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognized. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance of these systems. The Audit Committee meets at regular intervals to review the internal audit function;

g) Discussion on financial performance with respect to operational performances:-

The Profit before tax is ₹ 602 Lakhs, which is 45.06%. higher when compared to the Profit of the previous year. However on account of increased cost of imports and reduced margins it is not commensurate with the expectations. Your Company adopts all the possible measures to reduce the cost and exploring new market segments and better product mix. A detailed discussion on financial performance has been given under Performance of this report.

h) Human Resources:-

Excellent cordial industrial relations are maintained with the employees of the Company at all levels. Various HRD and training programmes are conducted to develop the skills of the employees and their value contribution to the Company. Professional managers are employed to manage key positions in the Company. The total number of employees in Karur K.C.P. Packkagings Limited, as on 31st March, 2016 is 1487.

i) Wholly Owned Subsidiary Company:

The Company has a Wholly Owned Subsidiary Company in the name M/s. Shriudha Ventures Pte Ltd, which has been incorporated on 09th April, 2012 in Republic of Singapore for the purpose of carrying the business of importers, exporters, whole salers and agents of Urea, Packaging materials and other general commodities.

j) Cautionary Statement :-

Estimates & Expectations stated in this Management Discussion & Analysis Report may be within “Forward looking” statements within the meaning of applicable Securities Laws and Regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company’s operation include economic condition affecting demand / supply and price conditions in the domestic & international markets, changes in Government Regulations, Import policies, Tax Laws, Statutes and other incidental factors.

On behalf of the Board

Place : Karur K. C. PALLANI SHAMYDate : 5th December, 2016 Chairman

61


INDEPENDENT AUDITORS’ REPORT ON CORPORATE GOVERNANCE

AUDITOR’S CERTIFICATE ON COMPLIANCE OF THE PROVISIONS OF THE CODE OF CORPORATE GOVERNANCE

To

The Shareholders of KARUR K. C. P. PACKKAGINGS LIMITED

We have examined the compliance of conditions of Corporate Governance by M/s. Karur KCP Packkaagings Limited, (“the Company”) for the year ended 31st March 2016 as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges and as per the relevant provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR) Regulations].

The compliance of conditions of Corporate Governance is the responsibility of Company’s management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement / SEBI (LODR) Regulations, as applicable.

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

Place : Karur For MSS SRIRAM & Co.,Date : 04th November, 2016 Chartered Accountants ICAI Firm Registration No 007909S

P.R.MAHADEVAN Partner Membership Number : 007377

62


INDEPENDENT AUDITORS’ REPORT

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of M/s. Karur K.C.P. Packkagings Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under and the order under section 143 (11) of the Act.

We conducted our audit in accordance with the Standards on Auditing specified u/s 143(10) of the Companies Act, 2013. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2016:

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date.

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

To the Members of Karur K.C.P. Packkagings Limited

63



Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India, in terms of Section 143(11) of the Companies Act, 2013, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purpose of our audit;b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our

examination of those books; c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement, dealt with by this Report are in agreement with

the books of account;d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section

133 of the Act.e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board

of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013.

f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operative effectiveness of such controls, refer to our separate report in “Annexure B”.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(iv) The Company has disclosed the impact of pending litigations on its financial position in its financial statement as referred to in Note No. 28 to the standalone financial statements.

(v) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(vi) The company has a sum of Rs.2,05,837/- required to be transferred to the Investor Education and Protection Fund which is yet to be transferred to the said fund.



64


“Annexure A” to the Independent Auditor’s Report(Referred to in paragraph 1 under the heading ‘Report on Other Legal and Regulatory Requirements’ of our report of even date)

1. Fixed assets: (a). The company has maintained proper records showing full particulars, including quantitative details and situation of fixed

assets on the basis of available information; (b). According to the information and explanation furnished to us, the fixed assets have been physically verified by the management

during the year in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of assets. No material discrepancies were noticed on such physical verification.

(c). According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

2. Inventories:(a). As explained to us, the inventories have been physically verified by the management during the year at reasonable intervals(b). In our opinion and according to the information and explanation given to us, the Company has maintained proper records of

inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been appropriately dealt with in the books of accounts.

3. Loans and advances: The Company has not granted any loans secured or unsecured to the Companies, Firms, Limited Liability partnerships or any

other parties covered in the register maintained under Section 189 of the Companies Act. Accordingly, the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the company and hence not commented upon.

4. Loans, Investments, Guarantees and Securities: According to the information and explanation to us, the company has given guarantee for the loan availed by its wholly owned

subsidiary company M/s.Shriudha Venture Pte Ltd., Singapore from the bank, the terms and conditions whereof are not prejudicial to the interest of the company.

5. Acceptance of Public Deposits: In our opinion and according to the information and explanation given to us, the Company has not accepted or invited any

deposits from the public during the year. Therefore, the provisions of the clause (v) of the paragraph 3 of the CARO, 2016 are not applicable.

6. Cost Records: We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost Records and Audit)

Rules, 2014 prescribed by the Central Government under section 148 (1) (d) of the Companies Act, 2013, the prescribed cost accounts and records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7. Statutory Dues: (a) According to the information and explanations given to us and the records examined by us, the company is regular in depositing

with appropriate authorities undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales-Tax, Value Added tax, Service Tax, Custom Duty, Excise Duty and other statutory dues applicable to it. According to the information and explanation given to us, no undisputed arrears of statutory dues were outstanding as at March 31, 2016 for a period of more than six months from the date become payable.

(b) Details of dues of Excise Duty, Service Tax, and Value added Tax which has not been deposited as on March 31, 2016 on account of disputes are given below:

Name of the statute Nature of the dues Period to which the amount relates Amount ` In Lakhs Forum where dispute in pending

Tamil Nadu Value Added Tax, 2006

Dispute on Reversal of Input Tax Credit

2013-14 28.62 High Court of Judicature, Madras (Madras Bench)

2014-15 44.15 High Court of Judicature, Madras (Madurai Bench)

ANNEXURE TO INDEPENDENT AUDITORS’ REPORT

65


Out of the above Rs.3.58 lakhs for 2013-14 and Rs.11.04 lakhs for 2014-15 has been deposited in pursuance of the direction of the Hon’ble Madras High Court Madurai Bench.

8. Default in repayment of Bank and Financial Institutions: In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of

dues to banks. The Company has not taken any loan either from Financial Institutions or from government has not issued any debentures.

9. Raise of money from public including debts and term loans: In our opinion and according to the information and explanation given to us, monies raised by way of debt instruments and the

terms loans during the year have been applied by the company for the purposes for which they were raised.

10. Frauds: According to the information and explanations given to us, we report that no fraud by the company or on the company by its

officers or employees has been noticed or reported during the year.

11. Managerial Remuneration: According to the information and explanations given to us and based on our examination of the books of account and other records

of the company, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V of the Act.

12. Nidhi Company: In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to

the Company.

13. Related Party Transactions. According to the information and explanations given to us, all transactions with the related parties are in compliance with section

177 and 188 of Companies Act, 2013 and the details have been disclosed in the financial statements as required by the applicable accounting standards.

14. Private placement / Preferential allotment:a) According to the information and explanation given to us, the company has not made any preferential allotment of shares or

fully or partly convertible debentures and hence reporting under clause 3(xiv) of the Order are not applicable to the Company.b) During the Financial Year 2015-16 the Company has made private placement of 4,66,666 equity shares of Rs.10/- each at a

premium of Rs.140/- per share and the amount raised have been utilised for the purposes for which they were raised.

15. Non-Cash Transactions: According to the information and explanations given to us, the company has not entered into any non-cash transactions with

directors or persons connected with him. And hence reporting under clause 3(xv) of the order are not applicable to the company.

16. Registration with Reserve Bank of India: In our opinion, the company is not required to be registered under section 45IA of the Reserve Bank of India Act, 1934 and

accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the company and hence not commented upon.




66


“Annexure B” to the Independent Auditor’s Report of even date on the Standalone Financial Statement of M/s. Karur K.C.P. Packkagings Limited Report on the Internal Financial Controls u/s 143 (3) (i) of the Companies Act, 2013 (“ the Act”)We have audited the internal financial controls over financial reporting of M/s. Karur K.C.P Packkagings Limited (“the company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies the safe-guarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the company’s internal financial controls over financial reporting based on our au-dit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial Controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.Our audit involves performing procedure to obtain audit evidence about the adequacy of the internal financial controls system over financial report-ing and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the re-liability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accept-ed accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding pre-vention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper manage-ment override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial control over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016 based on the internal control over financial reporting crite-ria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Place : Karur For MSS SRIRAM & Co.,Date : 04th November, 2016 Chartered Accountants ICAI Firm Registration No 007909S P.R.MAHADEVAN Partner Membership Number : 007377

ANNEXURE TO INDEPENDENT AUDITORS’ REPORT

67


BALANCE SHEET AS AT 31ST MARCH, 2016

Particulars Note No. AS AT 31.03.2016 AS AT 31.03.2015 ` `

A EQUITY AND LIABILITIES

1 Shareholders Funds

(a) Share capital 1 11,71,66,660 11,25,00,000

(b) Reserves and Surplus 2 158,40,14,276 147,86,78,756

Sub-total-Shareholders Funds 170,11,80,936 159,11,78,756

2 Non-Current Liabilities

(a) Long-term borrowings 3 40,97,72,228 49,01,41,340

(b) Deferred tax liabilities (net) 4 31,22,30,000 29,22,46,700

(c) Other long-term liabilities 5 75,43,41,000 71,69,20,000

(d) Long-term provisions 6 59,13,459 57,98,075

Sub-total-Non-Current Liabilities 148,22,56,687 150,51,06,1153 Current Liabilities

(a) Short-term borrowings 7 208,64,39,272 226,72,19,255

(b) Trade Payables 8 64,99,36,961 75,55,91,783

(c) Other Current liabilities 9 26,71,69,272 18,67,40,618

(d) Short-term provisions 10 1,46,71,381 95,06,772

Sub-total- Current Liabilities 301,82,16,886 321,90,58,428 TOTAL EQUITY AND LIABILITIES 620,16,54,509 631,53,43,299B ASSETS 1 Non-Current Assets (a) Fixed assets 11 (i) Tangible assets 245,68,64,904 253,22,90,474 (ii) Capital work-in-progress 7,40,14,085 3,80,70,419 (b) Non-Current investments 12 6,44,97,672 6,32,86,542 (c) Long-term loans and advances 13 1,37,22,218 1,09,74,605 (d) Other non-current assets 14 2,18,67,112 2,82,17,363

Sub-total- Non-Current Assets 263,09,65,991 267,28,39,4032 Current Assets (a) Inventories 15 175,41,19,338 193,94,65,608

(b) Trade receivables 16 123,86,80,671 123,91,15,059

(c) Cash and cash equivalents 17 39,65,82,825 29,97,62,105

(d) Short-term loans and advances 18 18,13,05,684 14,83,53,542

(e) Other Current assets 19 _ 1,58,07,582

Sub-total - Current Assets 357,06,88,518 364,25,03,896 TOTAL ASSETS 620,16,54,509 631,53,43,299 The accompanying notes are an integral part of the financial statements. As per our Report annexed For MSS Sriram & Co Chartered Accountants ICAI Firm Registration No.007909S P.R.MAHADEVAN V.VENKATESAN K.C.P.SHIVRAMAN K.C.PALLANI SHAMYPartner Company Secretary Joint Managing Director Managing DirectorMembership Number:007377 Place : Karur Date : 04th November, 2016

68


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016

Particulars Note No. FOR THE YEAR ENDED FOR THE YEAR ENDED 31.03.2016 31.03.2015 ` `

I Income

Revenue from operations 20 541,56,76,047 622,21,27,361

Less: Excise Duty 32,30,00,551 35,95,02,567

Revenue from Operations (Net) 509,26,75,496 586,26,24,794

Other Income 21 2,92,83,452 2,94,05,086

Total Revenue 512,19,58,948 589,20,29,880

II Expenses

Cost of materials consumed 22 359,96,03,323 433,19,39,740

Changes in inventories of 23 6,25,14,904 (1,09,49,921)

finished goods, work-in-progress

Employee benefits expense 24 23,56,33,720 24,33,15,833

Financial costs 25 38,53,02,127 39,79,29,816

Depreciation and amortization expense 17,22,75,015 17,22,00,380

Other expenses 26 60,64,44,280 71,61,27,117

Total Expenses 506,17,73,369 585,05,62,965

III Profit before tax (I -II) 6,01,85,579 4,14,66,915

IV Tax expense:

Current tax 1,25,00,000 85,00,000

MAT credit entitlement (1,23,00,000) (47,73,600)

Prior years - 18,66,282

Deferred tax 1,99,83,300 (28,44,300)

Sub-total 2,01,83,300 27,48,382

V Profit for the period from continuing operations (III-IV) 4,00,02,279 3,87,18,533

VI Earning per equity share (Face value of ` 10/- each)

Basic 3.41 3.44

Diluted 3.07 3.02

The accompanying notes are an integral part of the financial statements.

As per our Report annexed For MSS Sriram & Co Chartered Accountants ICAI Firm Registration No.007909S

P.R.MAHADEVAN V.VENKATESAN K.C.P.SHIVRAMAN K.C.PALLANI SHAMYPartner Company Secretary Joint Managing Director Managing DirectorMembership Number:007377 Place : Karur Date : 04th November, 2016

69


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016

Particulars 2015-16 2014-15 ` ` A. CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax 6,01,85,579 4,14,66,915 Add: Depreciation 17,22,75,015 17,22,00,380 Preliminary Expenses 63,50,251 73,65,312 Financial Charges 38,53,02,127 39,79,29,816 Loss on sale of Fixed Assets 7,94,900 - Less: Profit on sale of Fixed Assets 31,71,300 14,448 Interest Income 2,55,37,661 2,72,55,171 Dividend Income 60,000 60,000 Exchange Fluctuation relating to FCCB - (2,49,10,000) Operating Profit before Working Capital changes 59,61,38,911 61,65,42,804 Working Capital Changes Decrease/(Increase) in Inventories 18,53,46,270 (8,29,13,593) Decrease/(Increase) in Sundry Debtors 4,34,388 (6,75,92,970) Decrease/(Increase) in Other Current Assets 1,18,48,839 1,45,37,567 Decrease/(Increase) in Loans and Advances (3,29,52,142) (1,16,11,257) (Decrease)/Increase in Trade Payable, Current Liabilities and Provisions (16,35,05,157) 2,91,24,832 Net Cash flow from operating Activities 59,73,11,109 49,80,87,383 B. CASH FLOW FROM INVESTING ACTIVITIES Sale of Fixed Assets 1,24,28,699 79,70,000 Interest Received 2,55,37,661 2,72,55,171 Dividend Received 60,000 60,000 Less: Purchase of Fixed Assets 14,28,45,411 12,25,76,289 Net Cash used in Investing Activities (10,48,19,051) (8,72,91,119)C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Borrowings (8,03,69,113) (8,15,90,326) Issue of Equity Share Capital and Share Premium 69,999,900 _ Less: Financial Charges 38,53,02,127 39,79,29,816 Dividends Paid and Corporate Tax there on - - Net cash paid in Financing Activities (39,56,71,340) (47,95,20,142)D) TOTAL INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENT DURING THE YEAR 9,68,20,720 6,87,23,878 Cash and Cash equivalents at the beginning of the year 29,97,92,105 36,84,85,983 Cash and Cash equivalents at the closing of the year 39,65,82,825 29,97,62,105 Reconciliation of Cash & Cash Equivalents with the Balance Sheet: Cash & Cash Equivalents as per Balance Sheet (Refer Note.17) 39,65,82,825 29,97,62,105

Less: Bank Balances not considered as Cash and Cash Equivalents as defined in AS 3 Cash Flow Statements

Deposits for Margin Money & Others 38,18,62,919 27,58,96,388 Unpaid Dividend Accounts 3,37,561 3,91,168

Net Cash & Cash Equivalents (as defined in AS 3 Cash Flow 1,43,82,345 2,34,74,549 Statements) included in Note 17

Cash & Cash Equivalents at the end of the year 1,43,82,345 2,34,74,549

The accompanying notes are an integral part of the financial statements.As per our Report annexed For MSS Sriram & Co Chartered Accountants ICAI Firm Registration No.007909S


70


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 1 - SHARE CAPITAL

AUTHORISED 2,00,00,000 Equity Shares of ` 10/- each 20,00,00,000 20,00,00,000 ISSUED, SUBSCRIBED AND PAID UP At the beginning of the year 1,12,50,000 Equity Shares of ` 10/- each fully paid 11,25,00,000 11,25,00,000 Add : Issued during the year 4,66,666 Equity Shares of Rs.10/- each fully paid 46,66,660 TOTAL AS PER BALANCE SHEET 11,71,66,660 11,25,00,000 a. Par value per share 10 10b. Reconciliation of the number of shares Balance as at the beginning of the year 1,12.50,000 1,12,50,000 Add: Issued during the year 4,66,666 - Less: Redemption / withdrawn during the year - - Balance as at the end of the year 1,17,16,666 1,12,50,000c. List of shareholders holding more than five percent of the equity share capital:

AS AT 31.03.2016 AS AT 31.03.2015Name of the share holder No. of shares in % Value (`) No. of shares in % Value (`)

Shri K.C.Pallani shamy 60,21,600 51.39 6,02,16,000 60,21,600 53.53 6,02,16,000Shri K.C.P.Shivraman 11,73,300 10.01 1,17,33,000 11,73,300 10.43 1,17,33,000The India Cements Ltd. 9,96,500 8.50 99,65,000 9,96,500 8.86 99,65,000The Bank of New York Mellon, GDR 12,50,000 10.67 1,25,00,000 12,50,000 11.11 1,25,00,000

d. Terms / Rights / restrictions attached to shares:

The Company has only one class of Equity share. Each share has a paidup value of Rs.10/-. Every shareholder is entitled to one vote per share, except for the holders of Global Depository Receipts / Global Depository Shares, who don’t hold voting right. Equity Share holders are entitled to Dividends in proportion to their holding, if declared. In any event Equity Share holders are entitled to receive the remaining assets of the Company after distribution of all lawful amounts payable, such distribution will be proportionate to the number of equity shares held up.

e. Details on each class of shares for a period of five years immediately preceding the date as at which Balance sheet is prepared: i. There were no shares allotted for contract without payment being received in cash during the reporting period nor in the

preceding five years, excepting 12,50,000 of Equity Shares issued under GDR during Financial Year 2011-12.ii. No bonus shares were allotted during the reporting period nor in the preceding five years.iii. No shares were bought back during the reporting period nor in the preceding five years.

NOTE-2 - RESERVES & SURPLUS

A. Securities Premium account As per last Balance Sheet 67,06,66,500 67,06,66,500 Add: Addition during the year 6,53,33,240 -

Closing balance (Total - A) 73,59,99,740 67,06,66,500 B. General Reserve account As per last Balance Sheet 24,00,00,000 24,00,00,000 Add: Transfer from Statement of Profit & Loss - - Closing balance (Total - B) 24,00,00,000 24,00,00,000 C. Surplus Opening balance in Statement of Profit & Loss 56,80,12,256 60,04,19,876 Add :-Net Profit for the year 4,00,02,280 3,87,18,533 Less:- Appropriations Adjustment related to Fixed Assets - 7,11,26,153 Transfer to General Reserve - - Proposed Dividend - - Tax on Proposed Dividend - -Closing balance (Total - C) 60,80,14,536 56,80,12,256TOTAL AS PER BALANCE SHEET (A+B+C) 1,58,40,14,276 1,47,86,78,756

71



AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 3 - LONG TERM BORROWINGS a. Secured Term Loan from Banks

Wind Mills 2,04,04,604 2,79,74,739 Co-gen Power Plant 16,13,41,292 24,14,29,572

b. Other Secured Loans : Corporate Loans 19,03,68,333 18,95,34,223

c. Unsecured Loans : Hire Purchase Loans 3,76,57,999 3,12,02,806

TOTAL AS PER BALANCE SHEET 40,97,72,228 49,01,41,340

Common Security:

Term Loans on Fixed Assets: Term loan facility availed from Bankers are secured by deposit of title deeds of immovable properties and further secured by paripassu First Chage of Fixed Assets and paripassu Second Charge on Current Assets of the Company. It carries the base rate of 12% and have a tenure of 6 years. Specific Asset Security: Wind Mills:

The Loan is secured by deposit of title deeds of wind mill located at SF No.23, Thungavi Village, Madathukulam Taluk, Tirupur District, Tamilnadu with Karur Vysya Bank Limited and repayment started from November 2011 to August 2018.

Co-gen Power Plant (10 MW): The Loan is availed from State Bank of India is secured by deposit of title deeds of land located at Marichinaickenpalayam, Pollachi, Tamil Nadu and paripassu first charge on Co-gen power plant and machineries. Repayment starting from October 2012 to March 2018. Corporate loan

The Loan is availed from Karur Vysya Bank Limited is repayable in 60 monthly installments started from November 2015 to October 2020. Interest for the above Term loan range between 12 to 15% per annum.

Hire Purchase Loan: Hire Purchase Loan from HDFC Bank Ltd., and BMW Financial Services India Pvt Ltd., are secured by hypothecation of the specific asset. The installments vary between each and every HP Loan and also the terms of repayment / rate of interest / equated monthly interest. The tenure of HP loan are on average of beyond 30 months.

72



AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 4 - DEFERRED TAX DEFERRED TAX LIABILITY As per last Balance Sheet 29,22,46,700 29,50,91,000 Add : Transfer from Statement of Profit & Loss 1,99,83,300 (28,44,300)


NOTE - 5 - OTHER LONG TERM LIABILITIES (a) From Related Party –Interest free deposit from Managing Director 9,10,12,000 9,10,12,000 (b) Long term monetary item in foreign currency: Foreign Currency Convertible Bond 66,33,29,000 62,59,08,000

TOTAL AS PER BALANCE SHEET 75,43,41,000 71,69,20,000 Terms of Repayment FCCB carries 0% coupon with an YTM of 5% fall due in 2016.

NOTE - 6 - LONG TERM PROVISIONS Provision for Employees Benefits:- Gratuity provisions to working directors 59,13,459 57,98,075

TOTAL AS PER BALANCE SHEET 59,13,459 57,98,075 NOTE - 7 - SHORT TERM BORROWINGS

a. Secured Loans Cash Credit 1,22,23,61,366 115,92,79,653 Packing Credit loan 17,50,55,450 13,48,46,515 Letter of Credit 62,57,22,456 71,77,38,456 Deposit and Other Loans - 18,18,54,631

b. Unsecured Loans Inter Corporate Deposit 3,33,00,000 4,10,00,000 Bill Discounting 3,00,00,000 3,25,00,000

TOTAL AS PER BALANCE SHEET 2,08,64,39,272 226,72,19,254

Working Capital, Packing Credit Loan, Letter of Credit Facilities & Other Loans from Banks: The fund based and non-fund based working capital facilities are secured by a paripassu first charge on all the current assets and paripassu second charge on fixed assets of the Company. The said loans are also personally guaranteed by Chairman & Managing Director and two other Directors.

NOTE - 8 - TRADE PAYABLES Due to Micro & Small Enterprises Nil Nil Others 7,40,16,158 8,10,76,457 Due to subsidiary Company – Shriudha Ventures Pte Ltd, Singapore 57,59,20,803 67,45,15,326


73



AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 9 - OTHER CURRENT LIABILITIES

(a) Current maturities of long-term debt* i) Wind Mill 1,12,61,064 1,12,61,064 ii) Co-gen Power Plant 8,75,00,000 8,75,00,000 (b) Other Secured Loan:- Corporate Loan 9,00,02,588 1,33,33,332 (c) Unsecured Loan:- 2,84,06,780 2,95,99,661 Hire Purchase Loan (d) Unclaimed Dividend # 3,37,561 3,91,168 (e) Statutory Liabilities 2,31,25,827 2,18,49,254 (f) Application money received for allotment of securities and due for refund 1,25,100 - (g) Other payables 2,64,10,352 2,28,06,139

TOTAL AS PER BALANCE SHEET 26,71,69,272 18,67,40,618 * The details of securities are as already stated under note No.3 - Long Term Borrowings# Of the above Rs.2,05,837/- is transferable to Investor Education and Protection Fund.NOTE - 10 - SHORT TERM PROVISIONS Provision for Employee Benefits Gratuity Provisions 1,46,71,381 95,06,772

TOTAL AS PER BALANCE SHEET 1,46,71,381 95,06,772

NOTE - 12 - NON CURRENT INVESTMENT - AT COST Other Investment (Non - Trade & Unquoted) (a) The Shamarao Vithal Co-operative Bank Limited 5,00,000 5,00,000 (20000 shares @ ` 25/- each) b) Wholly Owned Subsidiary – Shriudha Ventures Pte Ltd., 6,27,86,542 6,27,86,542 (10 10 001 shares @ USD 1 each) c) Gold 12,11,130 _ TOTAL AS PER BALANCE SHEET 6,44,97,672 6,32,86,542 NOTE - 13 - LONG TERM LOANS AND ADVANCES Unsecured Considered Good Security Deposits with Government Agencies & Other Agencies 1,37,22,218 1,09,74,605

TOTAL AS PER BALANCE SHEET 1,37,22,218 1,09,74,605 NOTE - 14 - OTHER NON CURRENT ASSETS

(a) Preliminary & other expenses Balance as per last balance sheet 58,591 11,32,243 Add : Incurred during the year - - Less : Written off during the year 58,591 10,73,652

Total (a) - 58,591 (b) Foreign Currency Convertible Bonds expenses Balance as per last balance sheet 11,64,018 23,28,036 Add: Incurred during the year - - Less : Written off during the year 11,64,018 11,64,018 Total (b) - 11,64,018

(c) Expenses incurred on credit facility Balance as per last balance sheet 2,56,38,216 - Add : Incurred during the year - 3,07,65,858 Less : Written off during the year 51,27,642 51,27,642 Total (c) 2,05,10,574 2,56,38,216 (d) ESI Recoverable 13,56,538 13,56,538 TOTAL AS PER BALANCE SHEET (a+b+c+d) 2,18,67,112 2,82,17,363

74


TAN

GIB

LE A

SSET

S N

OTE

- 11

- FIX

ED A

SSET

S


Part

icul

ars

GR

OSS

BLO

CK

DEP

REC

IATI

ON

NET

BLO

CK

Cos

t as

at

01.0

4.20

15A

dditi

ons/

Tran

sfer

s

durin

g th

e ye

ar

Del

etio

ns

/ Tr

ansf

ers

durin

g th

e ye

ar

Cos

t as

at

31.0

3.20

16U

pto

31

.03.

2015

For t

he Y

ear

2015

-16

Del

etio

ns

durin

g th

e Ye

ar

Adj

uste

dD

urin

g th

e Ye

ar

Tota

l upt

o 31

.03.

2016

As

at

31.0

3.20

16A

s at

31

.03.

2015

``

``

``

``

``

`

LAN

D13

,03,

04,4

56-

4

0,71

,200

12,6

2,33

,256

-

-

-

--

12,6

2,33

,256

13,0

3,04

,456

BU

ILD

ING

94,2

1,39

,816

4,66

,27,

854

44,

00,0

0098

,43,

67,6

7014

,12,

61,6

162,

99,6

7,37

8 -

-

17,1

2,28

,994

81,3

1,38

,676

80,0

8,78

,201

PLA

NT

&

EQU

IPM

ENTS

263,

54,0

3,17

53,

68,3

3,36

6 1

8,17

,898

267,

04,1

8,64

311

4,76

,70,

494

12,0

7,76

,084

11,

03,3

60-

126,

73,4

3,21

814

0,30

,75,

425

148,

77,3

2,68

0

FUR

NIT

UR

E &

FIX

TUR

ES1,

63,8

5,61

8 4

,79,

507

-

1,68

,65,

125

91,

67,2

75 1

3,01

,087

-

-1,

04,6

8,36

263

,96,

763

72,

18,3

43

OFF

ICE

EQU

IPM

ENTS

2,87

,23,

531

19,

67,1

32-

3,06

,90,

663

2,33

,25,

683

20,

82,7

26 -

-

2,54

,08,

409

52,8

2,25

4 5

3,97

,849

VEH

ICLE

S15

,31,

60,2

352,

09,9

3,88

6 3

1,32

,305

17,1

0,21

,816

5,24

,01,

291

1,81

,47,

740

22,

65,7

44-

6,82

,83,

287

10,2

7,38

,530

10,0

7,58

,945

TOTA

L39

0,61

,16,

831

10,6

9,01

,745

1,34

,21,

403

399,

95,9

7,17

313

7,38

,26,

359

17,2

2,75

,015

33,

69,1

04 -

154,

27,3

2,27

024

5,68

,64,

904

253,

22,9

0,47

4

Figu

res

for t

he

prev

ious

yea

r37

7,13

,70,

791

15,2

1,31

,685

1,73

,85,

645

390,

61,1

6,83

111

3,99

,29,

918

17,2

2,00

,380

94,

30,0

947,

11,2

6,15

313

7,38

,26,

357

253,

22,9

0,47

426

3,14

,40,

872

75



AS AT 31.03.2016 AS AT 31.03.2015NOTE - 15 - INVENTORIES ` `

(a) Raw materials 111,28,85,347 122,76,41,971 (b) Work-in-progress 58,33,62,717 59,27,12,204 (c) Finished goods 1,09,94,404 6,41,59,821 (d) Stores and spares 4,68,76,870 5,49,51,612

TOTAL AS PER BALANCE SHEET 175,41,19,338 193,94,65,608 NOTE - 16 - TRADE RECEIVABLES (Unsecured Considered Good) (a) Outstanding for a period exceeding six months 72,55,820 76,06,140 (b) Others 123,14,24,851 123,15,08,919

TOTAL AS PER BALANCE SHEET 123,86,80,671 123,91,15,059 NOTE - 17 - CASH AND CASH EQUIVALENTS (a) Cash on hand 34,02,512 32,41,852 (b) Balances with Banks i) Current Account 1,09,79,833 2,02,32,697 ii) Dividend account 3,37,561 3,91,168 (c) Other Bank Balances Margin money with maturity more than 12 months 38,18,62,919 27,58,96,388

TOTAL AS PER BALANCE SHEET 39,65,82,825 29,97,62,105 NOTE - 18 - SHORT TERM LOANS AND ADVANCES (Unsecured Considered Good) (a) Advances to Employees 1,03,83,216 98,77,820 (b) Advances to Suppliers 1,60,93,746 1,78,17,184 (c) Balance with Government Authorities 4,94,60,737 5,43,03,672 (d) Advance Income Tax (Net of provisions) 1,01,96,690 1,48,40,315 (e) MAT Credit entitlement 6,00,99,600 4,77,99,600 (f) Prepaid Expenses 3,50,71,695 37,14,951


NOTE - 19 - OTHER CURRENT ASSETS (Unsecured Considered Good) a) Export Focus Product Scheme _ 1,58,07,582 TOTAL AS PER BALANCE SHEET _ 15,807,582

For the year ended For the year ended 31.03.2016 31.03.2015NOTE - 20 - REVENUE FROM OPERATION ` ` (a) Sale of products i) Finished Goods - Domestic 422,47,38,738 478,46,20,293 ii) Finished Goods - Export 117,55,22,115 141,94,47,340 (b) Freight charges received 1,54,15,194 1,80,59,728 TOTAL AS PER STATEMENT OF P & L 541,56,76,047 622,21,27,361NOTE- 21 - OTHER INCOME (a) Interest Income 2,55,37,660 2,72,55,170 (b) Export Incentive / Receipts 2,59,721 4,24,580 (c) Dividend Received 60,000 60,000 (d) Miscellaneous Income / Receipts 7,161 16,65,336 (e) Profit on sale of Land 31,71,300 - (f) Sundry Creditors no longer payable written back 2,47,610 - TOTAL AS PER STATEMENT OF P & L 2,92,83,452 2,94,05,086

76



77

For the year ended For the year ended 31.03.2016 31.03.2015 ` `NOTE - 22 - COST OF MATERIALS CONSUMED (a) Raw Material 3,58,11,47,637 4,31,18,17,528 (b) Packing Material 1,84,55,686 2,01,22,212

TOTAL AS PER STATEMENT OF P & L 3,59,96,03,323 4,33,19,39,740

NOTE - 23 - CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS

(a) Inventories at the end of the year: 1. Stock in Process 58,33,62,717 59,27,12,204 2. Finished Goods 1,09,94,404 6,41,59,821

59,43,57,121 65,68,72,025 (b) Inventories at the beginning of the year: 1. Stock in Process 5,92,712,204 58,59,23,623 2. Finished Goods 64,159,821 5,99,98,481

65,68,72,025 64,59,22,104 (INCREASE) / DECREASE IN STOCK 6,25,14,904 (1,09,49,921)

NOTE - 24 - EMPLOYEE BENEFITS EXPENSE

a. Employees other than Director’s (a) Salaries, Wages & Bonus 15,66,04,711 17,64,64,245 (b) Contribution to Provident Fund & other Funds 1,91,74,902 1,82,38,574 (c) Contribution to Gratuity 76,64,610 53,70,000 (d) Staff Welfare Expenses 3,76,70,675 3,02,01,572 (e) Security Charges 1,20,03,438 1,05,26,058

b. Managerial Remuneration (a) Managing Director 12,57,692 12,57,692 (b) Joint Managing Director 12,57,692 12,57,692 TOTAL AS PER STATEMENT OF P & L 23,56,33,720 24,33,15,833

NOTE - 25 - FINANCE COST (a) Interest expense i. Bank on a. Term Loans 9,01,94,136 9,43,29,226 b. Working Capital Loan 21,01,92,416 21,60,45,590 ii) HP loan 67,55,422 28,16,016 (b) Other borrowing costs 5,12,58,369 5,14,54,714 (c) Bank charges 2,69,01,784 3,32,84,270

TOTAL AS PER STATEMENT OF P & L 38,53,02,127 39,79,29,816

NOTE - 26 - OTHER EXPENSES A. Manufacturing expenses Stores & Spares Consumed 6,71,65,984 7,29,03,518 Repairs & Maintenance Plant & Machinery 5,05,65,110 5,18,79,134 Building 43,06,400 39,20,396 Power & Fuel 34,73,71,328 39,54,31,298 Total ( a) 46,94,08,822 52,41,34,346



For the year ended For the year ended 31.03.2016 31.03.2015 ` `B. Administrative Expenses Subscription 2,14,256 3,26,982 Rent 12,58,590 29,48,265 Rates & Taxes 64,99,004 75,22,350 Insurance 41,94,960 52,77,731 Payment to Auditors : Statutory Audit Fees 5,00,000 5,00,000 Audit Fees - Tax Audit 25,000 25,000 - Cost Audit 60,000 60,000 Reimbursement of Expenses 1,63,158 72,500 Professional charges 1,41,99,615 1,10,43,854 Telephone, Postage and Courier Charges 19,57,044 26,15,261 Travelling and Conveyance Charges 93,73,334 1,57,42,954 Printing & Stationery 27,68,171 27,75,500 General Expenses 24,78,112 30,02,350 Corporate Social Responsibilty Expenses 42,46,925 21,50,225 Filing Fees and Listing Fees 7,79,913 7,50,252 Repairs & Maintenance General 29,47,637 24,20,728 Vehicles 1,84,63,103 2,43,35,916 Preliminary & Other Expenses Written Off 51,86,233 62,01,294 Loss on Foreign Currency Fluctuation (52,70,353) 98,83,853 Foreign Currency Convertible Bonds Expenses written off 11,64,018 11,64,018 (Profit)/Loss on Sale of Fixed Assets 7,94,900 (14,448) Sundry Creditors Written off 10,70,202 Donation 6,40,180 1,58,755 Sitting Fees to Other Directors 70,000 77,000

Total ( b) 7,27,13,800 10,01,10,542 C. Selling Expenses Carriage Outwards 4,67,06,404 7,18,73,974 Loading & Unloading Expenses 6,60,133 8,01,296 Rebates and Discounts 9,39,282 10,71,089 Brokerage & Commission 76,39,903 78,59,871 ECGC Premium and Marine Insurance 39,75,539 41,59,276 Sample Supply 27,79,378 20,50,806 Advertisement Expenses 2,72,950 9,45,542 Sales promotion Expense 6,35,293 26,33,310 Research & Development Expenses 7,12,776 4,87,065

Total ( c) 6,43,21,658 9,18,82,229

TOTAL AS PER STATEMENT OF P & L (a+b+c) 60,64,44,280 71,61,27,117As per our Report annexed For MSS Sriram & Co Chartered Accountants ICAI Firm Registration No.007909S


78



27. DISCLOSURE PURSUANT TO ACCOUNTING POLICIESSIGNIFICANT ACCOUNTING POLICIES A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The Company follows accrual concept of accounting in preparing accounts. The financial statements have been prepared on

going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 have been followed to the extent applicable in preparation of Annual Accounts. Appropriate Accounting Policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as on the date of the Balance Sheet and the Financial Results of the Company for the year ended on that date.

B. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and

assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

C. FIXED ASSETS Tangible Assets are stated at cost net of recoverable duties and taxes less accumulated depreciation and impairment losses,

if any. The cost of tangible assets comprises its Purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditures related to a item of tangible assets are added to its book value only if they increase the future benefits from the existing assets beyond its previously assessed standard of performance. Projects under which assets are not ready for their intended use are disclosed under Capital Work in Progress.

D. INVESTMENTS Investments, including Gold being long-term, are stated at cost. Provision for diminution in value of long term investments is made

only if such a decline is other than temporary in nature. E. INVENTORIES Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower.

Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured finished goods lying in factory premises is included in the valuation.

F. LIABILITIES Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for and

are disclosed by way of a note. G. PROPOSED DIVIDEND Dividend proposed by Directors, if any, is provided for in the books of accounts pending approval at the Annual General Meeting. H. REVENUE RECOGNITION Revenue from Sales is recognized once the title is passed on to the buyer. Sales include excise duty, cess, and other Levis.

Expenses incurred on account of rising of Foreign Currency Convertible Bonds Loan (FCCB) and Global Depository Receipts (GDR) are treated as deferred revenue expenditure and amortized over a period of five years. In respect of other income and expenses it is recognized based on the contractual rights and obligations. Dividend and yields due, if any, are recognized when the right to receive the payment is established unconditionally and no significant uncertainty exists as to its measurability or correctibility.

With regard to Renewable Energy Certificate held by the company, the saleable value is not ascertainable / determinable on account of market conditions. As and when the actual demand arises the sale takes place by e-auction which is accounted as revenue.

I. DEPRECIATION ACCOUNTING

Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013.

79



J. FOREIGN EXCHANGE TRANSACTIONS Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions. The amount due to

or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be. The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

K. RESEARCH AND DEVELOPMENT Capital Expenditure on Research and Development, if any, are capitalized and depreciated. The revenue expenditure on

Research and Development, if any, is written off in the year in which it is incurred. L. BORROWING COSTS In respect of those asset that takes necessarily a substantial period to get ready for its intended use, borrowing costs directly

attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate.

M. EARNING PER SHARE Basic / Diluted Earnings per share has been computed with reference to the Weighted Average Number of Shares. N. EMPLOYEES BENEFITS

a. Short Term Benefits:- Short term employee’s benefits are charged at the undiscounted amount to profit and loss account in the year in which the

related service is rendered. b. Defined Contribution Plan:- Payments to defined contribution schemes are remitted to the regulatory authorities and charged as expenses as and when

incurred. c. Defined Benefit Plan:-

The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered

through trust funded with Life insurance Corporation of India.

O. CASH FLOW STATEMENT Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Equivalents comprise Cash in Hand, and

Accounts held with Banks. P. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES Significant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with

Accounting Standard 5. Q. SEGMENT REPORTING The Company has identified three business segments viz., Paper, Pager Bags and PP & FIBC Bags. Revenue and expenses

have been identified to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enterprises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

R. ACCOUNTING FOR TAXES ON INCOME

a. Tax expense includes current taxes and deferred taxes. b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year c. Deferred taxes reflect the impact of current year timing difference between taxable income and accounting income for the year

and reversal of timing differences of earlier years. The Tax effects of significant temporary differences are reflected through Deferred Tax Liabilities which has been reflected in the Balance Sheet and the corresponding effects of the same is given in the Profit and Loss Account.

d. The Net effect of taxation due to: i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year and

80



ii. Unadjusted carry forward losses/depreciation for the year computed in accordance with the provisions of the Income Tax Act 1961, is accounted subject to prudence and reasonable certainty in the said year and displayed in the financial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit entitlement.

S. IMPAIRMENT OF ASSETS

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

T. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Pursuant to Accounting Standard 29 Provisions, Contingent Liabilities and Contingent Assets, the Company recognizes provisions only when it has a present obligations a result of a past event, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its present value and are determined based on judgment and best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out flow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

81


28. DISCLOSURE PURSUANT TO FINANCIAL STATEMENTS-BALANCE SHEET 31.03.2016 31.03.2015 ` in lakhs ` in lakhs Disclosures regarding Contingent, Disputed liabilities and Commitments Contingent liabilities on: On 10th May, 2016, search in the premises of the company was conducted by the Income Tax Department. Quantum of Income, if any to be ascertained and impact of tax, if any is yet to be ascertained Factoring / Bills / Cheque discounting facilities availed 1,449 2,182 FCCB interest 3,317 2,817 Guarantees to Bankers of Subsidiary Company towards Standby Letter of Credit 19,900 18,777 Disputed statutory liabilities not provided for: Central Excise/ Service Tax Nil 62 Sales Tax (*) 58 58 (*) (Net after payment of Rs.3.58 Lakhs for 2013-14 & Rs.11.04 Lakhs for 2014-15) Commitments: Estimated amount of contracts to be executed on capital accounts and not provided for NIL NIL

29. DISCLOSURE PURSUANT TO FINANCIAL STATEMENTS-STATEMEMNT OF PROFIT & LOSS:

A. Disclosures regarding Dividend Amount per share (₹) NIL NIL Rate per share NIL NIL

B. Disclosures regarding reserves Amount transferred to reserves NIL NIL Amount transferred from reserves NIL NIL

C. Turnover of Finished goods ESK Paper & Others 23,181 27,178 Paper Bag 16,280 17,617 Polypropylene Bag 14,696 17,426

D. Sale includes inter division transfers Sales of products 15,105 18,119 31.03.2016 31.03.2015 ` in lakhs ` in lakhs E. Stock of Finished Goods ESK Paper Stock at opening 641 573 Stock at closing 110 641

Paper Bag Stock at opening Nil Nil Stock at closing Nil Nil

Polypropylene Bag Stock at opening - 27 Stock at closing - -


82


F. Purchase of Raw Materials Wood Pulp, Waste Paper & Others 12,251 16,501 ESK Paper 14,088 15,760 Polypropylene Granules 8,322 11,580 Note: - Other items do not individually account more than 10% of total purchase on principle of materiality. G. Raw Material Consumed Wood Pulp, Waste Paper & Others 12,714 16,168 ESK Paper 14,426 15,607 Polypropylene Granules 8,671 11,343

H. Imported and Indigenous material consumed during the year

31.03.2016 31.03.2015 ` in lakhs % ` in lakhs %

Wood Pulp & Waste Paper Imported 8,103 64 10,992 68 Indigenous 4,611 36 5,176 32

Paper Bag Imported 163 1 181 1 Indigenous 14,263 99 15,426 99 Polypropylene Granule Imported 202 2 274 2 Indigenous 8,469 98 11,069 98

I. Remittance in Foreign Exchange on account of dividends Number of non resident shareholders Nil Nil Amount of dividends (in ₹) Nil Nil Year to which it relates 2014-15 2013-14

J. Earnings in foreign Exchange Export of Finished Goods 11,755 14,194 K. Expenditure on Foreign Currency i) Raw Materials 8,305 11,266 ii) Chemicals 163 181 iii) Components and Spares 45 80 iv) Capital Goods 57 12 v) Travelling Expenses 10 37


83


L. Break up of Managerial Remuneration Remuneration paid to Shri K.C.Pallani Shamy, Chairman & Managing Director Salary 12 12 Gratuity (Provision) 1 1 Total 13 13

Remuneration paid to Shri K.C.P. Shivraman, Joint Managing Director Salary 12 12 Gratuity (Provision) 1 1 Total 13 13 M. Provision for Gratuity to Working Directors Opening Balance 58 57 Add: Recognized during the year 1 1

Closing Balance 59 58 The Company had recognized gratuity payable to working directors and the liability stand ascertained in accordance of Provisions for Payment of Gratuity Act 1972.

N. Income tax assessment status Income Tax Assessments have been completed up to Assessment year 2013-14.

30. DISCLOSURE PURSUANT TO ACCOUNTING STANDARDS 31.03.2016 31.03.2015 ` in lakhs ` in lakhs A. Disclosures regarding Depreciation

Pursuant to application of Schedule II to the Companies Act, 2013, effective from financial year 2014-15 the company has re-determined the useful life of its depreciable fixed assets and reworked the deprecia-tion chargeable for the year. Consequent to the application of this schedule depreciation additionally chargeable and is written off to Retained Earnings (Surplus in Statement of Profit and Loss under Reserves & Surplus).

The impact of this redetermination of useful life on deferred tax is at Rs.

B. Disclosures regarding Employees Benefits Defined Contribution Plan: The Company contributed towards Provident Fund. Defined Benefit Plan : Gratuity

The Company has contributed a gratuity fund for the benefit of its employees. The Company’s Gratuity scheme is administered by Life Insurance Corporation of India under Group Gratity Scheme to which the Company contributes premium as determined by Life Insurance Corporation of India as per Actuarial Valuation. The contribution so made during the year, other requirements as per AS 15 have not been considered as the entire fund is managed by the Life Insurance Corporation of India.

C. Disclosures regarding Borrowing Costs Pursuant to Accounting Standard-16, the Company has capitalized the borrowing costs of in respect of qualifying assets.


-

-

192

77

-

711

220

182

54

-

84


D. Disclosures regarding Segment Reporting The Company business segment analysis are as under:-

Information about primary segment-Business segment Name of Segment (₹ In Lakhs)

Paper Division Paper Bags Division PP & FIBC Division Total

2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15

Revenue:

Sales - Domestic 23,181 26,876 16,280 17,617 2,941 3,534 42,402 48,027

Sales - Export - 15 - - 11,755 14,179 11,755 14,194

Other Income 84 105 - 10 209 179 293 294

Segment Result - Operating Profit 4,789 4,329 (700) (798) 2,153 2,659 6,242 6,190

Financial Charges 1,951 2,241 335 308 1,567 1,430 3,853 3,979

Profit before Depreciation, Premilinary/ FCCB Expenses W/O 2,838 2,088 (1,035) (1,106) 586 1,229 2,389 2,211

Segment Depreciation, Premilinary / FCCB Expenses W/O 1,072 1,087 78 81 637 628 1,787 1,796

Net Profit / (Loss) before Tax 1,766 1,001 (1,113) (1,187) (51) 601 602 415

E. Disclosures relating to Related Party i) List of the Key Managerial Personnel with whom transactions have been taken place and relationships

Shri K.C.Pallani ShamyKey Managerial Personnel

Shri K.C.P. Shivraman

ii) List of the Other Related Parties

M/s Shriudha Ventures Pte Ltd., Wholly Owned Subsidiary

iii) Transactions during the year (Key Managerial Personnel)

Nature of Transactions Key Managerial Personnel

Expenditure 31.03.2016 ` In Lakhs

31.03.2015 ` In Lakhs

Expenditure

Rent 4.80 4.80

Hire Charges - 1.20

Remuneration to Whole Time Directors 25.15 25.15

Sitting Fees to Other Directors 0.10 0.12

Remuneration to Key managerial personnel - 18.00


85


iv) Transactions with other related parties during the year

Nature of Transactions Wholly Owned Subsidiary31.03.2016 ₹ In Lakhs

31.03.2015 ₹ In Lakhs

Opening Balance Due 67,45,15,326 88,27,80,801Purchases - -Sales 5,79,98,950 4,58,78,375Advances Received During the Year 33,04,54,100 48,56,92,800Sales Proceeds received - 3,13,44,681Advances Repaid/Settled During the Year 37,10,49,673 67,94,24,581Closing Balance Due 57,59,20,803 67,45,15,326

F. Disclosures regarding Earning Per share

Earnings per share has been computed as under 31.03.2016 31.03.2015

Profit After Tax (` In Lakhs) (a) 400 387

Weighted average number of equity shares outstanding (b) 1,17,16,666 1,12,50,000

Effect of potential equity shares on conversion of FCCB loan outstanding (c) 16,58,323 15,64,770

Weighted average number of equity shares in computing diluted earning per share (b+c) (d) 1,29,81,000 1,28,14,770

Earnings per share on profit after tax (Face value of ` 10/- each)

-Basic (`) (a/b) 3.41 3.44

-Diluted (`) (a/d) 3.08 3.02 G. Disclosures regarding Accounting for Taxes on Income Deferred Tax liability on account of depreciation (` in Lakhs)

Opening Balance 2,923 2,951

Add: Created during the year 199 (28)

Closing Balance 3,122 2,923

H. Disclosures regarding Accounting for Scientific Research Revenue Expenditure 7 5


86


31. INFORMATION PURSUANT TO MICRO SMALL AND MEDIUM ENTERPRISES (DEVELOPMENT) ACT, 2006 31.03.2016 31.03.2015 ` In Lakhs ` In Lakhs

ADDITIONAL INFORMATION PURSUANT TO MICRO SMALL AND MEDIUM ENTERPRISES ACT,2006 The Company has initiated the process of identifying enterprises which have supplied goods and services to this company and which qualify under the definition of Micro, Small and Medium Enterprises within the meaning of Micro, Small and Medium Enterprises (Development) Act, 2006. Accordingly, the disclosure in respect of the amount payable to such enterprises as at the end of the financial year has been made in the above said financial statement based on the information and records available with the company which is relied upon by the Auditor; according to the management, the company has not received any claim for interest from any of the above said enterprises. (a) the principal amount and the interest due thereon remaining unpaid to any supplier as at the end of the accounting year Nil Nil (b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act 2006, along with the amount of the payment made to the supplier beyond the appointed day during the accounting year Nil Nil (c) 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 the Micro, Small and Medium Enterprises Development Act, 2006. Nil Nil (d) the amount of interest accrued and remaining unpaid as at the end of the accounting year. Nil Nil (e) 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, for the purpose of disallowance as a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act,2006 Nil Nil 32. OTHER DISCLOSURES

A. The balances due from receivables, advances made, and payables are subject to confirmation from the party concerned. In the absence of the confirmation, the figures are as stated as per the ledger and will be reconciled in case of any discrepancy.

B. In the opinion of the Board of Directors, assets other than fixed assets and non current investments have the value of realization in the ordinary course of business, at least equal to amount at which they are stated

C. Figures of the previous year for the stand alone financial statements have been reworked, regrouped and reclassified wherever necessary to conform to current year’s presentation.


P.R.MAHADEVAN V.VENKATESAN K.C.P.SHIVRAMAN K.C.PALLANI SHAMYPartner Company Secretary Joint Managing Director Managing DirectorMembership Number:007377 Place : Karur Date : 04h November, 2016


87


INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To the Members of Karur K.C.P. Packkagings LimitedReport on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of M/s. Karur K.C.P. Packkagings Limited (“the Company”) and its subsidiary (the Company and its subsidiary constitute “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2016, the Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.Management’s Responsibility for the Financial StatementsThe Holding Company’s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 “(the Act)” with respect to the preparation of these consolidated financial statements that give a true and fair view of the financial position, financial performance and cash flows of the group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under and the Order u/s 143(11) of the Act.We conducted our audit in accordance with the Standards on Auditing specified u/s 143(10) of the Companies Act, 2013. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatements.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the holding company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis of our audit opinion on the consolidated financial statements.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2016.(b) In the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that date; and(c) In the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

Other MatterWe did not audit the financial statements of the Subsidiary Company i.e Shriudha Venture Pte Ltd., a company incorporated in the Republic of Singapore. These financial statements have been audited by the other auditors whose report has been furnished to us by the management and, our opinion, in so far as it relates to the amounts and disclosures included in respect of the Subsidiary Company is based solely on the report of the other auditors and on the information and explanation for the purpose of the consolidation referred to herein, furnished to us by the “Karur K.C.P.Packkagings Limited”.

88


The subsidiary company’s financial statements reflect total assets (net) of ₹ 2,300,499,806 as at 31st March 2016, total revenue of Rs 2,039,493,439/- and net cash flows amounting to Rs (2,501,330) for the year ended on that date, as considered in the consolidated financial statements.Auditors of the Subsidiary Company M/s.Shriudha Venture Ltd., in their report dated 05th December, 2016 have made an observation as under:

“We are unablea. Test the recoverability and impairment of dues from trade debtors amounting to US$ 12,570,459/- (2015: US$ 12,694,598/-) b. Financial covenant from bank includes a clause which prohibits company from availing any other loan facility. However it has

been observed that there is an overdraft facility availed against investments from another lender. Should the facility covenants be in breach as at 31 March 2016 the status of the bank facilities will be uncertain and the financiers may require these to be repayable on demand

We hereby draw the attention to the above said matter and we are unable to express any opinion on the above said matter. Our opinion is not qualified in respect of other matters.

Report on Other Legal and Regulatory Requirements1. As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated statements;

b) In our opinion, proper books of account as required by law relating to the preparation of the aforesaid consolidated statements have been kept so far as it appears from our examination of those books;

c) The reports on the accounts of the subsidiary company, audited by other auditors, have been furnished to us and have been properly dealt by us in preparing this report ;

d) The consolidated balance sheet, the consolidated statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements;

e) In our opinion, the aforesaid consolidated financial statements comply with the applicable Accounting Standards specified under section 133 of the Act.

f) On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2016 taken on record by the Board of Directors of the holding Company and the reports of the other statutory auditor of its subsidiary company, none of the directors of the Group Companies is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013.

g) With respect to the adequacy of the internal financial controls over financial reporting of the group and the operative effectiveness of such controls, refers to our separate report in “Annexure – A”.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i) The group has disclosed the impact of pending litigations on its financial position in its consolidated financial statements. ii) The group did not have any long-term contracts including derivative contracts for which there were any material

foreseeable losses. iii) The company has a sum of Rs.2,05,837/- required to be transferred to the Investor Education and Protection Fund which

is yet to be transferred to the said fund.

Place : Karur For MSS SRIRAM & Co.,Date : 5th December, 2016 Chartered Accountants ICAI Firm Registration No 007909S P.R.MAHADEVAN Partner Membership Number : 007377

89


“Annexure A” to the Independent Auditor’s Report of even date on the Consolidated Financial Statements of M/s. Karur K.C.P. Packkagings Limited Report on the Internal Financial Controls u/s 143 (3) (i) of the Companies Act, 2013 (“ the Act”)We have audited the internal financial controls over financial reporting of M/s. Karur K.C.P Packkagings Limited (“the Holding Company”) as of March 31, 2016 in conjunction with our audit of the consolidated financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies the safe-guarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the company’s internal financial controls over financial reporting based on our au-dit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial Controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.Our audit involves performing procedure to obtain audit evidence about the adequacy of the internal financial controls system over financial report-ing and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the re-liability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accept-ed accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and payments of the compa-ny are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a mate-rial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper manage-ment override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial control over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016 based on the internal control over financial reporting crite-ria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Place : Karur For MSS SRIRAM & Co.,Date : 5th December, 2016 Chartered Accountants ICAI Firm Registration No 007909S P.R.MAHADEVAN Partner Membership Number : 007377

90


CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2016

Particulars Note No. AS AT 31.03.2016 AS AT 31.03.2015 ` `

A EQUITY AND LIABILITIES

1 Shareholders Funds

(a) Share capital 1 11,71,66,660 11,25,00,000

(b) Reserves and Surplus 2 1,54,64,33,512 1,46,71,26,957

Sub-total-Shareholders Funds 1,66,36,00,172 1,57,96,26,957

2 Non-Current Liabilities

(a) Long-term borrowings 3 1,93,50,83,496 1,80,95,55,404

(b) Deferred tax liabilities (net) 4 31,22,30,000 29,22,46,700

(c) Other long-term liabilities 5 75,43,41,000 71,69,20,000

(d) Long-term provisions 6 59,13,459 57,98,075

Sub-total-Non-Current Liabilities 3,00,75,67,955 2,82,45,20,1793 Current Liabilities

(a) Short-term borrowings 7 2,28,54,37,972 2,58,88,23,807

(b) Trade Payables 8 61,87,29,721 78,56,03,599

(c) Other Current liabilities 9 26,92,30,014 19,57,37,341

(d) Short-term provisions 10 1,46,71,381 95,06,772

Sub-total- Current Liabilities 3,18,80,69,088 3,57,96,71,519 TOTAL EQUITY AND LIABILITIES 7,85,92,37,215 7,98,38,18,655B ASSETS 1 Non-Current Assets (a) Fixed assets 11 (i) Tangible assets 2,45,68,64,904 2,53,22,90,474 (ii) Capital work-in-progress 7,40,14,085 3,80,70,419 (b) Non-Current investments 12 17,11,130 500,000 (c) Long-term loans and advances 13 1,37,22,218 1,09,74,605 (d) Other non-current assets 14 2,18,67,112 2,637,32,926

Sub-total- Non-Current Assets 2,56,81,79,449 2,84,55,68,4242 Current Assets (a) Inventories 15 1,75,41,19,338 1,93,94,65,608

(b) Trade receivables 16 2,85,53,55,008 2,62,86,65,150

(c) Cash and cash equivalents 17 50,02,77,737 40,59,58,348

(d) Short-term loans and advances 18 18,13,05,683 14,83,53,543

(e) Other Current assets 19 - 1,58,07,582

Sub-total - Current Assets 5,29,10,57,766 5,13,82,50,231 TOTAL ASSETS 7,85,92,37,215 7,98,38,18,655 The accompanying notes are an integral part of the financial statements. As per our Report annexed For MSS Sriram & Co Chartered Accountants ICAI Firm Registration No.007909S

P.R.MAHADEVAN V.VENKATESAN V.SANKAR K.C.P.SHIVRAMAN K.C.PALLANI SHAMYPartner Company Secretary Chief Financial Officer Managing Director ChairmanMembership Number:007377 Place : Karur Date : 5th December, 2016

91


CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016

92

Particulars Note No. FOR THE YEAR ENDED FOR THE YEAR ENDED 31.03.2016 31.03.2015 ` ` I Income

Revenue from operations 20 7,45,51,69,486 8,00,43,70,579

Less: Excise Duty 32,30,00,551 35,95,02,567

Revenue from Operations (Net) 7,13,21,68,935 7,64,48,68,012

Other Income 21 3,07,82,092 8,66,95,086

Total Revenue 7,16,29,51,027 7,73,15,63,098

II Expenses

Cost of materials consumed 22 5,52,08,97,854 6,02,06,73,846

Changes in inventories of 23 6,25,14,904 (1,09,49,921)

finished goods, work-in-progress

Employee benefits expense 24 23,60,09,214 24,33,90,942

Financial costs 25 50,07,36,724 48,93,20,837

Depreciation and amortization expense 17,22,75,015 17,22,00,380

Other expenses 26 62,70,77,902 72,46,53,980

Total Expenses 7,11,95,11,613 7,63,92,90,064

III Profit before tax (I-II) 4,34,39,414 9,22,73,034

IV Tax expense:

Current tax 1,25,00,000 85,00,000

Less: MAT credit entitlement (1,23,00,000) (47,73,600)

Provision for earlier year - 18,66,282

Deferred tax 1,99,83,300 28,44,300

2,01,83,300 27,48,382

V Profit for the period from continuing operations (III-IV) 2,32,56,114 8,95,24,652 VI Earning per equity Shares (Face Value of ` 10/- each)

Basic 1.98 7.96 Diluted 1.79 6.98

The accompanying notes are an integral part of the financial statements.




CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016

Particulars 2015-16 2014-15 ` ` A. CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax 4,34,39,414 9,22,73,034 Add: Depreciation 17,22,75,015 17,22,00,380 Preliminary Expenses 63,50,251 73,65,312 Financial Charges 50,07,36,724 48,93,20,837 Loss on sale of Fixed Assets 7,94,900 - Less: Profit on sale of Fixed Assets 31,71,300 14,448 Interest Income 2,64,55,563 2,77,03,608 Dividend Income 6,40,738 9,60,995 Exchange Fluctuation 92,82,799 (2,49,10,000) Operating Profit before Working Capital changes 68,40,45,904 75,73,90,514 Working Capital Changes Decrease/(Increase) in Inventories 18,53,46,270 (8,29,13,593) Decrease/(Increase) in Sundry Debtors (22,66,89,859) (57,35,93,871) Decrease/(Increase) in Other Current Assets 24,73,64,402 (22,09,77,997) Decrease/(Increase) in Loans and Advances (3,29,52,140) (1,20,25,947) (Decrease)/Increase in Trade Payable, Current Liabilities and Provisions (35,42,66,047) 86,30,77,365 Net Cash Flow from Opearting Activities 50,28,48,531 73,09,56,472 B. CASH FLOW FROM INVESTING ACTIVITIES Sale of Fixed Assets 1,24,28,699 79,70,000 Interest Received 2,64,55,563 2,77,03,608 Dividend Received 6,40,738 9,60,995 Less: Purchase of Fixed Assets 14,28,45,411 12,25,76,290 Net Cash used in Investing Activities (10,33,20,411) (8,59,41,690)C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Borrowings 12,55,28,093 (16,61,07,590) Issue of Equity Share Capital and Share Premium 6,99,99,900 - Less: Financial Charges 50,07,36,724 48,93,20,837 Dividends Paid and Corporate Tax there on - Net cash paid in Financing Activities (30,52,08,731) (65,54,28,427)D. TOTAL INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENT DURING THE YEAR 9,43,19,390 (1,04,13,645) Cash and Cash equivalents at the beginning of the year 40,59,58,346 41,63,71,993 Cash and Cash equivalents at the closing of the year 50,02,77,737 40,59,58,348 Reconciliation of Cash & Cash Equivalents with the Balance Sheet: Cash & Cash Equivalents as per Balance Sheet (Refer Note.17) 50,02,77,737 40,59,58,348 Less: Bank Balances not considered as Cash and Cash Equivalents as defined in AS 3 Cash Flow Statements Deposits for Margin Money & Others 48,22,80,171 27,58,96,388 Unpaid Dividend Accounts 3,37,561 3,91,168 Net Cash & Cash Equivalents (as defined in AS 3 Cash Flow 1,76,60,005 12,96,70,792 Statements) included in Note 17 Cash & Cash Equivalents at the end of the year 1,76,60,005 12,96,70,792



93


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

94

AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 1 - SHARE CAPITAL

AUTHORISED 2,00,00,000 Equity Shares of ` 10/- each 20,00,00,000 20,00,00,000 ISSUED, SUBSCRIBED AND PAID UP At the beginning of the year 1,12,50,000 Equity Shares of ` 10/- each fully paid 11,25,00,000 11,25,00,000 Add: Issued during the year 46,66,660 4,66,666 Equity Shares of Rs.10/- each fully paid


NOTE-2 - RESERVES & SURPLUSRESERVES

A. Securities Premium account As per last Balance Sheet 67,06,66,500 67,06,66,500 Add: Addition during the year 6,53,33,240 -

Closing balance (Total - A) 73,59,99,740 67,06,66,500B. General Reserve account As per last Balance Sheet 24,00,00,000 24,00,00,000 Add :- Transfer from the Statement of Profit & loss - -

Closing balance (Total - B) 24,00,00,000 24,00,00,000 C. Surplus Opening balance 55,64,60,457 53,80,61,958 Add :-Net profit for the year 2,32,56,115 8,95,24,652 Reclassification of Profit and Loss account of Subsidiary (92,82,799) Less:- Appropriations Adjustment related to Fixed Assets - 7,11,26,153 Transfer to General Reserve - - Proposed Dividend - - Tax on proposed Dividend - -

Closing balance (Total - C) 57,04,33,772 55,64,60,457TOTAL AS PER BALANCE SHEET (A+B+C) 1,54,64,33,512 1,46,71,26,957

NOTE - 3 - LONG TERM BORROWINGS a. Secured Term Loan from Banks

Wind Mills 2,04,04,604 2,79,74,739 Co-gen Power Plant 16,13,41,292 24,14,29,572

b. Other Secured Loans : Corporate Loans 19,03,68,333 18,95,34,223 c. Unsecured Loans : Hire Purchase Loans 3,76,57,998 3,12,02,806 d. Term Loans : Subsidiary - M/s. Shriduha Ventures Pte. Ltd., 1,52,53,11,269 1,31,94,14,064 TOTAL AS PER BALANCE SHEET 1,93,50,83,496 1,80,95,55,404 NOTE - 4 - DEFERRED TAX DEFERRED TAX LIABILITY As per last Balance Sheet 29,22,46,700 29,50,91,000 Add : Transfer from Statement of Profit & Loss 1,99,83,300 (28,44,300)




95

AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 5 - OTHER LONG TERM LIABILITIES (a) From Related Party–Interest free deposit from Managing Director 9,10,12,000 91,012,000 (b) Long term monetary item in foreign currency: Foreign Currency Convertible Bond 66,33,29,000 62,59,08,000


NOTE - 6 - LONG TERM PROVISIONS Gratuity provisions to working directors 59,13,459 57,98,075 TOTAL AS PER BALANCE SHEET 59,13,459 57,98,075

NOTE - 7 - SHORT TERM BORROWINGS

a. Secured Loans

Cash Credit 1,22,23,61,366 133,81,77,180

Packing Credit loan 17,50,55,450 13,48,46,515

Letter of Credit 62,57,22,456 71,77,38,456

Deposit and other loans 19,89,98,700 32,45,61,656

b. Unsecured Loans

Inter Corporate Deposit 3,33,00,000 4,10,00,000

Bill Discounting 3,00,00,000 3,25,00,000

TOTAL AS PER BALANCE SHEET 2,28,54,37,972 2,58,88,23,807NOTE - 8 - TRADE PAYABLES Due to Micro, Small & Medium Enterprises Nil Nil Others 61,87,29,721 78,56,03,599


NOTE - 9 - OTHER CURRENT LIABILITIES

(a) Current maturities of long-term debt

i) Wind Mill 1,12,61,064 1,92,75,112

ii) Co-gen Power Plant 8,75,00,000 8,75,00,000

(b) Other Secured Loan

Corporate Loan 9,00,02,588 1,33,33,332

(c) Unsecured Loans:

Hire Purchase Loans 2,84,06,780 2,95,99,661

(d) Unclaimed Dividend # 3,37,561 3,91,168

(e) Statutory Liabilities 2,31,25,827 2,18,49,254

(f) Application money received for allotment of securities and due for refund 1,25,100 -

(g) Other payable 2,84,71,094 2,37,88,814


# Of the above Rs.2,05,837/- is transferable to Investors Education Protction Fund

NOTE - 10 - SHORT TERM PROVISIONS (a) Provision for Employee Benefits Gratuity provisions 1,46,71,381 95,06,772 (b) Provision for Taxation (Net of Advance payment of Taxes) - -

TOTAL AS PER BALANCE SHEET 1,46,71,381 95,06,772


TAN

GIB

LE A

SSET

S N

OTE

- 11

- FIX

ED A

SSET

S


Part

icul

ars

GR

OSS

BLO

CK

DEP

REC

IATI

ON

NET

BLO

CK

Cos

t as

at

01.0

4.20

15A

dditi

ons/

Tran

sfer

s

durin

g th

e ye

ar

Del

etio

ns

/ Tr

ansf

ers

durin

g th

e ye

ar

Cos

t as

at

31.0

3.20

16U

pto

31

.03.

2015

For t

he Y

ear

2015

-16

Del

etio

ns

durin

g th

e ye

ar

Adj

uste

d D

urin

g Th

e Ye

ar

Tota

l upt

o 31

.03.

2016

As

at

31.0

3.20

16A

s at

31

.03.

2015

``

``

``

``

``

LAN

D13

,03,

04,4

56-

4

0,71

,200

12,6

2,33

,256

-

-

-

--

12,6

2,33

,256

13,0

3,04

,456

BU

ILD

ING

94,2

1,39

,816

4,66

,27,

854

44,

00,0

0098

,43,

67,6

7014

,12,

61,6

162,

99,6

7,37

8 -

-

17,1

2,28

,994

81,3

1,38

,676

80,0

8,78

,201

PLA

NT

&

EQU

IPM

ENTS

263,

54,0

3,17

53,

68,3

3,36

6 1

8,17

,898

267,

04,1

8,64

311

4,76

,70,

494

12,0

7,76

,084

11,

03,3

60-

126,

73,4

3,21

814

0,30

,75,

425

148,

77,3

2,68

0

FUR

NIT

UR

E &

FIX

TUR

ES1,

63,8

5,61

8 4

,79,

507

-

1,68

,65,

125

91,

67,2

75 1

3,01

,087

-

-1,

04,6

8,36

263

,96,

763

72,

18,3

43

OFF

ICE

EQU

IPM

ENTS

2,87

,23,

531

19,

67,1

32-

3,06

,90,

663

2,33

,25,

683

20,

82,7

26 -

-

2,54

,08,

409

52,8

2,25

4 5

3,97

,849

VEH

ICLE

S15

,31,

60,2

352,

09,9

3,88

6 3

1,32

,305

17,1

0,21

,816

5,24

,01,

291

1,81

,47,

740

22,

65,7

44-

6,82

,83,

287

10,2

7,38

,530

10,0

7,58

,945

TOTA

L39

0,61

,16,

831

10,6

9,01

,745

1,34

,21,

403

399,

95,9

7,17

313

7,38

,26,

359

17,2

2,75

,015

33,

69,1

04 -

154,

27,3

2,27

024

5,68

,64,

904

253,

22,9

0,47

4

Figu

res

for t

he

prev

ious

yea

r37

7,13

,70,

791

15,2

1,31

,685

1,73

,85,

645

390,

61,1

6,83

111

3,99

,29,

918

17,2

2,00

,380

94,

30,0

947,

11,2

6,15

313

7,38

,26,

357

253,

22,9

0,47

426

3,14

,40,

872

96



AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 12 - NON CURRENT INVESTMENT Other Investment (Non - Trade & Unquoted) (a) The Shamarao Vithal Co-operative Bank Limited 5,00,000 5,00,000 (20000 shares @ ` 25/- each) (b) Gold 12,11,130 TOTAL AS PER BALANCE SHEET 17,11,130 5,00,000NOTE - 13 - LONG TERM LOANS AND ADVANCES Unsecured Considered Good Security Deposits with Government Agencies & Other Agencies 1,37,22,218 1,09,74,605 TOTAL AS PER BALANCE SHEET 1,37,22,218 1,09,74,605NOTE - 14 - OTHER NON CURRENT ASSETS (a) Preliminary & other expenses Balance as per last balance sheet 58,591 11,32,243 Add: Incurred during the year - - Less : Written off during the year 58,591 10,73,652 Total (a) (0) 58,591 (b) Foreign Currency Convertible Bonds expenses Balance as per last balance sheet 11,64,018 23,28,036 Add: Incurred during the year - - Less : Written off during the year 11,64,018 11,64,018 Total (b) (0) 11,64,018 (c) Expenses incurred on Credit Facility Balance as per last balance sheet 2,56,38,216 - Add: Incurred during the year - 3,07,65,858 Less : Written off during the year 51,27,642 51,27,642 Total (c) 2,05,10,574 2,56,38,216 (d) ESI Recoverable 13,56,538 13,56,538 (e) Financial Asset of Wholly Owned Subsidiary - 23,55,15,563 (The above shares are quoted securities and carrying values are shown at market value) TOTAL AS PER BALANCE SHEET (a+b+c+d+e) 2,18,67,112 26,37,32,926NOTE - 15 - INVENTORIES (a) Raw materials 1,11,28,85,347 1,22,76,41,971 (b) Work-in-progress 58,33,62,717 59,27,12,204 (c) Finished goods 1,09,94,404 6,41,59,821 (d) Stores and spares 4,68,76,870 5,49,51,612

TOTAL AS PER BALANCE SHEET 1,75,41,19,338 1,93,94,65,608 NOTE - 16 - TRADE RECEIVABLES (Unsecured Considered Good) (a) Outstanding for a period exceeding six months 72,55,820 76,06,140 ii) Unsecured Considered Doubtful - - (b) Others 2,84,80,99,188 2,62,10,59,010

TOTAL AS PER BALANCE SHEET 2,85,53,55,008 2,62,86,65,150 NOTE - 17 - CASH AND CASH EQUIVALENTS

(a) Cash on hand 34,02,578 3,241,915 (b) Balances with Banks i) Current Account 1,42,57,427 12,64,28,877 ii) Dividend account 3,37,561 3,91,168 (c) Other Bank Balances Margin money with maturity more than 12 months 48,22,80,171 27,58,96,388 TOTAL AS PER BALANCE SHEET 50,02,77,737 40,59,58,348

97



98

AS AT 31.03.2016 AS AT 31.03.2015 ` `NOTE - 18 - SHORT TERM LOANS AND ADVANCES (Unsecured Considered Good)

(a) Advances to Employees 1,03,83,216 98,77,821

(b) Advances to Suppliers 1,60,93,746 1,78,17,184

(c) Balance with Government Authorities 4,94,60,736 5,43,03,672

(d) Advance Income Tax (Net of provisions) 1,01,96,690 1,48,40,315

(e) MAT Credit entitlement 6,00,99,600 4,77,99,600

(f) Prepaid Expenses 3,50,71,695 37,14,951


NOTE - 19 - OTHER CURRENT ASSETS (Unsecured Considered Good)

Export Incentive Receivable : - 1,58,07,582 TOTAL AS PER BALANCE SHEET - 1,58,07,582

For the year ended For the year ended 31.03.2016 31.03.2015 ` `NOTE - 20 - REVENUE FROM OPERATION

(a) Sale of products i) Finished Goods- (a) Domestic 4,22,47,38,738 4,78,46,20,293 (b) Export 1,17,55,22,115 1,41,94,47,340

ii) Traded Goods 2,03,94,93,439 1,78,22,43,218

(b) Freight charges received 1,54,15,194 1,80,59,728

TOTAL AS PER STATEMENT OF P & L 7,45,51,69,486 8,00,43,70,579

NOTE- 21 - OTHER INCOME

(a) Interest Income 2,64,55,562 2,77,03,606

(b) Export Incentive / Receipts 2,59,721 4,24,580

(c) Dividend Received 6,40,738 9,60,995

(d) Miscellaneous Income / Receipts 7,161 5,76,05,905 (e) Profit on sale of land 31,71,300 -

(f) Sundry Creditors no longer payable written back 2,47,610 - TOTAL AS PER STATEMENT OF P & L 3,07,82,092 8,66,95,086 NOTE - 22 - COST OF MATERIALS CONSUMED (a) Raw Materials 5,50,24,42,168 6,00,05,51,634

(b) Packing Material 1,84,55,686 2,012,2,212

TOTAL AS PER STATEMENT OF P&L 5,52,08,97,854 6,02,06,73,846



For the year ended For the year ended 31.03.2016 31.03.2015 ` `NOTE - 23 - CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS (a) Inventories at the end of the year: 1. Work in Process 58,33,62,717 59,27,12,204 2. Finished Goods 1,09,94,404 6,41,59,821 59,43,57,121 65,68,72,025(b) Inventories at the beginning of the year: 1. Work in Process 59,27,12,204 58,59,23,623 2. Finished Goods 6,41,59,821 5,99,98,481

65,68,72,025 64,59,22,104 (INCREASE) / DECREASE IN STOCK 6,25,14,904 (1,09,49,921)

NOTE - 24 - EMPLOYEE BENEFITS EXPENSE a. Employees other than Directors

a) Salaries, Wages & Bonus 15,66,04,711 17,64,64,245

b) Contribution to Provident & other Funds 1,91,74,902 1,82,38,574

c) Contribution to Gratuity 76,64,609 53,70,000

d) Staff Welfare Expenses 3,76,70,675 3,02,01,572

e) Security Charges 1,20,03,438 1,05,26,058 b. Managerial Remuneration to Directors a) Managing Director 12,57,692 12,57,692

b) Joint Managing Director 12,57,692 12,57,692

c) Whole Time Director 3,75,495 75,109


NOTE - 25 - FINANCE COST (a) Interest expenses

i. Bank on

a. Term Loans 20,51,55,647 18,50,82,075

b. Working Capital Loan 21,01,92,416 21,60,45,590

ii. HP loan 67,55,422 28,16,016

(b) Other borrowing costs 5,12,58,369 5,14,54,714

(c) Bank charges 2,73,74,870 3,39,22,442


99



100

For the year ended For the year ended 31.03.2016 31.03.2016 ` `NOTE - 26 - OTHER EXPENSES A. Manufacturing Expenses Stores & Spares Consumed 6,71,65,984 7,29,03,518 Repairs & Maintenance Plant & Machinery 5,05,65,110 5,18,79,134 Building 43,06,400 39,20,396 Power & Fuel 34,73,71,328 39,54,31,298

Total (a) 46,94,08,822 52,41,34,346 B. Administrative Expenses Subscription 2,14,256 3,26,982 Rent 13,12,232 29,48,265 Rates & Taxes 64,99,004 75,22,350 Insurance 41,94,960 52,77,731 Payment to Auditor: Statutory Audit Fees 14,59,939 13,13,680 Audit Fees - Tax Audit 25,000 25,000 - Cost audit 60,000 60,000 Reimbursement of Expenses 1,63,158 72,500 Professional charges 1,81,85,060 158,41,625 Telephone, Postage and Courier Charges 19,57,044 26,15,261 Travelling and Conveyance Charges 93,73,334 157,42,955 Printing & Stationery 27,68,171 27,75,500 General Expenses 1,67,30,018 45,62,089 Corporate Social Responsibility Expenses 42,46,925 21,50,225 Filing Fees and Listing Fees 16,33,716 7,50,252 Repairs & Maintenance:- General 29,47,637 24,20,728 Vehicles 1,84,63,103 243,35,916 Preliminary & Other Expenses Written Off 51,86,233 62,01,294 Loss on Foreign Currency Fluctuation (47,41,466) 96,54,286 Foreign Currency Convertible Bonds Expenses written off 11,64,018 11,64,018 (Profit)/Loss on Sale of Fixed Assets 7,94,900 (14,448) Sundry Creditors Written off - 10,70,202 Donation 6,40,180 1,58,755 Sitting Fees to other Directors 70,000 77,000

Total (b) 93,347,422 10,70,52,166 C. Selling Expenses Carriage Outwards 4,67,06,404 718,73,974 Loading & Unloading Expenses 6,60,133 8,01,296 Rebates and Discounts 9,39,282 10,71,089 Brokerage & Commission 76,39,903 94,45,110 ECGC Premium and Marine Insurance 39,75,539 41,59,276 Sample Supply 27,79,378 20,50,806 Advertisement Expenses 2,72,950 9,45,542 Sales promotion Expense 6,35,293 26,33,310 Research & Development Expenses 7,12,776 4,87,065 Total (c) 6,43,21,658 9,34,67,468 TOTAL AS PER STATEMENT OF P&L (a+b+c) 62,70,77,902 72,46,53,980 As per our Report annexed For MSS Sriram & Co Chartered Accountants ICAI Firm Registration No.007909S




27. DISCLOSURE PURSUANT TO ACCOUNTING POLICIES1. PRINCIPLES OF CONSOLIDATION –

The consolidated financial statements have been prepared on the following basis: The financial statements of the company and its subsidiary company have been combined on a line-by-line basis by adding

together book values of similar items of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions have been fully eliminated.

a). Consolidated financial statements are prepared by applying uniform accounting policies to the extent possible, in use at the group.

b). Indian rupee is the reporting currency for the group. However, the reporting currencies of non-integral overseas subsidiaries are different from the reporting currency of the group. The translation of those currencies into Indian Rupee is performed for assets and liabilities, for revenues and cost/loss, using exchange date as at the Balance Sheet date.

c). The Consolidated Financial Statements include the financial statements of Karur K.C.P. Packkagings Limited (Parent Company) and its subsidiary.

Name of Subsidiary Company Country of Incorporation Proportion of Voting Power as on 31.03.2016Shriudha Ventures Pte Ltd. Re-Public of Singapore 100%

2. SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The Company follows accrual concept of accounting in preparing accounts. The financial statements have been prepared on

going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in U/S 133 of the Companies Act, 2013 have been followed to the extent applicable in

preparation of Annual Accounts. Appropriate Accounting Policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as on the date of the Balance Sheet and the Financial Results of the Company for the year ended on that date.

B. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and

assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

C. FIXED ASSETS Fixed Assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition

for its intended use less accumulated depreciation. D. INVESTMENTS Investments in holding Company, being long-term are stated at cost. Provision for diminution in value of long term investments

is made only if such a decline is other than temporary in nature. E. FINANCIAL ASSETS (IN SINGAPORE SUBSIDIARY COMPANY) Financial assets at fair value through profit or loss (“FVPL”) include financial assets that are either classified as held for trading

or are designated by the entity to be carried at fair value through profit or loss upon initial recognition. In addition, derivative financial instruments that do not quality for hedge accounting are classified as held for trading. Assets in this category are classified as current assets if they are either held for trading or are expected to be realized within 12 months of the balance sheet date.

Subsequent to initial recognition, the financial assets included in this category are measured at fair value with changes in fair value recognized in statement of comprehensive income.

Financial assets are derecognized when the rights to the cash flows have expired or have been transferred, and the Company has substantially transferred all risks and rewards of ownership.

F. INVENTORIES Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower.

Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured finished goods lying in factory premises is included in the valuation.

G. LIABILITIES Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for

and are disclosed by way of a note.

101



H. PROPOSED DIVIDEND Dividend proposed by Directors, if any, is provided for in the books of accounts pending approval at the Annual General Meeting. I. REVENUE RECOGNITION Revenue from Sales is recognized once the title is passed on to the buyer. Sales include excise duty, cess, and other

levis. Expenses incurred on account of raising of Foreign Currency Convertible Bonds Loan (FCCB) and Global Depository Receipts (GDR) are treated as deferred revenue expenditure and amortized over a period of five years. In respect of other income and expenses it is recognized based on the contractual rights and obligations. Dividend and yields due, if any, are recognized when the right to receive the payment is established unconditionally and no significant uncertainty exists as to its measurability or correctibility.

J. DEPRECIATION ACCOUNTING Depreciation is provided on Straight Line basis over the estimated useful life as specified in Scheduled II of the Companies

Act, 2013. Depreciation on additions/deletions in respect of fixed assets are charged up to the date on which the assets is available for use / disposal.

K. FOREIGN EXCHANGE TRANSACTIONS In Indian Holding Company : - Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions. The amount

due to or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be. The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

In Singapore Subsidiary Company : - Item included in the financial statements of the Company are measured using the currency that best reflects the economics

substance of the underlying events and circumstances relevant to the Company (“the functional currency”). The financial statements of the Company are presented in United States Dollars, which is also the functional currency of the Company.

For the Group :- All Foreign Exchange transactions are accounted at the exchange rate prevailing on the date of transaction and translated

in to Indian currency on the rate prevailing as on 31st, March 2016, for Consolidation purpose.L. RESEARCH AND DEVELOPMENT Capital Expenditure on Research and Development, if any, are capitalized and depreciated. The revenue expenditure on

Research and Development, if any, is written off in the year in which it is incurred. M. BORROWING COSTS In Indian holding Company In respect of those asset that takes necessarily a substantial period to get ready for its intended use, borrowing costs directly

attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate.

N. EARNING PER SHARE Basic / Diluted Earnings per share has been computed with reference to the Weighted Average Number of Shares O. EMPLOYEES BENEFITS

a. Short Term Benefits:- Short term employees benefits are charged at the undiscounted amount to profit and loss account in the year in which the related service is rendered.

b. Defined Contribution Plan:- Payments to defined contribution schemes are remitted to the regulatory authorities and charged as expenses as and when incurred.

c. Defined Benefit Plan:- The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered through trust funded with Life insurance Corporation of India.

P. CASH FLOW STATEMENT Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Equivalents comprise Cash in Hand, and

Accounts held with Banks. Q. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES Significant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with

Accounting Standard 5. R. SEGMENT REPORTING The Company has identified four business segments viz., Paper, Pager Bags, PP & FIBC Bags and Traded Goods. Revenue and

expenses have been identified to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enterprises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

102


S. ACCOUNTING FOR TAXES ON INCOME a. Tax expense includes current taxes and deferred taxes. b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year. c. Deferred taxes reflect the impact of current year timing difference between taxable income and accounting income for the

year and reversal of timing differences of earlier years. The Tax effects of significant temporary differences are reflected through Deferred Tax Liabilities which has been reflected in the Balance Sheet and the corresponding effects of the same is given in the Profit and Loss Account.

d. The Net effect of taxation due to: i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year andii. Unadjusted carry forward losses/depreciation for the year computed in accordance with the provisions of the Income

Tax Act 1961 is accounted subject to prudence and reasonable certainty in the said year and displayed in the financial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset, as per its tax records, the said asset is created by way of a credit to the Statement of Profit & Loss and shown as MAT Credit entitlement.

T. IMPAIRMENT OF ASSETS The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in

the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

U. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Pursuant to Accounting Standard 29 Provisions Contingent Liabilities and Contingent Assets, the Company recognizes

provisions only when it has a present obligations a result of a past event, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its present value and are determined based on judgement and best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out flow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

28. DISCLOSURE PURSUANT TO ACCOUNTING STANDARDS

A. Disclosures regarding Employees Benefits

Defined Contribution Plan: The Company contributed towards Provident Fund. 192 182

Defined Benefit Plan : GratuityThe Company has contributed a gratuity fund for the benefit of its employees. The Company’s Gratuity scheme is administered by Life Insurance Corporation of India under Group Gratuity Scheme to which the Company contributes premium as determined by Life Insurance Corporation of India as per Actuarial Valuation. The contribution so made during the year. Other requirements as per AS 15 have not been considered as the entire fund is managed by the Life Insurance Corporation of India.

77 54

B. Disclosures regarding Borrowing CostsPursuant to Accounting Standard-16, the Company has capitalized the borrowing costs of in respect of qualifying assets. - -


31.03.2016` in lakhs

31.03.2015` in lakhs

103


C. Disclosures regarding Segment Reporting The Company business segment analysis are as under:-

Information about primary

segment-Business segment

Name of Segment (` In Lakhs)

Paper Division Paper Bags Division PP & FIBC Division Trading Total

2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15

Revenue:

Sales - Domestic 23,181 26,876 16,280 17,617 2,941 3,534 - - 42,402 48,027

Sales - Export - 15 - - 11,755 14,179 - - 11,755 14,194

Traded Goods in Subsidiary Company - - - - - - 20,395 17,822 20,395 17,822

Other Income 84 105 - 10 209 179 15 573 308 867

Segment Result - Operating Profit 4,789 4,329 (700) (798) 2,153 2,659 987 1,422 7,229 7,612

Financial Charges 1,951 2,241 335 308 1,567 1,430 1,154 914 5,007 4,893

Profit before Deprecia-tion, Premilinary/ FCCB Expenses W/O

2,838 2,088 (1,035) (1,106) 586 1,229 (167) 508 2,222 2,719

Segment Depreciation, Premilinary / FCCB Expenses W/O

1,072 1,087 78 81 637 628 - - 1,788 1,796

Net Profit / (Loss) before Tax 1,766 1,001 (1,113) (1,187) (51) 601 (167) 508 434 923

D. Disclosures relating to Related Party

i) List of the Key Managerial Personnel with whom transactions have been taken place and relationships

Shri K.C.Pallani ShamyKey Managerial Personnel

Shri K.C.P. Shivraman

ii) Transactions during the year (Key Managerial Personnel)

Nature of Transactions Key Managerial Personnel

Expenditure 31.03.2016 ` In Lakhs

31.03.2015 ` In Lakhs

Rent 4.80 4.80

Hire Charges - 1.20

Remuneration to Whole Time Directors 25.15 25.15

Sitting Fees to Other Directors 0.10 0.12

Remuneration to Key managerial personnel - 18.00


104


E. Disclosures regarding Earning Per share Profit After Tax ( ` In Lakhs) (a) 233 895

Weighted average number of equity shares outstanding (b) 1,17,16,666 1,12,50,000

Effect of potential equity shares on conversion of FCCB loan outstanding (c) 15,64,770 15,64,770

Weighted average number of equity shares in computing diluted earning per share (d) 1,29,81,000 1,28,14,770

Earnings per share on profit after tax (Face value of ` 10/- each) -Basic (`) (a/b) 1.98 7.96 -Diluted (`) (a/d) 1.79 6.98

F. Disclosures regarding Accounting for Taxes on Income Deferred Tax liability on account of depreciation (` in Lakhs) Opening Balance 2,922 2,951 Add: Created during the year 200 (284) Closing Balance 3,122 2,922

G. For all other common notes forming part of consolidated financial statements please refer the notes of the Holding Company Karur K.C.P. Packkagings Limited

29. OTHER DISCLOSURES

A. In the consolidated statements while adopting line by line approach the following items have been eliminated a) capital invested by the holding company, shares allotted by the subsidiary company b) advance received by the holding company from its subsidiary, net of advance made by the holding company.

B. The balances due from receivables, advances made, and payables are subject to confirmation from the party concerned. In the absence of the confirmation, the figures are as stated as per the ledger and will be reconciled in case of any discrepancy.

C. In the opinion of the board of directors, assets other than fixed assets and non current investments have the value of realisation in the ordinary course of business, at least equal to amount at which they are stated.

D. Figures of the previous year have been reworked, regrouped and reclassified wherever necessary to conform to current year’s presentation.




105


PROXY FORM [Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

KARUR K. C .P. PACKKAGINGS LIMITEDCIN-L21029PY1991PLC000730

Registered Office: No. 1, First Floor, Bhagath Singh Street, (Behind Standard Ice Factory), Bharathipuram, Puducherry – 605 011.

Twenty Sixth Annual General Meeting - Friday, the 27th January, 2017

Name of the member (s) :

Registered address :

E-mail id :

Folio No. :

I / we, being the Shareholder(s) of …………. Shares of the above named Company, hereby appoint :

1 Name

Address

E-Mail ID

Signature

or failing him

2 Name

Address

E-Mail ID

Signature

or failing him

3 Name

Address

E-Mail ID

Signature

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 26th Annual General Meeting of the Company, to be held on Friday, the 27th Day of January, 2017 at 9.30 A.M. IST at the Registered Office of the Company and at any adjournment thereof in respect of such resolutions as are indicated below:

106


Resolution No. Business Vote (Optional, see Note 2)

(Please mention no. of shares)For Against Abstain

Ordinary Business

1. Adoption of Financial Statements of the Company for the financial year ended 31.03.2016.

2. Re-appointment of Director Smt. P. Annammal, retiring by rotation

3. Ratification of appointment of MSS SRIRAM & Co., Chartered Accountants as Statutory Auditors of the Company

Special Business

4. Ratification of remuneration of Cost Auditor, Shri B.Venkateswar, Practicing Cost Accountant

5. Appointment of Shri K.C.P Shivraman (DIN 00055049) as Managing Director of the Company

Signed this ……. Day of …………. 2017

................................................... ................................................... Signature of the member Signature of the proxy holder(s)

Note:

1. This form, in order to be effective, should be duly stamped, completed, signed and deposited at the registered office of the Company, at least 48 hours before the commencement of the meeting.

2. It is optional to indicate your preference. If you leave the “for, against or abstain” column blank against any or all resolutions, your proxy will be entitled to vote in the manner as he/she may deem appropriate.

AffixRe.1

Revenue Stamp

107


ATTENDANCE SLIP

KARUR K.C.P PACKKAGINGS LIMITEDCIN-L21029PY1991PLC000730

Registered Office: No.1, First Floor, Bhagath Singh Street, (Behind Standard Ice Factory),Bharathipuram, Puducherry – 605 011.

Twenty Sixth Annual General Meeting – Friday, the 27th January, 2017

Name of the member (s):

Registered address:

E-mail Id:

Folio No:

I certify that I am a member / proxy for the member of the Company.

I hereby record my presence at the 26th Annual General Meeting of the Company held on Friday, the 27th Day of January, 2017, at 9.30 A.M. IST at the Registered Office of the Company.

Name of the member / proxy Signature of the member / proxy(in BLOCK letters)

Note: Please fill up this attendance slip and hand it over at the entrance of the meeting hall.

108

NOTES

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

NOTES

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

...............................................................................................................................................................................

Documents

C O N T E N T S...ARUR CP PACAGINGS LIMITED NOTICE TO SHAREHOLDERS KARUR K. C. P. PACKKAGINGS LIMITED CIN-L21029PY1991PLC000730 Registered Office : No. 1, First Floor, Bhagath Singh