Shree Karthik Papers Limited is an Indian public entity dedicated to the manufacture of **writing and printing papers**. Operating as a standalone company with no subsidiaries, joint ventures, or associates, it maintains a lean corporate structure focused exclusively on the domestic paper market. The company adheres to **Ind AS 108**, managing its business under a single operating segment. --- ### **Manufacturing Infrastructure and Resource Strategy** The company’s operational core is centralized in Tamil Nadu, leveraging a business model that prioritizes indigenous production and recycled fiber sources. * **Production Facility:** Located at **SF.NO. 387, 388, 390, and 391**, Puliangudi, Kottur Village, Aliyar Nagar, Pollachi, Coimbatore. * **Fiber Sourcing:** In an industry where **two-thirds** of mills rely on non-wood sources, the company utilizes **waste paper** and **agricultural residues** (such as sawdust). This strategy mitigates the impact of increasing scarcity in natural forest resources. * **Supply Chain Vulnerability:** A critical operational factor is that **95%** of raw material procurement for the recycled paper industry originates from the **unrecognized sector**, necessitating robust procurement management to ensure supply continuity. * **Asset Lifecycle Management:** The company employs the **straight-line method** for depreciation under **Schedule II of the Companies Act, 2013**. | Class of Assets | Useful Life | | :--- | :--- | | **Building & River Pipeline** | **30 years** | | **Plant and Machineries** | **15 years** | | **Furniture, Fixtures & Electrical Fittings** | **10 years** | | **Office Equipment** | **5 years** | | **Computers** | **3 years** | --- ### **Operational Modernization and Efficiency Targets** Shree Karthik Papers is currently executing a strategic transition aimed at scaling production and enhancing margins through technical upgrades. * **Technical Expansion:** The company recently modernized its paper unit by installing **new compact systems**. * **Performance Benchmarks:** Management has set a target of a minimum **2% improvement in productivity** and a **3% increase in operational profits** directly attributable to these upgrades. * **Administrative Reorganization:** In **May 2025**, the company relocated its **Registered and Corporate Office** to **Ramanathapuram, Coimbatore**, to better serve evolving operational needs. This relocation was funded entirely through **internal accruals**. * **Service Integration:** Effective **January 2024**, the company transitioned its Registrar and Share Transfer Agent (RTA) to **Link Intime India Private Limited** following the amalgamation of S.K.D.C. Consultants Limited. --- ### **Financial Performance and Capital Structure** The company maintains a conservative financial profile characterized by a steady reduction in debt and a high level of promoter commitment. **Key Financial Indicators** | Particulars (Rs. in Lakhs) | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | | **Sales and Other Income** | **6,499.12** | **8,426.72** | | **Profit Before Tax (PBT)** | **43.05** | **47.01** | | **Profit After Tax (PAT)** | **33.76** | **41.72** | | **Paid-up Equity Capital** | **955.50** | **955.50** | | **Other Equity** | **(707.61)** | **(747.27)** | | **Earnings Per Share (EPS)** | **0.18** | **0.22** | **Debt Management and Liquidity** * **De-leveraging Trend:** The company has aggressively reduced its fixed-rate borrowings from **Rs. 9.21 Crore** in 2023 to **Rs. 3.91 Crore** as of March 31, 2025. * **Interest Rate Mitigation:** By maintaining **zero variable rate borrowings**, the company is insulated from interest rate volatility. * **Credit Facilities:** Current facilities include a term loan from **Axis Bank** at **9.8% p.a.**, secured by **30 acres of land** and factory buildings in Pollachi. Total sanctioned credit facilities for business expansion stand at **Rs. 3.91 crores**. * **Promoter Stability:** Promoters hold **1,42,41,700 equity shares (74.52%)**, with **zero** shares encumbered or pledged. * **Credit Risk Profile:** Financial assets (cash, bank balances, and trade receivables) totaling **Rs. 8.46 Crore** are classified under **Low Credit Risk**. --- ### **Market Dynamics and Growth Outlook** The company operates within a sector poised for steady growth, driven by environmental shifts and domestic demand. * **Industry Growth:** The recycled paper industry is projected to grow at **10% per annum**. * **Product Diversification:** To counter market volatility, the company is exploring **alternate products** and increasing its focus on **eco-friendly papers** and notebooks to meet rising consumer demand for sustainable products. * **Competitive Positioning:** Management is implementing rigorous **cost control measures** to protect thin margins against selling price volatility and the influx of increased domestic capacity. --- ### **Risk Framework and Contingencies** A formal **Risk Management Committee** and a **Vigil Mechanism** (Whistle Blower Policy) oversee the company’s stability. **Operational and Market Risks** * **Import Pressures:** Newsprint is currently imported at a low **5% duty**, leading to "dumping" by foreign manufacturers. This has forced domestic competitors to divert newsprint capacity toward **Writing and Printing Paper**, saturating the market and depressing prices. * **Capacity Utilization:** The company faces the challenge of sub-par capacity utilization; it is currently ramping up marketing efforts to achieve better **leverage benefits**. * **Exceptional Events:** A fire in **March 2025** resulted in an expenditure of **Rs. 18.55 lakhs**. While an insurance claim of **Rs. 90.83 lakhs** has been lodged, the realization of these funds is pending. **Legal and Tax Disputes** The company is currently contesting legacy tax issues related to the **CST Act, 1956**: * **AY 1995-96:** Dispute involving **Rs. 15.12 Lakhs** (Tax) and **Rs. 25.64 Lakhs** (Penalty) at the Central Sales Tax Appellate. * **AY 2003-04:** Dispute involving **Rs. 4.44 Lakhs** (Tax) at the RS Puram East Circle, Coimbatore.