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Directors Report of N R Agarwal Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors hereby present their Twenty Second Annual Report together with Audited Statement of Accounts for the year ended March 31,2015.

FINANCIAL RESULTS

(Rs in Lacs)

Year ended Year ended Particulars March 31,2015 March 31,2014

Revenue from Operations and Other Income 73071.91 54434.25

Finance Costs 3561.32 1151.03

Gross Profit after Finance Costs but 48.80 1101.61 before Depreciation and Taxation

Depreciation 1765.63 1031.07

Profit before Tax and Exceptional Items (1716.83) 70.54

Exceptional Items - -

Profit before Tax and after Exceptional Items (1716.83) 70.54

Provisions for Taxation 0.48 16.37

Deferred Tax 1626.15 8.96

Net Profit for the year (3343.46) 45.21

Balance in Statement of Profit and Loss 8408.03 8362.82

Amount available for Appropriation 5064.58 8408.03

Depreciation on transition to Schedule II of the

Companies Act, 2013 (net of deferred tax) (90.33) -

Balance carried to Balance Sheet 4974.25 8408.03

OVERVIEW OF THE ECONOMY

The industry growth was muted due to economic slowdown and decrease in spending across the board. With gradual improvement in the economy and growth drivers such as changing lifestyles, increasing organized retail and government spending on education in place, the paper and board consumption is bound to increase. However, increased supply in domestic market due to new capacities and cheaper imports from Asean countries at zero duty are likely to pose some challenges in the short term.

The Government envisages GDP growth to accelerate to 8% in FY 16 driven by strengthening macroeconomic fundamentals and implementation of policy reforms recently announced. Reforms currently underway such as GST implementation, Amendment to Land Acquisition Bill, Labour Reforms, etc. are expected to provide the requisite thrust for growth in the medium-term.

FINANCIAL PERFORMANCE

The Company's sales during the year increased to Rs 724.96 Crore (up 34%) from Rs 540.53 Crore in the previous year. The Operating Profit (PBIDT) stood at Rs 36.10 Crore, however, the Company recorded a loss of Rs 17.17 Crore as a result of higher interest and depreciation burden arising from commissioning of Company's new project (Rs 330 Crore) at Sarigam, Gujarat, slower ramp up of production and severe cost increase. Total production at 219,907 tonnes and Sales at 218,455 tonnes represented an increase of 29% and 28% respectively over the previous year. Overall capacity utilization (including new plant) was 87%.

The work on Sarigam Project is completed and Company has already commenced production in the previous year itself. As on March 31, 2015, the Company has incurred capital expenditure of approximately Rs 330 Crore.

EXPORTS

The Company continued to fare well in export markets. During the year, the exports increased to Rs 66.08 Crore (up 47%) from Rs 45.06 Crore in the previous year.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of the report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

There were 4 (Four) meetings of the Board of Directors of the Company during the financial year 2014-15.

DIVIDEND

In view of the loss, the Directors of the Company have not recommended any dividend for the financial year 2014-15.

DIRECTORS & KEY MANGERIAL PERSONNEL

In accordance with provisions of Section 152 of the Companies Act, 2013, Smt. Reena Agarwal, Executive Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for re-appointment.

During the financial year 2014-15, Smt. Reena Agarwal was appointed as an Additional Director of your Company at the meeting of the Board of Directors held on August 8, 2014 and her appointment as the Executive Director was approved by the shareholders at the Annual General Meeting held on September 20, 2014.

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1,2014, the Members approved the appointment of Shri S N Chaturvedi, Shri P Kumar and Shri C R Radhakrishnan as Independent Directors for a term of five years at the Annual General Meeting held on September 20, 2014.

Shri R N Agarwal has been re-appointed as the Managing Director of the Company with effect from August 1,2015 for a further period of three years. The resolution seeking approval of the Members for re-appointment of Shri R N Agarwal has been incorporated in the notice of the forthcoming Annual General Meeting of the Company.

Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1,2014, the appointments of Shri R N Agarwal, Chairman & Managing Director, Shri Raunak Agarwal, Whole Time Director, Shri Gopal Uchil, Chief Financial Officer and Ms. Hemali Shah, Company Secretary & Compliance Officer were formalized as the "Key Managerial Personnel" of the Company.

During the year, the Company also appointed Shri R H K Sinha as the President & CEO, in the category of Key Managerial Personnel of the Company with effect from November 14, 2014.

Ms. Hemali Shah resigned as the Company Secretary & Compliance Officer of the Company, with effect from February 28, 2015. Shri R H K Sinha also resigned as the President & CEO of the Company with effect from May 31,2015. The Board expresses it gratitude to Shri R H K Sinha and Ms. Hemali Shah for the services rendered by them during their tenure with the Company.

Ms. Pooja Daftary has been appointed as the Company Secretary & Compliance Officer with effect from March 1, 2015 and is designated as "Key Managerial Personnel" of the Company.

DECLARATION FROM INDEPENDENT DIRECTORS

Shri S N Chaturvedi, Shri P Kumar and Shri C R Radhakrishnan, Independent Directors, have submitted a declaration that each of them meets the criteria of independence as provided in sub- section (6) of Section 149 of the Act and that there has been no change in the circumstances which may affect their status as Independent Directors during the year. In the opinion of the Board, the Independent Directors possess appropriate balance of skills, experience and knowledge, as required.

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Composition of the Audit Committee has been detailed in the Corporate Governance Report.

VIGIL MECHANISM

In accordance with the provisions of Section 177(9) of the Act and Clause 49 of the Listing Agreement, the Company has adopted a Whistle Blower Policy ("Vigil Mechanism") to provide a mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct. The Policy prescribes adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been so far, denied access to the Audit Committee.

PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board Composition Analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director's appointment or re-appointment is envisaged. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-a-vis the required competencies and meeting potential candidates prior to making recommendations for their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement.

Independence: In accordance with the above criteria, a Director will be considered as an 'Independent Director' if he/ she meets with the criteria for 'Independent Director' as laid down in the Act and Clause 49 of the Listing Agreement.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill-domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong inter-personal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the 'Code for Independent Directors' as outlined in Schedule IV to the Act.

REMUNERATION POLICY

The Board of Directors has formulated a policy which lays down the framework in relation to remuneration of Directors, Key Managerial and Senior Managerial Personnel of the Company pursuant to the provisions of the Act and Clause 49 of the Listing Agreement.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company. The Remuneration Policy of the Company has been annexed as Annexure 1.

EVALUATION OF THE BOARD'S PERFORMANCE

During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest, etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non- Independent Directors was carried out by the Independent Directors.

The Board of Directors expresses its satisfaction with the evaluation process.

DIRECTORS' RESPONSIBILITY STATEMENT

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

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

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

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

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Internal Auditors of the Company conduct Audits of various departments to ensure that the necessary controls are in place. The Audit Committee of the Board reviews these and the Company takes corrective actions whenever needed.

DETAILS OF SUBSIDIARIES / JOINT VENTURES / ASSOCIATES

The Company does not have any subsidiary/ joint ventures/ associates.

EXTRACT OF ANNUAL RETURN

As required under sub Section (3) of Section 92 of the Act, the extract of annual return is enclosed, which forms part of the Directors' Report as Annexure 2.

AUDITORS

(1) Statutory Auditors:

Messrs Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment, they have furnished certificates of their eligibility for re-appointment as required under Companies Act, 2013. Members are requested to consider their re-appointment and authorize the Board of Directors to fix their remuneration.

The Auditors' Report for the financial year ended March 31,2015 does not contain any qualification, reservation or adverse remark.

(2) Secretarial Auditors:

Pursuant to provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed Messrs Parikh & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended March 31,2015. The Secretarial Audit Report is annexed as Annexure 3.

The Secretarial Audit Report for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark. The reasons for unspent amount of CSR expenditure is explained in the Report on Corporate Social Responsibility Activities forming part of this Directors' Report.

(3) Cost Auditors:

Pursuant to the provisions of Section 148 of the Act read with Companies (Audit and Auditors) Rules, 2014, Messrs N. Ritesh & Associates, Cost Accountants, Mumbai have been appointed to conduct Cost Audits for all the units of the Company for the year ending March 31,2016

The due date for filing of the Cost Audit Report for the financial year 2013-14 was September 30, 2014. The Company has filed the Report with the Ministry of Corporate Affairs on the due date i.e. September 30, 2014.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed as Annexure 4.

PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) and Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 5.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public. The Company has repaid all the deposits outstanding as on March 31, 2014 as stipulated under the provisions of Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORY/ JUDICIAL AUTHORITY

There are no significant or material orders passed by any regulator or court that would impact the going concern status of the Company and its future operations.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any investments during the year. The Company has not given any loans or guarantees or provided any security during the year.

RELATED PARTY TRANSACTIONS

Particulars of transactions with related parties, pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and the same forms part of this report as Annexure 6.

All Related Party Transactions are placed before the Audit Committee and the Board for necessary approval.

The Company has adopted a Related Party Transactions Policy and the same is uploaded on the Company's website at the web link: http://www.nrail.com/company policies.html.

RISK MANAGEMENT

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve this key objective, the policy provides for a structured and disciplined approach to Risk Management. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: regulations, competition, business risk, technology obsolescence, investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk, etc.

As a matter of policy, these risks are regularly assessed and appropriate steps are taken to mitigate the same.

CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted a Corporate Social Responsibility Committee which has formulated and recommended to the Board, a Corporate Social Responsibility Policy and the activities to be undertaken by the Company. The policy and the plan has been approved by the Board.

As part of CSR initiatives, your Company has during the financial year 2014-15 undertaken projects in areas of promoting education, preventive health care and sanitation, environmental sustainability and measures for benefits of villagers in rural areas of Vapi.

These projects are in accordance with Schedule VII of the Companies Act, 2013. The Company has spent Rs 10.89 lakhs towards the CSR projects during the financial year 2014-15.

The average net profit of the Company computed as per Section 198 of the Act, for the immediately preceding three financial years was Rs 789.38 lakhs. Hence, the Company was required to spend Rs 15.78 lakhs on CSR activities during the Financial Year 2014-15, being 2% of the average net profits of the three immediately preceding financial years. The Company has an unspent amount of Rs 4.88 lakhs in its CSR spend for the current year, which will be spent in the coming year.

The Report on CSR activities is annexed as Annexure 7.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee is set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under the policy. No complaint was received from any employee during the financial year 2014-15 and hence no such complaint was outstanding as on March 31, 2015 for redressal.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

As required by Clause 49 of the Listing Agreement with the Stock Exchange, the Corporate Governance Report, Management Discussion and Analysis Report, and the Auditor's Certificate regarding compliance with conditions of Corporate Governance, forms part of the Annual Report.

HUMAN RESOURCE

The Company's human resources continue to be its biggest asset. The team has remained as committed as ever and produced results that are considered significant. Quality, quick delivery and focus on resolving customer issues are the hallmark of the team performance. There is a strong focus on TEAM spirit, during the year. Employee relations continue to be cordial.

APPRECIATION

Your Company is grateful to its valued customers for their continuous co-operation and patronizing its products. Sincere appreciation is also due to Financial Institutions and Banks for their continuous co-operation and assistance in meeting the financial requirements of the Company. Your Company would also like to thank its employees, vendors and other service providers for their confidence reposed and cooperation extended to the Company.

Last but not the least, your Directors wish to place on record their warm appreciation for your continuous support and encouragement.

On behalf of the Board of Directors

R N AGARWAL CHAIRMAN & MANAGING DIRECTOR

Mumbai, August 4, 2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 21st Annual Report together with audited statement of accounts for the year ended March 31,2014.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended Year ended Particulars March 31,2014 March 31,2013

Net Sales/Income from Operations and Other Income 54,434.25 51,608.94

Finance Cost 1,151.03 1,035.60

Gross Profit after Finance Costs but before Depreciation and Taxation 1,101.61 1,472.42 Depreciation 1,031.07 945.77

Profit before Tax and Exceptional Items 70.54 526.65

Exceptional Item - -

Profit before Tax and after Exceptional Items 70.54 526.65

Provisions for Taxation 16.37 105.92

Deferred Tax 8.96 (38.45)

Net Profit for the year 45.21 459.19

Balance in Statement of Profit and Loss 8,362.82 7,903.63

Amount available for Appropriation 8,408.03 8,362.82

Balance carried to Balance Sheet 8,408.03 8,362.82

OPERATIONS AND BUSINESS PERFOMANCE

The shrinking operating profit margins, low liquidity, escalating debt cost, increasing competition, an overall suppressed consumer demand and adverse market conditions have become major concern for the Company in the last financial year. Despite of all the financial challenges the operations of the Company were not affected and Your Company has recorded a turnover of Rs. 54,053.02 lacs during 2013-14 against the turnover of Rs. 51,228.84 lacs during 2012-13 registering a growth of 5.51% over the turnover of the previous year.

The Company''s Earnings Before Interest, Depreciation and Tax (EBIDTA) during 2013-14 was Rs. 2,227.73 lacs. However Company''s Profit Before Tax (PBT) during 2013-14 has decreased from Rs. 526.65 lacs to Rs. 70.54 lacs registering a decline of 87%. The Earning per Share also reduced to Rs. 0.27 per share from Rs. 2.70 per share.

EXPANSION AND DEVELOPMENT PLAN

Liveraging a rich experience of over 25 years in the business of manufacturing and marketing various grades of paper, readymade and well-laid infrastructure in terms of land, energy (captive power), water availability, MOEF clearance and skilled resources, your Company has undertaken a landmark expansion by setting-up a 90,000 TPA paper machine for manufacturing Newsprint and Writing Printing at Sarigam, Gujarat State. With a view to reinforce its competitiveness in the market and secure energy availability, the new mill complex has also have a 15 MW Captive Power Plant, providing 100 percent self-reliance.

The project capital cost is optimally funded through a mix of promoter funds and rupee debt. The Sarigam Project commenced Commercial Production on July 21,2014.

EXPORTS

The Company continued to fair well in export markets where the exports increased by 65.44% from Rs. 2,723.36 lacs to Rs. 4505.59 lacs during 2013-14.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

Rainforest Alliance, who is accredited by the FSC, has awarded to the Company the Forest Stewardship Council (FSC) Certification, valid till October 7, 2017. FSC is an international certification and labeling system that guarantees that paper and wood products carrying the FSC label come from environmentally and socially responsible sources.

DEBT RESTRUCTURING

Further to the information furnished in the Directors'' Report for financial year 2012-13, after successful implementation of Corporate Debt Restructuring (CDR) package for its Rupee Term Loans, as approved by CDR EG, the Company has complied and continues to comply with the terms and conditions of CDR package. The Company has opened a Trust and Retention Account (TRA) with Bank of Baroda, Vapi on the terms and conditions set out in Trust and Retention Account Agreement. Further during the year Promoters have infused Rs. 1.20 Crs towards Promoter Contribution into the Company.

DIVIDEND

Considering the financials of the Company for the year 2013-14, the Board of Directors do not find it prudent to recommend any dividend for the FY 2013-14.

AUDITORS

The term of M/s. Chaturvedi & Partners, Chartered Accountants, Mumbai as Statutory Auditors, hold office till the conclusion of this Annual General Meeting and being eligible, they offer themselves for re-appointment. M/s Chaturvedi & Partners, Chartered Accountants, the existing auditors have furnished a certificate, confirming that if reappointed for the financial year 2014-15 their reappointment will be in accordance with Section 139 read with Section 141 of the Companies Act, 2013. You are requested to appoint auditors and to fix their remuneration.

DEPOSITS

During the year under review the Company did not accept any fixed deposits from the public. The Company would repay the deposits as stipulated in the provisions of Companies Act, 2013.

DIRECTORS

Shri Mangilal Suthar resigned as Director of the Company with effect from August 8, 2014. Your directors place on record its appreciation of the valuable service and guidance given by him during the tenure of his directorship with the Company.

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, the Board of Directors in their meeting held on August 8, 2014 appointed Smt. Reena Agarwal, as an Additional Director of the Company with immediate effect and she holds office upto the date of the ensuing Annual General Meeting. The Company has received requisite notice from a member proposing the name of Smt. Reena Agarwal for appointment as a Director of the Company.

As per the provisions of Section 149 of the Act, which has come into force with effect April 1, 2014, an independent director shall hold office for a term upto five consecutive years on the Board of a Company and is not liable to retire by rotation. In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Shri S. N. Chaturvedi, Shri C. R. Radhakrishnan and Shri P Kumar as Independent Directors are being placed before the Members in General Meeting for their approval.

In the opinion of the Board, they fulfill the conditions specified in the Act and the Rules made thereunder for appointment as Independent Directors and are independent of the management.

Appropriate resolutions for their appointment/re-appointment are being placed for approval of the members at AGM.

In accordance with the provisions of the Companies Act, 2013, Shri Raunak Agarwal, Whole Time Director retires by rotation at the Company''s ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Necessary resolutions for the approval of the members of the company for the appointment of and payment of remuneration to Smt. Reena Agarwal as Executive Director and reappointment of and payment of remuneration to Shri Raunak Agarwal pursuant to Section 197 of the Companies Act, 2013 read with Schedule V have been proposed at the ensuing Annual General Meeting.

The brief resume of these directors proposed to be appointed and re-appointed and their relevant information has been furnished in the Corporate Governance Report.

The Board, therefore, recommends their appointment / re-appointment as Directors of the Company.

Necessary resolution is also proposed for the approval of the shareholders to the waiver of excess remuneration paid to Shri. R. N. Agarwal for the FY 2013-14 and to the revision in remuneration payable to Shri R. N. Agarwal with effect from April 1,2014 for the residual period of his tenure upto July 31,2015.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, on the Company''s performance, industry trends and other material changes with respect to the Company is presented in a separate section forming part of this Annual Report.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''A'' to the Directors'' Report.

* Nature of employment is contractual.

* Gross Remuneration includes Salary from April, 2013 to December, 2013, Contribution to Provident Fund and Perquisite chargeable under the Income Tax Act, 1961

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Reports on Corporate Governance, Managing Director''s Certificate and Auditor''s Certificate regarding the compliance of conditions of Corporate Governance form part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed. There are no material departures from prescribed accounting standards;

b) the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

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

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

HUMAN RESOURCE

Your Company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building a competitive work environment. Employee relations continued to be harmonious and cordial at all levels and in all the units of the Company.

ACKNOWLEDGEMENT

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees, shareholders and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the Board of Directors

R N AGARWAL Chairman, Managing Director & CEO

Mumbai, August 8, 2014


Mar 31, 2013

To the Members,

The Directors are pleased to present the 20th Annual Report together with the audited statement of accounts for the financial year ended March 31, 2013.

FINANCIAL RESULTS

(Rs.in lacs)

Particulars Year ended Year ended March 31,2013 March 31,2012

Net Sales/Income from Operations and Other Income 51,608.94 49,694.17

Finance Cost 1,035.60 1,027.74

Gross Profit after Finance Costs but before Depreciation and Taxation 1,472.42 2,662.85

Depreciation 945.77 903.35

Profit before Tax and Exceptional Items 526.65 1,759.50

Exceptional Item

Profit before Tax and after Exceptional Items 526.65 1,759.50

Provisions for Taxation 105.92 356.70

Deferred Tax (38.45) (6.70)

Net Profit for the year 459.19 1,409.50

Balance in Statement of Profit and Loss 7,903.63 6,775.49

Amount available for Appropriation 8,362.82 8,184.99

Appropriation:

Transfer to General Reserve 44.00

Proposed Dividend on Equity Shares 204.23

Corporate Dividend Tax 33.13

Balance carried to Balance Sheet 8,362.82 7,903.63

PERFORMANCE REVIEW AND OPERATIONS

Your Company has recorded a turnover of Rs. 51,228.84 lacs during the year 2012-13, registering a growth of 4% over the turnover of previous year.

However, profit before tax decreased from Rs. 1,759.50 lacs to Rs. 526.65 lacs registering a decline of 70.07 % whereas profit after tax decreased from Rs. 1,409.50 lacs to Rs. 459.19 lacs registering a decline of 67.42%. The Earning Per Share also reduced from Rs. 8.28 per share to Rs. 2.70 per share.

Inspite of recording a better sales number during the financial year 2012-13, the rising interest cost, rise in input cost and slowdown in global economies saw pressure on the Company''s financials during this period.

CORPORATE DEBT RESTRUCTURING

Due to delay in project implementation of the new plant situated at Sarigam, Dist. Umergaon, Gujarat on account of non receipt of approval from Government Authorities, it was necessary to restructure project debts of the Company to ensure that debt servicing can be sustained out of operational cash flows of the Company. To overcome these facilities, the Company embarked on debt restructuring under CDR mechanism. Your Board of Directors at their Board Meeting held on September 21, 2012, therefore took steps to initiate process for availing relief in terms of Restructuring of Advances by Banks / Corporate Debt Restructuring (CDR) Mechanism by making representation to the Lead Bank i.e. Bank of Baroda and got the approval of CDR on March 28, 2013. Under the CDR, certain term loans have been restructured with moratorium in repayment of installments and j certain relief has been provided in the interest.

DIVIDEND

As per the conditions mentioned in the Master Restructuring Agreement of CDR Package as well as constraints by the i Consortium Bankers of the Company, your Directors regret their j inability to propose any dividend for the year 2012-13.

During the year under review, the Company has credited Rs. 2.08 lacs, lying in the unpaid / unclaimed dividend to the Investor Education and Protection Fund (IEPF) pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001.

AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General ¦ Meeting and are eligible for re-appointment as auditors to hold office until the conclusion of the next Annual General Meeting of the Company. The Directors recommend that they be re- I appointed as Statutory Auditors of the Company for the current ; year

COST AUDIT

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, j the Board has appointed M/s. N Ritesh & Associates, Cost j Accountants as the Cost Auditors of the Company for audit of ! cost accounting records of the Company in respect of paper | products for the year ended March 31, 2013.

DEPOSITS

The Company did not accept any fixed deposits from the public and no fixed deposits were outstanding or unclaimed as on March 31, 2013.

DIRECTORS

In accordance with the provisions of Section 256 of the Companies Act, 1956, Shri R Kumar retires by rotation at the Company''s forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment..

Brief resume of the above Director, nature of his experience in specific functional areas and names of the Companies in which he holds Directorships and Membership/Chairmanship of Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange are given in the section on Corporate Governance in the Annual Report.

The Remuneration paid to the Managing Director for the year ended March 31, 2013 crossed the overall limits of the profits due to various internal and external factors. The Board of Directors noted the foregoing and considering the comparative industry standards and significant role played by the Managing Director, the Board felt that the remuneration paid to him was in line with his long experience and expertise and accordingly ratified, confirmed and approved, subject to the approval of the Shareholders and of the Central Government, the payment of remuneration, in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956 and decided to waive the recovery of the excess remuneration paid to him, subject to the approval of the Central Government in this regard.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''A'' to the Directors'' Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Reports on Corporate Governance, Management Discussion and Analysis, Managing Director''s Certificate and Auditor''s Certificate regarding the compliance of conditions of Corporate Governance form part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed.There are no material departures from prescribed accounting standards;

b) the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

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

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

HUMAN RESOURCE

Your Company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building a competitive work environment. Employee relations continued to be harmonious and cordial at all levels and in all the units of the Company.

ACKNOWLEDGEMENT

Your Directors thank all the employees for the sincere efforts, active involvement and devoted services rendered.

Your Directors thank the shareholders of the Company for the confidence reposed in the Management of the Company.

Your Directors place on record their gratitude to the Customers, Suppliers, Company''s Bankers, Financial Institutions and State and Central Governement Authorities for their support and co- operation during the year under review.

For and on behalf of the Board of Directors

R N Agarwal

Chairman, Managing Director and CEO

Mumbai May 30, 2013


Mar 31, 2012

The Directors have pleasure in submitting their Nineteenth Annual Report on the business and operation of the Company along with the Annual Accounts for the year ended on March 31, 2012.

FINANCIAL RESULTS

(Rs in Lacs)

Year ended Year ended

March 31, 2012 March 31,2011

Net Sales/Income from Operations and Other Income 49,694.17 46,999.62

Interest 1,027.74 766.04

Gross Profit after Interest but before Depreciation and Taxation 2,662.85 4,468.59

Depreciation 903.35 848.17

Profit before Tax and Exceptional Items 1,759.50 3,620.42

Exceptional Item - -

Profit before Tax and after Exceptional Items 1,759.50 3,620.42

Provisions for Taxation 356.70 860.16

Deferred Tax (6.70) (29.37)

Net Profit for the year 1,409.50 2,789.64

Balance in Statement of Profit and Loss 6775.49 4501.08

Amount available for Appropriation 8184.99 7290.71 Appropriation:

Transfer to General Reserve 44.00 158.00

Proposed Dividend on Equity Shares 204.23 306.34

Corporate Dividend Tax 33.13 50.88

Balance carried to Balance Sheet 7903.63 6775.49

DIVIDEND

The Directors are pleased to recommend a dividend of Rs 1.20 Per Equity Share [Previous year Rs 1.80 per equity share]. If the dividend, as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on equity shares for the year would be Rs 23,736,028 (including dividend tax).

COMPANY PERFORMANCE

During the financial year ended March 31, 2012 the Company recorded production of 131426 MT of Duplex Board, 7680 MT of Newsprint and 31031 MT of Kraft Paper as against 131106 MT of Duplex Board, 28476 MT of Newsprint and 3402 MT of Kraft Paper in previous financial year. During the year under review, the Company has manufactured Kraft Paper till December, 2011 in its Unit No.II and effective January 1, 2012 the Company has started manufacturing Newsprint.

The Turnover for the financial year under review was Rs 49,260 Lacs as against Rs 46,690 Lacs for the previous financial year. The profit before tax has been reduced to Rs 1,760 Lacs as compared to Rs 3,606 Lacs of the previous year.

During the year, the Company exported Duplex Board and realized Rs 2,405 Lacs, as compared to Rs1,529 Lacs, during the previous year.

FIXED DEPOSITS

As on March 31, 2012 no fixed deposit was due or unclaimed.

COST AUDIT

Pursuant to the directives of the Central Government under the I provisions of Section 233B of the Companies Act, 1956, Company's cost records in respect of Paper products for the year ended March 31, 2012 are being audited by the Cost Auditor M/s. N Ritesh & Associates, Cost Accountants, who were appointed by the Board with the approval of the Central Government.

The due date for filing of the Cost Audit Reports for the financial year 2010-11 was September 30,2011. The Company has filed the Reports with Ministry of Corporate Affairs on September 29, 2011.

FINANCE

The Financial Statements have been prepared as per the revised Schedule VI of the Companies Act, 1956, as notified by the Ministry of Corporate Affairs. Accordingly, previous year's figures have also been regrouped/restated wherever necessary to conform to the classification of the current year.

DIRECTORS

Shri Mangilal Suthar holds office till the date of the forthcoming Annual General Meeting and a notice has been received from a Member proposing the candidature of Shri Mangilal Suthar for being appointed as Director of the Company.

Shri Mangilal Suthar has rich and varied experience of almost 38 years in the field of Accounts, Finance, and Budgeting & Taxation. Shri Mangilal Suthar has been working with N R Agarwal Group Companies since its inception and his valuable expertise will contribute substantially to the overall growth of the organization. Considering his vast experience of 38 years in paper industry, the Board thought prudent to appoint Shri Mangilal Suthar as an Additional Executive Director, Non-Independent of the Company with effect from November 11, 2011.

Shri S N Chaturvedi would retire by rotation at the ensuing Annual General Meeting of the Company and is eligible for reappointment.

Brief resume of the above Directors, nature of their experience in specific functional areas and names of the Companies in which they hold Directorship and Membership/Chairmanship of Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange are given in the section on Corporate Governance in the Annual Report.

DISCLOSURE UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Details of energy conservation and research and development activities undertaken by the Company along with the information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure A to the Directors' Report.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given below.

Sr. Name Age Designation Gross Net Qualification No Remunetion Remunation

1. Shri R N 52 Chairman MD & 13,748,960 7,417,900 BE-Electrical Agarwal CEO MBA



Name Total Date of Last Experience Commencement Employment (in Year) of Employment

Shai R.N Agarwal 22 Since Incorporation - (08.12.1993)

- Nature of employment is contractual. -

- Gross Remuneration includes Salary, Commission, Contribution to Provident Fund and Perquisite chargeable under the Income Tax Act, 1961.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) that the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, the Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment as auditors to hold office until the conclusion of the next Annual General Meeting of the Company. The Directors recommend that they be re-appointed as Auditors of the Company for the current year.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Reports on Corporate Governance, Management Discussion and Analysis, Managing Director's Certificate and Auditor's Certificate regarding the compliance of conditions of Corporate Governance are made part of the Annual Report.

INDUSTRIAL RELATIONS

The Employer - Employee relations at all units of the Company were cordial and harmonious throughout the year under review.

ACKNOWLEDGEMENT

The Board wishes to record its deep appreciation for the exemplary contribution made by the employees at all levels. The Board would also like to express their appreciation for assistance and co-operation received from the Financial Institutions, Banks and various Central and State Government Authorities, Customers, Vendors and Shareholders during the year under the review.

For and on behalf of the Board of Directors

R N AGARWAL

Chairman Managing Director & CEO

Mumbai, May 25, 2012


Mar 31, 2011

To the Members,

The Directors have pleasure in submitting their Eighteenth Annual Report on the business and operation of the Company along with the Annual Accounts for the year ended on March 31, 2011.

FINANCIAL RESULTS

(Rs. in Lacs)

Particulars Year ended Year ended March 31 2011 March 31 2010

Net Sales / Income from Operations and Other Income 48,754.91 39,244.02

Interest 732.42 861.38

Gross Profit After Interest but Before Depreciation and Taxation 4,453.83 2,857.17

Depreciation 848.17 808.53

Profit Before Tax and Exceptional Items 3,605.66 2,048.64

Exceptional Item - 761.80

Profit Before Tax and After Exceptional Items 3,605.66 2,810.44

Provisions for Taxation 860.16 715.00

Deferred Tax (29.37) -

Prior year Adjustments (14.76) 63.37

Net Profit for the year 2,789.63 2,158.81

Balance in Profit and Loss Account 4,501.08 2,858.68

Amount Available for Appropriation 7,290.71 5,017.49

Appropriation:

General Reserve 158.00 158.00

Proposed Dividend 306.34 306.34

Tax on Dividend 50.88 52.06

Balance carried to Balance Sheet 6,775.49 4,501.08

DIVIDEND

The Directors are pleased to recommend a dividend of Rs. 1.80 per equity share (18%) [Previous year Rs. 1.80 per equity share]. If the dividend, as recommended above, is approved by the Members at the Annual General Meeting, the total outflow towards dividend on equity shares for the year would be Rs. 35,722,368 (including dividend tax).

COMPANY PERFORMANCE

During the financial year ended March 31, 2011 the Company recorded production of 131106 MT of Duplex Board, 28476 MT of Newsprint and 3402 MT of Kraft Paper as against 126059 MT of Duplex Board and 31972 MT of Newsprint in previous financial year. During the year under review, the Company has commenced production of Kraft Paper in its Unit No. II.

The turnover for the financial year under review was Rs. 48,328 lacs as against Rs. 38,855 lacs for the previous financial year. As compared to the previous year, there has been a substantial increase in the Net Profit, mainly due to improved sales realization.

During the year/the Company exported Duplex Board and realized Rs. 1,529 lacs, as compared to Rs. 439 lacs, in the previous year.

FIXED DEPOSITS

As on March 31, 2011 no fixed deposit was due or unclaimed.

COST AUDIT

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, Company's cost records in respect of Paper products for the year ended March 31, 2011 are being audited by the Cost Auditor M/s. N Ritesh & Associates, Cost Accountants, who were appointed by the Board with the approval of the Central Government.

The due date for filing of the Cost Audit Reports for the financial year 2009-10 was September 30,2010. The Company has filed the Reports with Ministry of Corporate Affairs on September 29, 2010.

DIRECTORS

Shri C R Radhakrishnan would retire by rotation at the ensuing Annual General Meeting of the Company and is eligible for reappointment.

Brief resume of the above Director, nature of his experience in specific functional areas and names of the companies in which he hold Directorship and Membership/Chairmanship of Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange are given in the section on Corporate Governance in the Annual Report.

DISCLOSURE UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Details of energy conservation and research and development activities undertaken by the Company along with the information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure I to the Directors' Report.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given below.

Sr. Name Age Designation Gross Net No. Remuneration Remuneration

1. Shri R N Agarwal 51 Chairman MD & 18,248,960 15,574,960 CEO

Name Qualifications Total Date of Last Experience Commencement Employ- of Employment ment

Shri R N Agarwal BE-Electrical, 22 Since - MBA Incorporation

-Nature of employment is contractual.

-Gross Remuneration includes Salary, Commission, Contribution to Provident Fund and Perquisite chargeable under the Income Tax Act, 1961.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) that the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, the Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment as auditors to hold office until the conclusion of the next Annual General Meeting of the Company. The Directors recommend that they be re-appointed as Auditors of the Company for the current year.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Report on Corporate Governance, Management Discussion and Analysis, Managing Director's Certificate and Auditor's Certificate regarding the compliance of conditions of Corporate Governance are made part of the Annual Report.

INDUSTRIAL RELATIONS

The Employer - Employee relations at all units of the Company were cordial and harmonious throughout the year under review.

ACKNOWLEDGEMENT

The Board wishes to record its deep appreciation for the exemplary contribution made by the employees at all levels. The Board would also like to express their appreciation for assistance and co-operation received from the Financial Institutions, Banks and various Central and State Government Authorities, Customers, Vendors and Shareholders during the year under the review.

For and on behalf of the Board of Directors

R N AGARWAL Chairman Managing Director & CEO

Mumbai, May 30, 2011

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