Home  »  Company  »  International Paper  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of International Paper APPM Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 52nd Annual Report of the Company and the Audited Accounts for the year ended March 31, 2016.

Performance of the Company

During the financial year 2015-16, your Company recorded a significant improvement in business performance through strong operational performance, better revenue management and generating better cash flow. During the financial year ended March 31, 2016, the Company continued to execute initiatives for reducing the cost of production, improve the customer satisfaction, continued focus on safety environment and productivity. These efforts have helped the Company improve profitability substantially, registering an increase of 148 times over the last financial year. These initiatives will also create long-term value for the stakeholders and help position the Company as a leading supplier of premium grade products in the domestic market. The summary of financial performance for the year is encapsulated below:

In Rs. crore Financial Results March 31,2016 March 31, 2015

Sales and other income 1166.27 1173.94

Earnings before interest, depreciation & taxation

(EBIDTA) 137.13 106.16

Finance costs 40.30 44.60

Depreciation 73.17 69.00

Profit/(Loss) before exceptional items 23.66 (7.44)

Exceptional items 32.70 1.13

Profit/(Loss) before tax 56.36 (6.31)

Tax expense/(benefit) 19.47 (6.56)

Profit for the year 36.89 0.25

Sales & Marketing

Market demand for uncoated free sheet (UFS) paper remained soft during most part of the year with signs of improvement towards the year-end. Our estimate is that overall demand for paper grew by around 2-3% during the year. Demand was adversely impacted as government buying was deferred/reduced. Uncertain government policy of restraining private publishers in CBSE school books took a toll in the creamwove segment. Imports and substitution in some segments also continues to be a threat. Pricing was under pressure during the year due to sluggish demand and is now showing signs of firming up gradually. In this market environment, the Company was able to make marginal progress in sales growth in domestic and export markets and could maintain our prices through- out the year.

Highlights of sales & marketing performance:

a. Sales of 217,706 MT in the financial year 2015-16 as against 215,846 MT in the financial year 2014-15, a growth of 1%;

b. We grew in West and Andhra Pradesh/Telangana which were our focus markets which aligns well with our future strategy of domestic growth;

c. Cutsize grew by 38% and we expanded our distribution in new markets and new geographies;

d. We also expanded our export sales in Middle East & Africa and achieved a substantial growth of around 46%. Established consistent sales of cut-size products (under the HP brand). The Company has successfully met all its EPCG obligations;

e. Your Company continues to be focused on delivering increased value to customers through improved products and customer service;

f. The Company continued to increase penetration of new products launched with the International Paper brand last year. Sales of TruPrint, TruPrint Ultra, WriteChoice in the printing/notebook segment & Hammermill and HP in the cut-size segment registered strong growth during the year with significant improvement in brand building;

g. The Company continued to be responsive to customer needs and developed new products to cater to niche segments. Developed watermark paper to maintain Creamwove sales in lean months;

h. Launched WD engagement program - Paper Barons

- to differentiate ourselves and improve customer connect;

i. Introduced mobile app to provide real time information to customers;

j. Launched door to door delivery model in Cutsize varieties in Andhra Pradesh;

k. Special focus on OTIF which improved the score from 77 to 85 in 3 years time;

l. Have undertaken deliberate improvement projects involving cross-functional teams to enhance customer service through OTIF

Raw Material Procurement

The Company''s sustainable farm forestry program represents a strong competitive advantage. During 2015-16, your Company continued to expand the program and its partnership with local farmer communities with an endeavor to ensure long term fiber sustainability. The Company was able to source 100% requirement of pulpwood from Andhra and Telangana, primarily within a radius of 350 sq.kms. After three years of significant increase in fiber costs, 2015-16 experienced an increase in wood availability and correction in wood prices.

The Company continues to focus on empowerment of farmers by expanding the clonal distribution program under its robust farm forestry program with education, research & development and community support.

During 2015 planting year, approximately 225 million saplings were distributed covering an area of 31,300 hectares under plantation. The Company expanded the clonal propagation center infrastructure and introduced new business practices to improve safety and productivity. To have even more better meaningful relationship with the farmers, your Company has started a unique initiative through digital system by launching www.rythukosam.com and ''Krishak honored smart card''. IP APPM farmers will have direct access with your Company and the Company will have direct relationship with them.

Research and Development has been taken at a wider perspective through a collaborative project with Indian Paper Manufacturers Association (IPMA) and Institute of Forest Genetic & Tree Breeding (IFGTB), Coimbatore. We are introducing more farmer-friendly demonstration plots and other cost reduction measures in qualitative and quantitative production processes. In addition, the initiatives with high yielding, short rotation planting stock will enhance raw material availability. These have created a pool of over 123 million man-days so far.

In India, long awaited research and development on Eucalyptus has been started with partnering with IP Brazil being Brazil as most advanced and progressive country in the world.

Information Technology

Our vision is to enable business processes and systems through strategic adoption of IT. These cover all the operating areas including manufacturing, sales and marketing, human resources and forestry. During 2015-16, the Company implemented several IT systems and processes including redesign to the internet, new farmer portal, a new payroll system, mobile app to enable customers to view our products and most importantly SAP upgrade. SAP upgrade provides operational efficiency, cost reduction, improved controls in the areas of finance, costing, purchasing, manufacturing and project systems

During the year under view, the Company implemented SAP FICSM project (Finance, Capital, Source, Maintenance, Order Management and Manufacturing) with a view to be a part of IP''s standard application portfolio with global processes. The benefits derived from this project are simplified, standardized and streamlined business processes with greater integration across the enterprise.

HR initiatives

During the year under review, the Company made significant investments in digitizing all the HR systems and creating culture of leadership whereby every leader demonstrates the 3 Cs - Character, Capability and Catalyst. The Company has successfully completed implementing all the modules of SAP HR that provides system as one place for all employee data. It also created the Performance Management System in one platform that is available online for an employee and the manager to effectively plan their objectives, measure performance, update their accomplishments etc. Talent Reviews were conducted function-wise to recognize the competencies, growth and development of the employees.

IP Leadership Institute conducted various programs that provide development opportunity for talent at all levels.

A multi-skilled, multi-trade study was conducted with a view to understand the current skills and map them to the jobs currently performed by the workmen in order to position them in the right grade and jobs.

Industrial relations at both manufacturing units are cordial and focused on long-term development.

During 2014-15, the Company conducted the Global Engagement Survey to assess employee engagement and satisfaction. The participation rate was 98.37%, the highest among all IP entities. Overall employee engagement registered a strong improvement compared to prior surveys, with a specific improvement in communication and recognition.

CSR Initiatives

The Company has adopted CSR Policy which is placed on the Company''s website. The Board of Directors during the year has re-constituted Corporate Social Responsibility Committee comprising of:

a. Mr. M.S. Ramachandran (Independent Director) - Chairman

b. Ms. Ranjana Kumar (Independent Director) - Member

c. Mr. Rampraveen Swaminathan (Chairman & Managing Director) - Member

d. Ms. Ann Barbara Wrobleski (Non-Executive Director)

- Member

The focus areas of CSR Policy are education, environment and engagement. In view of past losses, the Company is not required to spend money on CSR activities as per Section 135 of the Companies Act, 2013. However, as a responsible corporate citizen, the Company incurred a sum of Rs.47.35 lakhs supporting various CSR initiatives in these focus areas. During the year, the Company''s CSR initiatives included:

- As part of Swatch Bharath programme, installation of RO plants in Madhavarayudu Village and Chaitanya Nagaram Village, Kadiyam Mandalam;

- Construction of bus shelter in Kadiyam Village;

- Supporting the sports events viz., AP State Volley Ball Association and AP State Kabaddi Championships;

- Construction of community sanitary complex for the women in Setty Balijapeta, Kadiyam Mandalam;

- Construction of compound wall for Government Primary School at Bhaskara Ram Nagar, Kadiyam Mandalam and construction of Diamond Mesh Fence for Government Primary School, Chaitanya Nagaram Village, Kadiyam Mandalam;

- Construction of girls toilet and installation of RO plant in Girijana Vikas Kendra School which supports the tribal students;

- Under project New Horizons, students of 5 municipal schools in Rajahmundry were given training in spoken English;

- Sponsored the Balakalakar Art Camp for underprivileged children.

In addition to the above financial commitments, your Company actively engaged employees to volunteer in the local community. Our employees have logged over 2,300 hours with impressive results.

Awards

During the year under review, the Company received the following Awards:

- Special Export Award for its export performance for the year 2012-13 from CAPEXIL.

- Parivarthan Sustainability Leadership Award for its sustainability initiatives under the category of leadership in branding for sustainability.

- Community Development Award from World CSR Congress for the Community development work done by the Company around Unit: Kadiyam.

- Award for social innovation from World CSR Congress for the project New Horizons whereby the students in municipal schools in Rajahmundry were trained in spoken English.

- A Certificate of Appreciation from FICCI for good practice in safety systems by the Company''s Unit: Kadiyam in recognition of its commitment to safety at workplace and putting in place safety systems.

- Uttama Smart Partner Award from Mandal Praja Parishad, Kadiyam, Government of Andhra Pradesh in recognition of the various development works done by the Company in Kadiyam Mandal.

- ''Best Management Award'' from the Government of Andhra Pradesh for the good practices followed to keep industrial harmony and good employee relations in the organization.

Related Party Transactions

All related party transactions that were entered into during the financial year under review were on arms length basis and were also in the ordinary course of business. There are no materially significant related party transactions entered into by the Company with the promoters, directors, key managerial personnel which may have a potential conflict with the interests of the Company at large.

The Board of Directors approved a policy on related party transactions which is placed on the Company''s website. The related party disclosures are given in note no.27 to the financial statements.

Remuneration Policy

The Company has adopted the Nomination and Remuneration Committee Charter which includes the Company''s policy on directors'' appointment and remuneration including criteria for determining the qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Companies Act, 2013.

Pursuant to Section 178(4) of the Companies Act, 2013, the Company also adopted remuneration policy relating to remuneration for the directors, key managerial personnel and senior executives in the rank of vice president and above. The remuneration policy is placed on Company''s website.

Technology Absorption & Energy Conservation

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in the Annexure-1 attached and forms part of this Report.

Risk Management

The Company has a robust business risk management framework to identify and evaluate business risks and opportunities. This framework aims to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The key business risks identified by the Company and its mitigation plans are as under:

a. Fiber Procurement

The Company spends more than 25% of its income on procurement of fiber viz. casuarina, subabul, mixed hard wood, eucalyptus etc. Keeping in view the criticality of this factor, the Company has been expanding farm forestry program to secure fiber supply.

b. Competition Risk

The paper industry is becoming intensely competitive with the expansion of capacities by the existing players and lower import duties. To mitigate this risk, the Company is leveraging on its expertise and experience by enhancing its brand equity/visibility and energy product portfolio.

c. Occupational Health & Safety (OH&S)

Safety of employees is of paramount importance to the Company. In order to inculcate safety culture in the Company, it has identified Occupational Health & Safety as one of its focus areas. Various training programs have been conducted at the plants and other locations. Accountability has been strengthened by integrating OH&S objectives into job descriptions with the introduction of management personnel and safety professionals.

Directors

a. Meetings of the Board

The Company prepares Calendar of Meetings for each calendar year and circulates the same in advance to all the Directors.

During the year under review, four Board meetings and four Audit Committee meetings were held. The details of the meetings held are given in the Corporate Governance Report forming part of Annual Report.

During the year under review, Ms. Jayashree Satagopan resigned as Non-Executive Director with effect from the close of office hours of April 24, 2015.

The Board placed on record its appreciation for the valuable advice and guidance received from Ms. Jayashree Satagopan.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Thomas G. Kadien retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

b. Independent Directors

The Members at the 50th Annual General Meeting held on August 27, 2014 appointed the existing

Independent Directors viz. Mr. Praveen P. Kadle, Mr. Adhiraj Sarin, Ms. Ranjana Kumar, Mr. Milind Sarwate and Mr. M.S. Ramachandran under the Companies Act, 2013 each for a term of five years up to March 31, 2019.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

c. Key Managerial Personnel

There is no change in the key managerial personnel during the year.

d. Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, as well as the evaluation of the working of its Committees.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman & Managing Director who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and its minority shareholders etc.

e. Board Training and Induction

At the time of appointing a Director, a formal letter of appointment is given to him/her, which inter alia explains the role, function, duties and responsibilities expected of him/her as a Director of the Company. The Director is also explained in detail the compliances required from him/her under the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other relevant laws and regulations. Details of familiarization of directors are disclosed on the website of the Company.

f. Audit Committee

The Audit Committee comprises of Mr. Milind Sarwate as Chairman and Messrs Praveen P. Kadle, Adhiraj Sarin, Thomas G. Kadien and Rampraveen Swaminathan as other Members. All the recommendations made by the Audit Committee were accepted by the Board.

Extract of Annual Return

The extract of Annual Return as on financial year ended March 31, 2016 as required under sub-section 3 of Section 92 of the Companies Act, 2013 in Form No. MGT 9 is attached as Annexure-2.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary at the registered office in this regard.

Vigil Mechanism

The Company has adopted Whistle Blower Policy to deal with instance of fraud or any unethical or improper practices. A copy of this policy is placed on the Company''s website.

Internal Financial Controls

The Company has an internal financial control system commensurate with the size, scale and complexity of the operations. Internal audit function was jointly controlled by in-house department and by a professional firm of chartered accountants. The main function of Internal Audit is to monitor and evaluate adequacy of internal control system in the Company, its compliances with the operating systems, accounting procedures and policies at all locations in the Company. Based on the report of internal audit function, process owners take corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions are reported to the Audit Committee.

Statutory Auditors audited the internal financial controls (IFC) over financial reporting of the Company as of March 31, 2016 in conjunction with audit of the financial statements of the Company for the year ended on that date. Unmodified opinion on IFC was given by them.

Statutory Auditors

The Members at the Annual General Meeting held on August 27, 2014 appointed Messrs Deloitte Haskins & Sells, Chartered Accountants, Hyderabad, as Auditors of the Company for a period of five years to hold office from the conclusion of 50th Annual General Meeting to the conclusion of the fifth consecutive annual general meeting subject to ratification of the appointment by the Members at every subsequent annual general meetings. Messrs Deloitte Haskins & Sells, Chartered Accountants have confirmed their eligibility and willingness to accept office, if re-appointed by the Members at the 52nd Annual General Meeting of the Company.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs D. Hanumanta Raju & Co., a firm of Company Secretaries in Practice to undertake the secretarial audit of the Company. Secretarial Audit Report under Section 204(1) of the Companies Act, 2013 issued by Messrs D. Hanumanta Raju & Co., Practising Company Secretaries is attached as Annexure-3.

Cost Auditors

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, the Board at their meeting held on April 22, 2016 appointed Messrs Narasimha Murthy & Co., Cost Accountants as Cost Auditors of the Company at a remuneration of ''6.50 lakhs (excluding service tax) plus reimbursement of travelling and out of pocket expenses on the recommendation of Audit Committee at their meeting held on April 22, 2016 for the financial year ending March 31, 2017 and their remuneration shall be ratified by the Members at the forthcoming Annual General Meeting.

Cost Accounting Records

Cost accounting records for the financial year under review were maintained as per the Companies (Cost Accounting Records) Rules. M/s. Narasimha Murthy & Co., Cost Accountants were appointed as Cost Auditors of the Company with the approval of Central Government to audit the cost accounts for the financial year ended March 31, 2016. The Cost Audit Report in XBRL form due for filing on September 27, 2015 for the financial year ended March 31, 2015 was filed with the Ministry of Corporate Affairs on September 30, 2015.

The report for the year ended March 31, 2016 will be filed on or before end of September, 2016.

Public Deposits

The Company had discontinued its public deposit scheme in the financial year 2012-13. Despite efforts to identify and repay unclaimed deposit, the amount of public deposit matured and remaining unclaimed with the Company as on March 31, 2016 was Rs.0.65 lakhs. The Company has not accepted or renewed any deposit during the year from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. During the year under review, there was no unclaimed deposit amount which is required to be transferred to Investor Education and Protection Fund.

Particulars of loans, guarantees or investments

No loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 were given during the year under review.

Dividend

In view of accumulated losses, your Directors decided not to recommend payment of dividend on the equity shares for the financial year under review.

Subsidiary Company

The Company made an investment of Rs.5 lakhs by way of share capital in IP India Foundation, a Section 25 company under the Companies Act, 1956 wherein the excess of income over expenditure will be applied for promoting its objectives. Accordingly, the accounts of IP India Foundation are not consolidated since the holding Company will not derive any economic benefit from its investment in IP India Foundation. During the financial year ended March 31, 2016, the Foundation recorded a deficit amounting to Rs.0.62 lakhs.

The Company undertakes that annual accounts of IP India Foundation and the related information will be made available to the members of holding company seeking such information at any point of time. The annual accounts of IP India Foundation is placed on the Company''s website www.ipappm.com and is also available for inspection by any Member at the Registered Office of the Company during business hours on working days of the Company.

Statement containing salient features of the financial statement of IP India Foundation for the financial year ended March 31, 2016 is attached as Annexure-4.

Directors'' Responsibility Statement

Your Directors hereby confirm and declare that:

- in the preparation of final accounts for the year ended March 31, 2016 the applicable accounting standards had been followed along with proper explanation relating to material departures;

- they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the financial year ended March 31, 2016 and of the profit of the Company for the year;

- they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- they had prepared the accounts for the year ended March 31, 2016 on a ''going concern'' basis;

- they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating efficiently;

- they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently.

General

- During the year under review, the Chairman & Managing Director of the Company has not received any remuneration or commission from the subsidiary company.

- There were no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

- The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules there under for prevention and redressal of complaints of sexual harassment at workplace. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All women employees (permanent, contractual, temporary, trainees) are covered under this policy.

Acknowledgements

Your Directors wish to place on record their gratitude to the Central Government, the Government of Andhra Pradesh, the Government of Telangana, State Bank of India, Axis Bank Limited, Citibank N.A., BNP Paribas, JPMorgan Chase Bank, Royal Bank of Scotland and Bank of America N.A. for their continued support during the year.

Your Directors wish to convey their thanks to the valued customers and dealers for their continued patronage during the year and place on record their appreciation of the contribution made by all the employees, during the year.

For and on behalf of the Board

Hyderabd Rampraveen Swaminathan

April 22, 2016 Chairman & Managing Director


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 51st Annual Report of the Company and the Audited Accounts for the year ended March 31, 2015.

Performance of the Company

During the financial year 2014-15, your Company recorded a significant improvement in business performance through strong operational performance, better revenue management and generating better cash flow. During the financial year ended March 31, 2015, the Company continued to execute initiatives for reducing the cost of production, improve the customer satisfaction, continued focus on safety environment and productivity. These efforts have helped the Company improve profitability, resulting in a nominal net profit of Rs. 24.78 lakhs as against a net loss of Rs. 4161.21 lakhs in the previous year. These initiatives will also create long-term value for the stakeholders and help position the Company as a leading supplier of premium grade products in the domestic market. The summary financial performance for the year is encapsulated below:

In Rs. crore

March 31, March 31, Financial Results 2015 2014

Sales and other income 1152.50 1104.16

Earnings before interest, depreciation & taxation (EBIDTA) 106.16 73.98

Less: Interest (including bank & finance charges) 44.60 43.39

Depreciation 69.00 87.01

Profit/(Loss) before exceptional items (7.44) (56.42)

Exceptional items 1.13 -

Profit/(Loss) before tax (6.31) (56.42)

Tax expense/(benefit) (6.56) (14.81)

Profit/(Loss) for the year 0.25 (41.61)

Sales & Marketing

Market demand for uncoated free sheet (UFS) paper remained sluggish during the year. We estimate that overall demand for paper grew by around 3% during the year. Demand was impacted by the weak economic environment, lower demand from government organization and substitution in some segments. Pricing was under pressure during the year due to sluggish demand and increased supply of paper. In this market environment, the Company was able to make progress in sales growth in domestic and export markets.

Highlights of sales & marketing performance:

a. Sales of 215,846 MT in the financial year 2014-15 as against 208,089 MT in the financial year 2013-14, a growth of 4%;

b. Marked improvement in exports through entering new markets with annualized growth of over 70%. During the year, your Company expanded its geographical coverage and added new distribution partners in Africa and Latin America, and also introduced new cut-size products (under the HP brand) in the Middle East. The Company is well positioned to meet all its EPCG obligations;

c. Your Company continues to be focused on delivering increased value to customers through improved products and customer service;

d. The Company continued to increase penetration of new products launched with the International Paper brand last year. Sales of TruPrint, TruPrint Ultra, WriteChoice in the printing/notebook segment & Hammermill and HP in the cut-size segment registered strong growth during the year;

e. On Time in Full (OTIF) delivery was improved during the year by 8%.

Raw Material Procurement

The Company''s sustainable farm forestry program represents a strong competitive advantage. During 2014-15, your Company continued to expand the program and its partnership with local farmer communities. The Company was able to source 100% requirement of pulpwood from Andhra and Telangana, primarily within a radius of 350 sq.kms. After three years of significant increase in fiber costs, 2014-15 saw increased availability and price stability.

The Company continues to focus on empowerment of farmers by expanding the sapling program, education, research & development and community support.

During 2014 planting year, approximately 220 million saplings were distributed covering an area of 30,656 hectares under plantation. The Company expanded the clonal propagation center infrastructure and introduced new business practices to improve safety and productivity.

Research and Development has been taken at a wider perspective through a collaborative project with Indian Paper Manufacturers Association (IPMA) and Institute of Forest Genetic & Tree Breeding (IFGTB), Coimbatore. The Company is introducing more farmer-friendly demonstration plots and other cost reduction measures in qualitative and quantitative production processes. In addition, the initiatives with high yielding, short rotation planting stock will enhance raw material availability. These have created a pool of over 107 million man-days so far.

Information Technology

The Company''s approach towards Information Technology (IT) is to enable business processes and systems through strategic adoption of IT. These cover all the operating areas including manufacturing, sales and marketing, human resources and forestry. During 2014-15, the Company implemented several IT systems and processes including an upgrade to the intranet, a new time & attendance system, automation of weighbridge operations, automation of accounts payable and label printing systems at Units: Rajahmundry and SN Palem. The Company is also in process of implementing an upgrade to the current SAP based ERP system. The project will automate and integrate our finance, control, purchasing and project management functions providing operational efficiency, cost reduction, improved controls and management information systems.

During the year, the Company also completed development of a Business Continuing Plan (BCP) to provide a framework and response plan in case of disasters. Implementation and monitoring of the BCP is an ongoing activity.

HR initiatives

Employee engagement and development are critical to the Company''s long term success. During 2014-15, the Company implemented several initiatives to create a performance management culture and enable talent development. As part of the same, the Company has invested in providing managers training at the IP Leadership Institute. The First Line Leadership (FLL) Program targeted at first time leaders and supervisory staff was launched in August 2014. The Company is in the process of launching manufacturing training programs as part of the Global Manufacturing System (GMS) initiative.

Long term collective bargaining wage settlement has been completed for Rajahmundry Mills and Section 12(3) agreement signed on January 7, 2015 as per the provisions of the Industrial Disputes Act. Industrial relations at both units are collaborative and focused on long-term development.

During 2014-15, the Company conducted the Global Engagement Survey to assess employee engagement and satisfaction. The participation rate was 98.37%, the highest among all IP entities. Overall employee engagement registered a strong improvement compared to prior surveys, with a specific improvement in communication and recognition.

CSR Initiatives

The Company has adopted CSR Policy which is placed on the Company''s website. The Board of Directors has also constituted Corporate Social Responsibility Committee comprising of:

a. Mr. M.S. Ramachandran (Independent Director) - Chairman

b. Ms. Ranjana Kumar (Independent Director) - Member

c. Mr. Rampraveen Swaminathan - Member

The focus areas of CSR Policy are education, environment and engagement. In view of past losses, the Company is not required to spend money on CSR activities as per Section 135 of the Companies Act, 2013. However, as a responsible corporate citizen, the Company incurred a sum of Rs. 55.14 lakhs supporting various CSR initiatives in our focus areas. During the year, the Company''s CSR initiatives included:

* Donation to Andhra Pradesh Chief Minister''s Relief Fund for Hudhud Disaster Relief;

* Construction of a check dam for water management in Tantikonda;

* Provision of drinking water to villages around the mill operations;

* Financial support to 62 students under IP Scholarship Program & Project Saathi;

* Continued distribution of solar lamps to the students in villages which enabled students to study during power cut time;

* Supporting rain water harvesting activities in five government schools;

* Construction of drains in Venkatanagaram Village;

* Planting of trees in Visakhapatnam, affected by cyclone ''Hudhud''.

In addition to the financial commitments, your Company has actively encouraged employees to volunteer in the local community. Our employees have logged over 3,500 hours, with some impressive results.

Awards/Recognitions

During 2014-15, the Company received the following recognitions:

* IPMA Environment Award 2013-14 from Indian Paper Manufacturers Association in recognition of maintenance of high standard of environment management at Rajahmundry Mill;

* Excellence Award and Udyog Rattan Award from Institute of Economic Studies (IES), New Delhi;

* Finalist in Parivartan Sustainability Leadership Award 2014 from Sustainability Outlook in recognition of the resource management leadership demonstrated by the organization;

* Three-star rating from CII Southern Region, in recognition of its commitment to environment, health and safety practices and policies for the year 2014 at Rajahmundry mill.

Related Party Transactions

All related party transactions that were entered into during the financial year under review were on arms length basis and were also in the ordinary course of business. There are no materially significant related party transactions by the Company with the promoters, directors, key managerial personnel which may have a potential conflict with the interests of the Company at large.

The Board of Directors approved a policy on related party transactions which was uploaded on the Company''s website. The related party disclosures are given in note no.26 to the financial statements.

Remuneration Policy

The Company has adopted the Nomination and Remuneration Committee Charter which includes the Company''s policy on directors'' appointment and remuneration including criteria for determining the qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Companies Act, 2013.

Pursuant to Section 178(4) of the Companies Act, 2013, the Company also adopted remuneration policy relating to remuneration for the directors, key managerial personnel and senior executives in the rank of vice president and above. The remuneration policy is placed on Company''s website.

Technology Absorption & Energy Conservation

Particulars of conservation of energy, technology absorption are given in the prescribed format under the Companies (Accounts) Rules, 2014. Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in the Annexure-1 attached and forms part of this Report.

Risk Management

The Company has a robust business risk management framework to identify and evaluate business risks and opportunities. This framework aims to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The key business risks identified by the Company and its mitigation plans are as under:

a. Fiber Procurement

The Company spends more than 25% of its income on procurement of fiber viz. casuarina, subabul, mixed hard wood, eucalyptus etc. Keeping in view the criticality of this factor, the Company has been expanding farm forestry programme to secure fibre supply.

b. Competition Risk

The paper industry is becoming intensely competitive with the expansion of capacities by the existing players and lower import duties. To mitigate this risk, the Company is leveraging on its expertise and experience by enhancing its brand equity/visibility and energy product portfolio.

c. Occupational Health & Safety (OH&S)

Safety of employees is of paramount importance to the Company. In order to inculcate safety culture in the Company, it has identified Occupational Health & Safety as one of its focus areas. Various training programs have been conducted at the plants and other locations. The accountability has been strengthened by integrating OH&S objectives into job descriptions with the introduction of management personnel and safety professionals.

Directors

a. Meetings of the Board

The Company prepares Calendar of Meetings with venue and circulates the same in advance to all the Directors.

During the year under review, four Board meetings and four Audit Committee meetings were held. The details of the meetings held are given in the Corporate Governance Report forming part of Annual Report.

During the year under review, (a) Mr. Kenneth P. Huelskamp resigned as Non-Executive Director with effect from July 14, 2014; (b) Mr. Michael Baymiller resigned as Non-Executive Director with effect from December 1,2014 and (c) Mr. W. Michael Amick Jr. resigned as Whole-time Director designated as Executive Chairman from the close of office hours of October 31, 2014. However, he continued as Non- Executive Director effective November 1, 2014.

Mr. Rampraveen Swaminathan was appointed as Chairman & Managing Director with effect from November 1, 2014. Subsequently, Mr. W. Michael Amick Jr. resigned as Non-Executive Director with effect from January 19, 2015, and Mr. M. K. Sharma resigned as Independent Director with effect from January 22, 2015. Ms. Jayashree Satagopan resigned as Non-Executive Director with effect from April 24, 2015.

The Board placed on record its appreciation for the valuable advice and guidance received from Mr. Kenneth P Huelskamp, Mr. Michael Baymiller, Mr. W. Michael Amick Jr., Mr. M.K. Sharma and Ms. Jayashree Satagopan.

Ms. Ann Barbara Wrobleski was appointed as Additional Director under the category of Non-Executive Director effective April 23, 2015 and she will hold office upto the date of ensuing Annual General Meeting. The Company had received requisite notice in writing under Section 160 of the Companies Act, 2013 proposing her candidature.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Ms. Shiela P Vinczeller will hold office up to the forthcoming Annual General Meeting and being eligible offer herself for re-appointment.

b. Independent Directors

The Members at the 50th Annual General Meeting held on August 27, 2014 appointed the existing Independent Directors viz. Mr. Praveen P Kadle, Mr. Adhiraj Sarin, Ms. Ranjana Kumar, Mr. Milind Sarwate and Mr. M.S. Ramachandran under the Companies Act, 2013 each for a term of five years with effect from August 27, 2014.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the stock exchanges.

c. Key Managerial Personnel

Mr. C. Badrinath was appointed as Chief Financial Officer with effect from May 1, 2014 in the place of Ms. Jayashree Satagopan.

d. Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration, Corporate Social Responsibility Committees and Stakeholders Relationship Committee.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman& Managing Director who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and its minority shareholders etc.The performance evaluation of independent directors was carried out by entire Board with the help of an outside agency viz. Egon Zehnder. The performance evaluation of Chairman & Managing Director and non-independent directors was carried out by Independent Directors.

e. Board Training and Induction

At the time of appointing a Director, a formal letter of appointment is given to him/her, which inter alia explains the role, function, duties and responsibilities expected of him/her as a Director of the Company. The Director is also explained in detail the compliances required from him/her under the Companies Act, 2013, Clause 49 of the Listing Agreement and other relevant regulations and his/ her affirmation taken with respect to the same. Details of familiarization of directors are disclosed on the website of the Company.

f. Audit Committee

The Audit Committee comprises of Mr. Milind Sarwate as Chairman and Messrs Praveen P. Kadle, Adhiraj Sarin, Thomas G. Kadien and Rampraveen Swaminathan as other Members. All the recommendations made by Audit Committee were accepted by the Board.

Extract of Annual Return

The extract of Annual Return as on financial year ended March 31,2015 as required under sub-section 3 of Section 92 of the Companies Act, 2013 in Form No. MGT 9 is attached as Annexure-2.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary at the registered office in this regard.

Vigil Mechanism

The Company has adopted Whistle Blower Policy to deal with instance of fraud or any unethical or improper practices. A copy of this policy is also posted on the website of the Company.

Internal Financial Controls

The Company has an internal financial control system commensurate with the size, scale and complexity of its operations. Internal audit function is jointly controlled by in-house department and E&Y LLP. The main function of Internal Audit is to monitor and evaluate adequacy of internal control system in the Company, its compliances with the operating systems, accounting procedures and policies at all locations in the Company. Based on the report of internal audit function, process owners take corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions are reported to the Audit Committee.

Statutory Auditors

The Members at the Annual General Meeting held on August 27, 2014 appointed Messrs Deloitte Haskins & Sells, Chartered Accountants, Hyderabad, as Auditors of the Company for a period of five years to hold office from the conclusion of 50th Annual General Meeting to the conclusion of the fifth consecutive annual general meeting subject to ratification of the appointment by the Members at every subsequent annual general meetings. Messrs Deloitte Haskins & Sells, Chartered Accountants have confirmed their eligibility and willingness to accept office, if re-appointed.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs D. Hanumanta Raju & Co., a firm of Company Secretaries in Practice to undertake the secretarial audit of the Company. Secretarial Audit Report under Section 204(1) of the Companies Act, 2013 issued by Messrs D. Hanumanta Raju & Co., Practising Company Secretaries is attached as Annexure-3.

Cost Auditors

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, the Board at their meeting held on April 23, 2015 appointed Messrs Narasimha Murthy & Co., Cost Accountants as Cost Auditors of the Company at a remuneration of Rs. 6.15 lakhs (excluding service tax) plus reimbursement of travelling and out of pocket expenses on the recommendation of Audit Committee at their meeting held on April 22, 2015 for the financial year ending March 31, 2016 and their remuneration shall be ratified by the Members at the forthcoming Annual General Meeting.

Cost Accounting Records

Cost accounting records for the financial year under review were maintained as per the Companies (Cost Accounting Records) Rules. M/s. Narasimha Murthy & Co., Cost Accountants were appointed as Cost Auditors of the Company with the approval of Central Government to audit the cost accounts for the financial year ended March 31, 2015. The Cost Audit Report in XBRL form due for filing on September 27, 2014 for the financial year ended March 31, 2014 was filed with the Ministry of Corporate Affairs on August 15, 2014.

The report for the year ended March 31,2015 will be filed on or before September 27, 2015.

Public Deposits

The Company had discontinued its public deposit scheme in the financial year 2012-13. Despite efforts to identify and repay unclaimed deposit, the amount of public deposit matured and remaining unclaimed with the Company as on March 31, 2015 was Rs. 0.65 lakhs. The Company has not accepted or renewed any deposit during the year from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. During the year under review, there was no unclaimed deposit amount which is required to be transferred to Investor Education and Protection Fund.

Particulars of loans, guarantees or investments

No loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 were given during the year under review.

Dividend

In view of accumulated losses, your Directors decided not to recommend payment of dividend on the equity shares for the financial year under review.

Subsidiary Company

The Company made an investment of Rs. 5 lakhs by way of share capital in IP India Foundation, a Section 25 company under the Companies Act, 1956 wherein the excess of income over expenditure will be applied for promoting its objectives. Accordingly, the accounts of IP India Foundation are not consolidated since the holding Company will not derive any economic benefit from its investment in IP India Foundation. During the financial year ended March 31,2015, the Foundation recorded an excess of income over expenditure amounting to Rs. 3.95 lakhs.

The Company undertakes that annual accounts of IP India Foundation and the related information will be made available to the members of holding company seeking such information at any point of time. The annual accounts of IP India Foundation will be available on the Company''s website www.ipappm.com and will also be available for inspection by any Member at the Registered Office of the Company during business hours on working days of the Company.

Statement containing salient features of the financial statement of IP India Foundation for the financial year ended March 31, 2015 is attached as Annexure-4.

Directors'' Responsibility Statement

Your Directors hereby confirm and declare that:

* in the preparation of final accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

* they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the year ended March 31, 2015 and of the profit of the Company for the year;

* they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

* they had prepared the accounts for the year ended March 31, 2015 on a ''going concern'' basis;

* they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating efficiently;

* they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently.

General

* During the year under review, the Executive Directors of the Company have not received any remuneration or commission from the subsidiary company.

* There were no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

* During the year under review, no complaints/cases were filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgements

Your Directors wish to place on record their gratitude to the Central Government and Government of Andhra Pradesh, State Bank of India, Axis Bank Limited, Citibank N.A., BNP Paribas, JPMorgan Chase Bank, Royal Bank of Scotland and Bank of America N.A. for their continued support during the year.

Your Directors wish to convey their thanks to the valued customers and dealers for their continued patronage during the year and place on record their appreciation of the contribution made by all the employees, during the year.

For and on behalf of the Board

Hyderabad Rampraveen Swaminathan June 15, 2015 Chairman & Managing Director


Mar 31, 2013

The Directors have pleasure in presenting the 49th Annual Report of the Company and the Audited Accounts for the 15 month period ended March 31, 2013.

The financial performance of the Company for the period under review is summarized in the table given below:

Financial Results Rs. Crore

15 Month 9 Month ended ended March 31, December 31, 2013 2011 @

Sales and other income 1253.62 601.60

Earnings before interest, depreciation & taxation (EBIDTA) 138.77 73.56

Less: Interest (including bank & finance charges) 55.36 36.10

Depreciation 87.94 50.62

Profit/(Loss) before tax (4.53) (13.16)

Less: Exceptional items 16.19 -

Provision for tax 2.98 84.65

Profit/(Loss) for the period (23.70) (97.81)

@ Figures have been regrouped/reclassified, wherever necessary.

Change in the Financial Year

In order to have uniform financial year under various legislations, your Company has decided to change the financial year from January-December to April-March. Accordingly, current annual accounts and this Report of the Company are for a period of 15 months from January 1, 2012 to March 31, 2013. Therefore, the figures for the current period are not comparable with those of the 9 month period ended December 31, 2011.

Performance of the Company

Your Company adopted 5 strategic principles viz.

a. Become the low cost producer

b. Customer support excellence

c. World class operations and focus on safety, environment and productivity

d. Expand in printing and writing segments and

e. Create a performance culture.

During the 15 month period ended March 31, 2013 your Company recorded:

a. paper production of 258,201 MT as against 160,565 MT for the previous 9 month period ended December 31, 2011;

b. revenue of Rs.1230.50 crore from net sale of paper as against Rs.595.23 crore for the previous 9 month period ended December 31, 2011;

c. sales of 279,093 MT as compared to 1,39,786 MT. The Company managed to get a better Net Sales Realization per MT over the previous year due to upward price revisions across all grades and a change in the product mix;

d. export volume of 37,819 MT as against 15,283 MT. Volume growth of 147% in exports accompanied by a sharp increase in prices improved net realization per MT;

e. EBIDTA of Rs.138.77 crore as against Rs.73.56 crore;

f. a loss of Rs.23.70 crore in view of outage, abnormal increase in fibre cost, certain exceptional items and increase in legal and professional charges. The outage incurred at a cost of Rs.35 crore, had an unfavourable impact on shipment of 13,000 MT. However, the outage completed without any LIFE incident resulted in increase in bleached pulp production and stabilization of power and paper machine performance.

Dividend

In view of loss, your Directors decided not to recommend payment of dividend on the equity shares for the financial year under review.

Raw Material Procurement

Your Company concentrated its efforts to procure pulpwood from South India with focus on State of Andhra Pradesh for meeting its entire requirement despite unprecedented competition from other paper manufacturers in this area.

During the year under review, 161.30 million quality saplings were distributed covering an area of 26,134 hectares under plantation against development and distribution of 120.70 million seedlings covering an extent of 16,823 hectares during the previous 2011 planting year. Research on clonal development has resulted in introduction of high yielding, disease resistant clones and versatile to a wide variety of agro-climatic conditions in inland and coastal areas.

Research and Development initiatives with low cost planting techniques, quality seed material and high yielding, short rotation planting stock have enhanced raw material availability spread over more than 158,891 hectares.

These benefits are extended to around 48,718 families creating employment resource pool of 79 million man-days especially in rural areas so far.

Specific projects for infrastructure development and to provide better facilities in wood procurement areas were undertaken.

Future Plan of Action

Major thrust shall be given for increasing the Casuarina clonal plantation with low cost clone development technique, intensifying specific projects for fibre security, introducing more site-specific clones by means of macro propagation, clonal trials for Subabul and spacing trials along with encouraging specific projects for CSR and environment improvement.

New Projects

During the financial year under review, the Company had commissioned various maintenance and upgradation projects for sustaining production levels with quality as well as regulatory projects for meeting regulatory norms and strategic projects as part of business strategy in Units: Rajahmundry and Kadiyam.

Awards/Certifications

The Company received second prize in appreciation of the achievements in Energy Conservation in Large Scale Industry Sector for the year 2011-12 from the Government of Andhra Pradesh.

The Company was also awarded the ''2013 Award for Outstanding Rural Development'' at the World CSR Congress in Mumbai. This award is in global recognition of Company''s efforts in the areas of Social Development.

The 2013 award recognizes the integrated CSR efforts undertaken by the Company in rural areas, combining our farm forestry programs and social enrichment programs such as the Mamidilova Check Dam.

The award was titled ''Corporate Social Responsibility - Rural Development'' for improving the livelihood of farmers in the Mamidilova village.

Your Company also received Forest Stewardship Council Certification (FSC), in respect of Unit:Kadiyam covering the production of paper using transfer and credit systems and sourcing of reclaimed material.

Sustainability

Your Company believes that sustainability makes good business sense and it extends from plantations to the employees, suppliers and the society at large. During the year, your Company made significant progress in the following key focus areas:

- Improving water consumption and waste water treatment performance;

- Reducing fiber losses in process and pulp mill operations;

- Continuing to focus on energy efficiency and renewable energy sources.

Your Directors are very happy to report that the Company had achieved a land mark of reaching 1 billion saplings under the social agro forestry program during the year under review.

Corporate Social Responsibility

As a responsible corporate citizen, the Company has been focusing on different Corporate Social Responsibility activities like education, empowerment, environment and employee engagement to help the communities in and around Rajahmundry.

The following CSR activities were undertaken during the year under review:

a. Launched distribution of solar lamps to the students of Zilla Parishad High Schools in the forest areas to enable them to study where there are power cuts benefitting around 1,500 students;

b. Launched Green Wave campaign at Rajahmundry which motivated several children to pledge towards plantation of trees and understand its use towards improving the environment;

c. Constructed a Check Dam in Mamidilova village with storage capacity of 0.00012 TMC which enables increase in irrigated area from 800 acres to 5,000 acres;

d. Provided support to the farmers of Eastern Ghatts of Yetikoppaka village by purchasing the toys from them and participated in the exhibition;

e. Supported along with employees the farmers during the recent Neelam Cyclone in the Coastal Andhra region and fire accident at Chaitanyapuram in Rajahmundry;

f. Organized blood donation camps, health and motivation awareness event and awareness on HIV/ AIDS.

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules, 1988 are given in the Annexure-I attached and forms part of this Report.

Particulars of employees

The information required under Section 217 (2A) of the Companies Act, 1956 and the Rules made thereunder is provided in the Annexure-II forming part of the Report.

Public Deposits

3 deposits totaling Rs.1.45 lakhs due for repayment on or before March 31, 2013 were not claimed by the depositors as on that date. A deposit for Rs.0.75 lakhs was refunded during April, 2013. During the year under review, there was no unclaimed deposit amount which is required to be transferred to Investor Education and Protection Fund.

The provisions of Section 58A of the Companies Act, 1956 have been complied with.

Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Hyderabad, Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment.

Directors

During the year under review, Mr. Paul Brown, Executive Chairman resigned from the Board with effect from July 13, 2012. Mr. Shreeyash Bangur and Mr. P.K.Suri, Director (Operations) also resigned from the Board with effect from July 12, 2012 and July 13, 2012 respectively.

The Board placed on record its appreciation for the valuable advice and guidance received from Mr. Paul Brown, Mr. Shreeyash Bangur and Mr. P.K.Suri during their tenure as Directors of the Company.

The Board of Directors at the Meeting held on July 13, 2012 appointed Mr. W. Michael Amick Jr. as Director and also as Executive Chairman for a period of 5 years from the date of assuming charge i.e. August 23, 2012.

Mr. Michael Baymiller and Mr. Kenneth P. Huelskamp were appointed as additional directors with effect from July 13, 2012.

Mr. M.K. Sharma, Mr. Adhiraj Sarin and Mr. Milind Sarwate who were appointed as independent directors in the casual vacancies, will hold office up to the ensuing Annual General Meeting and being eligible, offered themselves for re- appointment.

Mr. W. Michael Amick Jr., Mr. Michael Baymiller and Kenneth P. Huelskamp will hold office up to the ensuing Annual General Meeting. The Company has received requisite notices in writing under Section 257 of the Companies Act, 1956 from Members proposing their candidature.

HR Initiatives and Industrial Relations

During the period under review, the Company had taken the following HR initiatives:

- Introduced performance based pay by assessing the performance of the employees through contribution summary assessment forms;

- Encouraged the employees to participate in Global Employee Engagement Survey;

- Completed Compensation Mark-to-Market Survey for aligning the compensation structure with that of the market;

- Introduced medical insurance, personal accident insurance and group term life insurance as part of social security benefits;

- Introduced certain policies like gift policy, new forestry allowances policy and office infrastructure and workplace policy and is in the process of finalizing the other HR related policies;

- Conducted technical, safety and SAP training in co- ordination with the mills'' HR;

- Nominated certain leaders and young and aspiring leaders for week long training at the Leadership Institute, US.

The overall industrial relations at both the Units: Rajahmundry and Kadiyam are harmonious and cordial. The employees and the unions have been cooperating in improving productivity.

All the employees have been motivated to improve safety and environment at workplace and facilitate the management to take pro-active steps/measures in this regard.

Cost Accounting Records

Costing accounting records for the financial year under review were maintained as per Cost Accounting Records Rules. M/s. Narasimha Murthy & Co., Cost Accountants, were appointed as Cost Auditors of the Company with the approval of Central Government to audit the cost accounts for the financial year ended March 31, 2013.

The Cost Audit Report in XBRL form due for filing on February 28, 2013 for the financial year ended December 31, 2011 was filed with the Ministry of Corporate Affairs on January 31, 2013.

The report for the year ended March 31, 2013 will be filed on or before September 27, 2013.

Directors'' Responsibility Statement

Your Directors hereby confirm and declare that:

i. in the preparation of annual accounts for the 15 month period ended March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the 15 month period ended March 31, 2013 and of the loss of the Company for that period;

iii. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they had prepared the accounts for the 15 month period ended March 31, 2013 on a ''going concern'' basis.

Acknowledgements

Your Directors wish to place on record their gratitude to the Central Government and Government of Andhra Pradesh, State Bank of India, Canara Bank, Axis Bank Limited, Citibank N.A., IFC, DEG, BNP Paribas, JPMorgan Chase Bank, and Bank of America N.A., for their continued support during the year.

Your Directors wish to convey their thanks to the valued customers and dealers for their continued patronage during the year. Your Directors also place on record their appreciation of the contribution made by all the employees during the year.

For and on behalf of the Board

Hyderabad W. Michael Amick Jr.

April 23, 2013 Executive Chairman


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the 47th Annual Report and the Audited Accounts for the year ended 31st March, 2011.

Rs. Crore

Financial Results 2010-11 2009-10

Sales and other income 798.62 658.02

Earnings before Interest,

Depreciation and Taxation (EBIDTA) 163.94 153.03

Less: Interest 39.88 32.16

Depreciation 66.97 55.82

Profit before Tax 57.09 65.05

Less: Provision for Tax 12.14 10.86

Profit for the year 44.95 54.19

Add: Profit brought forward

from previous year 69.99 119.61

Profit available for appropriation 114.94 173.80

Appropriations

Transfer to General Reserve 50.00 100.00

Proposed Equity Dividend 3.98 3.27

Corporate Tax on Dividend 0.65 0.54

Balance carried to Balance Sheet 60.31 69.99

114.94 173.80

During the year under review, your Company recorded production of 1,87,233 MT during the year under review as against 1,76,452 MT in the previous year and sales of 1,93,302 MT as compared to 1,77,351 MT in the previous year. The increase in volumes and net sales realization contributed to higher sales value. EBIDTA was Rs.163.94 crore as against Rs.153.03 crore in the corresponding year. However, profitability was affected due to higher input cost, retrospective settlement of wage revision following an agreement with the union of Unit:APPM, higher depreciation cost and interest and finance charges.

Change in the share capital

On 2nd December, 2010, your Company allotted 70,18,242 equity shares of Rs.10 each for cash at a premium of Rs.40 per share aggregating to Rs.3509.12 lakhs by converting equivalent number of Detachable Warrants.

Consequently, the equity share capital has gone up from Rs.32,75,17,970 divided into 3,27,51,797 equity shares of Rs.10 each to Rs.39,77,00,390 divided into 3,97,70,039 equity shares of Rs.10 each. The newly issued equity shares have since been listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

Sale of Promoter Shareholding

On 1st April, 2011, a public announcement was issued by Lazard India Private Limited on behalf of IP Holding Asia Singapore PTE. Limited (Acquirer) along with International Paper Company ('Person Acting in Concert' or PAC) to the equity shareholders of the Company pursuant to Regulations 10, 12 and other applicable provisions of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 offering to acquire 85,67,521 equity shares of Rs.10 each representing 21.54% of the paid-up capital of your Company at Rs.544.20 per share payable in cash. The public announcement was made consequent upon share purchase agreement dated 29th March, 2011 entered into with the promoter group of APPM whereby the acquirer would purchase the entire shareholding of the promoter group in APPM.

The acquirer is a private unlisted company incorporated on 15th September, 2010 under the laws of Singapore and is a subsidiary of IP International Holdings Inc., a subsidiary of International Paper Company. The PAC is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Net sales for the financial year ended 31st December, 2010 were more than USD 25 billion.

After acquisition of shares from the promoter group and the equity shareholders from the public category, the acquirer would be holding 75% of the equity share capital of the Company. Consequently, the Company would become a subsidiary of IP Holding Asia Singapore PTE. Limited.

Dividend

Your Directors are pleased to recommend a dividend of Rupee One per share on 3,97,70,039 Equity Shares of Rs.10 each including 70,18,242 equity shares of Rs.10 each allotted in December, 2010 on conversion of detachable warrants involving an outgo of Rs.462.22 lakhs including Dividend Distribution Tax.

Marketing and exports

Sales for the year were 1,93,302 MT as compared to 1,77,351 MT in the previous year. In 2010-11, paper sales comprised 1,88,569 MT and sale of surplus pulp was 4,733 MT in comparison, paper sales in 2009-10 was 1,52,646 MT and that of pulp was 24,705 MT. Additional quantity resulted from the commissioning of PM 6. However, the complete benefit of the expanded capacity will be derived in the financial year 2011-12.

The Company managed to get a better Net Sales Realization per MT over the previous year partly due to better market conditions and revisions in the price list across all grades and partly due to change in product mix at Unit:CP.

Export volumes were 21,669 MT as against 13,646 MT in the previous year. The Company was not only able to significantly increase quantity, but also able to substantially increase the sales realization per MT over the previous year as well.

Raw material procurement

In the field of social/farm forestry, efforts were made to increase the area under plantation activities in order to meet the demand of pulpwood in tune with the mill development plan. Concerted efforts by APPM have enabled to meet and over come the stiff competition in the catchment for pulpwood procurement.

Raw material resource development

103.70 million quality saplings were developed and distributed during the year 2010-11 covering an area of 15,000 Ha under plantation against development and distribution of 97 million saplings covering an extent of 14,000 Ha during previous 2009- 10 planting year. Research on clonal development has resulted into introduction of high yielding, disease resistant clones and versatile to a wide variety of agro-climatic conditions in inland and coastal areas.

Research and Development initiatives with low cost planting techniques, quality seed material and high yielding, short rotation planting stock have enhanced raw material availability spread over more than 1,15,000 Ha. These benefits are extended to around 41,000 families creating employment resource pool of 57 million man-days especially in rural areas so far.

Forestry targeting marginal and wastelands

The ongoing farm forestry activities focused on agrarian community of small and marginal land holdings which could be better utilised for plantations with minimal investment by adopting low cost planting technology. Wasteland development also geared up by introducing site specific superior clones. Introduction of casuarina hybrid has come out with higher yield ensuring quality raw material to mills and higher returns to farmers.

The mills farm forestry activities have helped in generating the pulpwood requirement to mills and also in sustaining the local needs of farmers by means of generating employment and upliftment of socio-economic conditions of the villagers and tribal communities.

The industries presence in greening waste lands for raw material resources have created a strong network comprising tribal beneficiaries, self help groups, village organizations etc. to fight against poverty and natural disasters.

Projects

Unit:APPM

Paper Machine # 6

Erection of the second hand paper machine of capacity of 67,000 TPA, imported from Germany was completed and commissioned in May 2010. The machine has stabilized.

Two numbers of sheet cutters were received along with the paper machine and installed in conversion unit near mill and were commissioned in August 2010.

In addition, one number synchro duplex sheeter and A4 cutting line were commissioned at SN Palem facility in March 2011.

Export of power

Retrofit of electro static precipitators (ESP) for reduction of emissions and environment in improvement is completed for coal fired boilers No.1 to 5. Electrical front arrangements are also completed to export power up to 8 MW per day.

Construction of D1 tower for DnD sequence

Tower construction and equipment erection was completed. Tower testing, equipment pre-commissioning trials were completed and commissioned in July 2011.

Installation of a new ESP and retrofit of Recovery Boiler # 4

All equipments for ESP are received at site. Erection completed and commissioned in April 2011. Boiler retrofit shall be carried out during November 2011.

Modifications in Paper Machine # 5

New closed hood and PV system, new state of art design steam & condensate system equipment, new ceramic top de-watering elements and new micro travel variable speed high pressure oscillating showers are ordered on reputed suppliers and partly received at site. The modifications of new closed hood & ventilation will be completed during November 2011. All other modifications were completed during April 2011.

Re-winders for PM # 3 and PM # 6

New re-winders are being installed in PM # 6 and PM # 3 to meet the production requirements. The existing Jagenberg re- winder of PM # 6 is being retrofitted and operates at its rated speed. The existing re-winder of PM # 3 will be retrofitted and installed for PM # 2 to meet converting capacity of the machine.

On-line monitoring systems for stacks, ambient air quality and waste water

New on-line monitoring systems are installed for stacks for CF Boiler # 1 to CF Boiler # 6 (for SPM) in July 2011. Installation of on-line monitoring system is in progress for both the lime kilns (for SPM & HS) and Recovery Boiler # 4 (for SPM & HS). Ambient air quality monitoring systems (RSPM, SO2, NOx, and Methyl Mercaptans) are being installed. On-line monitoring systems for waste water (for total organic carbon, dissolved oxygen, temperature and pH) are also being installed.

Unit:CP

Retrofit of De-Inking Plant

All the imported and indigenous equipment were received at site. Erection is completed and commissioned in July 2011.

On-line monitoring systems for stack

New on-line monitoring systems are being installed for stack of CF Boiler # 4 (for SPM). On-line monitoring systems for waste water (for total organic carbon) are being installed.

Awards

The Company received the following awards during the year under review:

i. The Financial Express - Emergent Venture India (FE-EVI) Green Business Leadership Award in pulp and paper Sector for the year 2009-10 for its commitments and continuous improvements towards environment protection, minimizing greenhouse gas emissions through selection of state-of-the-art technologies and bringing awareness about climate change.

ii. IPMA Environment Award 2009-10.

iii. The CII Environmental Best Practices Award 2011 for its commitment and continuous improvements towards environment protection by installing high efficiency and low odour chemical recovery boiler.

Corporate Social Responsibility

Under CSR initiatives, during July 2010, an ambulance was donated to Government Hospital, Rajahmundry. A check dam was constructed (initiated during 2009-10) at Mamidilova Village, near Pendurthi of Visakhapatnam District. This has helped the villages to increase their land productivity, wood yield and their earnings considerably. A sum of ?18.07 lakhs was spent till now towards this initiative. At Venkatanagram village, your Company started operating and maintaining the reverse osmosis plant which was installed in the previous year.

Your Company also initiated road development works at quarry market area of Rajahmundry City.

Summer training facility was extended to engineering/MBA/ ITI/polytechnic students for nearby college students. Over 300 students underwent such training. At Ongole Division, covering five villages, about 800 school bags were distributed to the poor and needy school going children.

A number of eye camps and cataract operations, free supply of spectacles were organized in and around Rajahmundry. Free tailoring and embroidery training facilities were provided to women and youth of weaker section of society through APPM developed training centers. 300 ladies underwent a six months training program, which has helped them to provide financial support to their respective families.

Your Company also continued its support to local social-cultural- religious functions and sports and games events in and around Rajahmundry.

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules, 1988, are given in the Annexure - I attached and forms a part of this Report.

Particulars of employees

The information required under Section 217 (2A) of the Companies Act, 1956 and the rules made there under is provided in the Annexure - II forming part of the Report.

Public deposits

37 deposits totaling Rs.23.60 lakhs due for repayment on or before 31st March, 2011 were not claimed by the depositors as on that date. Deposits aggregating to Rs.22.90 lakhs were refunded upto 31st July, 2011. During the year under review, there was no unclaimed deposit amount which is required to be transferred to Investor Education and Protection Fund.

The provisions of Section 58A of the Companies Act, 1956 have been complied with.

Auditors

M/s. B S R & Co., Chartered Accountants, Hyderabad, Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and, being eligible, have offered themselves for re-appointment.

Directors

Pursuant to Article 142 of the Articles of Association of the Company, Mr. L.N. Bangur and Mr. Rajiv Kapasi will retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Mr. P.R. Ramakrishnan, who was appointed as Director in the casual vacancy caused by the resignation of Mr. R.V. Raghavan, will hold office upto the date of ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

Mrs. Alka Bangur resigned as a Director from the Board of Directors of the Company with effect from 17th May, 2011. The Board placed on record its appreciation of the valuable services rendered by Mrs. Alka Bangur during her tenure as a Director of your Company.

Mr. R. C. Sarin resigned from the Board with effect from 8th August, 2011. Your Directors placed on record their appreciation of the excellent services rendered by him during his association with the Company.

The Board appointed Mr. Paul Brown, nominee of IP Holding Asia Singapore PTE Limited as Additional Director through Circular Resolution with effect from 18th May, 2011. Pursuant to Article 129 of the Articles of Association, Mr. Paul Brown will hold office upto the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

Industrial relations/initiatives

The industrial relations at both the units of the Company have been harmonious and cordial. The employees and unions have been proactive in maintenance of discipline and cooperative in improving productivity. The wage settlement was successfully concluded for Unit:APPM and for Unit:CP.

Employee training and development

Thrust is being continued by providing necessary training in their respective functional areas as well as on safety, management systems, leadership development skills to enhance individual competency to meet the current challenges and improve organizational performance. During the year 2010-11, total training man-hours were 35,977 which worked out to 15 hours per participant.

Cost Accounting Records

Cost accounting records for the year ended 31st March, 2011 were maintained as per Cost Accounting Records Rules. M/s. Narasimha Murthy & Co., Cost Accountants were appointed as Cost Auditors of the Company with the approval of Central Government to audit the cost accounts for the year ended 31st March, 2011.

The cost audit report due for filing on 30th September each year, was filed with the Ministry of Corporate Affairs on 24th August, 2010 for the financial year 2009-10.

The report for 2010-11 will be filed on or before 30th September, 2011.

Directors' Responsibility Statement

Your Directors hereby confirm and declare that:

a. in the preparation of annual accounts for the year ended 31st March, 2011, the applicable Accounting Standards has been followed along with proper explanation relating to material departures as mentioned in Note No. 3 of Schedule No. 20 of the said annual accounts;

b. they had selected such accounting policies and applied them consistently and made judgements 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 i.e. 31st March, 2011 and of the profit of the Company for that period;

c. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they had prepared the accounts for the year ended 31st March, 2011 on a going concern basis.

Response to the Auditors' observation

As regards Auditors' observation vide Item No.3 of the Auditors' Report dated 4th May, 2011 regarding Accounting Standard 22 on Accounting for Taxes on Income, an explanation has been given in Note No. 3 of Schedule No. 20 of the annual accounts for the year ended 31st March, 2011.

Acknowledgements

Your Directors wish to place on record their gratitude to Central Government and the Government of Andhra Pradesh, IFC, DEG, Finnish Fund for Industrial Cooperation Limited, State Bank of India, Canara Bank, IDBI Bank, ICICI Bank and Axis Bank for their continued support during the year. Your Directors also wish to convey their thanks to the valued customers and dealers for their continued patronage during the year. Your Directors also place on record their appreciation of the contribution made by all the employees during the year.

For and on behalf of the Board

Secunderabad L.N. Bangur

8th August, 2011 Executive Chairman








Mar 31, 2010

The Directors have pleasure in presenting the 46th Annual Report and the Audited Accounts for the year ended 31st March, 2010.

Rs. Crore Financial Results 2009-10 2008-09 Sales and other income (after accounting for increase/(decrease) in stocks) 638.92 669.05 Earnings before Interest, Depreciation and Taxation (EBIDTA) 153.03 125.37 Less: Interest 32.16 49.37 Depreciation 55.82 54.11 Profit before Tax 65.05 21.89 Less: Provision for Tax 10.86 2.93 Profit for the year 54.19 18.96 Add: Profit brought forward from previous year 119.61 104.06 Profit available for appropriation 173.80 123.02 Appropriations: Transfer to General Reserve 100.00 1.90 Proposed Equity Dividend 3.27 1.29 Corporate Tax on Dividend 0.54 0.22 Balance carried to Balance Sheet 69.99 119.61 173.80 123.02

During the year under review, your Company achieved the highest ever performance in terms of,

a. Earnings before interest, depreciation and tax (EBIDTA) Rs.153.03 crore

b. Profit before tax (PBT) Rs.65.05 crore and

c. Profit after tax (PAT) Rs.54.19 crore

reflecting operational efficiency and incremental contribution. The increase in performance compared to previous year in terms of EBIDTA was 22%, PBT 197% and PAT 186%.

Change in the share capital

On 30th March, 2010, the Company allotted 70,18,242 Equity Shares of Rs.10 each for cash at a premium of Rs.40 per share aggregating to Rs.3509.12 lakhs on rights basis in the ratio of 3:11 to the equity shareholders and also 70,18,242 detachable warrants simultaneously. These detachable warrants would be converted into Equity Shares at any time before the expiry of eighteen months from the date of allotment i.e. 30th September, 2011 on payment of warrant exercise price of Rs.50 per warrant.

Consequently, the equity share capital had gone up from Rs.25,73,35,550 divided into 2,57,33,555 Equity Shares of

Rs.10 each to Rs.32,75,17,970 divided into 3,27,51,797 Equity Shares of Rs.10 each. The newly issued Equity Shares and Detachable Warrants have since been listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

Dividend

Your Directors are pleased to recommend a dividend of Rupee One per Share on 3,27,51,797 Equity Shares of Rs.10 each including the Equity Shares allotted in March, 2010 involving an outgo of Rs.381.92 lakhs including Dividend Distribution Tax.

Marketing and Exports

Sales for the year were 1,77,351 MT as compared to 1,70,239 MT in the previous year. In 2009-10, paper sales comprised 1,52,646 MT and sale of surplus pulp was 24,705 MT. In comparison, paper sales in 2008-09 was 1,38,630 MT and that of pulp was 31,609 MT. While the slowdown in the economy had limited impact on the volumes, it did have an impact on the price realizations both in the pulp and paper segments.

New Products

In the second half of the year, the Company introduced a new 90+ brightness range of papers in a bid to re-establish and grow our volumes in both copier and graphic papers including Indias first copier with Colour Freeze technology - Copyrite. Apart from this, the other introductions are Reflection a premium grade 70 GSM copier, a high bright paper Andhra Starwhite, high-end writing and printing paper Andhra Primavera, a premium grade Maplitho paper Andhra Royal Silk and a superior special grade paper Andhra Hi Brite SG Maplitho in the surface size segment. Andhra Skytone and Andhra Starliner in the premium non-surface sized category were introduced to primarily cater to the notebook conversion segment. All these products are positioned and benchmarked to the best in competition and have not only been very well received but are also being increasingly demanded by the end customer.

Power Generation

During the year under review, your Company started exporting surplus generated power of 5 MW to Transmission Corporation of Andhra Pradesh Limited resulting in additional revenue of Rs.15 crore.

Raw Material Procurement

In the field of social/farm forestry, efforts were made to increase the area under plantation activities in order to meet the demand of pulpwood in tune with the mill development plan. Concerted efforts by APPM have enabled to meet and overcome the stiff competition in the catchment for pulpwood procurement.

Raw Material Resource Development

97.74 million quality seedlings were developed during the year 2009-10 covering an area of 14,500 hectares under plantation against 95.2 million seedlings covering an extent of 14,000 hectares during the 2008 planting year. Research on clonal development has resulted into introduction of high yielding, disease resistant clones and versatile to a wide variety of agro-climatic conditions in inland and coastal areas.

Research and Development initiatives with low cost planting techniques, quality seed material and high yielding, short rotation planting stock have enhanced raw material availability spread over more than 1 Lakh hectares. These benefits are extended to around 39,000 families creating employment resource pool of 50 million man-days especially in rural areas so far.

Forestry Targeting Marginal and Wastelands

The ongoing farm forestry activities focused on agrarian community of small and marginal land holdings which could be better utilised for plantations with minimal investment by adopting low cost planting technology. Wasteland development also geared up by introducing site specific superior clones. Introduction of Casuarina hybrid has come out with higher yield ensuring quality raw material to mills and higher returns to farmers.

The mills farm forestry activities have helped in generating the pulpwood requirement to mills and also in sustaining the local needs of farmers by means of generating employment and upliftment of socio-economic conditions of the villagers, tribal communities and self-help groups.

Projects implemented

Umt:APPM

Your Company successfully started commercial production from Paper Machine No.6 on 19th May, 2010 at its Unit:APPM at Rajahmundry. Currently, the Voith made machine imported from Salach, Germany has a paper production capacity of 67,000 MTPA of UFS (Uncoated Free Sheet) and Copier Grades. However, with some modifications, the machine can be scaled up to manufacture an additional 20,000 MTPA. With the startup of this machine, your Company now has approximately 250,000 MTPA of Pulp and Paper manufacturing capacity.

The start up of Paper Machine No.6 marks the end of the final phase of the Mill Development Plan worth almost USD 205 million at Unit:APPM. Earlier, your Company had commissioned a 500 Bone Dry Metric Tonnes (BDMT)/day Elementary Chlorine Free (ECF) pulp mill of Andritz make, a 105 TPH coal fired boiler and a 34 MW turbine at the same location. With its new ECF pulp mill, de-inking plant and rice straw pulp mill, your Company is among a handful of fully integrated paper manufacturers in India who are not dependent on market pulp.

Unit:CP

Projects implemented

Sludge de-watering machine

Sludge de-watering press of 35 BD MTPD sludge handling capacity was commissioned on 25th August, 2009 for disposal of sludge. The performance has been satisfactory.

Awards

The Company received the following awards during the year under review:

i. A special award by CAPEXIL (sponsored by Ministry of Commerce & Industry, Government of India) in recognition of outstanding export performance in respect of paper and paperboards for the year 2008-09.

ii. Forest Stewardship Councils (FSC) Chain-of-Custody (C0C) Certificate for responsible sourcing of pulpwood fibre for manufacture of pulp and paper.

iii. First Prize under National category for design and concept of the stall at the International Exhibition and Conference in New Delhi by PAPEREX.

iv. Gold Medal from the Governor of Andhra Pradesh & President - Red Cross Society, AP State Branch for assisting Red Cross Society in mobilising resources for its various humanitarian activities in East Godavari District for the year 2008-09.

Corporate Social Responsibility

The Company installed a Reverse Osmosis plant with a capacity to process 3,000 litres/hr along with a dedicated borewell and water storage tank to hold 20,000 litres to supply safe drinking water to Venkatanagaram Village. Another initiative in the farm-forestry area was the construction of a check dam at Mamidilova near Pendurthi in Visakhapatnam District for enhancing the land productivity through optimum utilization of site resources. With the involvement of the local people and a goal of environment amelioration, the Company has succeeded in the upliftment of socio-economic status of the farmers living in the areas near the dam.

Free tailoring and embroidery training has been provided to women and youth of weaker sections of society through Company developed tailoring centers. 220 ladies underwent a six months training programme, which has helped them to provide financial support to their individual families.

Our Company has also continued its support to local socio- cultural-religious functions and sports & games events in and around Rajahmundry. Activities such as conducting eye camps (Drushtee), assistance for construction of dressing rooms at the newly developed skating ring etc. were initiatives taken in this area.

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules, 1988, are given in the Annexure attached hereto and forms a part of this report.

Particulars of Employees

The information required under Section 217 (2A) of the Companies Act, 1956 and the Rules made thereunder is provided in the Annexure forming part of the Report. However,

in terms of Section 219 (1) (b) (iv) of the Companies Act, this Annual Report is being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company.

Public Deposits

Three deposits totalling Rs.1.05 lakhs due for repayment on or before 31st March, 2010 were not claimed by the depositors as on that date.

During the year under review, there was no unclaimed deposit amount which is required to be transferred to Investor Education and Protection Fund.

Auditors

In view of rotational policy of the Company, Messrs Brahmayya & Co., Chartered Accountants, Visakhapatnam, Auditors of the Company informed that they would not seek re-appointment at the conclusion of the ensuing Annual General Meeting. On the recommendation of the Audit Committee, your Board of Directors decided to propose the appointment of Messrs B S R & Co., Chartered Accountants, Hyderabad as statutory auditors to hold office from 15th July, 2010 being the date of 46th Annual General Meeting till the conclusion of next Annual General Meeting.

The Board placed on record its appreciation of the long association with the outgoing firm of auditors viz. Messrs Brahmayya & Co. and the valuable assistance rendered by them during their tenure as auditors.

Directors

Pursuant to Article 142 of the Articles of Association of the Company, Shri P.J.V. Sarma and Shri P.K. Paul will retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

The Board at the meeting held on 30th January, 2010 decided to re-appoint Ms. Sheetal Bangur as Whole-time Director designated as Director (Commercial) for a further period of five years from 1st April, 2010 subject to approval of shareholders.

Shri R. V. Raghavan, resigned on 14th May, 2010 from the Directorship of the Company. The Board placed on record its appreciation of the valuable services rendered by Shri Raghavan during his tenure as Director of the Company.

The Board at the meeting held on 20th May, 2010 appointed Shri L. N. Bangur, Chairman as Executive Chairman for a period of five years from 27th May, 2010 subject to approval of Members.

Directors Responsibility Statement

Your Directors hereby confirm and declare that:

a. in the preparation of Annual Accounts for the year ended 31st March, 2010, the applicable Accounting Standards had been followed along with proper explanation relating to material departures as mentioned in Note No.10 of Schedule No.19 of the said Annual Accounts;

b. they had selected such accounting policies and applied them consistently and made judgements 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 i.e. 31st March, 2010 and of the profit of the Company for that period;

c. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting the fraud and other irregularities;

d. they had prepared the accounts for the year ended 31st March, 2010 on a going concern basis.

Industrial Relations

Industrial relations during the year under review were cordial.

Employee Training and Development

Thrust has been continued by providing training in their respective functional areas, safety, management systems and behavioral skills to enhance individual competence to meet the current challenges and thereby improve organizational performance. During the year 2009-10, total training manhours were 39,736 which worked out to 6.5 hours per participant.

Cost Accounting Records

Cost accounting records for the year ended 31st March, 2010 were maintained as per Cost Accounting Records Rules. M/s. Narasimha Murthy & Co., Cost Accountants were appointed as Cost Auditors of the Company with the approval of Central Government to audit the cost accounts for the year ended 31st March, 2010.

Response to the Auditors observation

As regards Auditors observation vide Item Nos. 4 (d) and (e) of Auditors Report dated 4th May, 2010 regarding Accounting Standard 22 on Accounting for Taxes on Income, an explanation has been given in Note No.10 of Schedule No.19 of the Annual Accounts for the year ended 31st March, 2010.

Acknowledgements

Your Directors wish to place on record their gratitude to Central Government and the Government of Andhra Pradesh, IFC, DEG, Finnish Fund for Industrial Cooperation Limited, State Bank of India, Canara Bank, IDBI Bank and Axis Bank for their continued support during the year. Your Directors also wish to convey their thanks to the valued customers and dealers for their continued patronage during the year. Your Directors also place on record their appreciation of the contribution made by all the employees during the year.

For and on behalf of the Board

Secunderabad L.N. Bangur 27th May, 2010 Executive Chairman

 
Subscribe now to get personal finance updates in your inbox!