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Directors Report of Essel Propack Ltd.

Mar 31, 2015

The Members,

Essel Propack Limited

The Directors are pleased to present their Report on your Company''s businessoperationsalongwith theAudited Financial statements for the financial year ended March 31, 2015.

Your Company has posted yet another year of good performance, both in India and in Global operations. The highlights of the results are set out below:

RESULTS OF OPERATIONS

CONSOLIDATED GLOBAL RESULTS:

The summary results are set out below: (rs in million) Year ended Year ended 31.03.2015 31 .03.2014

Total Revenue 23439 21490 (excluding Excise duty)

Profit Before Depreciation, 4117 3765 Finance and Tax (PBDIT) inclusive of other income

PBDIT exclusive of other income 3908 3541

Finance cost (793) 814)

Depreciation (1318) (1257)

Profit before Tax and 2006 1694 exceptional items

Exceptional items 55 (8)

Tax (611) (569)

Share of profits from associates 3

Minority interest 47) 39)

Net profit 1406 1078

Total revenue increased by a healthy 9.1% with all the four regions contributing to this achievement. Productivity gains helped the operating margin to expand by 60 bps over the previous year. Further helped by 2.6% reduction in the finance cost, lower effective tax rate and exceptional items, your Company''s Net profit expanded 30.4% over the previous year, to post an all-time high ofRs. 1406 million. The exceptional items Rs. 55 million represent profit on sale during the year of certain surplus land and building by subsidiaries which were not required for business operations. Even after adjusting for the exceptional items, the Net profit on underlying basis has grown a healthy 24.4% over the previous year. The healthy increase in the Net Profit witnessed in the recent years is indicative of a sustained profitable growth in your Company''s business operations.

INDIA STANDALONE RESULTS:

The summary results are set out below: (rs in million)

Year ended Year ended 31.03.2015 31.03.2014

Total Revenue 7755 6922 (excluding Excise duty)

Total expenditure (6135) (5362)

Profit Before Depreciation, 1620 1560 Interest and Tax (PBDIT) inclusive of other income

PBDIT exclusive of other income 1411 1298

Finance cost (409) (450)

Depreciation (457) (367)

Profit before Tax and 753 743 exceptional items

Exceptional items 0 13

Tax (188) (211)

Profit after Tax 565 545

Appropriations:

Dividend recommended 302 230 (inclusive of tax thereon)

Transfer to Debenture 75 0 Redemption Reserve

Transfer to General Reserve 0 55

Total revenue grew by 12% over the previous year, with Sales and Operating income growing by 13.3% year over year. In fact, the Sales and Operating income grew by a high 18% during the first half year, which was partly offset by a weak 8% growth during the second half in the wake of a sluggish Indian economy. New capacity investment made early in the year thus could not ramp up as envisaged. With a higher operating cost and the depreciation charge attributable to new capacity which could not be ramped up on account of weakness in demand beginning middle of the year, the India Standalone posted Net profit for the year ofRs. 565 million as against Rs. 545 million in the previous year.

REVIEW OF BUSINESS AND OPERATIONS

Your Company is a leading manufacturer globally of Laminated and Plastic Collapsible tubes and laminates. Its products are extensively used in packaging of products across categories such as Beauty & Cosmetics, Pharma & Health, Foods, Home and Oral care. The FMCG and Pharma industry which consume your Company''s products has been a high growth industry and is expected to sustain growth in future. In the so called mature markets of Europe, USA and Japan, the FMCG is witnessing introduction of new Beauty care products such as Anti Ageing, Beauty Balms, Complexion Correction creams. Hair colorants, cosmetic and therapeutic toothpastes etc which brings new growth opportunityforyour Company in the emerging markets of India, China, Latin America, Middle and Far East. The FMCG usage is expanding helped by increasing disposable income, growing youth population, expansion of modern retail/ etail and increasing awareness and demand to look and feel good in the emerging markets. The Pharma demand too is buoyed by increasing life expectancy, growth of generics and "health for all" policies pursued globally by governments and the NGOs. Your Company as an established player providing innovative packaging solutions for products in paste/cream/gel forms, is in a sense firmly embedded in the FMCG / Pharma space. In addition to benefitting from growth in the brands traditionally in the tube form, your Company is also actively involved in replacing packaging forms such as bottles, jars and aluminum tubes for a number of brands, leveraging the inherent advantage of laminated tubes and the technological improvement your Company has been able to bring about.

INDIA STANDALONE

ndia Standalone accounts for 32.5% of your Company''s Consolidated Sales. Your Company enjoys a massive franchise in India, having pioneered the laminated tubes over three decades. The Customer portfolio encompassing reputed FMCG and Pharma brands - Indian and MNC, mass and niche, established and new, continues to grow. The second half of the year witnessed a distinct slow down in customer off-take reflective of the state of economy. This impacted the ramp up of new capacity invested early in the year impacting the operating margin. Your Company continued to pursue opportunity in Pharma packaging and help change of other packaging form to laminated tube. Several efficiency improvement measures too were implemented at the factories. A new clean room for pharma packaging was commissioned in another unit. The unit at Nallagarh is undergoing expansion to support new customers located nearby. Exports to markets in South Asia, Middle East and Africa continue to be a focus area. Your Directors are of the view that India growth story remains intact, notwithstanding the recent sluggishness. The oral care category in the country, even though large, is far from mature even in comparison to ASEAN or China, and therefore will continue to drive growth for your Company. The non oral care category powered by increasing aspirations of growing young population and expanding modern retail, presents your Company with exciting opportunity to pursue growth. Your Company already derives 52.38% of its sales from the non oral care category. Your

Directors are of the view that as the country''s per capita GDP increases to mid to high range, demand for sophisticated packaging will drive medium to long term value growth.

SUBSIDIARY, JOINT VENTURES, AND ASSOCIATES

Being a global player in the laminated and plastic tubes, your Company has active manufacturing and marketing presence in twelve other countries through its direct and step down subsidiaries, joint ventures and associates. Your Company also has a wholly owned subsidiary in India to manufacture and market flexible packaging used in the packing of home care, personal care and food products. All these subsidiaries /joint ventures/associates continue to work closely with the customers and grow their business with product offerings relevant to their respective markets. During the year, all the operating subsidiaries have improved their financial performance over the previous year, with the exception of the Chinese subsidiary whose profit was impacted by reduced off-take from couple of existing Oral care customers. This subsidiary is actively developing new business in the non-oral care category and in the high value niche tooth paste packaging. As part of this strategy, this subsidiary also commissioned a new Unit in the East of China where the major part of the Cosmetic Industry of China is located. Your Directors are pleased to report that your Company''s subsidiary in Poland turned profitable during the year and underpinned the strong growth in the Europe region Sales and Operating profit. Your Company''s joint venture in Germany and associate company in Indonesia continued to be profitable. The affairs of the subsidiaries are reviewed throughout the year by the Board. The development at these subsidiaries and the markets they operate in are further discussed in the Management Discussion and Analysis (MDA) forming part of this Report. The performance and the financial position of each of the subsidiaries, associates and joint ventures is set out in the statement in the prescribed form attached to the Financial statements.

During the year, as part of simplifying the holding structure, EP Lamitubes Ltd., a wholly owned Indian subsidiary was amalgamated with your Company with effect from the appointed date April 1, 2014, pursuant to a Scheme approved by the Hon''ble High Court of Mumbai at its hearing held on December 19, 2014, accordingly, this subsidiary has ceased to exist.

Also completed during the year was the liquidation of your Company''s overseas subsidiary Essel Packaging (Nepal) Pvt Ltd under the Company regulations of Nepal. Following the distribution of balance cash, representing a small gain ofRs. 3.33 lakhs, over the book value of investment in your Company''s books, this subsidiary has since ceased to exist.

With a few to exploring opportunity to trade in raw material and finished products , a new step down subsidiary Lamitube Hongkong Trading Company Ltd was incorporated during the year in the Hongkong Autonomous Region. Further as stated elsewhere, to gain entry into the cosmetic packaging market in China, a step down subsidiary Essel Packaging (Jiangsu) Ltd was incorporated in China.

The Consolidated Financial Statements presented by the Company include financial results of all its subsidiaries joint ventures and associates. The Audited Financial Statements of the Subsidiary Companies have been reviewed by the Audit Committee and the Board.

The Board of Directors at its Meeting held on March 05, 2015 has formulated a policy for determining material subsidiaries pursuant to the provisions of the Listing Agreement with the stock exchanges. The same is displayed on the website of the Company (www.esselpropack.com).

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report of the operations of your Company and all of its subsidiaries, associates and joint ventures is provided in a separate section of this Annual Report and forms part of the Directors'' Report.

DIVIDEND

Your Directors are satisfied that with various initiatives undertaken over the last few years, your Company has got back to the path of profitable growth. The debt servicing capability has improved too as has the Company''s credit rating in respect of debt.

Considering the cash requirement for business growth and debt servicing, your Directors advocate a policy of steady dividend payout within a band of 20-25% of the consolidated Net profit subject to statutory provisions, applicable dividend tax and unforeseen exigencies. Your Directors believe this will serve the interests of the shareholders especially those dependent on regular income. Accordingly, your Directors recommend a dividend of Rs. 1.60 per share of face value of Rs. 2 each, for the financial year ending on March 31, 2015 [previous financial year: Rs. 1.25 per share of face value of Rs. 2 each).

TRANSFER TO RESERVES

Pursuant to the guidelines requiring creation of Debenture Redemption Reserve (DRR) to the extent of 25% of the value of listed debt securities issued, your Company has during the year under reporting transferred a sum of Rs. 75 million to DRR to the issue of listed debt securities. In view of the commencement of the Companies Act 2013 there is no requirement to transfer any sum to General Reserve in relation to the payment of dividend. Accordingly, the entire undistributed Net Profit is taken to Surplus in the Profit and Loss account

SHARE CAPITAL

At the beginning of the year, there were 71650 partly paid shares on which the allottees had not paid the call money alongwith premium and interest on the said shares. After issuing a final reminder to the 129 allottees to pay the call money together with premium and interest, the Board, during the year under review, forfeited 35725 partly paid up equity shares belonging to 116 allottees who failed to respond to the final reminder, together with the bonus entitlement thereon of 21395 fully paid equity shares. These shares have not been re-issued. Consequently, the paid up capital of the Company stands reduced by 57120 equity shares at 157,044,165 equity shares of Rs. 2 each fully paid. During the year under the review, the Company has not issued shares with differential voting rights. As on March 31, 2015, Mr. Ashok Goel, Vice Chairman & Managing Director holds 3,20,760 equity shares of face value of Rs. 2 each and Dr. Subhash Chandra, Chairman holds 89,305 equity shares of face value of Rs. 2 each in the Company.

EMPLOYEE STOCK OPTION SCHEME

During the year under review. Members of the Company had approved the Essel Employee Stock Option Scheme 2014 ("ESOS-2014"/"Scheme") for granting options to the eligible employees of the Company and its subsidiaries through postal ballot, the results of which were declared on January 30, 2015. Pursuantto this,the Nomination and Remuneration Committee of the Board of Directors of the Companyat its meeting held on March 19, 2015, has granted 29,53,000 (Twenty Nine Lakhs Fifty Three Thousand) Stock Options to the eligible employees of the Company and its subsidiaries under the ESOS-2014 not being directors or promoters. These options when vested as per the terms and conditions of the Scheme entitle the option holder to apply for and be allotted equal number of equity shares of face value of Rs. II- each at an exercise price of Rs.121.65 per share being the closing market price of the equity shares of the Company on the National Stock Exchange of India Limited as on March 18, 2015. Since the Options have been granted at the market price, the intrinsic value at grant is Nil and hence there is no charge to the Profit and Loss account. The options will vest in a phased manner over a period of 3 years from 2016, subject to performance targets being met for the respective years and may be exercised within maximum 4 years from the date of vesting, subject to terms and conditions of the said Scheme. Your Directors believe this Scheme will help create long term value for shareholders and operate as long term incentive to attract and retain senior managerial talent.

Your Company''s Auditors, M/s. MGB & Co, LLP, Chartered Accountants, have certified that the Company''s Employee Stock Option Schemes have been implemented in accordance with the SEBI Regulations and the resolutions passed by the Members in this regard.

FINANCE

YourCompanycontinuestofocuson reducingfinancial leverage and finance costs through enhancing capital productivity and improving cash generation. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. Cash and cash equivalent as at March 31, 2015 wasRs.9.56 million.

During the year, the Company has issued 900 Rated, Listed, Secured, Redeemable, Non-Convertible Debentures of face value of Rs. 10,00,000 each for Rs. 900 million for cash at par to the face value on private placement basis to further optimize the debt portfolio and finance costs. Finance cost during the year was thus lower by 9.1 % as compared to previous year, despite prevailing high interest regime in India.

Reflecting the improved financial strength, during the year under reporting the Credit Analysis & Research Limited "CARE" has upgraded the credit rating assigned to the Company''s Long term facilities from CARE A- to CARE A and Short term Bank facilities from CARE A2 to CARE A2 .

Forex exposures were closely reviewed and appropriately hedged in order to minimize risk to the results during a year when the Indian rupee depreciated to record lows against USD during the previous year.

ACCOUNTS

The merger of EP Lamitubes Ltd with your Company approved by the Shareholders and confirmed by the Hon''ble Bombay High court has been given effect as provided in the Approved Scheme under the Pooling of interests method from the appointed date of April 1, 2014. A sum ofRs. 2750 million being the difference between the net assets taken over after cancellation of inter-company investment and the merger expenses has been charged to the Share premium account as provided by the approved Scheme and explained in the note 30 to the accounts. The Companies Act 2013 has mandated depreciation to be provided with reference to useful life for various assets as detailed in Schedule 2. The same has been given effect to in the year''s accounts as detailed in note 11 to the Stand alone accounts in accordance with the provisions of the Act.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There has been no material changes and commitment affecting the financial position of the Company which have occurred between the end of the Financial year of the Company to which the Financial statements relate and the date of the Report.

PUBLIC DEPOSITS

Your Company has not accepted any fixed deposits from the public and there are no outstanding fixed deposits from the public as on March 31,2015.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators / courts that would impact the going concern status of the Company and its future operations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by rotation

In accordance with the provisions of Section 152(6) and the Articles of Association of the Company, Dr Subhash Chandra (DIN 00031458) will retire by rotation at the ensuing Annual General Meeting of the Company and being elligible, offer himself for re-appointment. The Board recommends his re-appointment.

Appointments / Resignations from the Board of Directors

During the year under review, the Company appointed MrTapan Mitra (DIN 00101 574), Mr Boman Moradian (DIN 002421 23), Mr MukundMChitale(DIN00101004)andMsRadhikaPereira(DIN 00016712) as Independent Directors of the Company on July 09, 2014 for a period of five years. All Independent Directors have given declaration that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with the stock exchanges.

The Board of Directors on the recommendation of Remuneration and Nomination Committee appointed Mr. Atul Goel (DIN 00013157) as an Additional Director (Non Independent) in accordance to Section 161 of the Companies Act, 2013 w.e.f November 05, 2014. Mr. Atul Goel is a graduate from The American Graduate School of International Management at Thunderbird, USA. He leads E-City Ventures and has pioneering experience in developing and managing malls & multiplexes on a PAN India scale. As an Additional Director, Mr Atul Goel holds office upto the date of the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013, from a Member proposing his candidature as Director. The Board of Directors recommends his appointment as Director at the ensuing Annual General Meeting.

Further details about the above Directors are given in the Corporate Governance Report as well as in the Notice of the ensuing Annual General Meeting being sent to the Members along with the Annual Report.

There was no resignation of Directors during the year.

Appointments / Resignations of the Key Managerial Personnel

Mr Ashok Goel, Vice Chairman & Managing Director; Mr A V Ganapathy, Chief Financial Officer - Global and Mr Ajay N Thakkar, Company Secretary & Head- Legal of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and were already in office before the commencement of the Companies Act, 2013.

None of the Key Managerial Personnel has resigned or was appointed during the year under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

i. that in the preparation of the annual financial statements for the year ended March, 31, 2015 , the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. that such accounting policies as mentioned in note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

Hi. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual financial statements have been prepared on a going concern basis;

v. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MEETINGS OF THE DIRECTORS

A calendar of meetings to be held in the forthcoming financial year is prepared and circulated in advance to the Directors to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, at times decisions are taken by the Board also by means of resolutions circulated among the Directors, During the year Eight (8) Board Meetings and Seven (7) Audit Committee Meetings were convened and held. Detailed information on the meetings of the Board and all its Committees are included in the report on Corporate Governance, which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the listing agreement entered into with the stock exchanges.

COMPOSITION OF AUDIT COMMITTEE

The Board has constituted the Audit Committee which comprises of Mr Mukund Chitale, Independent Director as Chairman and Mr Tapan Mitra, Independent Director, Mr. Boman Moradian, Independent Director, as the members. More details on the Committee are given in the Corporate Governance Report which forms part of this Annual Report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the stock exchanges, the Board has carried out an annual performance evaluation of its own performance, and of the directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in detail in the Corporate Governance Report, which forms part of this Annual Report.

FAMILIARIZATION PROGRAMMES

The Company had conducted various sessions during the financial year to familiarize Independent Directors with the Company, their roles, responsibilities in the Company, and the technology and the risk management systems of the Company. Further, the Directors are encouraged to attend the training programmes being organized by various regulators/bodies/ institutions on above matters. The details of such familiarization programmes are displayed on the website of the Company (www.esselpropack.com).

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate Internal Financial Control System, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.

The Internal Financial Control is exercised through documented policies, guidelines and procedures. It is supplemented by an extensive program of internal audits conducted by in house trained personnel and external firms of Chartered Accountants appointed by the Audit Committee and the Board. The audit observations and corrective action taken thereon are periodically reviewed by the Audit committee to ensure effectiveness of the Internal Financial Control System. The internal financial control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note 37 to the Standalone Financial Statements.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All contracts /arrangements/ transactions with related parties are placed before the Audit Committee as also the Board, as may be required, for approval.

The policy on the materiality of the Related Party Transactions and also on dealing with the Related Party Transactions as approved by the Audit Committee and the Board of Directors is displayed on the Company''s website (www.esselpropack.com).

Details of contracts / arrangements / transactions with related parties are given in the note 36 to the Standalone Financial Statements.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, an extract of the Annual Return as at March 31, 2015 in the prescribed format is given in Annexure 1 and forms part of this Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also displayed on the website of the Company (www.esselpropack.com).

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

RISK AND AREAS OF CONCERN

The Company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor the principal risks that can impact its ability to achieve its strategic objectives. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. Details on the risk elements which the Company is exposed to are covered in the Management Discussion and Analysis which forms part of this Report.

In line with the new regulatory requirements, the Company has formally framed a Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure. A Risk Management Committee under the Chairmanship of Mr. Boman Moradian, ndependent Director, has also been constituted to oversee the risk management process in the Company.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013, and the relevant rules, the Board has constituted the Corporate Social Responsibility (CSR) Committee under the chairmanship of, Mr. Ashok Goel. The other members of the Committee are Mr. Boman Moradian and Mr. Mukund Chitale.Adetailed CSRpolicy has been framed which is placed on the Company''s website. As a part of its initiative under the CSR drive, the Company has undertaken CSR activities through registered trust or registered society and other permissible entities by giving donations and contributions to various permitted entities. The Company has also undertaken CSR initiatives on its own and has started with the project of providing benches and toilets to schools in the vicinity of the plants of the Company. The said project could not be completed before the end of the financial year under review since the Company was doing some research in this regard. The project is at advanced stage and will be completed during the current financial year.

These CSR projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company''s CSR policy. Details of the CSR activities as required under Section 135 of the Companies Act, 2013 and rules framed thereunder are given in the CSR Report as Annexure 2 forming part of this Report.

Apart from the above CSR activities, the Company''s subsidiary companies in India and overseas are also involved in CSR activities in their respective geographies as per their respective CSR policies and regulations applicable to the said subsidiaries.

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

The Company has been employing women employees in various cadres within its office and factory premises. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. nternal Complaint Committees are set up at shop floor level to redress any complaints received and are monitored by women line supervisors. All employees are covered under the policy. There was no compliant received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal.

AUDITORS

STATUTORY AUDITORS

The Members at the 31st Annual General meeting held on July 09, 2014 appointed M/s. MGB & Co, Chartered Accountants as Statutory Auditors of the Company to audit financial accounts for the financial years 2014-15, 2015-16, and 2016-17, subject to ratification by the Members annually. During the year under review, M/S MGB & Co, informed the Board of Directors of having converted themselves into a Limited Liability Partnership (LLP) under the provisions of the Limited Liability Partnership Act, 2008 under the name and title M/S MGB & Co. LLP, Chartered Accountants. In terms of the Ministry of Company Affairs, Government of India, General circular No 9/2013 dated April 30,2013, if a firm of Chartered Accountants, being an auditor of the Company is converted into an LLP, then such LLP would be deemed as an Auditor of the Company. Accordingly, the audit of the Company for the year under reporting was conducted by M/s MGB & Co.LLP, Chartered Accountants

Section 139 of the Companies Act, 2013 read along with the Companies (Audit and Auditors) Rules, 2014, states that the appointment of the Auditor shall be subject to ratification by the Members at every Annual General Meeting till the expiry of the term of the Auditor.

M/s. MGB & Co, LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 41 of the Listing Agreement with the stock exchanges, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of ndia. As required under the Companies Act, 2013, appointment of Auditors is required to be placed before the Members in the General Meeting for their approval. Your Directors propose ratification of appointment of M/s. MGB & Co, LLP, Chartered Accountants as the Statutory Auditors of the Company to audit accounts for the financial year 2015-16.

COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read along with the Companies (Cost Records and Audit) Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on June 30, 2014 and further to its amendment on December 31, 2014, the cost audit records maintained by the Company is required to be audited in respect of the year ending March 2016. Your Directors have, on the recommendation of the Audit Committee, appointed M/s R Nanabhoy & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2015-16 at a remuneration of Rs. 1,00,000/- (plus service tax and out of pocket expenses). As required under Section 148 of the Companies Act, 2013 and read alongwith the Companies (Audit & Auditors) Rules 2014, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a Resolution seeking Member''s approval for the remuneration payable to M/s R Nanabhoy & Co., Cost Accountants is included as item no. 6 of the Notice convening the Annual General Meeting.

SECRETARIAL AUDIT:

Pursuant to Section 204 of the Companies Act, 2013 the Board of Directors had appointed Mr. Dharmesh Zaveri of M/s. D.M. Zaveri & Co, Practicing Company Secretary (C. P. No. 4363) as Secretarial Auditor to undertake the Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed herewith as Annexure 3 and forms part of this Report.

There is no secretarial audit qualification for the year under review.

HUMAN CAPITAL & PARTICULARS OF EMPLOYEES

Your Company had 2858 employees globally as of March 31, 2015, of which 945 employees are in India.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure 4(a) and forms part of this Report.

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure 4(b) and forms part of this Report.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 5 and forms part of this Report.

CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements as per the revised Clause 49 of the Listing Agreement with the stock exchanges. A separate report on Corporate Governance along with a Certificate of Compliance from the Auditors forms a part of this Annual Report.

CAUTIONARY STATEMENT

Statements in the Directors'' Report and the Management Discussion and Analysis may be forward looking within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Certain factors that could affect the Company''s operations include increase in price of inputs, availability of raw materials, changes in government regulations, tax laws, economic conditions and other factors.

APPRECIATION

Your Directors wish to place on record their appreciation for the cooperation and support received from banks and financial institutions, customers, suppliers, members and employees towards the growth and prosperity of your Company and look forward to their continued support.

For and on behalf of the Board of Directors ESSELPROPACK LIMITED

Subhash Chandra Chairman

Mumbai, April 28,2015


Mar 31, 2013

To The Members of Essel Propack Limited

The Directors are pleased to present their Report on your company''s business operations alongwith the Audited Statement of Accounts for the financial year ended March 31, 2013.

Your Company''s relentless focus on customer development, new packaging solutions and operational excellence has led to a satisfying improvement in results, both on a Standalone and on Consolidated basis.

RESULTS OF OPERATIONS:

India Standalone results:

The summary results are set out below:

(Rs. Million)

Year ended Year ended 31.03.2013 31.03.2012

Total Revenue 6183 5419 (excluding Excise duty)

Total expenditure (4641) (4030)

Profit Before Depreciation, 1542 1389 Interest and Tax (PBDIT)

PBDIT exclusive of other income 1150 936

Finance cost (550) (587)

Depreciation (331) (286)

Profit before Tax and 661 516 exceptional items

Tax (163) (25)

Profit after Tax 498 491

Appropriations:

Dividend recommended 138 119 (inclusive of tax)

Transfer to General Reserve 50 49

The year''s revenues reflect a strong sales growth of 16.6% over the previous year, driven by robust volume and increasing share in the sales of high value non oral-care category. Tight control on costs and higher asset productivity has helped the profit before depreciation, interest, other income and tax to grow at a healthy 22.9%, reflecting a margin gain of 100 bps over the previous year. In a year marked by high interest rates, the finance cost has been reduced by 6.3% compared to the previous year by active management of the debt portfolio. The tax incidence during the previous year was lower on account of the merger with your Company of Ras Propack Lamipack Ltd (RPLL) and Ras Extrusions Ltd (REL) pursuant to a Merger Scheme forming part of the Modified Scheme approved by the Hon''ble BIFR on 10 May, 2012. Consequently, the profit after the tax for the year is seen at same level as in the previous year. The profit before tax has recorded a healthy growth of 28% over the previous year.

Consolidated Global results:

The summary results are set out below:

(Rs. Million)

Year ended Year ended 31.03.2013 31.03.2012

Total Revenue 18620 16034 (excluding Excise duty)

Profit Before Depreciation, 3434 2864 Interest and Tax (PBDIT)

PBDIT exclusive of other income 3132 2667

Finance cost (912) (841)

Depreciation (1262) (1170)

Profit before Tax and 1260 853 exceptional items

Exceptional items - (13)

Tax (443) (223)

Share of profits from 23 24 associates

Minority interest (30) (25)

Profit after Tax and minority 810 616 interest from continuing operations

Profit/(Loss) from discontinued -- (102) operations

Net profit 810 514

The year''s Global Revenues reflect a strong sales growth of 15.7% contributed by all four regions. This together with improved material efficiencies and productivity has helped the Profit before tax and exceptional items to increase by 47.7% and the Profit after tax from continuing operations by 31.5%.

REVIEW OF BUSINESS AND OPERATIONS:

Your Company is a leading global manufacturer of laminated and plastic collapsible tubes and laminates. Its products are extensively used by industry in packaging of their products spanning categories such as cosmetics, foods, pharmaceuticals and toothpaste. The packaging industry continues to grow given its symbiotic linkage to Fast Moving Consumer Goods (FMCG). The FMCG industry is a key driver of economic growth globally and will continue in future too given the major demographic shift in the developed world and fast improving standards of living in the developing markets. As a leader in the tube space, your Company is constantly striving to grow the market and gain share through innovative offerings and efficient supply chain.

India accounts for approx. 30% of your company''s global revenues & continues to be a key market where your Company has been a market Leader since its inception in the 1980''s. The fast growing non oral care category powered by increasing disposabLe income, growing young popuLation and expanding modern retaiL, present your Company with a great opportunity to pursue value growth, over and above the potential offered by the Large oraL care category.

During the year, your Company has Leveraged its worLd cLass capability for decoration and new product development to drive a strong growth in the cosmetic category, offering packaging soLutions with both Laminated and pLastic tubes. The Company''s plants in SiLvassa and Wada have reached high levels of utiLization catering to demand of the cosmetic category. Your Company continues to pursue opportunities in the pharma category and this is evident in the number of new customer acquisitions achieved during the year. The contribution to revenue of non oral care category thus increased by 5 percent points (pp) over the previous year. As the various stage gate processes get completed in our creative & innovation Centre and at the customers, this pharma category wiLL add to your Company''s saLes.

During the year your Company completed the expansion of capacity for Laminated tubes and the new capacity has been significantly ramped up. The Company also implemented number of programs to reduce scrap and improve productivity at its various pLants. The pLants of the erstwhiLe RPPL and REL were revamped and the capacity utiLized to meet the increasing demand.

Being a gLobaL pLayer in the Laminated and pLastic tubes, your Company has active manufacturing and marketing presence in eLeven other countries through its direct and step down subsidiaries, joint ventures and associates. Your Company also has a wholly owned subsidiary in India to manufacture and market flexible laminates widely used in the packaging of home care, personaL care, food and pharma products. ALL these subsidiaries / joint ventures / associates continue to work cLoseLy with the customers and grow their business with product offerings relevant to their markets. During the year, all the operating subsidiaries have improved their performance over the previous year.

FoLLowing the decision to service the Latin American markets from its pLants in CoLombia and Mexico, your Company has discontinued the operations of its subsidiary in VenezueLa. During the year, this subsidiary was Liquidated and aLL reLated formaLities compLeted. There were no other changes with respect to subsidiaries during the year.

The subsidiaries in Mexico, CoLombia, PhiLippines and PoLand are in the process of increasing capacity in order to service new Long term customer contracts.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Report of Board of Directors and Auditors, Balance sheet and Statement of Profit and Loss (financial statements) of its subsidiaries. In view of the general exemption granted by the Ministry of Corporate Affairs, CentraL Government vide GeneraL CircuLar no. 2, 2011 dated February 08, 2011, the said reports and financial statements of the subsidiaries are not attached. The Company wiLL make avaiLabLe annuaL accounts of the subsidiary companies and the reLated prescribed information, where appLicabLe, upon request by any member of the Company. Any member interested in obtaining such particuLars may inspect the same at the Company''s Registered and Corporate office between 11:00 a.m. and 1:00 p.m. on aLL working days tiLL the date of the 30th Annual General Meeting.

The ConsoLidated FinanciaL Statements presented by the Company include financial results of all its subsidiaries.

JOINT VENTURES AND ASSOCIATES:

Your Company has a joint venture in Germany and an associate company in Indonesia. These continued to be profitable and their resuLts have been appropriateLy considered in the consolidated financial results of your Company.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and AnaLysis of the operations of your Company and aLL of its subsidiaries, associates and joint ventures is provided in a separate section of the AnnuaL Report and forms part of the Directors'' Report.

MERGER OF RAS PROPACK LAMIPACK LIMITED (RPLL) AND RAS ExTRUSIONS LIMITED (REL), SICK INDUSTRIAL COMPANIES WITH THE COMPANY:

Pursuant to the order of the Hon''bLe BIFR in its hearing heLd on May 10, 2012 sanctioning a "Modified Scheme" including Scheme of Merger (''the Scheme'') of RPLL and REL with EsseL Propack Limited (EPL) from the appointed date of ApriL 1, 2011, your Company gave effect to the merger and completed the issue of 500,155 equity shares of face value of Rs. 2 each to the equity shareholders of RPLL and REL, as per the share exchange ratio stipuLated in the Merger Scheme. These shares have been issued from out of the share suspense account credited in your Company''s books when giving effect to the merger in the financial statements of the previous financial year. Your Company has also applied to the various authorities and reguLators for making aLL necessary changes in the documents, registrations, obLigations, Licenses and permissions etc., of erstwhiLe RPLL and REL pursuant to vesting of the undertaking, assets and LiabiLities of the erstwhiLe RPLL and REL to your Company.

Dealing in RPLL and REL shares was stopped by the stock exchange w.e.f. September 11, 2012 and September 05, 2012 respectively and the EPL shares issued in exchange to RPLL and REL shareholders pursuant to merger have been admitted for trading from December 13, 2012.

Taking into account the overall need to maximize internal accruals as the means to lower your Company''s financial gearing and to support future capital expenditure and keeping in mind the interests of the shareholders, your Directors recommend a dividend of Rs. 0.75 per share of face value of Rs. 2 each, for the financial year ending on March 31, 2013 (previous financial year Rs. 0.65 per share of face value of Rs. 2 each).

FINANCE AND ACCOUNTS:

Your Company continues to focus on reducing financial leverage and finance costs through enhancing capital productivity and improving cash generation. Forex and interest rate exposures are closely reviewed and appropriately hedged in order to minimize risk to the results.

During the year, some of the subsidiaries of your Company successfully raised finances and repaid the loan and advances they had earlier received from your Company. The proceeds were used by your Company to significantly reduce its India borrowing from Rs. 536.26 crores at the end of previous year to Rs. 444.39 crores at the end of the current year. Consequently, your Company''s short term debt is now at optimal level.

Your Company has not accepted any fixed deposits from the public and there are no outstanding fixed deposits from the public as on March 31, 2013.

Your Company has 865 employees in India and 2648 employees globally as of March 31, 2013. The information on employees'' remuneration as per Section 217 (2A) of the Companies Act, 1956 (the Act) read with the Companies (Particulars of Employees) Rules, 1975, as amended till date, forms part of this Report. However, as per provisions of Section 219(1)(b)iv of the Act, the Report and Accounts are being sent to all the members, excluding the statement containing the particulars of employees to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Company''s registered and corporate office between 11:00 a.m. and 1:00 p.m. on all working days till the date of the 30th Annual General Meeting. Further, those seeking a copy of the said statement may write to the Company Secretary at the Corporate Office.

DIRECTORS:

Mr K V Krishnamurthy, Director, expired on January 16, 2013. Your Directors express their profound grief and sorrow at the sad demise of Director Mr K V Krishnamurthy. His contribution to your Company was immense.

The following Directors seek re-appointment:

Mr. Tapan Mitra, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment.

Mr. Boman Moradian, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment.

Brief resumes'' of Mr. Tapan Mitra and Mr. Boman Moradian as required by Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to the Notice convening the 30th Annual General Meeting of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

2. Appropriate Accounting Policies have been selected and applied consistently and have made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit for the financial year ended March 31, 2013;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956; for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

4. The Annual Accounts have been prepared on a "going concern" basis.

AUDITORS:

M/s MGB & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITORS:

During the year the Ministry of Corporate Affairs, Central Government vide its order F.No. 52/26/CAB-2010 dated November 06, 2012 has made cost audit mandatory in respect of various industries including your Company''s products. Accordingly in terms of Section 233B (2) of the Companies Act, 1956 the Board of Directors on the recommendations of the Audit Committee has appointed M/s. R Nanabhoy & Co., Cost Accountants, as Cost Auditors of the Company for the financial year 2013-14.

CORPORATE GOVERNANCE:

Your Company has complied with the Corporate Governance requirements as per the revised Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance along with a Certificate of Compliance from the Auditors forms a part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN ExCHANGE EARNINGS AND OUTGO:

The information as prescribed under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in a separate annexure, which forms a part of this Report.

CAUTIONARY STATEMENT:

Statements in the Directors'' Report and the Management Discussion and Analysis may be forward looking within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Certain factors that could affect the Company''s operations include increase in price of inputs, availability of raw materials, changes in government regulations, tax laws, economic conditions and other factors.

APPRECIATION:

Your Directors wish to place on record their appreciation for the co-operation and support received from banks and financial institutions, customers, suppliers, members and employees towards the growth and prosperity of your Company and look forward to their continued support.

For and on behalf of the Board of Directors

ESSEL PROPACK LIMITED

Subhash Chandra

Chairman

Mumbai, 29 May, 2013


Mar 31, 2012

The Directors are pleased to present their Report on your Company's business operations alongwith the audited statement of accounts for the financial year ended March 31, 2012.

In a year that posed a challenging economic and business environment in terms of rising input costs, sharp rupee devaluation, high interest rates in India and sluggish economic growth, your Company by focusing on pro- active customer development, efficiency improvement and cost control measures was able to post satisfactory results both on India Standalone and Consolidated basis.

Following the sanction by the Hon'ble Board of Industrial & Financial Reconstruction (BIFR) at its hearing held on May 10, 2012 of a Modified Scheme involving the merger of Ras Propack Lamipack Limited (RPLL) and Ras Extrusions Limited (REL), both sick companies where your Company was earlier joined as a co-promoter, the said companies merged with your Company from the appointed date i.e. April 1, 2011 in terms of the scheme of merger approved by the members earlier this year. Accordingly, the merger has been given effect in the accounts of your Company for the year ended March 31, 2012 and to this extent, the results of the year are not strictly comparable with those of the previous year.

Results of Operations:

India standalone results:

The summary results are set out below:

(Rs. Million)

Year Year ended ended 31.03.2012 31.03.2011

Total Revenue (excluding 5,419 4,754 Excise duty)

Total expenditure (4,030) (3,284)

Profit Before Depreciation, 1,389 1,469

Interest and Tax

Finance cost (587) (594)

Depreciation (286) (243)

Profit before Tax and 516 632 exceptional items

Tax (25) (192)

Profit after Tax 491 441

Appropriations:

Dividend recommended 119 109 (inclusive of tax)

Transfer to General Reserve 49 44

A strong sales growth of 18.7% driven by robust volumes and a lower tax incidence on account of the merger and availment of MAT credit helped the Company to off-set higher input and energy costs and post a Net profit of Rs. 491 million as against Rs. 441 million in the previous year.

Consolidated Global results:

The summary results are set out below:

(Rs. Million)

Year Year ended ended 31.03.2012 31.03.2011

Total Revenue (excluding 16,034 14,347 Excise duty)

Profit before Depreciation, 2,864 2,750

Finance and Tax

Finance cost (841) (851)

Depreciation (1,170) (1,070)

Profit before Tax and 853 829 exceptional items

Exceptional items (13) (45)

Tax (223) (338)

Share of profits from 24 25 associates

Minority interest (25) (30)

Profit after Tax and minority 616 441 interest from continuing operations

Profit/(Loss) from (102) 31 discontinued operations

Net profit 514 473

Strong sales growth in India, improved profitability in the Americas operations, sharp reduction in the losses of Europe operations and a lower tax incidence, underpin higher net profit of Rs. 616 million on consolidated basis from the continuing operations, as compared to Rs. 441 million in the previous year. Loss of Rs. 102 million on account of discontinuing operations for the year, relates to settlement during the year of certain claims of the medical device subsidiary divested in the year 2009. Consequently, the consolidated net profit of the Company for the year is Rs. 514 million as against Rs. 473 million in the previous year.

Review of business and operations:

Your Company is a leading manufacturer globally of multi- layered plastic collapsible tubes and laminates, considered as specialty packaging. Its tubes are extensively used by industry in the packing of their products spanning categories such as toothpaste, cosmetics, foods and pharmaceuticals. Packaging plays an important role in protecting the product, keeping it fresh and potent and making for its aesthetics and display value in the retail shelf, besides helping to deliver it to consumer in an efficient and convenient manner. The packaging industry continues to grow given its symbiotic linkage to products of mass daily consumption. The growth in developing markets like India is even more pronounced. As a leader in the tube space, your Company is constantly striving to grow the market and gain share through innovative offerings and efficient supply chain.

India:

Your Company having pioneered laminated tubes in India since the 1980's, continues to be the market leader. The toothpaste category is a pre-dominant user of the laminated tubes in India. This category holds high growth potential given the current low per capita usage of tooth paste and the growing income and awareness levels and will continue to power your Company's sales.

Complementing this, your Company is actively promoting the use of high value laminated and plastic extruded tubes in categories such as cosmetics, foods and pharmaceuticals. The increasing number and range of customers and SKUs bear testimony to your Company's success with this strategic foray. So much so, over 47% of your Company's India sales this year is from the non- oral care category.

Your Company's innovation driven R&D, show-cased to customers as Creativity & Innovation (C&I) has been powering these efforts through a pipeline of innovations in material structure, product dispensing, 'look and feel' features, and product recyclability. During the year, your Company filed 18 patent applications. Your Company has invested in printing technologies which can produce high impact graphics and decoration and can flexibly cater to varying run sizes and print customization.

During the year, your Company ramped up its new plastic tube capacity at Wada and continued to invest in new capacities to support the fast growing demand. Customer service process was strengthened in order to achieve higher order servicing levels and faster order turnaround.

The rupee devaluation coupled with escalating global commodity prices put pressure on input costs. While your Company has an established process of regular price review and pass through of cost escalation, the margins were impacted on account of the lag effect in passing through the cost escalation. Your Company has also initiated in parallel, a number of measures to improve material and machine productivity and to make its cost structure even more competitive on long term basis.

Subsidiary operations:

Being a global player in the laminated and plastic extruded tubes, your Company has active manufacturing and marketing presence in eleven other countries through its direct and step down subsidiaries, joint ventures and associates. Your Company also has a wholly owned subsidiary in India to manufacture and market flexible packaging used in the packing of home care, personal care, food and pharma products. All these subsidiaries / joint ventures / associates continue to work closely with the customers and grow their business with product offerings relevant to their markets.

There was no change in the subsidiaries or in the holding pattern during the year under report. Following the re- organisation of your Company's Egypt business, the Egyptian Indian company for Modern Packaging S.A.E. closed its operations during the year.

With a view to improving the cost structure, Essel Propack UK Limited, UK has closed its manufacturing operations in the UK at the end of the year and going forward will source its sales requirements from other Essel Propack's group companies in Europe. The closure costs have been provided in the consolidated accounts under 'exceptional items'.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Report of Board of Directors and Auditors', Balance sheet and Statement of Profit and Loss (financial statements) of its subsidiaries. In view of the general exemption granted by the Ministry of Corporate Affairs, Central Government vide General Circular no. 2, 2011 dated February 8, 2011, the said reports and financial statements of the subsidiaries are not attached. The Company will make available annual accounts of the subsidiary companies and the related prescribed information, where applicable, upon request by any member of the Company. Any member interested in obtaining such particulars may inspect the same at the Company's registered and corporate office between 11.00 a.m. to 1.00 p.m. on all working days till the date of the 29th Annual General meeting.

The Consolidated Financial Statements presented by the Company include financial results of all its subsidiaries.

Joint ventures and Associates:

Your Company has a joint venture for manufacture of laminated tubes in Germany and an associate company in Indonesia. These continued to be profitable and their results have been appropriately considered in the consolidated financial results of your Company.

Management Discussion and Analysis:

The Management Discussion and Analysis of the operations of your Company and all of its subsidiaries, associates and joint ventures is provided in a separate section of the Annual Report and forms part of the Directors' Report.

Merger of Ras Propack Lamipack Limited (RPLL) and Ras Extrusions Limited (REL), sick industrial companies with the Company:

Hon'ble BIFR in its hearing held on May 10, 2012, sanctioned a 'Modified Scheme' including Scheme of Merger ('the Scheme') of Ras Propack Lamipack Limited (RPLL) and Ras Extrusions Limited (REL) with Essel Propack Limited (EPL) from the appointed date of April 1, 2011. The merger has since been effected and the other formalities including the issue of your Company's shares to the shareholders of RPLL and REL as per the share exchange ratio stipulated in the Merger scheme would be completed shortly. Consequently, your Company will issue 500,155 equity shares of face value of Rs. 2 each to the equity shareholders of RPLL and REL, while your Company's existing holding of equity shares in these two companies will be cancelled. Pending allotment of these new shares, your Company has credited the same to share suspense account. Your Directors extend their warm welcome to the members of RPLL and REL on their joining the Essel Propack family. Your Company will work to improve the operations of the RPLL and REL facilities and leverage their existing capacity to create value for all shareholders.

Dividend:

Taking into account the profits reported, the overall need to maximize internal accruals as means to lower your Company's financial gearing and keeping in mind the interests of the shareholders, your Directors recommend a dividend of Rs. 0.65 per share of face value of Rs. 2 each, for the financial year ending on March 31, 2012. (previous financial year: Rs. 0.60 per share of face value of Rs. 2 each). The shares issued pursuant to merger will also be entitled to the aforesaid dividend in respect of the full financial year.

Finance and Accounts:

Your Company continues to focus on reducing financial leverage and finance costs through enhancing capital productivity and improving cash generation. Forex and interest rate exposures are closely reviewed and appropriately hedged in order to minimize risk.

Your Company closely plans and monitors its fund flow with a view to maintaining a healthy mix of long and short term debt that is optimal in terms of cost, flexibility and risk. The Euro crisis during the second half of the year 2011, caused some delay in the timely completion of the borrowing programme of your Company's overseas subsidiaries. Being just a timing issue, your Company supported their requirement through advances resulting in an increase in short term borrowings in the India standalone balance sheet. The subsidiaries have since successfully raised finances and repaid these advances to your Company to reduce the short term debt.

Buy-Back of shares:

Your Company has not announced in the last three years any Share Buy-Back programme. If there is any future proposal for Buy-Back, fresh mandate will be sought from the members as necessary under the applicable guidelines.

Public Deposits:

Your Company has not accepted any fixed deposits from the public and there are no outstanding fixed deposits from the public as on March 31, 2012.

Human Capital:

Your Company has 852 employees in India and 2,546 employees globally as of March 31, 2012. The information on employees' remuneration as per Section 217 (2A) of the Companies Act, 1956 (the Act) read with the Companies (Particulars of Employees) Rules, 1975, as amended till date, forms part of this Report. However, as per provisions of Section 219(1)(b)iv of the Act, the Report and Accounts are being sent to all the members, excluding the statement containing the particulars of employees to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Company's registered and corporate office between 11.00 a.m. to 1.00 p.m. on all working days till the date of the 29th Annual General Meeting. Further, those seeking a copy of the said statement may write to the Company Secretary at the Corporate Office.

Directors:

The following Directors seek re-appointment:

Mr. Subhash Chandra, Director of the Company, retires by rotation and being eligible, offers himself for re- appointment.

Mr. Mukund M. Chitale, Director of the Company, retires by rotation and being eligible, offers himself for re- appointment.

Brief resumes of Mr. Subhash Chandra and Mr. Mukund M. Chitale as required by Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to the Notice convening the 29th Annual General Meeting of the Company.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

2. Appropriate Accounting Policies have been selected and applied consistently and have made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit for the financial year ended March 31, 2012;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

4. The Annual Accounts have been prepared on a "going concern" basis.

Auditors:

M/s MGB & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Corporate Governance:

Your Company has complied with the Corporate Governance requirements as per the revised Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance along with a Certificate of Compliance from the Auditors, forms a part of this Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The information as prescribed under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in a separate annexure, which forms a part of this Report.

Cautionary Statement:

Statements in the Directors' Report and the Management Discussion and Analysis may be forward looking within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Certain factors that could affect the Company's operations include increase in price of inputs, availability of raw materials, changes in government regulations, tax laws, economic conditions and other factors.

Appreciation:

Your Directors wish to place on record their appreciation for the co-operation and support received from banks and financial institutions, customers, suppliers, members and employees towards the growth and prosperity of your Company and look forward to their continued support.

For and on behalf of the Board of Directors

ESSEL PROPACK LIMITED

Subhash Chandra

Chairman

Mumbai, August 31, 2012


Mar 31, 2011

The Members,

Essel Propack Limited

The Directors are pleased to present their Report on your Company's business operations along with the audited statement of accounts for the financial year ended March 31, 2011

As you are aware, your Company changed its Accounting year to align with the Financial year (April - March), and consequently the previous accounting year was a period of 15 months, January 2009 - March 2010. The current accounting year being a period of 12 months ended March 2011, the current year figures are not comparable with those of the previous period.

Results of Operations:

I India Standalone results:

The summary results are set out below:

(Rs. Million)

Year Period ended ended 31.03.2011 31.03.2010 (Twelve (Fifteen months) months)

Total Revenue (excluding 4,380 4,541 Excise duty)

Total expenditure (3,283) (3,457)

Profit Before Depreciation, 1,097 1,084 Interest and Tax

Financial expenses (net) (221) (352)

Depreciation (243) (289)

Profit before Tax and 633 443 exceptional items

Exceptional items - (1)

Tax (192) (97)

Profit after Tax 441 345

Appropriations:

Dividend recommended 109 73 (inclusive of tax)

Transfer to General Reserve 44 26

Your directors are pleased to highlight that amidst challenges posed during the year by rising input costs and interest rates, your Company recorded a Profit After Tax of Rs. 441 million i.e. 27% higher, compared to Rs. 345 million during the previous period which was a 15 months period. Improved Sales, reduction in the interest cost and capital productivity have been the main drivers.

Consolidated Global results

The key financials are set out below. In comparing the current year consolidated global results with those of previous period, it may be noted that the previous year besides being a 15 months period also included the results of the Medical devices business and the one-off exceptional gain arising upon divestment of that business during December 2009.

(Rs. Million)

Year Period ended ended 31.03.2011 31.03.2010 (Twelve (Fifteen months) months)

Total Revenue (excluding 14,117 16,941 Excise duty)

Profit Before Depreciation, 2,539 3,008 Interest and Tax

Financial expenses (net) (640) (947)

Depreciation (1,070) (1,329)

Profit before Tax and 829 732 exceptional items

Exceptional items (14) 302

Tax (338) (386)

Share of profits from 25 14 associates

Minority interest (29) (63)

Profit after Tax and minority 473 599 interest

Your directors are pleased to report that in a year which witnessed economic malaise in the developed countries, relentless inflationary pressures in the developing countries, significant volatility in the commodity prices and forex rates, your Company's global operations recorded a "Profit Before Tax and exceptional items" for the year of Rs. 829 million, 13% higher, as compared to Rs. 732, million reported for the 15 months period ended March 31, 2010. The "Profit after tax and minority interest" for the year of Rs. 473 million is also a good improvement considering that the previous period net profit of Rs. 599 million, included one off exceptional gain of Rs. 302 million relating to the divestment of Medical Devices business. It is indeed satisfying that the growth in your Company's plastic packaging business has within just a year closed the gap in the revenue and profit stream caused by divestment of the Medical Devices business. The exceptional charge for the year of Rs. 14 million relates to one-off plant consolidation and re-location costs, net of retention relating to divestment of Medical Devices business.

Review of business and operations:

Global:

The packaging industry plays an important role in delivering Fast Moving Consumer Goods in an efficient and attractive manner to the ultimate consumer while protecting the product inside. The industry continued to grow strongly in the emerging markets even as it recovered from the 2009 lows in the developed markets of Europe and USA. Your Company rolled out a number of market specific initiatives during the year involving customer partnering, new customer development, new product introduction, de- bottlenecking of supply chain, improvement in customer servicing etc, which underpin the improved performance during the year.

India:

Your Company continues to be the lead supplier of laminated and plastic tubes in India. While ramping up its supplies to the large customer category, your Company also strongly pursued opportunities in the high value Cosmetics, Food and Pharma categories with innovative products and improved order turnaround times. To this end, during the year, your Company expanded the capacity at its units in Nallagarh, Goa and Wada. The Company pioneered in the Indian market new decorative tubes offerings involving customized printing and multi-effect decorations and innovated new laminate structures to pack food products like cheese and jams in tubes. The Company also established a focused pharma manufacturing facility complete with a "Clean Room" and other accessories meeting highest hygiene standards. Consequently, the Company posted a double-digit annualized top line growth and improved profits and grew its market share in India.

Subsidiary operations:

As a global player in tubing business, your Company has active presence in eleven other countries through direct and step down Subsidiaries, Joint Ventures and Associates. These entities manufacture and market tubes in these various countries. Your Company also has a wholly owned subsidiary in India to manufacture and market flexible plastic laminates used in the packing of home care, personal care, food and pharma products. All these subsidiaries continue to work closely with customers and grow their business with product offerings relevant to their markets. The highlights of the various subsidiary operations are set out below:

During the year, all the Company's subsidiaries in the emerging markets of China, Philippines, Egypt and Latin America continued to grow profitably.

a. The subsidiary in China successfully ramped up its new manufacturing units in North China and South China, and increased its market share in laminated tubes. The unit was also granted license for manufacture of pharma tubes, which is expected to open a new growth avenue. The unit is actively developing customers in the cosmetics category for its high decoration inviseam tubes.

b. The subsidiaries in Egypt were re-located to a new larger premises with a view to develop into a regional manufacturing hub catering to Africa and Middle East, and pioneering into the pharma category in Egypt by accelerating conversion from the aluminium to laminated tubes.

c. With a view to create space for future growth, the Mexican subsidiary relocated its manufacturing facility to a new modern facility during the last quarter of the year under report.

d. Colombian plant also qualified for manufacture of baby care products.

The subsidiaries in UK, Poland and Russia have cut their losses by more than half compared to the previous period through several initiatives.

a. In Russia, new customer wins improved capacity utilisation.

b. The Poland subsidiary's plastic tube plant was not able to achieve break even as planned given the weak market conditions in Europe during the year. However, the unit has stabilized on productivity and quality parameters. The unit has been able to fill its recently added laminated tubes capacity through new customer development in Europe.

c. The UK subsidiary has been downsized in line with the customer off-take, so as to minimize cash losses and with the new customer and supply chain strategies that the management is working on, these losses will be plugged.

The laminated tubes subsidiary in USA posted growth in a recession hit market. Focussed measures to improve productivity! and efficiency helped this unit to improve its profitability during! the year. The subsidiary in USA manufacturing plastic tubes, however continued to underperform. There were also capacity] bottlenecks on account of line balancing which have since been streamlined. The unit has recently won a large contract for export of plastic tubes which is expected to improve capacity utilization and help achieve break even. The unit has re-located its plant to Danville, USA, which has laminated tubes manufacturing facility, in order to achieve operational and cost synergies as part of its turn-around strategy. During the year, your Company transferred its holding of equity and preference shares in its wholly owned subsidiary, Essel Propack America LLC, USA to Arista Tubes Inc., USA which in consideration has allotted its own equity shares to your Company, thereby becoming a direct subsidiary, as detailed in the note 4(b) (Investments and Restructuring) to India Standalone Accounts.

Packaging India Private Limited, the Indian wholly owned subsidiary engaged in the flexible plastic laminate business increased its sales and profitability in a very challenging local environment where prices of some key raw material inputs, shot up three fold during the first half of financial year ended March 31 2011. The unit worked closely with customers for prompt review of sale prices and implemented a number of cost effectiveness measures during the year. The Unit in Uttarakhand set up in 2007 is fully ramped up.

The subsidiary in Venezuela and Nepal having ceased operations and will go through dissolution process as per local regulatory frame-work.

During the year, your Company's holding of 1250 Non Cumulative Preference shares of USD 1000 each in its wholly owned subsidiary, Lamitube Technologies Limited, Mauritius were redeemed.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Report of Board of Directors and Auditors Balance sheet and Profit and Loss account (financial statements) of its subsidiaries. In view of the general exemption granted by the Ministry of Corporate Affairs, Central Government vide General Circular no. 2, 2011 dated February 8, 2011 and consent of the Board of Directors as required by the circular, the said reports and financial statements of the subsidiaries are not annexed

The Company will make available annual accounts of the subsidiary companies and the related detailed information where applicable, upon request by any member of the Company. These documents will also be available for inspection to any member at the registered office of the Company during business hours on any working day upto the date of this Annual General Meeting. The Consolidated Financial Statements presented by the Company include financial results of subsidiaries.

Joint ventures and Associates:

Your Company's joint venture for manufacture of laminated tubes in Germany and its associate in Indonesia, both continued to be profitable.

Ras Propack Lamipack Limited and Ras Extrusions Limited became associate company following allotment of shares to your Company as a Co-promoter pursuant to order of the Hon'ble Board of Industrial and Financial Reconstruction (BIFR). The financial results of these companies have been duly considered in your Company's accounts.

Proposed Merger of Ras Propack Lamipack Limited (RPLL) and Ras Extrusions Limited (REL), sick industrial companies with the MCompany.

Your Company had agreed to be Co-Promoter in the rehabilitation of RPLL and REL, sick industrial companies, and as per the scheme approved by the Hon'ble BIFR, your Company has infused funds in these companies, by way of equity and unsecured loans amounting toRs. 110 million. The Company's shareholding in RPLL and REL is 39.57% and 36.67% respectively.

BIFR in its recent hearing, gave directions to RPLL and REL (sick industrial companies) to file a Draft Modified Rehabilitation Proposal (DMRP) along with the requisite documents in connection with their proposal to merge the sick industrial companies (RPLL & REL) with your Company to achieve an early turnaround. The DMRP including the Scheme of Merger and other documents were approved by the Board of Directors of your Company and have since been filed with IDBI Bank Limited who is the Monitoring Agency appointed by BIFR. Based on an independent valuer's report, the proposed scheme of merger envisages issue of 10 equity shares of face value of Rs. 2 each | of your Company for every 165 equity shares of face value of Rs. 10 each held by the shareholders of RPLL (other than to your Company) and 10 equity shares of your Company of face value of Rs. 2 each for every 108 equity shares of face value of Rs. 10 each held by the shareholders of REL (other than to your Company)

The DMRP involving the Scheme of Merger and allotment of Equity shares as per aforesaid share exchange ratio is subject to sanction of BIFR, approval of the Company's members, and all other necessary approvals, as may be required

Group

Pursuant to the intimation received by the Company from the Promoter entities, names of Promoter entities comprising 'group' for the purpose of regulation 3(1)(e)(i) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations,1997 are disclosed in Annual Report.

Management Discussion and Analysis

The Management Discussion and Analysis on the operations of the Company is provided in a separate section of the Annual report and forms part of the Directors' report.

Equity Dividend

Taking into account the profits reported, the overall need to maximize internal accruals as means to lower your Company's ) financial gearing and keeping in mind the interests of the shareholders, your Directors recommend a dividend of Rs. 0.60 per share of Rs. 2 each on 1,56,601,130 equity shares for the financial year ending March 31, 2011 [@30%]. (previous financial period (15 months) Rs. 0.40 per share of Rs. 2 each [@20%]

Finance and Accounts:

Your Company continues to focus on reducing financial leverage and the finance costs through higher capital productivity and improved cash generation. Forex and interest rate exposures are closely reviewed and appropriately hedged to minimize risk.

Buy-Back of shares

Your Company has not announced in the last three years any Share Buy-Back program. If there is any future proposal for Buy-Back, fresh mandate will be sought from the members as necessary under the applicable guidelines.

Public Deposits

Your Company has not accepted any fixed deposits from the public and there are no outstanding fixed deposits from the public as on March 31, 2011.

Human Capital

The information on employees' remuneration as per Section 217 (2A) of the Companies Act, 1956 (the Act) read with the Companies (Particulars of Employees) Rules, 1975, as amended till date, forms part of this Report. However, as per provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all the members excluding the statement to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Company's registered and / or corporate office between 11.00 a.m. to 1.00 p.m. on all working days till the date of the 28th Annual General Meeting of the Company. Further, those seeking a copy of the said statement may write to the Company Secretary.

Directors

The following Directors seek re-appointment -

Mr. Tapan Mitra, Director of the Company retires by rotation and being eligible, offers himself for re-appointment.

Mr. Boman Moradian, Director retires by rotation and being eligible, offers himself for re-appointment.

Brief resume of Mr. Tapan Mitra and Mr. Boman Moradian as required by Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to the Notice convening the 28th Annual General Meeting of the Company.

Your directors place on record their special appreciation to Late Shri Davendra Ahuja for his long and meritorious association as Director of the Company till his sad demise on August 20, 2010.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

2. Appropriate Accounting Policies have been selected and applied consistently and have made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit for the financial year ended March 31, 2011;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

4. The Annual Accounts have been prepared on a "going concern" basis.

Auditors

M/s MGB & Co. Chartered Accountants, Statutory Auditors of the Company, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Corporate Governance

Your Company has complied with the Corporate Governance requirements as per the revised Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance along with a Certificate of Compliance from the Auditors forms a part of this Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information as prescribed under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in a separate annexure, which forms a part of this Report.

Cautionary Statement

Statements in the Director's Report and the Management Discussion and Analysis may be forward looking within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Certain factors that could affect the Company's operations include increase in price of inputs, availability of raw materials, changes in government regulations, tax laws, economic conditions and other factors.

Appreciation

Your Directors wish to place on record their appreciation for the co-operation and support received from banks and financial institutions, customers, suppliers, members and employees towards the growth and prosperity of your Company and look forward to their continued support.

For and on behalf of the Board of Directors ESSEL PROPACK LIMITED

Subhash Chandra

Mumbai, July 15, 2011 Chairman




Mar 31, 2010

The Directors are pleased to present their Report on your Companys business operations along with the audited statement of accounts for the fifteen months period ended March 31,2010.

As earlier communicated, in October 2009 it was decided to change the Accounting year of the Company to align with the Financial year (April - March). This would avoid duplication of time and efforts in preparing financial statements separately under the Companies Act, 1956 and the Income Tax Act, 1961. Consequently the Report and the Accounts presented here relate to the fifteen months period from January 1, 2009 to March 31, 2010. The figures for this accounting year are thus not comparable with those of the previous accounting year which covered a period of twelve months ending December 2008.

Results of Operations

Consolidated Global results

The key financials are set out below:

(Rs. Million)

Period ended Year ended

31.03.2010 31.12.2008

(Fifteen months) (Twelve months)

Total Revenue (excluding 16941 12949

Excise duty)

PBDIT before exchange 3015 1841

gain/(loss)

Exchange gain/(loss) (7) (518)

PBDIT after exchange gain/ 3008 1323 (loss)

Net Interest (841) (619)

Profit before Tax and 732 (497)

exceptional items

Exceptional items 302 12

Tax (386) (346)

Minority interest (63) (60)

Profit afterTaxand Minority 599 (883) interest

In a period challenged by recessionary pressures and cautious business environment, your Company staged a quick turnaround and posted a Net Profit of Rs 599 million against Net loss of Rs 883 million during the previous year.

Revenue for the period grew 31% over the previous year.The PBDIT before exchange gain/loss however grew much higher at 64% reflecting significant improvement in business profitability helped by pro-active material cost pass through, stringent operating cost reduction measures and significant curtailment of losses in the European business.

Interest cost increased 36% on account of higher borrowings necessitated by the losses of the previous year as well as higher interest rate in the aftermath of the global financial crisis of 2008. It has however shown significant reduction during the last quarter of the period following repayment of substantial debt, helped by divestment of the non-core Medical Devices Business.

The exceptional item for the period includes profit of Rs 314 million attributable to the divestment of Medical Devices Business by subsidiaries of your Company.

India standalone results

The summary results are set out below:

(Rs Million)

Period ended Year ended

31.03.2010 31.12.2008

(Fifteen months) (Twelve months)

Total Revenue (excluding 4541 3548

Excise duty)

Total expenditure (3457) (2708)

PBDIT 1084 840

Financial expenses (net) (352) (261)

Depreciation (289) (206)

PBT before exceptional 443 373

items

Exceptional items (1) 12

Tax (97) (113)

Profit after Tax 345 272

Appropriations:

Dividend recommended 73 55

(inclusive of tax)

Transfer to General 26 14

Reserve

Your Companys Standalone total revenue for 15 months period grew 28% over the previous year (12 months), while the PBDIT grew 29% reflecting improved cost management. Sharp increase in the financial expenses was on account of higher short term interest rates and high level of debt.Through reduction achieved in working capital and advances, the Companys debt reduced significantly helping lower interest cost in the last quarter of the year. Your Companys plant in Nalagarh (Himachal Pradesh) ran to capacity during the period, helping optimize the tax holiday benefit and the tax cost. The net profit for the period thus grew 27% to Rs 345 million.

Review of business and operations

The packaging industry continues to play an important role in delivering fast moving consumer goods in an efficient and attractive manner to the ultimate consumer. Given this strong linkage to the FMCG sector,the plastic collapsible tubes and laminate industry has weathered the economic downturn caused by the financial crisis of 2008. The off-take for plastic extruded tubes in the developed markets of US and Europe has turned sluggish, however given the relatively minor presence of your Company in this product category, this is not expected to impede your Company in achieving its sales plans. The demand for plastic laminated tubes on the contrary holds strong in the developed markets and in fact is growing in the emerging markets.

India:

Your Company continues to lead the market for tubes in India. With rapidly increasing penetration of oral care and personal care products helped by strong economic growth and increasing disposable income,your Company is faced with a growing demand for tubes from several FMCG customers in the country. In seizing the opportunity, your Company continues to pro-actively identify the changing needs of customers, develop tube solutions for varied applications and actively encourage conversion from conventional packaging solutions into tubes. Key initiatives include, new customer development in the pharmaceuticals and cosmetics categories. Besides continuing to grow its traditional product offering of laminated tubes for the oral care segment, your Company is now rapidly increasing its sale of plastic tubes targeted at the cosmetics segment.

Subsidiary operations

Your Company is a global player in tubing business with an active presence in eleven other countries through direct and step down subsidiaries. These subsidiaries are involved in the manufacture and marketing of tubes in the various countries. Your Company also has a wholly owned subsidiary in India focusing on manufacture and marketing of flexible packaging used in the packing of home care, personal care, food and pharmaceutical products. All these subsidiaries continue to work closely with customers and grow the business with product offerings relevant to their markets.

During the year, the subsidiaries in China, Egypt, Philippines and Latin America continued to perform well. Packaging India Private Limited, the Indian subsidiary engaged in flexible packaging business, increased its sales and profitability following the ramping up of its operations in its new unit at Uttarakhand and improvement in the gross margin.

The subsidiaries in the UK, Poland and Russia have significantly cut their losses (almost by 60%) compared to the previous year through several focused initiatives. The Polish subsidiary has added laminated tubes to its product offerings, targeting the local East European customers. All these units are actively developing new customers to ramp up their volumes and turn profitable. The plastic tubes subsidiary in the US posted loss as the off-take of a key customer fell short of the plan in the recessionary climate. The Company is working to develop new customers to be able to step up capacity utilization and achieve an early break even.

The subsidiaries in Venezuela and Nepal having ceased operations are in the process of winding up. During the year, the Nepal subsidiary carried out capital reduction and remitted Rs 20 million to the holding company.

Two of the Companys subsidiaries divested all of their shareholding in one of the Companys step down subsidiaries viz. Avalon Medical Services Pte. Ltd., Singapore, engaged in Medical Devices Business. Consequently, this step down subsidiary along with its various subsidiaries viz. Tacpro Inc, USA, Tactx Medical Inc, USA, Produxx Inc, USA, Catheter and Disposables Technology Inc, USA, Medical Engineering and Design Inc, USA have ceased to be Companys subsidiaries with effect from December 23, 2009. The consolidated financial results for the year therefore reflect the performance of these entities only until this date,and these entities are not included in the Consolidated Balance Sheet of the Company as on March 31, 2010. With this divestment, Essel Propack has exited its non-core medical devices business.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors Report, Balance Sheet and Profit and Loss Account of its subsidiaries. Your Company had applied to the Government of India and obtained exemption from such attachment (vide letter no. 47/289/2010-CL-III dated 21/06/2010), since the Audited Consolidated financial statements are presented in the Annual report. Accordingly, the annual report does not contain the financial statements of these subsidiaries. The Company will make available the audited accounts and related information of the subsidiary companies, where applicable, upon request by any member of the Company. These documents will also be available for inspection by any member between 11.00 am to 1.00 pm at the Companys Registered office / Corporate office till the date of the 27th Annual General Meeting.

Management Discussion and Analysis

The Management Discussion and Analysis on the operations of the company is provided in a separate section of the Annual Report and forms part of the Directors Report.

Dividend

Taking into account the profits reported,the overall need to maximize internal accruals as means to lower your Companys financial gearing and keeping in mind the interests of the small shareholders, your Directors recommend a dividend of 20% (Re.0.40 per share of Rs 2 each) for the 15 months period ended March 31,2010 (previous year Re.0.30 per share of Rs 2 each).This will also help your Company to maintain its dividend paying record.

Annual General Meeting

Following the decision to change the accounting year as mentioned earlier in this Report,the Company has sought and received approval for extension of time from the Registrar of Companies, Mumbai for holding this 27th Annual General meeting of the Company upto September 30,2010.

Finance and Accounts

In response to the economic downturn and as part of the turnaround strategy, your Company implemented a number of measures to reduce costs,improve asset productivity and conserve cash across its global operations. The debt profile was rationalized minimizing the short-term debt. Further helped by exit from the non-core Medical Devices Business, the debt in the Consolidated Balance Sheet of the Company has reduced by Rs 1.9 billion by end of the year.

During the year, your Company implemented SAP as its new ERP platform worldwide, replacing its existing financial accounting software. This has entailed the Company to cost the raw and packaging material inventories using "moving weighted average of prices" method instead of "FIFO" method followed earlier.

Effective January 1,2009, your Company has adopted the amended provisions ofAS-11as per the Companies (Accounting Standards) Amendment Rules 2009 related to" Effects of the changes in foreign exchange rate."The impact on the reported results for the year has been disclosed in the Accounts.

Mergers, Acquisitions, Disposals

Divesture of shareholding in Bericap India Private Limited

In December 2008, your Company had exercised the put option for transfer of 31,41,971 equity shares of Rs. 10 each in associate company, Bericap India Private Limited to its joint venture partner, Bericap Holding GmbH, Germany ("Purchaser"). Accordingly, the share transfer was completed and consideration amount of Euro 442,700 was received by your Company during August, 2009 with all necessary approvals. With this your Company has fully exited from the joint venture company, Bericap India Private Limited.

Acquisition of shareholding in Ras Propack Lamipack Ltd (RPLL) and Ras Extrusion Limited (REL)

These companies (RPLL & REL) having Units near Pune to manufacture 15 million sq m of laminate and 156 million laminated tubes were declared as sick companies during the year 2001 and 2008 respectively. Your Company had agreed in principle to act as Co-Promoter in connection with an application for approval of the Scheme for Revival and Rehabilitation submitted by RPLL and REL before the Board of Industrial and Financial Reconstruction (BIFR), New Delhi.

As per the Scheme approved by BIFR and as part of Co-Promoters contribution, the Company has infused funds in RPLL and REL, by way of equity and unsecured loans. RPLL has allotted 41,09,100 equity shares of Rs 10 each at par and REL allotted 7,50,000 equity shares of Rs 10 each at par to the Company on March 29,2010 and April 30,2010 respectively. These shares are subject to lock in for a period of three years from the date of allotement as per the BIFR Order. Your Companys shareholding in RPLL and REL stands at 39.57% and 36.67% respectively. The unsecured loan amounts to Rs 30 million and Rs 15 million respectively in the two companies.

Buy-Back of shares

Your Company has not announced in last three years, any Share Buy-Back program. If there is any future proposal for Buy-Back, fresh mandate will be sought from the members as necessary under the applicable guidelines.

Public Deposits

Your Company has not accepted any fixed deposits from the public and there are no outstanding fixed deposits from the public as on March 31,2010.

Human Capital

Your Company has 750 employees in India and 2044 employees globally in various subsidaries as of March 31,2010.The information on employees remuneration as per Section 217 (2A) of the Companies Act, 1956 (the Act) read with the Companies (Particulars of Employees) Rules, 1975, as amended till date, forms part of this Report. However, as per provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all the members excluding the statement containing the particulars of employees to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Companys Registered / Corporate Office between 11.00 am to 1.00 pm on all working days till the date of the 27th Annual General meeting. Further, those seeking a copy of the said statement may write to the Company Secretary at the Corporate Office.

Directors

The following Directors seek re-appointment :-

Mr. Subhash Chandra, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Subhash Chandra is related to Mr. Ashok kumar Goel,Vice Chairman & Managing Director of the Company.

Mr. K.V. Krishnamurthy, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Brief resume of Mr. Subhash Chandra and Mr. K.V. Krishnamurthy as required by Clause 49 of the Listing Agreement with the Stock

Exchanges is annexed to the Notice convening the 27th Annual General Meeting of the Company. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

2. Appropriate Accounting Policies have been selected and applied consistently and have made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit for the period from January 1,2009, to March 31,2010;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

4. The Annual Accounts have been prepared on a"going concern" basis.

Auditors

M/s MGB & Co., Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible,offerthemselves for re-appointment. Corporate Governance

Your Company has complied with the Corporate Governance requirements as per the revised Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance along with a Certificate of Compliance from the Auditors forms part of this Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information as prescribed under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in a separate annexure, which forms part of this Report. Cautionary Statement

Statements in the Directors Report and the Management Discussion and Analysis may be forward looking within the meaning of the applicable laws and regulations. Actual results may differ materially from those expressed in the statement. Certain factors that could affect the Companys operations include increase in price of inputs, availability of raw materials, changes in government regulations,tax laws, economic conditions and other factors. Appreciation

Your Directors wish to place on record their appreciation for the co- operation and support received from banks and financial institutions, customers, suppliers, members and employees towards the growth and prosperity of your Company and look forward to their continued support.

Cautionary Statement

Statements in the Directors Report and the Management Discussion and Analysis may be forwardlooking within the meaning of the applicable laws and regulations.Actual results may differ materially from those expressed in the statement. Certain factors that could affect the Companys operations include increase in price of inputs,availability of raw materials,changes in government regulations,tax laws,economic conditions and other factors.

Appreciation

Your Directors wish to place on record their appreciation for the co- operation and support received from banks and financial institutions, customers,suppliers,members and employees towards the growth and prosperity of your Company and look forward to their continued support.



For and on behalf of the Board of Directors

ESSEL PROPACK LIMITED

Subhash Chandra

Chairman

Mumbai, July 28,2010

 
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