Shreyans Industries Ltd

Dear Members,

Your Directors are pleased to present the 44th Annual Report on the operational and financial performance of the Company along with Audited Financial Statements for the year ended 31st March 2024.

(F in lakhs)

CORPORATE REVIEW

During the year under review, your Company achieved a production of 89466 MTs as against 92996 MTs in the previous year. Total revenue of the Company was F734.15 crores against F871.04 crores of last year. Profit before interest & financial charges and depreciation stood at F132.57 crores. Net profit after tax stood at F87.42 crores against F73.46 crores of last year. Following the last year's robust performance riding on good demand of paper & higher sales realization, your company has done fairly well in the current year as well on due to comparatively lower input costs like raw material, fuel and chemicals. The demand and overall market for writing and printing paper remained reasonably good almost throughout the financial year. This helped in sustaining the profitability during the year under review.

Your Company continued to strive for maintaining market leadership in agro based writing & printing paper category with the support & cooperation of its business associates and committed team of professionals & workforce. The Company initiated certain steps for continual improvement in quality, product development and cost optimization on sustainable basis.

The global disturbances caused by conflicts between Russia-Ukraine and then Isreal-Palestine had its own impacts on trade which got normalized over a period of time. However, these disturbances did not affect the company's working/performance significantly. The ESG is mandatory for sustainable business model for the industry in general and Paper manufacturing in particular. Some of the obligations of a responsible corporate are meaningful contribution towards environment, society and safety. We are doing our best within the resources of the organization towards environment and socio-economic areas. The Company continued to emphasize and have focus on improving safety of its human capital and environmental compliance besides improving the customer experience through operational efficiencies.

PAPER INDUSTRY

The demand for writing & printing paper segment globally and India particularly is largely generated by schools, educational institutions, coaching centers and to some extent by public/private sector offices.

The required impetus for sustained demand and growth of writing and printing segment also comes from ever increasing budgetary allocation for education and it is going to get further boost with the implementation of the much propagated New Education Policy of the Government.

The domestic paper industry has witnessed growth in terms of both top line and bottom line. The Government of India's thrust for propelling non plastic packaging has been a major boost for paper industry as many trades/industry have turned to paper oriented packaging especially in food& beverages packaging.

Domestic demand of paper in India is growing at a steady pace every year and thus contributes to the global demand. The per capita consumption of Paper at around 16 kgs in India is nowhere near the other Asian countries like Vietnam (33 kg), Thailand (66 kg), China (76 kg) and is considerably lower than the global average of 57-60 kg. The requirement of good-quality packaging of FMCG/other products marketed through organized retail& e-commerce, demand for daily utility/ hygiene products such as tissue paper, lightweight coated paper, medical grade coated paper, growing manufacturing sector and Government's focus to increase literacy level are expected to be the key drivers for the paper industry in India in near future.

PERFORMANCE REVIEW

The market for paper remained bullish to stable during the year. The continuous demand for writing and printing paper segment led to sustained price line and consequently better margins.

To meet the ever growing and changing requirements of the market for quality, serviceability etc, and to match the industry competition, your company embarked upon some initiatives for technical upgradation, automation and increase in machine speed for higher productivity in both the Units. The unit wise performance of the Company is described as under:

SHREYANS PAPERS

Total production of paper in this unit was 50883 MTs, which was slightly lower as compared to last year figure of 51721MTs. The minor decrease was due to lower GSM. Capital expenditure includes Steam & Condensate system, Closed hood and pocket ventilation for paper machine. The above major projects are expected to be commissioned in 1st quarter of FY25. This will help the unit to further improve its operations in terms of quality and overall energy efficiency. Besides above, capital expenditure towards balancing facilities and essential sustenance capital projects are undertaken on year to year basis.

SHREE RISHABH PAPERS

Total paper production in this unit was 38583 MTs which was lower as compared to last year's production of 41275 MTs. The decrease in production was due to lower GSM. New Rewinding Machine with increased automation features to reduce converting losses & higher finished production was commissioned &started yielding desired results. Besides some other steps were taken for streamlining the working and improve productivity & efficiency from current levels. It is expected to derive benefits of the same in the next financial year.

FINANCIAL REVIEW EQUITY SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2024 was F13.82 crores. During the year under review, the Company has neither issued any shares nor granted stock options and nor sweat equity.

FINANCE

An amount of F7.59 crores, out of existing term loan were repaid and fresh term loan of F11.60 crores were availed during the year. Overall financial cost relating to borrowings has decreased during the year owing repayment of existing term loans and lesser utilization of working capital.

EXTERNAL CREDIT RATING

During the year under review, CARE Ratings Limited has reviewed the external credit rating for the Long-Term, Short-term Bank facilities and Fixed Deposits of the company and has reaffirmed the rating. The facility wise rating is as under:

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

OTHER EQUITY

The Company does not propose to carry any amount to any reserves.

PROPOSED DIVIDEND

The Board of Directors had recommended dividend of F3.00/- per equity share and special dividend of F2.00/- per equity share amounting to F691.23 lakhs for the year 2023-24 during their meeting held on 10th May 2024. The dividend, as recommended by the Board of Directors, if approved at the Annual General Meeting, would be paid subject to deduction of tax (TDS) at the prescribed rates as per Income Tax Act,1961 as amended by Finance Act 2020.

(F in Crores)

At the end of the year, fixed deposits from the public were outstanding to the tune of F2.03 crores. There were no overdue deposits as on 31st March 2024.

FUTURE PLANS/PROSPECTS

Proposed capital expenditure have been discussed while reviewing the performance of both the units. Capital expenditure planned will help the Company in improving its operations in terms of quality and operating parameters along with cost effectiveness.

The demand of paper during the year remained fairly good riding over lower prices. However, matching decrease in input costs helped the company in achieving healthy bottom line.

We moved into FY25 under almost similar market conditions. However, a couple of months in summer are usually considered lean from demand point of view. As such, demand for paper has become sluggish, forcing the mills to liquidate stocks at further lower prices. This may not have much bearing on results in the current year because input costs are equally supportive. Barring unforeseen circumstances, it can be cautiously forecasted that the FY 25 should be better for the company. Your company shall continue to focus on improvisation in technology and up gradation of equipments to achieve sustainable growth.

NUMBER OF MEETINGS HELD

The details of Board and Committee/other meetings held in Financial Year 2023-24 are given in the Corporate Governance Report.

DIRECTORS/ KEY MANAGERIAL PERSONNEL

Mr. Vishal Oswal, Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting under article 86[1] of Article of Association of the Company and being eligible, offers himself for reappointment.

Mr. Prem Kumar (DIN: 00051349) shall cease to be Independent Director of the Company on completion of his first term of five consecutive years on 12th May, 2024. The Board places on record its sincere appreciation for the valuable contribution and guidance provided by Mr. Prem Kumar during his association as Director of the Company.

All independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149[6] of the Companies Act, 2013 and Regulation 16[1][b] of the SEBI [Listing Obligations & Disclosure Requirements] Regulations, 2015.

Ms. Ruchita Vij (FCS 9210), Company Secretary and Compliance Officer has resigned w.e.f. the closing hours of 12th May, 2023 and the Board has appointed Mr. Parminder Singh (ACS 43115) as Company Secretary and Compliance Officer w.e.f. 12th May, 2023.

BOARD EVALUATION

Pursuant to provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out as an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their Remuneration. The said policy has been uploaded on the website of the Company. The Key provisions of Nomination and Remuneration policy are appended as an Annexure I to the Board's report.

AUDIT COMMITTEE

The Company has duly constituted Audit Committee, the scope of which is quite comprehensive and is in conformity with the provisions of the Companies Act, 2013 and Listing Regulations. The composition of the Audit Committee is given in Corporate Governance Report.

All the recommendations of the Audit Committee were accepted by the Board.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted the Whistle Blower Policy/Vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's Code of Conduct and Ethics. Such mechanism/policy is also uploaded on the website of the Company.

STATUTORY AUDITORS

At 42nd Annual General Meeting held on 19th August, 2022, M/s SCV & Co. LLP (formerly known as S.C. Vasaudeva & Co.), Chartered Accountant, (FRN : 000235N/N5000089), were appointed as statutory auditors of the Company to hold office from 42nd Annual General Meeting till the conclusion of the 47th Annual General Meeting.

The Auditors' Report on the accounts of the Company for the year under review requires no comments.

Further, there were no frauds reported by the Statutory Auditors of the Company during the period under review neither under Section 143(12) of neither the Act nor which are reportable to the Central Government.

COST AUDIT

M/s Rajan Sabharwal & Associates were appointed as Cost Auditors of your Company for auditing the cost accounts records for Financial Year 2023-24 under provisions of Section 148 of the Companies Act, 2013. They are likely to submit Cost Audit Report within the prescribed time limit.

Furthermore, the Board has re-appointed M/s Rajan Sabharwal & Associates as Cost Auditors of the Company for Financial Year 2024-25.

SECRETARIAL AUDIT

M/s P.S. Bathla & Associates, Practising Company Secretaries at Ludhiana, were appointed to conduct the secretarial audit of the Company for Financial Year 2023-24, as required under Section 204 of the Companies Act, 2013 and Rules made there under. The Secretarial Audit Report for Financial Year 2023-24 is appended as an Annexure II to the Board's Report.

The Secretarial Auditors' in their report and in Annual Secretarial Compliance Report (Under Regulation 24A of SEBI LODR Regulations, 2015) for year ended 31st March 2024 has marked no observation.

The Board has re-appointed M/s P.S. Bathla & Associates, Practising Company Secretaries, Ludhiana as Secretarial Auditor of the Company for Financial Year 2024-25.

RELATED PARTY TRANSACTIONS

All Related Party transactions entered during the financial year were on arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval.

Since there were no contracts/arrangements/transactions which were not at arm's length basis or material with Related Party during the year; disclosure in form AOC-2 is not applicable.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the rules there under and Listing Regulations.

This Policy as considered and approved by the Board has been uploaded on the website of the Company at http://www.shreyansgroup.com/upload/c1449201532SILRelat ed_Party_Transaction_Policy_07_11_2015.pdf

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies [Appointment and Remuneration of Managerial Personnel [Rules, 2014 is appended as an Annexure III and forms an integral part of this report.

ANNUAL RETURN

A copy of Annual Return for the financial year 2023-24 will be available on the website of the company after submission of the same to the registrar of Companies.

Annual Returns of previous years are available on the website of the company at www.shreyansgroup.com.

INDUSTRIAL RELATIONS

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks through well-defined risk management policy/procedures, which in the opinion of the Board may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS

The Company had laid down adequate internal financial controls with reference to financial statements. During the year such controls were tested and no material weakness in their operating effectiveness was observed.

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements for the year ended 31st March, 2024 have been prepared in accordance with Indian Accounting Standards [Ind-AS], the provisions of the Company Act. 2013, and guidelines issued by the Securities and Exchange Board of India [SEBI]. The Ind-AS are prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies [Indian Accounting Standards] Rules, 2015 and relevant amendment rules issued thereafter.

ASSOCIATES AND SUBSIDIARIES

The Company has no Associates & Subsidiaries as on 31st March, 2024.

CORPORATE GOVERNANCE

As per the provisions of Listing Regulations, a separate Report on Corporate Governance practices followed by the Company together with a Certificate from the Practicing Company Secretary, confirming compliance forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134[3][m] of the Companies Act, 2013 read with Rule 8 of Companies [Accounts] Rules, 2014 the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is appended as an Annexure IV to the Board's Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Shreyans Industries Limited has been positively contributing to the society for over 31 years. It has been the vision and mission of the company to develop the local community and uplift the underprivileged sections.

Going ahead with this vision, the company has identified several projects in the local surrounding areas to enhance community welfare, partnered with several NGOs to create positive change for education, healthcare, rural development, women empowerment, skill development and environment conservation etc. The Company continued providing free notebooks and educational material, as well financial assistance to various students to pursue further education. As the company believes strongly in education being the means to better living for people and thereby adding to the nation's development.

The Company continued regular monthly and yearly financial support to Eye hospital in Ahmedgarh towards operational support and conducting annual free eye checkup camp. The company provided the eye hospital the modern equipment it needed to perform surgeries, namely the Oertli Phaco Machine and Kerato Meter. Additionally, the company provided funding to a number of NGOs for organising blood donation camps and providing treatment to underprivileged and needy people. The company has incurred an expenditure of F64.32 lakhs spread out under in varied initiatives, out of which 44% is on promoting education and literacy, 49% towards providing medical aid and care and balance on redevelopment of surrounding areas.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business.

MATERIAL CHANGES

There are no material changes or commitments affecting the financial position of the Company have occurred during the year under consideration, or after closure of the financial year till the date of this report.

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

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134[5] of the Companies Act, 2013, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable Indian Accounting Standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 and loss of the Company for that period;

(c) The directors had 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;

(d) The directors had prepared the annual accounts on a going concern basis; and

(e) 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;

(f) The directors had devised proper systems to ensure compliance with the provisions all applicable laws and that such systems were adequate and operating effectively.

GENERAL DISCLOSURES

Your directors state that, no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review.

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. The Company has already complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of women at workplace [Prevention and Redressal] Act, 2013. There were no complaints/cases reported with internal complaints committee formed under the Sexual Prohibition and Redressal] Act, 2013.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the contributions made by the employees through their dedication, hard work and commitment in achieving your Company's performance. In an increasingly competitive environment collective dedication of employees is delivering superior and sustainable shareholder value.

The Board has pleasure in recording its appreciation of the assistance, co-operation and support extended to the Company by the Government Authorities, Commercial Banks, Financial Institutions and Depositors.

The Board also places on record its sincere appreciation towards the Company's valued customers, vendors, shareholders and investors for their continued support to the Company.

For and on Behalf of the Board