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Directors Report of Golden Tobacco Ltd.

Mar 31, 2016

The Members,

The Directors present the 60th Annual Report along with the audited financial statements of the Company for the financial year ended March 31, 2016.

FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Particulars

Current Year ended 31st March,2016

Previous year ended 31st March,2015

Profit/(Loss) before Interest, Depreciation, Exceptional item and Tax

(1081.98)

(634.90)

(Less):Interest-Net

(2470.53)

(2307.45)

(Less):Depreciation

(104.08)

(120.98)

Profit/(Loss) before Taxation

(3656.59)

(3063.33)

Provision for Taxation

NIL

NIL

Profit/(Loss)after Taxation

(3656.59)

(3063.33)

Exceptional Item-Income/(expense)

NIL

NIL

(Loss) for the year

(3656.59)

(3063.33)

(Loss) brought forward from previous year

(19328.61)

(15841.40)

Depreciation charge in useful life

(NIL)

(423.88)

(Loss) carried over to Balance Sheet

(22985.20)

(19328.61)

PERFORMANCE OF THE COMPANY

During the year, the industry volume declined by 15-20% which affected the Company''s volume drastically. Increased grey market & illegal Cigarettes activities coupled with the increased excise and VAT are the factors which have adversely affected the organized sector of legal Cigarettes Industries at large. Moreover, the export performance of the Company was not achieved at the desired level mainly due to the drop in demand of international market due to change in the policy of the various countries which affected the exports of cigarettes business.

However the Company has initiated new measures to spread its wings in several new international markets with new brands to increase the export sales.

At the domestic front, the Company has launched a few more brands during the financial year and is exploring untapped markets to regain the lost volume.

Presently the Company is also focusing on domestic sales & marketing of the new pack size of 1, 2 and 3 cigarettes pack in view of the banned on sale of loose cigarettes by some states which in turn would increase the overall sales as well as contribution of the Company. Hence, your directors are optimistic of better performance in the current financial year.

BIFR STATUS

The Hon''ble Supreme Court vide its order dated May 12, 2016 in Civil Appeal No. 5038 of 2016 in the SLP No. 26747 of 2012 filed by the Income Tax Department, held that the Modified Draft Rehabilitation Scheme (MDRS) filed by the Company is not maintainable.

NEW REFERENCE TO BIFR

In the light of aforesaid order of the Hon''ble Supreme Court in the matter of Income Tax Department read with applicable provisions, if any of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the Board of Directors of the Company in its meeting held on May 23, 2016 has formed an opinion that the Company''s net worth is totally eroded as on March 31, 2016 and accordingly, decided to file a new reference before the Hon''ble BIFR under section 15(1) and other applicable provisions, if any of the SICA. The management expects sanction of a suitable Rehabilitation Package for revival of the Company.

REAL ESTATE BUSINESS:

The Company in the year 1982 has been authorized vide its Memorandum and Articles of Association to enter into a real estate business and accordingly, started its real estate business from the year 2007-2008 when its Hyderabad property was offered for Joint Development and executed a Joint Development Agreement with M/s Ashoka Builders Hyderabad. The commencement of the project was delayed due to several issues. Now all the approval has been obtained and the commencement of project is expected shortly. Earlier the Company has invested in real estate business through its wholly owned subsidiary Company to acquire certain development rights in respect of the property situated at New Delhi and the commencement for development of the said property is expected shortly. With regard to the Vile Parle Mumbai, property, the Company had executed a Memorandum of Understanding (MOU) with M/s Sheth Developers Pvt. Ltd. and Suraksha Realty Ltd. in December 2009 to jointly develop the said property. However, the development could not be proceeded with due to failure on part of the said parties to make remaining payment as agreed. Consequently, there were litigations between the parties on various issues. However, the Hon''ble Supreme Court vide its order dated May 12, 2016 decided that the said MOU was in violation of the sanctioned scheme. Hence, MOU loses its legal force and no rights would accrue to the parties.

The Hon''ble Supreme Court in its aforesaid order also held that the Income Tax Department shall be entitled to take necessary steps for attachment and sale of the Company''s properties including its Vile Parle, Mumbai property up to the principal amount, which is presently disputed and pending before various forum i.e. High Court/ ITAT etc. and also excise department demand up to admitted dues, subject to right of the secured creditors in the said properties. The Hon''ble Supreme Court has permitted parties to approach the Hon''ble BIFR for seeking clarification in respect of waiver of interest and penalties under the Income Tax Act.

In view of the aforesaid recent development, presently the Company is unable to carry on its real estate business as well as its present business up to its desired level of operations.

DIVIDEND

Your Directors do not recommend any dividend on equity shares of the Company in view of the carried forward losses,

SHARE CAPITAL:

The paid up Equity Capital of the Company as on March 31, 2016 was Rs.17,58,80,212 comprising of 1,76,00,802 equity shares of '' 10 each. During the year under review, the Company has neither bought back nor issued any kind of equity shares either by bonus or by right or stock option or sweat equity or otherwise.

FINANCE:

During the year under review, your Company continues to focus on judicious management of its working capital, receivables and inventories. Few working capital parameters and consequent obligation towards its bankers could not be fulfilled and lenders due to accumulated cash losses in the Company. However, the management is taking necessary steps to regularize the same.

DEPOSITS :

The Company has not accepted any deposits within the meaning of section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Loans, guarantees and investments covered under section 186 of the Companies Act, 2013 ("the Act") forms part of the Notes to the financial statements

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to section188 (1) of the Act. In the prescribed form AOC-2 is annexed as per Annexure - 6 of the Board''s Report.

CORPORATE SOCIAL RESPONSIBILITY ("CSR"):

The Company does not fall in any of the criteria of Corporate Social Responsibility ("CSR") as specified in section 135 (1) of the Companies Act, 2013 and accordingly, the Company is not required to comply with provisions of section 135 of the Act and rules framed there under.

CORPORATE GOVERNANCE:

The Company is committed to maximize the value of its stakeholders by adopting the principles of good Corporate Governance in line with the Act read with Regulation 24 of Listing Regulations. A separate report of Corporate Governance pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") are annexed with the report and forms part of Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS :

Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report is annexed with the report and forms part of this Annual Report.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY :

Good environment as well as safe & healthy working conditions are at the root of the good performance. Your Company has been in a constant quest for providing to its employees, a very congenial work environment which will in turn add to the performance of the Company. Keeping in mind, the dynamism in the environment, your Company is continuously imparting requisite training to its employees in their respective fields of work.

Health and safety of our employees is of prime concern to us. The workplace is designed to abate the hazards naturally prone to our product. No accident or any pollution problem was noticed during the year. Care is taken to ensure that all laws pertaining to environment, pollution, health and safety of employees and other relevant enactments are being scrupulously adhered to. Our commitment towards the society in terms of providing a clean and healthy environment is of utmost concern and we pledge to take active efforts to preserve the same.

DIRECTORS AND KEY MANAGERIAL PERSONNEL ("KMP") :

As per provisions of the Companies Act, 2013 Shri Jaskaran S. Khurana retires by rotation at the ensuing 60th AGM and being eligible, seek reappointment. The Board recommends his re-appointment.

The Board of Directors has on the recommendation of the Nomination and Remuneration Committee (NRC) on its meeting held on May 23, 2016 re-appointed Shri Jaskaran S. Khurana as Whole Time Director and designated as Executive Director and Chief Operations of the Company for a period of three years effective from May 23, 2016, subject to the approval of the Members and other requisite authorities including Central Government.

Shri A.K.Joshi, Managing Director, Shri Pawan Kumar Malsaria, Chief Financial Officer and Shri Manoj Kumar Srivastava, Company Secretary of the Company is a Key Managerial Personnel (KMP) of the Company pursuant to the Companies Act, 2013.

INTERNAL FINANCIAL CONTROL

The Corporate Governance Policy guides the conduct of the affairs of your Company and clearly delineates the roles, responsibilities at each level of its key functionaries involved in governance .Your Company has in place adequate internal financial controls with reference to the Financial Statements. During the year under review no reportable material weakness in the operation was observed. Regular audit and review processes ensure that such systems are reinforced on an ongoing basis. Details in respect of internal financial controls and their adequacy are included in the Management Discussion & Analysis Report.

RELATED PARTY TRANSACTIONS:

None of the transactions with related parties falls under the scope of section 188 (1) of the Companies Act, 2013. There were no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel (KMP) or other designated persons which may have potential conflict with interest of the Company at large. All related party transactions that were entered into during the year under review were on arm''s length basis and in the ordinary course of the business. Particulars of the transactions are available in the financial statement.

DIRECTORS APPOINTMENT AND REMUNERAION POLICY:

The Company''s policy is to have and appropriate mix of executive and non executive and independent director to maintain the independence of the Board and separate its function of governance and management. As on March 31, 2016 the Board consist five members, two of whom are executive directors and three are independent directors. The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, senior management and their remuneration including criteria for determining, qualifications, positive attribute independence of a director and other matters as required pursuant to section 178(3) of the Companies Act, 2016 the remuneration policy is stated Corporate Governance report which form of part the annual report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Regulation 22 of the Listing Regulations read with the Act, the Company has a Vigil Mechanism/Whistleblower Policy to deal with instance of fraud and mismanagement, if any in the Company. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected Company''s in India. The Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and take appropriate actions to ensure that the requisite standards of the professional and ethical conduct are always upheld. It is the Company''s policy to ensure that no employee is victimized or harassed for bringing such incidents to the attention of the Company. The practice of the whistleblower policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The Whistleblower Policy is available on the Company''s website www.goldentobacco.in

POLICY AND DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE :

The Company has in place in Anti Sexual Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules there under and redressal of complaints of sexual harassment at work place. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, no complaints were reported to the Board.

AUDITORS:

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s Lodha & Co., Chartered Accountants, Mumbai were appointed as statutory auditors of the Company at the Annual General Meeting held on September 22, 2014 to hold office till the Annual General Meeting to be held in the calendar year 2017. The appointment of the auditor shall be placed for ratification every Annual General Meeting. Accordingly, the appointment of Lodha & Co. as statutory auditors of the company is placed for ratification by the shareholders.

The Auditors report for the financial year 2015-16 does not contain any qualifications, reservations, or adverse remark. The auditor''s report is enclosed with the financial statement in this annual report.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Act and rules framed there under M/s Devesh Vimal & Co. Practicing Company Secretaries was appointed as secretarial auditor to conduct the secretarial audit of the Company for the financial year 2015-16. The secretarial audit report does not contain any qualification, reservations or adverse remark. The Board has appointed M/s. Devesh Vimal & Co. as Secretarial Auditor of the Company for the financial year 2016-17. The Secretarial audit report is enclosed as per annexure-1 which forms part the Board''s report.

EXTRACT OF ANNUAL RETURN:

Pursuant to section 92(3) of the Companies Act, 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return for the financial year 2015-16 in form MGT-9 is enclosed as per annexure-2 of the Board''s report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO:

The information on conversation 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 enclosed as per annexure-3 of the Board''s report.

SUBSIDIARY COMPANIES

The Company is having four Subsidiary Companies i.e. Golden Realty & Infrastructure Ltd., Golden Investment (Sikkim) Pvt. Ltd., GTC Inc B.V. and Western Express Industries Ltd. and Raigadh Papers Limited, the fellow subsidiary of Western Express Industries Limited as on March 31, 2016.

Pursuant to section 129(3) of the Companies Act, 2013, the Board and the Audit Committee has reviewed the affairs of the subsidiary companies. There is no Associate Company within the meaning of section 2(6) of the Companies Act, 2013. There has been no material change in the nature of the business of the subsidiaries. Pursuant to section 136 of the Companies Act, 2013 the audited financial statement and related information of the Company and audited accounts of each subsidiaries will be provided on request. These documents will be available for inspection during business hours at the registered office of the Company. A statement containing the salient features of the financial statement of subsidiaries in the prescribed format AOC-1 is annexed as per annexure 4 which forms the Board''s report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Regulation 33 & 34 of Listing Regulations read with other applicable provisions, the Company has prepared a Consolidated Financial Statements accordance with Accounting Standard 21 of the ICAI for the financial year ended March 31,2016 financial statement of the Company annexed which forms part of the annual report.

INDUSTRIAL RELATIONS:

Your Company enjoyed cordial relationship with workers and employees at all levels.

BUSINESS RESPONSIBILITY REPORTING :

Pursuant to the Listing Regulations the Business Responsibility Report (BRR) is applicable only to top 100 Companies, based on the market capitalization of the preceding financial year i.e. March 31, 2015. Accordingly, the same is not applicable to your Company.

Your Company''s Human Resources Management Systems and process are aimed to create a responsive market focused and customer centric and endeavors to move ahead with its most valuable resources, its employees. Your Company is engaged with a constructive relationship with employees and always believed that motivated employees are the core source are the competitive advantage and these are the continuous investments providing training and development programs an emphasis on productivity and efficiency and underline safe working practices etc.

HUMAN RESOURCES DEVELOPMENT

Your Company''s Human Resources Management Systems and process are aimed to create a responsive market focused and customer centric and endeavors to move ahead with its most valuable resources, its employees. Your Company is engaged with a constructive relationship with employees and always believed that motivated employees are the core source are the competitive advantage and these are the continuous investments providing training and development programs an emphasis on productivity and efficiency and underline safe working practices etc.

PARTICULARS OF EMPLOYEES:

Pursuant to Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. A statement containing the names of employee in the financial year and in receipt of a remuneration of Rs. Sixty Lakhs or more or posted for part of the year and in receipt of Rs. Five Lakhs or more a month enclosed as per annexure 5 of the Board'' report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR / COURTS:

During the year under review, no material significant orders were passed by any regulator / Hon''ble Courts etc., which would impact the going concern status of the Company and its future operations. However, under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 read with guidance note issued by the SEBI/Stock Exchanges from time to time, the Company has been reporting all the updates /major cases / litigations and other matters etc. from time to time as and when necessary to the Stock Exchanges.

FRESH LISTING AGREEMENT:

The Securities Exchange Board of India (SEBI) on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") with the aim to consolidate and streamline the provisions of the Listing Regulations for different segment of capital market to ensure better enforceability. The said regulations w.e.f. December 1, 2015. Accordingly, all listed entities were required to enter in a Listing Agreement within six month from the effective date. Your Company has entered into a fresh Listing Agreement with BSE Ltd. and National Stock Exchange of India Ltd. The Annual listing fee for the period 2016-17 have been paid to both the stock exchanges.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 read with Listing Regulations, the Board carried out an evaluation of its own performance as well as the directors individually. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as Board composition and structure, effectiveness of Board process, information and functioning etc. The Board and Nomination and Remuneration Committee (NRC) reviewed the performance of the individual directors. The Chairman of the Board /Committee was also evaluated on the key aspects of his roles mainly on Board dynamic and relationship, information flow, decision making, relationship with shareholders, company performance and strategy, tracking Board and Committee effectiveness etc.

In separate meeting of independent directors, performance of Non Independent Directors, performance of the Board as a whole and performance of the Chairman of the Board was evaluated, taking into account the views of Executive and Non Executive Directors including the performance of the Board, its Committees and individual directors. The same was discussed in the Board meeting that followed in the meeting of the Independent Directors.

CERTIFICATE ON CORPORATE GOVERNANCE

Pursuant to requirement of Listing Regulation a Certificate confirming material compliance by the Company with the provisions of Corporate Governance is given by M/s. Lodha & Co., Chartered Accountants, Mumbai, annexed with the Corporate Governance Report, which forms part of annual report.

MEETING OF THE BOARD OF DIRECTORS:

During the year under review, five meetings of the Board were held i.e. on May 25, 2015, August 12, 2015, September 25, 2015, November 06, 2015, and February 11, 2016. Details of meetings of the Board and their attendance are mentioned in the corporate governance report which farms part of annual report.

DECLARTAION BY INEPENDENT DIRECTORS:

The Company has received necessary declaration from each independent directors under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independent laid down in section 149 (6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

FAMILIARISATION PROGRAME FOR INDEPENDENT DIRECTORS:

The Company believes that a Board, which is well informed /familiarized with the Company, can contribute significantly to effectively discharge its role of trusteeship. All new independent directors inducted into a Board attend an orientation programme. The details of familiarization programme are provided in the corporate governance report and also available on the Company''s website..www.goldentobacco.in.

CODE OF CONDUCT OF PREVENTAION OF INSIDER TRADING :

The Board of Directors of the Company has adopted the Insider Trading Policy in accordance with requirement of Listing Regulations. The Company has adopted Golden Tobacco Limited - Code of Conduct for Prevention of Insider Trading Policy - 2015 and lays down guidelines and procedure to be followed and disclosure to be made while dealing with shares of the Company. The policy has been formulated to regulate, monitor and ensure reporting and maintain the highest ethical standards of dealing the Company''s securities. The insider trading policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information and code of conduct for Prevention of Insider Trading is available on Company''s website.

AUDIT COMMITTEE:

The composition of the Audit Committee is in line with the provisions of Section 177 of the Companies Act, 2013 read with Regulation 18 of the Listing Regulations the Chairman of the Audit Committee is an Independent Director. The Audit Committee of the Board provides reassurance to the Board on the existence of an effective internal control environment that ensures the efficiency and effectiveness of the operations of the Company and safeguarding of assets and adequacy of provisions for all liabilities. The details of meetings and their attendance are included in the Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE:

The composition of the Nomination and Remuneration Committee (NRC) is in line with the section 178 of the Companies Act, 2013 read with Regulation. The Committee is to determine overall Company''s Policy on remuneration packages and other terms and conditions of the appointment of the Executive Directors and senior management of the Company and sitting fees to the Non Executive Directors of the Company and also to approve payment of remuneration to Managing Director or Whole Time Directors as approved by the members of the Company and recommends to the Board of Directors for their consideration and approval. The details of meetings and their attendance are included in the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The composition of the Stakeholders Relationship Committee (SRC) is in line with the section 178 of the Companies Act, 2013 and Listing Regulation. The Committee is to look after the Stakeholders grievances and redress of investors'' complaints related to transfer of shares, non receipt of balance sheet, non receipt of dividend etc. The details of meetings and their attendance are included in the Corporate Governance Report.

RISK MANAGEMENT COMMITTEE:

The composition of the Risk Management Committee is not applicable to your Company. However, the Company has voluntarily constituted the Risk Management Committee (RMC) which is in line with the section 134(3) of the Companies Act, 2013 read with regulation 21 of the Listing Regulations. The Company has framed Risk Management Policy which inter-alia covers financials, operational, regulatory and Legal and product and market risk etc. and to formulate a procedure for mitigation of risk which may threaten the existence of the Company. The details of meetings and their attendance are included in the Corporate Governance Report.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and ability confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year under review;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively;

based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the, internal, statutory and secretarial auditors and the review performed by the management and the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2015-16.

ACKNOWLEDGEMENTS:

Your Directors express their deep gratitude and sincere appreciation for the whole-hearted assistance and co-operation extended to the Company by the Bankers, Financial Institutions, Business associates, Employees and all the Shareholders of the Company who have continued to repose utmost faith in the Company.

For and on behalf of the Board

Place : Mumbai Bharat B. Merchant A. K. Joshi

Date : May 23, 2016 Independent Director Managing Director


Mar 31, 2014

The Members,

The Directors have pleasure in presenting the Fifty-Eighth Annual Report together with the Audited Accounts for the year ended March 31, 2014:

FINANCIAL HIGHLIGHTS (Rs in Lacs)

Particulars Current Previous Year ended Year ended 31st March 31st March 2014 2013

Profit/(Loss) before Interest, Depreciation, Exceptional item and Tax (188.25) (1404.50)

(Less):Interest-Net (2558.01) (2324.71)

(Less):Depreciation (108.64) (125.22)

Profit/(Loss) before Taxation (2478.40) (3854.43)

Provision for Taxation NIL NIL

Profit/(Loss)after Taxation (2478.40) (3854.43)

Exceptional Item-Income/(expense) 288.32 (487.30)

(Loss) for the year (2190.08) (4341.73)

(Loss) brought forward from previous year (13651.32) (9309.59)

(Loss) carried over to Balance Sheet (15841.40) (13651.32)

PERFORMANCE OF THE COMPANY

During the year, despite a decline in industry volume, the Company volume improved by 11% compared to the previous year. Increased grey market activities coupled with steep excise and VAT increases are the factors that have adversely affected the organized sector.

Your Company has been able to achieve some growth through launch of GGF 65mm and also through distribution extensions of Panama Deluxe Filter. The consumers'' response to both these brands is favorable and your Directors are confident of increased turnover. On the export front, several new markets with new brands have been opened up and regular orders have started flowing in. This is likely to result in not only increased turnover but increase in bottom line also.

DIVIDEND

Your Directors do not recommend any dividend on equity shares of the Company in view of the carried forward losses. STATUS OF BIFR SCHEME

As per the Hon''ble Delhi High Court order, the Company has filed Modified Draft Rehabilitation Scheme before the Hon''ble BIFR for extension of implementation of Scheme period which was in operation up to 31st March, 2011. Accordingly, Hon''ble BIFR has appointed Canara Bank as monitoring agency to appraise the Scheme and submit the final report to them for their consideration. In pursuit of the recent direction given by the BIFR, the Company has submitted amended MDRS to Canara Bank for their examination and onward submission to the BIFR for their consideration.

REAL ESTATE DEVELOPMENT

The Company had started the Real Estate Business in the year 2007-2008, when its Hyderabad property was offered for Joint Development and the Company also entered into a Memorandum of Understanding in the year 2009-10 with reputed developers to jointly develop its Vile Parle, Mumbai property. However, the development could not be proceeded because of the failure of the parties to make further payment as agreed as also in view of filing of suit by the Company''s minority shareholders in the Hon''ble City Civil Court Mumbai challenging the MOU signed by the Company with the developers for Vile Parle property. The Hon''ble Court has granted ad-interim stay in respect of operation of the MOU.

However, your Directors are exploring the avenues for the purpose.

Beside the above, the Hon''ble Supreme Court has also put an embargo for disposal of the said property. As already decided by the Company to develop the property on its own and in line of the same, the Company, in the Modified Draft Rehabilitation Scheme (MDRS) submitted to the Hon''ble BIFR, has sought to refund the advances received from the developers since the Company is hopeful of raising the fund as and when, the sale of the prospective/constructed sale of the proposed development of the said property would take place. In view of this, the Company is in dialogue with some strategic investors who would infuse the required fund for the purpose of the said development of property.

Central Excise department litigation is pending before the Hon''ble BIFR and Hon''ble AAIFR. However, the Income Tax department litigation is pending with the Hon''ble Supreme Court. Hence, at present, the Company is unable to proceed in its real estate business. However, the Management is hopeful to resolve the said issues in Company''s favour. Your Directors are therefore optimistic of commencement of real estate business on receipt of approval of MDRS which is pending before the BIFR.

As regards Hyderabad property, the existing developer has expressed his inability to proceed in the development agreement. The Company has now floated enquiry in the market to identify some strategic investors/developers for the development of the said property. Now after a gap of a long period, the real estate market scenario is gradually moving upwards and the Company is in lookout for right opportunity to enter into the market and find a strategic investor to raise the required fund for the development of the said property.

CORPORATE GOVERNANCE

The Company is committed to maximize the value of its stakeholders by adopting the principles of good Corporate Governance in line with the provision of law and in particular those stipulated in the Listing Agreement with the Stock Exchange(s). A separate report of Corporate Governance stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is given under the separate head where the detailed operational performance of the Company has been comprehensively discussed, which forms part of Directors'' Report.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY

Good environment as well as safe & healthy working conditions are at the root of the good performance. Your Company has been in a constant quest for providing to its employees, a very congenial work environment which will in turn add to the performance of the Company. Keeping in mind the dynamism in the environment, your Company is continuously imparting requisite training to its employees in their respective fields of work.

Health and safety of our employees is of prime concern to us. The workplace is designed to abate the hazards naturally prone to our product. No accident or any pollution problem was noticed during the year. Care is taken to ensure that all laws pertaining to environment, pollution, health and safety of employees and other relevant enactments are being scrupulously adhered to. Our commitment towards the society in terms of providing a clean and healthy environment is of utmost concern and we pledge to take active efforts to preserve the same.

BOARD OF DIRECTORS

As per section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Shri R. R. Kumar and Shri V.K.Bhandari, Directors of the Company are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. During the year under review, Shri Sanjay Dalmia Shri Anurag Dalmiya, Shri J.P. Khetan, Shri V. Anish Babu and Shri Rishabh Jain resigned from the Directoship of the Company. Shri Ved Berry, Whole-time Director also resigned from the Directorship of the Company. Your Directors have appreciation for valuable contributions made by them.

PARTICULARS OF EMPLOYEES

The particulars of employees drawing remuneration of Rs. 60 lacs per annum or Rs. 5.00 lacs per month for part of the year or more pursuant to provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 are set out below:

DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under section 217 (2AA) of the Companies Act, 1956, your Directors confirm:

i. That the preparations of the annual accounts and applicable accounting standards have been followed along with proper explanations relating to material departures.

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review.

iii. That the Directors have taken proper and sufficient care 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 fraud and other irregularities.

iv. That the Directors have prepared annual accounts on a going concern basis.

AUDITORS'' REPORT:

Emphasis of Matter:

We draw attention to the paragraph of "emphasis of matter " of the Auditor''s Report, without considering the same as qualification as follows :

(a) There is substantial diminution in the carrying value of certain long term investments, particularly in respect of quoted investments- the diminution being Rs. 3,45,31,403 as compared to its market value which in the opinion of the management, is temporary and no provisioning is considered necessary at this stage as the same are long term and of strategic in nature. (Refer note no.9.1)

(b) Overdue advances of Rs. 9,99,70,868 and an investment made of Rs. 2,31,20,000 in Western Express Industries Limited (WEIL), a wholly owned subsidiary company has accumulated losses far in excess of its paid up capital and reserves & surplus. As explained, the management is hopeful of recovering/realizing the same in due course of time in view of expected revival of activities/development in the said subsidiary. (Refer note no. 10.1)

AUDITORS

M/s. Lodha and Co., Chartered Accountants, statutory auditors, retire at the ensuing Annual General Meeting and have furnished their consent for reappointment, if made, as well as requisite certificate. You are requested to reappoint them as Statutory Auditors from the conclusion of 58th Annual General Meeting upto the conclusion of 61st Annual General Meeting and fix their remuneration. SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements enclosed with the accounts are prepared in accordance with Accounting Standard 21. In view of the general exemption granted by the Ministry of Corporate Affairs, the Report and Accounts of subsidiary companies are not required to be attached to your Company''s Accounts. Shareholders desirous of obtaining the report and accounts of your Company''s subsidiaries may obtain the same upon request. The report and accounts of the subsidiary companies will be kept for inspection at your Company''s Registered Office and those of subsidiary companies viz. The Golden Realty & infrastructure Limited, Golden Investment (Sikkim) Private Limited, Western Express Industries Limited, GTC INC B.V. and Raigadh Papers Limited, a subsidiary of Western Express Industries Limited are the subsidiary companies of your Company.

OTHER INFORMATION

Certificate, as required under Clause 49 of the Listing Agreement with the Stock Exchanges in India, confirming compliance by the Company with the provisions of Corporate Governance as given by the Auditors, M/s. Lodha and Co., Chartered Accountants, declaration by the CEO certifying compliance with the Code of Conduct of the Company and Certificate given by the CEO and CFO as required under the Listing Agreement are annexed herewith. Information pursuant to 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 relating to Foreign Exchange Earnings and Outgo, Conservation of Energy and Technology Absorption and Export Market Developments is also provided as an annexure to this report. Additional disclosures in the form of Consolidated Financial Statements and Related Party Transactions have been made by your Company in compliance with the Listing Agreement.

ACKNOWLEDGEMENTS

Your Directors express their deep gratitude and sincere appreciation for the whole-hearted assistance and co-operation extended to the Company by the Bankers, Financial Institutions, Business associates, Employees and all the Shareholders of the Company who have continued to repose utmost faith in the Company.

For and on behalf of the Board

Place : Mumbai R. R. Kumar A. K. Joshi Dated : May 27, 2014 Director Managing Director


Mar 31, 2013

To, The Members,

The Directors have pleasure in presenting the Fifty-Seventh Annual Report together with the Audited Accounts for the year ended 31st March, 2013:

FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Particulars Current Year ended Previous year ended 31st March,2013 31st March,2012

Profit/(Loss) before Interest, Depreciation, Exceptional item and Tax (1361.95) (531.90)

Interest-Net 2324.71 2266.45

Depreciation 125.22 105.02

Profit/(Loss) before Taxation (3811.88) (2903.38)

Provision for Taxation 1.36 1.40

Profit/(Loss)after Taxation (3813.24) (2904.78)

Exceptional Item 528.49 Nil

(Loss) for the year (4341.73) (2904.78)

(Loss) brought forward from previous year (9309.59) (6404.81)

(Loss) carried over to Balance Sheet (13651.32) (9309.59)

PERFORMANCE OF THE COMPANY

During the year, despite a decline in industry volume, the Company volume improved by 11% compared to the previous year. Increased grey market activities coupled with steep excise and VAT increases are the factors that have adversely affected the organized sector.

Your Company has been able to achieve growth through launch of products in the new 65mm category i.e Panama Delux Filter- HLP and SS, PPF, Delux Filter, Style 69 etc. and also intensified rural penetration. The response from the market is encouraging and your Directors are hopeful of in creased turnover. The export market performance continues to be on increasing path. Several new markets have been opened up and new brand names have been added. This is likely to increase top line as well as bottom line and increase the contribution of the Company in the coming financial year.

DIVIDEND

Your Directors do not recommend any dividend on equity shares of the Company in view of the carried forward losses.

STATUS OF BIFR SCHEME

As per the Honble Delhi High Court order, the Company has filed Modified Draft Rehabilitation Schem e before the Honble BIFR for extension of implementation of Scheme period which was in operation up to 31st March, 2011. Accordingly, Honble BIFR has appointed Canara Bank as monitoring agency to appraise the Scheme and submit the final report to them for their consideration. Further as per the recent direction given by the BIFR, the Company has to submit amended MDRS to Canara bank for their examination and onward submission to the BIFR for their consideration. The Company is in the process of submitting the same.

REAL ESTATE DEVELOPMENT

The Company had started the Real Estate Business in the year 2007-2008, when its Hyderabad property was offered for Joint Development and the Company also entered into a Memorandum of Understanding in the year 2009-10 with reputed developers to jointly develop its Vile Parle, Mumbai property. However, the development could not be proceeded because of the failure of the parties to make further payment as agreed as also in view of filing of suit by the Companys minorit y shareholders in the Honble City Civil Court, Mumbai challenging the MOU signed by the Company with the developers for Vile Parle property. The Honble Court has granted ad-interim stay in respect of operation of the MOU.

Besides the above, the Honb'' le Supreme Court has also put an embargo for disposal of the said proper ty. As already decided by the Company to develop the property on its own and in line with the same, the Company, in the Modified Draft Rehabilitation Scheme (MDRS) submitted to the Honb'' le BIFR, has sought to refund the advances received from the dev elopers since the Company is hopeful of raising the fund as and when the sale of the prospective/constructed sale of the proposed development of the said property would take place. In view of this, the Company is in dialogue with some strategic investors who would infuse the required fund for the purpose of the said development of property.

Central Excise department litigation is pending before the Honb'' le BIFR and Honb'' le AAIFR. However, the Income Tax department litigation is pending with the Honb'' le Supreme Court. Hence, at present, the Company is unable to pr oceed in its real estate business. However, the management is hopeful to resolve the said issues in Companys'' favour. Your Di rectors are therefore optimistic of commencement of real estate business on receipt of approval of MDRS which is pending before the BIFR. As regards Hyderabad property, the existing developer has expressed his inability to proceed in the development agreement. The Company has now floated enquiry in the market to identify some strategic investors/developers for the development of the said property. Now after a gap of a long period, the real estate market scenario is gradually moving upwards and the Company is in lookout for right opportunity to enter into the market and find a strategic investor to raise the required fund for the development of the said property.

CORPORATE GOVERNANCE

The Company is committed to maximize the value of its stakeholders by adopting the principles of good Corporate Governance in line with the provisions of laws and in particular those stipulated in the Listing Agreement with the Stock Exchange(s). A separate report on Corporate Governance stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is given under the separate head where the detailed operational performance of the Company has been comprehensively discussed, which forms part of Directors ''Report.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY

Good environment as well as safe & healthy working conditions are at the root of the good performance. Your Company has been in a constant quest for providing to its employees, a very congenial work environment which will in turn add to the performance of the Company. Keeping in mind, the dynamism in the environment, your Company is continuously imparting requisite training to its employees in their respective fields of work.

Health and safety of our employees is of prime concern to us. The workplace is designed to abate the hazards naturally prone to our product. No accident or any pollution problem was noticed during the year. Care is taken to ensure that all laws pertaining to environment, pollution, health and safety of employees and other relevant enactments are being scrupulously adhered to. Our commitment towards the society in terms of providing a clean and healthy environment is of utmost concern and we pledge to put in active efforts to preserve the same.

BOARD OF DIRECTORS

As per section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Shri Sanjay Dalmia, Chairman, Shri Anurag Dalmia, Vice Chairman and Shri Bharat B. Merchant, Directors of the Company are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

PARTICULARS OF EMPLOYEES

The particulars of employees drawing remuneration of Rs. 60 lacs per annum or Rs. 5.00 lacs per month for part of the year or more pursuant to provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 are set out below:

Note :

1. Remuneration includes Salary, Allowances and Contribution to retiral benefits and monitory value of perquisites at cost of the Company.

2. He does not hold any shares of the Company by himself or their spouse and dependent children.

3. His service is of contractural nature.

DIRECTORS ''RESPONSIBILITY STATEMENT :

As required under section 217 (2AA) of the Companies Act, 1956, your Directors confirm:

i. That the preparations of the annual accounts and applicable accounting standards have been followed along with proper explanations relating to material departures.

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review.

iii. That the Directors have taken proper and sufficient care 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 fraud and other irregularities.

iv. That the Directors have prepared annual accounts on a going concern basis.

AUDITORS ''REPORT:

Emphasis of Matter:

We draw attention to the paragraph of "emphasis of matter " of the Auditors'' Report, without conside ring the same as qualification as follows :

(a) There is substantial diminution in the carrying value of certain long term investments, particularly in respect of quoted investments- the diminution being Rs. 3,45,31,403 as compared to its market value which in the opinion of the management, is temporary and no provisioning is considered necessary at this stage as the same are long term and of strategic in nature. (Refer note no.9.1)

(b) Overdue advances of Rs. 9,94,60,043 and an investment made of Rs. 2,31,20,000 in Western Express Industries Limited (WEIL), a wholly owned subsidiary company has accumulated losses far in excess of its paid up capital and reserves & surplus. As explained, the management is hopeful of recovering/realizing the same in due course of time in view of expected revival of activities/development in the said subsidiary. (Refer note no. 10.1)

AUDITORS

M/s. Lodha and Co., Chartered Accountants, statutory auditors, retire at the ensuing Annual General Meeting and have confirmed that their reappointment, if made, would be within prescribed limit under section 224(1B) of the Companies Act 1956.

COST AUDITORS

Your Directors have appointed M/s Diwanji & Co, Cost Accountants, as the Cost Auditors of the Company, in compliance with the Companies (Cost Accounting Records ) Rules 2011 and pursuant to MCA Order No.F.No.52/26/CAB-2010 dated Nov. 6, 2012 and as amendment time to time.

SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements enclosed with the accounts are prepared in accordance with Accounting Standard 21. In view of the general exemption granted by the Ministry of Corporate Affairs, the Report and Accounts of subsidiary companies are not required to be attached to your Companys'' Accounts. Shareholders desirous of obtaining the repor t and accounts of your Companys'' subsidiaries may obtain the same upon request. The report and accounts of the subsidiary c ompanies will be kept for inspection at your Companys'' Registered Office and those of subsidiary companies. The Golden Realty & infrastructure Limited, Golden Investment (Sikkim) Private Limited, Western Express Industries Limited, GTC INC B.V. and Raigadh Papers Limited, a subsidiary of Western Express Industries Limited are the subsidiary companies of your Company.

OTHER INFORMATION

Certificate, as required under Clause 49 of the Listing Agreement with the Stock Exchanges in India, confirming compliance by the Company with the provisions of Corporate Governance as given by the Auditors, M/s. Lodha and Co., Chartered Accountants, declaration by the CEO certifying compliance with the Code of Conduct of the Company and Certificate given by the CEO and CFO as required under the Listing Agreement are annexed herewith. Information pursuant to 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 relating to Foreign Exchange Earnings and Outgo, Conservation of Energy and Technology Absorption and Export Market Developments is also provided as an annexure to this report. Additional disclosures in the form of Consolidated Financial Statements and Related Party Transactions have been made by your Company in compliance with the Listing Agreement.

ACKNOWLEDGEMENTS

Your Directors express their deep gratitude and sincere appreciation for the whole-hearted assistance and co-operation extended to the Company by the Government, Bankers, Financial Institutions, Business associates, Employees and all the Shareholders of the Company who have continued to repose utmost faith in the Company. For and on behalf of the Board

Place : New Delhi Sanjay Dalmia

Dated :May 23, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Fifty-Sixth Annual Report together with the Audited Accounts for the year ended 31st March, 2012:

FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Particulars Current year Ended Previous year Ended 31.03.2012 31.03.2011

Profit/(Loss) before Interest, Depreciation, Exceptional item and Tax (531.90) (1554.55)

Interest-Net 2266.45 1679.66

Depreciation 105.02 152.52

Profit/(Loss) before Taxation 2903.38 (3386.73)

Provision for Taxation 1.40 1.60

Profit/(Loss) after Taxation (2904.78) (3386.33)

Loss brought from previous year (6404.81) 3016.48

Loss carried over to Balance Sheet (9309.59) (6404.81)

PERFORMANCE OF THE COMPANY

During the year the performance of the Company is deteriorated in view of drop in the turnover compared to previous year mainly due to rapid increase of grey market and increasing in VAT ranging as high as between 20 to 40% in few state. During the year, the Company has launched aromatic new brands of cigarettes viz. Koffee and Pan Aroma. The response from the market is encouraging and your Company is hopeful of increase in the turnover. The export market performance has improved and the Company is expected to spread its wings in few more countries as well increase the number of brands which inturn would contribute to the Company's turnover for the next financial year.

DIVIDEND

Your Directors do not recommend any dividend on equity shares of the Company in view of the carried forward losses,

STATUS OF BIFRSCHEME

As per the Hon'ble Delhi High Court order the Company has filed Modified Draft Rehabilitation Scheme before the Hon'ble BIFR for extension of implementation of Scheme period which was in operation up to 31st March, 2011. Accordingly, Hon'ble BIFR has appointed Canara Bank as monitoring agency to appraise the Scheme and submit the final report to them for their consideration.

SHIFTING OF REGISTERED OFFICE

Registered Office of Your Company shifted from Tobacco House, Vile Parle (W), S.V.Road, Mumbai to At Darjipura ,PostAmliyara, Dist. Vadodara, Gujarat w.e.f. 25th 0ctber,2011 consequent to approval of Company Law Board Mumbai Bench and other requisite authority.

REAL ESTATE DEVELOPMENTS

The Company had started the Real Estate Business in the year 2007-2008, when its Hyderabad property was offered for Joint Development and the Company also entered into a Memorandum of Understanding (MOU) in the year 2009-10 with reputed developers to jointly develop its Vile Parle, Mumbai property. However, the development could not be proceeded because the parties failed to make further payment as agreed. Apart from the above, the Company's minority shareholders have filed a suit in the Hon'ble City Civil Court Mumbai challenging the MOU signed by the Company with the developers for Vile Parle property. The Hon'ble Court has granted ad- interim stay in respect of operation of the MOU.

Consequent to the above, the Company in the Modified Draft Rehabilitation Scheme (MDRS) submitted to the Hon'ble BIFR has sought to refund the advances received from the developers on the Company being able to raise the funds from a new Investors I Financials by providing the aforesaid property as security. In view of this, the Company has proposed in the Modified Draft Rehabilitation Scheme to develop the said land on its own with the support of the strategic investor who would infuse the required fund for this purpose.

Pending Central Excise and Income Tax departments litigation before the Hon'ble BIFR and Hon'ble AAIFR, it would be difficult to proceed in the real estate business of the Company. However in view of submission of MDRS before BIFR your Directors are optimistic of commencement of real estate business on receiving approval of Hon'ble BIFR.

As regards Hyderabad property, the existing developer has expressed his inability to proceed in the development agreement. The Company has now floated enquiry in the market to find out alternative investors/developer for the development of the said property.

CORPORATE GOVERNANCE

The Company is committed to maximize the value of its stakeholders by adopting the principles of good Corporate Governance in line with the provision of law and in particular those stipulated in the Listing Agreement with the Stock Exchanges. A separate report of Corporate Governance stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is given under the separate head where the detailed operational performance of the Company has been comprehensively discussed, which forms part of Directors' Report.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY

Good environment as well as safe & healthy working conditions are at the root of the good performance. Your Company has been in a constant quest for providing to its employees, a very congenial work environment which will in turn add to the performance of the Company. Keeping in mind the dynamism in the environment, your Company is continuously imparting requisite training to its employees in their respective fields of work.

Health and safety of our employees is of prime concerns to us. The workplace is designed to abate the hazards naturally prone to our product. No accident or any pollution problem was noticed during the year. Care is taken to ensure that all laws pertaining to environment, pollution, health and safety of employees and other relevant enactments are being scrupulously adhered to. Our commitment towards the society in terms of providing a clean and healthy environment is of our utmost concern and we pledge to take active efforts to preserve the same.

BOARD OF DIRECTORS

As per section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Shri J.P.Khetan and Shri Vijay Kumar Bhandari Directors of the Company are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

PARTICULARS OF EMPLOYEES

The particulars of employees drawing remuneration of Rs. 60 lacs per annum or Rs. 5.00 lacs per month for part of the year or more pursuant to provisions of Section 217(2A)ofthe Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 as amended, are set out below:

Sr. Name Designation Remuneration Qualification No. (Rs.)

1 Shri J P Khetan* Managing 65,76,619 Inter Arts Director

2 Shri A K Joshi Acting- 58,06,384 B.Com,F.C.A. Managing Director

Name Experience Date of Age Last Employment (years) Joining

Shri J P Khetan 49 10.02.1975 69 Dalmia Industries Ltd, as Comm. Manager, 7 years

Shri A K Joshi 33 01.02.1993 54 Chinar Exports Ltd, Sr. Manager - Finan .& Accts, 2years

'Retired as MD on 31st July, 2011 and is on the Board as Director w.e.f.1.8.2011

DIRECTORS'RESPONSIBILITY STATEMENT:

As required under section 217 (2AA) of the Companies Act, 1956, your Directors confirm:

i. That the preparations of the annual accounts and applicable accounting standards have been followed along with proper explanations relating to material departures.

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review.

iii. That the Directors have taken proper and sufficient care 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 fraud and other irregularities.

iv. That the Directors have prepared annual accounts on a going concern basis.

AUDITORS' REPORT:

With reference to the observations and qualifications made by the Auditors in the notes to the accounts as referred in the Auditors Report are self-explanatory. Directors further clarify that:

The Company has a consistent practice to account for the gratuity liability as and when the employees retire and the amount is due, and as such, no provision is considered necessary in respect of estimated liability for future payment of gratuity of Rs.4,87,29,868/-which is determined on the basis of actuarial valuation.

The Company has not made provision for the overdue Sundry Debtors and Loans & Advances aggregating to Rs 605,07,890/- since the Management has taken suitable measures to recover the same and is hopeful of its recovery in due course.

AUDITORS

M/s. Lodha and Co., Chartered Accountants, statutory auditors, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment and if made would be within prescribed limit under section 224(1B) of the Companies Act 1956.

SUBSIDIARY COMPANY&CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements enclosed with the accounts are prepared in accordance with Accounting Standard 21. In view of the general exemption granted by the Ministry of Corporate Affairs, the Report and Accounts of subsidiary companies are not required to be attached to your Company's Accounts. Shareholders desirous of obtaining the report and accounts of your Company's subsidiaries may obtain the same upon request. The report and accounts of the subsidiary companies will be kept for inspection at your Company's Registered Office and those of subsidiary companies. The Golden Realty & infrastructure Limited, Golden Investment (Sikkim) Private Limited, Western Express Industries Limited, GTC INC B.V. and Raigadh Papers Limited, a subsidiary of Western Express Industries Limited are the subsidiary companies of your Company.

OTHER INFORMATION

Certificate, as required under Clause 49 of the Listing Agreement with the Stock Exchanges in India, confirming compliance by the Company with the provisions of Corporate Governance as given by the Auditors, M/s. Lodha and Co., Chartered Accountants, declaration by the CEO certifying compliance with the Code of Conduct of the Company and Certificate given by the CEO and CFO as required under the Listing Agreement are annexed herewith. Information pursuant to 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 relating to Foreign Exchange Earnings and Out Go, Conservation of Energy and Technology Absorption and Export Market Developments is also provided as an annexure to this report.

Additional disclosures in the form of Consolidated Financial Statements and Related Party Transactions have been made by your Company in compliance with the Listing Agreement.

ACKNOWLEDGEMENTS

Your Directors express their deep gratitude and sincere appreciation for the whole-hearted assistance and co-operation extended to the Company by the Bankers, Financial Institutions, Business associates, Employees and above all the Shareholders of the Company, who have continued to repose utmost faith in the Company.

For and on behalf of the Board

Chairman

Sanjay Dalmia

Place: Mumbai

Dated: 25th May 2012


Mar 31, 2010

The Directors hereby submit their Fifty-fourth Annual Report with the Audited Accounts for the year ended 31st March, 2010.

SUMMARY OF FINANCIAL RESULTS

(Rs. in lacs)

For the year For the year

Ended 31.03.2010 Ended 31.03.2009

Profit for the year before Interest, Depreciation, Exceptional Items and Tax 414.99 1571.54

Interest 1341.91 1249.16

Depreciation 202.96 254.75

Profit /(Loss)before Taxation (1129.88) 67.63

Provision for Taxation :

Current Tax including (Wealth Tax) 3.78 11.70

Fringe Benefit Tax - 30.90

Deferred Tax Assets/ (Liabilities) - -

Profit/(Loss) after Taxation (1133.66) 25.03

Balance brought forward from last year (1882.81) (1907.84)

Balance of loss carried over to Balance Sheet 3016.47 1882.81

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE & DIVIDEND

Though there was no change in the excise duty structure, at the same time there was no relief given in the mini segment by the Government, in which your company enjoyed the largest market share in the cigarette industry. Beside this the grey market cigarettes continue to be a major threat for the organised sector especially low priced segment. Despite representations, before the Government by the industry, grey market continue to grow at a rapid rate resulting sharp drop in your company’s volume.

Introduction of mini filter (59 mm) in this year budget is a good move by the government.

This year saw the consolidation of the brands launched earlier. We launched new Cigar with the brand name of Golden Cigaro. This product from the stables of Golden Tobacco was received favorably, and was rolled out across the country. But this year budget heavily taxed cigars.

In view of the carried forward losses, your Directors do not recommend any dividend.

REAL ESTATE DEVELOPMENTS

The Company has started the Real Estate business in the year 2007-08, when its Hyderabad Property was offered for Joint Development with a reputed builder. In addition its Vile Parle Property was offered for Joint Development during the year and has now tied up with a reputed builders of Mumbai to develop this property. The Memorandum of Understanding (MOU) has been signed during the year and an advance of Rs. 75.00 crores have been received upto 31st March, 2010.

The existing manufacturing facility of Vile Parle Property is being shifted to Vadodra/Palghar units. The workers have been offered Voluntary Retirement Scheme (VRS) during the year. The response to the scheme was overwhelming as 343 workers out of a total of 352 have opted for the scheme. The workers who have accepted the VRS has already been paid in the month of April, 2010.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. As required under clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is included as a part of the Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS (MD&A)

Management Discussion and Analysis Report is given under the Separate Head at the end of the Directors’ Report.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY

At the root of a good performance is, a good environment and safe & healthy working conditions. Your Company has been in a constant quest for providing to its employees, a very congenial work environment which will in turn add to the performance of the Company. Keeping in mind the dynamism in the environment, your Company is continuously imparting requisite training to its employees in their respective fields of work.

Health and safety of our employees is of primary importance to us. The workplace is designed to abate the hazards naturally connected to our product. There was no accident or any pollution problem noticed during the year at any of the three units. Care is taken that all laws pertaining to environmental pollution, health and safety of employees and other associated enactments are being scrupulously adhered to. Our commitment towards the society in terms of providing a clean and healthy environment is of our utmost concern and we pledge to take active efforts to preserve the same.

DIRECTORS

In accordance with the provisions of section 256 the Companies Act, 1956 and the Articles of Association of the Company, Shri Sanjay Dalmia, Shri Anurag Dalmia and Shri Bharat B Merchant, Directors, will be liable to retire by rotation at the forthcoming Annual General Meeting. Being eligible, the re-appointment of Shri Sanjay Dalmia, Shri Anurag Dalmia and Shri Bharat B Merchant is recommended by the Directors for your approval.

The resume of these Directors is attached along with the notice.

PARTICULARS OF EMPLOYEES

As required under provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 as amended, the requisite particulars in respect of the employees of the Company, who were in receipt of remuneration in excess of the limits specified under the said section are set out in the annexure herewith and form part of this report.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under section 217(2AA) of the Companies Act, 1956, your Directors confirm having:

followed in the preparation of the Annual Accounts, the applicable accounting standards with proper explanation relating to material departures if any ;

selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of your Company for the year;

taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and prepared the Annual Accounts on a going concern basis.

AUDITORS REPORT

With reference to the observations and qualifications made by the Auditors in their report, the Directors wish to state that the relevant notes forming part of the Company’s accounts as given under Schedule Q to the Accounts, are self-explanatory in this regard.

Your Directors also clarify that the remarks made by the Auditors regarding accumulated losses of the Company at the end of the financial year are more than 50 % of its net worth, the Company has a consistent practice to account for the gratuity liability as and when the employees retire and the amount is due, and as such, no provision is considered necessary in respect of estimated liability for future payment of gratuity of Rs.11,22,95,185 which is determined on the basis of actuarial valuation.

Your Directors further clarify that the company has not made any provision with regard to the overdue Sundry Debtors and Loans & Advances aggregating to Rs.3,09,91,797 since the management has taken suitable measures to recover the said dues and is hopeful of recovery in due course of time.

Therefore if the unprovided gratuity liability and doubtful overdue Sundry Debtors and Loans & Advances are excluded, the accumulated losses will not exceed more than 50 % of the net worth of the Company as mentioned by the Auditors in their report.

AUDITORS

The Auditors, M/s Lodha and Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The necessary certificate pursuant to Section 224(1B) of the Companies Act, 1956 has been received from them. Your Directors recommend their reappointment for your approval at the ensuing Annual General Meeting.

SUBSIDIARIES

Following Companies are the subsidiaries of your Company:

1. Golden Realty & Infrastructure Limited

2. Golden Investment (Sikkim) Private Limited

3. Western Express Industries Limited

4. GTC INC B.V. and

5. Raigadh Papers Limited, a subsidiary of Western Express Industries Limited.

Pursuant to Accounting Standard (AS 21) issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include financial information of its subsidiaries. The Company has applied for an exemption from the Government of India under Section 212(8) of the Companies Act, 1956, from attachment of the documents of its subsidiaries, the approval of which is expected shortly.

However, a statement giving information on subsidiaries as required under section 212(3) of the Act is attached along with the Annual Report. Also, additional information in respect of the subsidiaries and Consolidated Financial Statements as required is provided in the Annual Report.

The Annual Report and accounts of Subsidiaries will be kept for inspection at your Company’s Registered Office. Shareholders desirous of obtaining the Annual Accounts of the Company’s subsidiaries may obtain the same on request.

OTHER INFORMATION

Certificate, as required under Clause 49 of the Listing Agreement with the Stock Exchanges in India, confirming compliance by the Company with the provisions of Corporate Governance as given by the Auditors, M/S. Lodha and Co., declaration by the CEO certifying compliance with the Code of Conduct of the Company and Certificate given by the CEO and CFO as required under the Listing Agreement are annexed herewith. Information pursuant to 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 relating to Foreign Exchange Earnings and Out Go, Conservation of Energy and Technology Absorption and Export Market Developments is also provided as an annexure to this report.

Additional disclosures in the form of Consolidated Financial Statements and Related Party Transactions have been made by your Company in compliance with the Listing Agreement.

ACKNOWLEDGEMENTS

Your Directors express their deep gratitude and sincere appreciation for the whole-hearted assistance and co-operation extended to the Company by the Bankers, Financial Institutions, Business Associates, Employees and above all the Shareholders of the Company, who continued to repose utmost faith in the Company.

For and on behalf of the Board

SANJAY DALMIA

Chairman Place : New Delhi

Dated : 25th May, 2010

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