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Directors Report of Rainbow Papers Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors' have pleasure in presenting the 29th Annual Report of the Company together with the Audited Accounts for the financial year ended 31st March, 2015.

1. Financial Highlights

The standalone and consolidated financial results of the company for the year ended 31st March, 2015, are as under:

(Rs,in Lacs)

FINANCIAL RESULTS STANDALONE CONSOLIDATED

2014-15 2013-14 2014-15 2013-14

Revenue from Operations 57321 67242 115263 115049

Profit before Exceptional, Extra ordinary items,

Depreciation, Interest & Tax 11537 14237 14590 18044

Depreciation 3899 4787 3899 4787

Profit before Interest & Tax 7638 9450 10691 13257

Interest 7060 6076 7066 6076

Profit before Exceptional & Extraordinary Items & Tax 578 3374 3625 7181

Prior Period items / Exceptional items 33 - 33 -

Taxation: Less/ (Add) Current Tax 109 707 109 707

MAT Credit Entitlement (109) (707) (109) (707)

Deferred Tax (1866) 970 (1866) 970

NET PROFIT AFTER TAX FOR THE YEAR 2444 2404 5524 6211

Add: Balance brought forward 16468 14708 24180 18598

NET SURPLUS AVAILABLE FOR APPROPRIATION 18912 17112 29704 24809

Capital Reserve on Consolidation - - - 15

Proposed Dividend/ Dividend Paid 241 396 241 396

Corporate Tax on Dividend 48 67 48 67

Transfer to General Reserve - 181 - 181

Surplus carried forward to Balance Sheet 18622 16468 29415 24180

EPS (Face Value of Rs. 2 per share)

Basic 2.37 2.43 5.37 6.28

Diluted - 2.27 - 5.85

2. Dividend and its revocation

The Board of Directors has in its meeting held on 29th May, 2015 had recommended dividend of 10% i.e. Rs. 0.20 per Equity Share on 10,62,17,300 Equity Shares of Rs. 2/- each for FY 2014-15, amounting to Rs. 212.43 lacs.

However, the Board of Directors of the Company at its meeting held on 12th August, 2015 has decided to revoke the decision of recommendation of dividend as the Lending Banks / Financial Institutions have not agreed to the request of the Company on such decision. Accordingly, the recommendation of dividend stands revoked.

3. Finance

During the year under review, your Company has converted its outstanding Indian Rupee Term Loan under consortium finance into Non Fund based limits in the form of Export Performance Bank Guarantee Limits (EPBG limits). The total exposure of the said EPBG limits was Rs. 326.23 Crores i.e. US$ 54.372 Mn. considered at a notional rate of Rs. 60.00 per US$.

Under the said arrangement, your company has executed Advance Payment & Supply Agreement (APSA) with an international trading entity M/s Cargill International Trading Pte. Ltd. for export of its goods over next 10 years.

Further, the consortium bankers have sanctioned the EPBG and the validity of this guarantee is initially for a period of 2 years which will be extended by 2 years every time upto a maximum period of 10 years. The value of Bank Guarantee will get reduced gradually on execution of Export Orders. The bank guarantee is issued by Consortium bankers in favour of M/s Cargill International Trading Pte. Ltd. which can be endorsed/ transferred to the International Bankers.

The said EPBG limits have resulted in drastic savings of interest and also your company is not required to pay installments for the said Term Loan on monthly basis.

4. Capacity Expansion

During the year under review, your Company has successfully completed the installation of Folding Duplex Board plant. Post installation of the said plant, the production capacity of the Company has gone up to 4,66,700 MTPA. The production from the said machine is mainly used for the packaging of cosmetics, cigarettes, medicines & electrical appliances etc.

5. Exports & Imports

During the Year under review, your Company has exported 16148.29 MT of paper. The export proceeds amounted to Rs. 6,186 Lacs (being 5.32% of Gross Sales).

Your Company imported 88673.24 MT of waste paper and 496 MT of chemical during the year under review. The imports amounted to Rs. 11508 Lacs of waste paper and Rs. 423 Lacs of chemicals.

6. Subsidiary Company

Your company is having one wholly owned subsidiary company viz. Rainbow Papers JLT, Dubai. The said subsidiary company is engaged in trading of paper and waste paper.

7. Public Deposits

The Company has not accepted or renewed any deposits from the public during the financial year 2014- 15.

8. Human Resources

At the core, our underlying belief is that Human Resource Development is about nurturing human resources and leveraging human capital towards the achievement of business goals. The Company is committed towards development and creation of opportunities for its employees that help in retaining and developing a diversified workforce.

During the year, our focus was on strengthening a conducive work culture for our employees, reinforce health, safety and well-being of employees and also uphold our commitment towards ensuring transparency in business processes. Your organization encourages reporting of unethical / wrong practices and is committed to creating a constructive and open work environment. Further, initiatives were introduced to redefine various policies for employees' empowerment so as to enrich their professional, personal & social life.

During their tenure at the Company, employees are motivated through various skill-development, engagement and volunteering programs.

The Company has an employee strength of 1259 employees as on 31st March, 2015.

9. Corporate Social Responsibility (CSR)

As a part of its CSR, the Company makes concentrated efforts in the fields of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern.

In line with the provisions of the Companies Act, 2013 and rules made there under, Corporate Social Responsibility (CSR) Committee has been formed by the Board of Directors at its meeting held on 12th August, 2014. The Composition of the CSR Committee is as under:

Name of Director Category of Directorship Designation

Shri Ajay Goenka Managing Director Chairperson

Shri Rahul Maheshwari Executive Director Member

Shri Kantibhai Patel Independent Director Member

The details about the CSR policy recommended by the CSR Committee and approved by the Board of Directors, along with other details required as per the Companies Act, 2013 and rules made there under are given in the Annual Report on CSR Activities as an Annexure A to this Report.

10. Environment, Health and Safety

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliance of environmental regulations and preservation of natural resources.

The Company accords the highest priority to Environment, Health and Safety. Your Company continues to be accredited with ISO 9001, ISO 14401, OHSAS 18001.

11. Directors and Key Managerial Personnel

Subsequent to the notification of Section 149 and other applicable provisions of the Companies Act 2013, the shareholders have at the 28th Annual General Meeting of the Company, held on 25th September, 2014, appointed the Independent Directors - Shri Mahendra Patel, Shri Kantibhai Patel, Shri Shashikant Thakar for a term of three consecutive years upto 31st Annual General Meeting of the Company. Smt. Aanal Trivedi has also been appointed for a term of three years up to 31st Annual General Meeting of the Company as Woman Director of the Company. The Shareholders have, in the same meeting, also approved the reappointment of Shri Rahul Maheshwari as Executive Director of the Company w.e.f. 30th August, 2014 for a term of three consecutive years.

Shri Mahendra Patel has resigned from the directorship w.e.f 2nd July, 2015 and Shri Indrasinh B. Zala is appointed as Independent Director of the company in the meeting of Board of Directors of the Company held on 12th August, 2015.

Smt. Aanal Trivedi retires by rotation as Director and being eligible, has offered herself for re- appointment. The Board recommends her re- appointment as director as detailed in the notice convening the Annual General Meeting, subject to approval of the shareholders.

Shri Pankit Shah, Chartered Accountants, has been designated as Chief Financial Officer (CFO) of the Company w.e.f. 12th August, 2014.

12. Composition and number of meetings of the Board

The Board of Directors of the Company comprises of well qualified and experienced persons having expertise in their respective areas. It has appropriate combination of Executive and Non-Executive Directors consisting of one Chairman & Managing Director, one Executive Director, three Independent Director and one Woman Director as required pursuant to Section 149 of the Companies Act, 2013.

The Board meets at regular intervals with gap between two meetings not exceeding 120 days. Additional meetings are held as and when necessary. During the year under review, the Board met 14 times on 17th April, 2014, 22nd May, 2014, 30th May, 2014, 19th June, 2014, 28th June,2014, 12th August, 2014, 24th September, 2014, 16th October, 2014, 14th November,2014, 23rd December, 2014, 7th January, 2015, 29th January, 2015, 14th February, 2015 and 20th March, 2015.

13. Composition of Audit and Risk Management Committee

In compliance with the requirement of Section 177 of the Companies Act, 2013, the Board of Directors has constituted Audit Committee. The members of the Audit Committee possess financial/accounting expertise and exposure. The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements.

The Audit Committee of the Company also carries out the role of Risk Management Committee and hence, it has been renamed as Audit and Risk Management Committee in the Board Meeting held on 12th August, 2014.

The Audit & Risk Management Committee comprises of the Independent Directors of the Company under the Chairmanship of Mr. Shashikant Thakar. The other independent directors of the Committee are Mr. Kantibhai Patel, Mr. Mahendra Patel (up to 2nd July, 2015) and Mr. Indrasinh B. Zala (w.e.f. 12th August, 2015) Statutory Auditors, Internal Auditors and Chief Financial Officer are the permanent invitees at the committee meetings. Company Secretary acts as the Secretary of the Committee.

During the financial year 2014-15, the Audit Committee met 5 times on the following dates: 22nd May, 2014, 30th May, 2014, 12th August, 2014, 14th November,2014 and 14th February, 2015.

The recommendations given by the Audit Committee are considered and reviewed by the members of the Board of the Company. However, there is no such case where the Board dissented or did not accept the recommendation of the Audit Committee.

The Company has established the vigil mechanism through Whistle Blower Policy for all the stakeholders of the Company which also provides for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases as per the Policy.

The Whistle Blower Policy will be applicable to all the stakeholder of the Company, which is an extension of the Code of Business Conduct through which the Company seeks to provide a mechanism for the stakeholders to disclose their concerns and grievances on unethical behavior and improper/illegal practices and wrongful conduct taking place in the Company for appropriate action. The Company shall oversee the vigil mechanism only through the Audit Committee. If any of the members of the Audit Committee have a conflict of interest in a given case, they should excuse themselves and the others in the Committee would deal with the matter on hand.

14. Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, indolence of a director and other matters provided under Sub-section (3) of Section 178

Pursuant to provision of Section 178 of the Companies Act, 2013, as applicable to the Company, the Company has renamed "Remuneration Committee" during the financial year 2014-15 as "Nomination and Remuneration Committee". The Composition of the Nomination & Remuneration Committee is as under:

1. Shri Kantibhai Patel – Independent Director

2. Shri Shashikant Thakar - Independent Director

3. Shri Mahendra Patel - Independent Director (upto 2nd July, 2015)

4. Shri Indrasinh B. Zala (w.e.f. 12th August, 2015) The Committee met on 12th August, 2014.

The Nomination & Remuneration Committee considers the requirement of the skill sets on the Board, integrity of the persons having standing in their respective field/profession and who can effectively contribute to the Company's business and policy decisions, recommend the appointment to the Board for approval.

The Committee has approved a policy with respect to the appointment and remuneration of the Directors and Senior Management personnel. The objectives of this policy are:

(a) to create a transparent system of determining the appropriate level of remuneration throughout all levels of the Company;

(b) encourage people to perform to their highest level;

(c) allow the Company to compete in each relevant employment market;

(d) provide consistency in remuneration throughout the Company;

(e) align the performance of the business with the performance of key individuals and teams within the Company;

(f) long term value creation; and

(g) attract and retain the best professionals.

The policy details about the types of remuneration to be offered by the Company and factors to be considered by the Board, Nomination & Remuneration Committee and management in determining the appropriate remuneration strategy.

15. Board Evaluation

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (SEBI) under Clause 49 of the Listing Agreements ("Clause 49").

The performance of the committee was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

In a separate meeting of the independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.

16. Insurance

The Company's properties including Building, Plant and Machinery, Stocks, Stores, etc., have been adequately insured.

17. Global Depository Receipts

As on date, the entire GDR holding has been converted into Equity Shares. Necessary application has been made on 21st July, 2015 for delisting of GDR's from Luxembourg Stock Exchange.

18. Transfer of Unclaimed Dividend to Investor Education and Protection Fund

In terms of Section 125 of the Companies Act, 2013, the unclaimed dividend aggregating to Rs. 1,45,661/- lying with the Company for a period of seven years pertaining to the year ended on 31st March, 2007, was transferred during the year 2014-15, to the Investor Education and Protection Fund established by the Central Government.

19. Awards and Accolades

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

- Ranked 438 under BW Real 500 rank in Special Issue of Business World dated 17th November, 2014 (451 in 2013).

- Certificate of Appreciation & Certificate of Honour for best Safety Performance for 2014 by Gujarat Safety Council & Directorate of Industrial Safety & Health Government of Gujarat.

- Shrama Ratna Award was given to one employee of the Company and three employees were awarded Prashansapatra for 2014 by Department of Labour Ministry , Government of Gujarat.

20. Information Technology

All the functional areas of your company are working on IT (Information Technology) platform i.e. Planning, Raw Material, Purchase, Finance, Sale, Weight Bridge, Production, HR etc.

We are working with ERP systems, modules and functions. Our entire plant is under observation on CCTV cameras and PA System (Public Announcements) for safety and security purpose.

21. Corporate Governance

Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders expectation. At Rainbow Papers Limited, it is imperative that our company affairs are managed in a fair and trans apparent manner. This is vital to gain and retain the trust of our stakeholders.

As stipulated in Clause 49 of the Listing Agreement, the Management Discussion and Analysis Report and Report on Corporate Governance forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is also annexed to the Directors' Report.

22. Credit Rating

The current Bank Loan rating as assigned by the CARE vide their letter dated 31st March, 2015, is as under:-

Facility Rated Rating Amount (Rs,in Crores)

Long-term Bank Facilities 983.16 BBB

Short-term Bank Facilities 150 A3

Total 1133.16

'BBB' are judged to offer a moderate degree of safety regarding timely servicing of financial obligations.

'A3' indicates moderate degree of safety regarding timely payment of financial obligations.

23. Dematerialization

The Equity shares of the Company are in compulsory demat segment and are available for trading in the depository system of both National Securities Depository Ltd (NSDL) and the Central Depository Services (India) Ltd. (CDSL). 10,52,26,395 nos. of equity shares forming 99.07% of the equity share capital of the Company stands dematerialized on 31st March, 2015.

24. Listing of Shares

The equity shares of the Company are presently listed on the BSE Ltd (BSE) and the National Stock Exchange of India Limited (NSE). The BSE & NSE have nation wide terminals and therefore, shareholders/investors are not facing any difficulty in trading in the shares of the Company from any part of the Country.

The GDR of the Company are listed on Euro MTF Market of Luxembourg Stock Exchange. However, on account of conversion of entire GDR Holding necessary application has been made to Luxembourg Stock Exchange on 21st July, 2015 for delisting of its GDRs'.

Your Company has paid annual listing fees for financial year 2015-16 to BSE and NSE. Annual maintenance and listing agency fee for the calendar year 2015 has also been paid by the Company to Luxembourg Stock Exchange, Luxembourg. Your Company has also paid custodial fees to National Securities Depository Ltd. and Central Depository Services (India) Ltd.

25. Statutory Auditors and their Report

M/s. P A R Y & Co., Chartered Accountants, the Statutory Auditors of the Company who were appointed at the 28th Annual General Meeting to hold office till 33rd Annual General Meeting are subject to ratification. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the rules framed there under for ratification as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 139 (1) of the Companies Act, 2013 read with rules. The Board of Directors recommends their re- appointment.

The Auditors Report does not contain any qualification, reservation or any adverse remark.

26. Internal Auditors

Pursuant to the provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rules, 2014, your Company has appointed M/s Dhanesh B. Khatri & Co., Chartered Accountants, as the Internal Auditors of the Company for conducting internal audit for the financial year 2015-16.

27. Cost Auditors

M/s. V. H. Shah, Cost Accountant, has been appointed as Cost Auditors for the financial year 2015-16 to conduct the cost audit of the accounts maintained by the company. He has confirmed his eligibility for appointment under the provisions of Section 148 of the Companies Act, 2013. The remuneration proposed to be paid to the Cost Auditor is submitted for ratification for approval of the shareholders at the ensuing Annual General Meeting of the Company.

28. Secretarial Audit Report

Pursuant to Section 204 read with Section 134(3) of the Companies Act, 2013, the Board of Directors has appointed M/s. Yogesh Chhunchha & Co., Company Secretaries, Ahmedabad as Secretarial Auditor of the Company for FY 2014-15. The Secretarial Audit Report

provided by M/s Yogesh Chhunchha & Co. is annexed with the Board's report as Annexure B.

29. Directors' Responsibility Statement

In terms of Section 134 (3) of the Companies Act, 2013, in relation to the financial statements for FY 2014-15, the Board of Directors states that:

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

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2015 and of the profits for the year ended 31st March, 2015;

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

d) the financial statements have been prepared on a going concern basis.

e) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

30. Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149

Shri Kantibhai Patel, Shri Mahendra Patel, Shri Shashikant Thakar and Shri Indrasinh B. Zala, Independent Directors of the Company have given their declarations to the Board that they meet the criteria of Independence as provided under the applicable provisions of the Companies Act, 2013 and Listing Agreement.

31. Particulars of Contracts or Arrangements with Related Parties

All the related party transactions were at arm's length basis. They were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement.

All the related party transactions are put forth for the approval of appropriate bodies, as applicable, in compliance with the applicable provisions of the Act. Omnibus approval from the Audit and Risk Management Committee is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit and Risk Management Committee for its review on quarterly basis, specifying the nature, value and terms and conditions of the transaction.

The particulars of contracts/arrangements entered into by the Company with related parties referred to in sub- section (1) of section 188 of the Companies Act, 2013 are annexed to this report as Annexure C.

32. Code of Conduct

The Company has adopted a Code of Business Conduct based on the business principles of the Company. The Board has laid down the code of conduct for all Board members and Senior management of the Company. The code of conduct has been posted on the website of the company. All Board members and Senior management personnel affirms the compliance with the code on an annual basis in the prescribed format.

33. Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has put in place an Anti-Sexual Harassment mechanism in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaint of sexual harassment during the year 2014-15.

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

The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under section 134 of the Companies Act, 2013 read with Companies (Account) Rules, 2014 are given in the Annexure D and forms part of this Directors' Report.

35. Risk Management Policy

The Board of Directors has developed and implemented risk management policy for the Company ensuring that systems of risk management are in place. It has identified and assessed internal and external risks, with potential impact and likelihood, that may impact the Company in achieving its strategic objectives or may threaten its existence. The policy lays down procedures for risk identification, assessment, monitoring, review and reporting.

36. Particulars of Employees

The information required pursuant to Section 197 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided below:

1. The ratio of the remuneration of each director to the median employee's remuneration:

Sr. No. Name of the Director Ratio (Remuneration of Director to Median Remuneration)

1. Ajay R Goenka 13 Times

2. Rahul J Maheshwari 13 times

2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Sr. No Name Designation % increase (incl. sitting fees)

1. Ajay Goenka Managing Director -83.15

2. Rahul Maheshwari Executive Director -5.91

3. Shashikant Thakar Independent Director 5.26

4. Mahendrabhai Patel Independent Director 29.17

5. Kanitibhai Patel Independent Director -52.78

6. Aanal Trivedi Director -

7. Runel Rathi Company Secretary 5.40

8. Pankit Shah CFO -

3. The percentage increase in the median remuneration of employees in the financial year:

- 10% (% increase in the remuneration of median employee as on 31.03.2015)

4. The number of permanent employees on the rolls of company:

1259 employees as on 31st March 2015.

5. Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:

Shri Ajay Goenka (Managing Director), Shri Rahul Maheshwari (Executive Director), have been paid Rs. 1,42,43,243/- and Rs. 25,50,852/- respectively as remuneration during FY 13-14. During the year under review, they were paid Rs. 24,00,000/- each.

6. Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Market BSE NSE

Capitalization

31.3.2015 8,07,25,14,800 7,93,97,43,175

31.3.2014 7,37,81,61,315 7,39,79,55,175

P/E Ratio BSE NSE

31.3.2015 32.07 31.54

31.3.2014 30.68 30.76

percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies.

7. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year:

Average percentage increase is 10% in FY 14-15

8. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company

The increase in the remuneration to the Chief Financial Officer and the Company Secretary was in line with the general increase of 10% for all employees of the Company.

9. The key parameters for any variable component of remuneration availed by the directors: NOT APPLICABLE.

10. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

Sr. Name of the Designation Ratio No. Employee

1. Niyati Agrawal Senior 0.83 Vice President

2. Sangeeta Goenka Senior 0.99 Vice President

11. Affirmation that the remuneration is as per the remuneration policy of the company:

We hereby affirm that the remuneration paid to the Key Managerial Personnel is as per the remuneration policy of the Company.

12. Name of every employee of the company, who-

i. if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees —NIL

ii. if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month— NIL

iii. if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company -NIL

37. Industrial Relations

Industrial Relations remained cordial throughout the year under review. Several industrial relation initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

38. The Extract of the Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 as required under Section 134 (a) of the Companies Act, 2013, is attached as Annexure E to this Report.

39. Appreciation and Acknowledgements

The Board of Directors places on record its appreciation for the continued support and confidence received from its Bankers and employees of the Company.

The Directors are also thankful to all other stakeholders for their valuable sustained support to the Company.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

PLACE: AHMEDABAD AJAY R. GOENKA

DATE : 12th AUGUST, 2015 CHAIRMAN &

MANAGING DIRECTOR


Mar 31, 2014

Dear Members,

The Directors have great pleasure in presenting herewith the 28th Annual Report together with the audited statements for the financial year ended 31st March, 2014.

Financial Highlights:

The standalone and consolidated results of your company for the financial year ended on 31st March, 2014 are summarized herein below:

(Rs. in Lacs) FINANCIAL RESULTS CONSOLIDATED 2013-14 2012-13

Revenue from Operations 115049.27 91548.69 Profit before Exceptional, Extra ordinary items, Depreciation, Interest & Tax 18719.86 13647.56 Depreciation 4786.62 2662.32 Profit before Interest & Tax 13933.24 10985.24 Interest 6752.52 3669.75 Profit before Exceptional & Extraordinary Items & Tax 7180.72 7315.49 Prior Period items/Exceptional items - 12.29 Taxation: Less/(Add) Current Tax 707.16 948.28 MAT Credit Entitlement (707.16) (748.17) Deferred Tax 970.03 1013.67 NET PROFIT AFTERTAX FOR THE YEAR 6210.69 6114.00 Add: Balance brought forward 18598.43 13244.30 NET SURPLUS AVAILABLE FOR APPROPRIATION 24809.12 19358.30 Capital Reserve on Consolidation 15.33 - Proposed Dividend/ Dividend Paid 395.88 418.87* Corporate Tax on Dividend 67.28 71.00 Transfer to General Reserve 181.00 270.00 Surplus carried forward to Balance Sheet 24180.29 18598.43 EPS (Face Value of Rs. 2 per share) Basic 6.28 6.46 Diluted 5.85 6.30

(Rs. in Lacs) FINANCIAL RESULTS STANDALONE 2013-14 2012-13

Revenue from Operations 67241.72 54217.24 Profit before Exceptional, Extra ordinary items, Depreciation, Interest & Tax 14236.90 10675.78 Depreciation 4786.62 2662.31 Profit before Interest & Tax 9450.28 8013.47 Interest 6076.49 3276.29 Profit before Exceptional & Extraordinary Items & Tax 3373.79 4737.18 Prior Period items/Exceptional items - 12.29 Taxation: Less/(Add) Current Tax 707.16 947.80 MAT Credit Entitlement (707.16) (748.17) Deferred Tax 970.03 1013.67 NET PROFIT AFTERTAX FOR THE YEAR 2403.76 3536.16 Add: Balance brought forward 14707.96 11931.68 NET SURPLUS AVAILABLE FOR APPROPRIATION 17111.72 15467.84 Capital Reserve on Consolidation - - Proposed Dividend/ Dividend Paid 395.88 418.87* Corporate Tax on Dividend 67.28 71.00 Transfer to General Reserve 181.00 270.00 Surplus carried forward to Balance Sheet 16467.56 14707.96 EPS (Face Value of Rs. 2 per share) Basic 2.43 3.74 Diluted 2.27 3.64

*Previous figures have regrouped/rearranged wherever necessary.

Dividend:

Your Directors are pleased to recommend a Dividend @ Rs. 0.40 per Equity Share (previous year Rs. 0.40 per Equity Share) on the face value of Rs. 2/- each for the year ended 31st March, 2014.

The dividend, subject to approval of members at the Annual General Meeting on 25th September, 2014, will be paid on or after 30th September, 2014 to the Members whose names appear in the Register of Members, as on the date of book closure i.e. from 19th September, 2014 to 25th September, 2014 (inclusive of both dates). The total dividend payout for the financial year will be Rs. 424.86 Lacs and the Dividend Distribution Tax of Rs. 72.21 Lacs which includes the divided for new equity shares allotted during the year. The new equity shares allotted on conversion of warrants, before the record date are entitled for dividend and the total dividend amount may be increased to that extent.

Transfer to Reserves

A sum of Rs. 181.00 Lacs is proposed to be transferred to the General Reserves out of the total amount available for appropriations. An amount of Rs. 24180.29 Lacs is proposed to be retained in the statement of profit and loss.

Share Capital

Your Company has allotted 75,00,000 Equity Shares at Rs. 81/ - per share in three tranches at different dates on conversion of warrants. Post conversion, the issued and paid up capital of the company stands at Rs. 21,24,34,600/- as on 12th August, 2014.

Review of Operations:

The brief highlights of the consolidated results of the Company during the year are as under:

. Your company has achieved total production of 1,71,898.47 MT as compared to 1,49,251.23 MT in the previous year recording yoy growth of 16%.

. Your company has recorded Gross Sales of Rs. 1161.4Crores as compared to Rs. 921.4 Crores for FY13, recording a yoy growth of 26%.

. The EBITDA for the financial year 2013-14 is Rs. 187.2 Crores compared to Rs. 136.5 Crores during the previous year, registering a growth of 37% yoy.

. The Net Profit is at Rs. 62.2 Crores compared to Rs. 61.1 Crores last year, generating a yoy growth of 2%.

Subsidiary Companies:

Your company is having one wholly owned subsidiary company viz. Rainbow Papers JLT, Dubai. The said subsidiary company is engaged in trading business of paper.

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss, Directors'' Report, Auditors'' Report etc. of the subsidiary companies are not attached with the Annual Report of your company.

The annual accounts of your Company''s subsidiaries as stated above and the related information shall be made available to the shareholders of the Company and its subsidiaries upon receipt of a request from them. Such statements shall also be kept open for inspection at the Registered Office of your Company during business hours.

Capacity expansion:

During the year under review, your Company has successfully completed the mill modernization project and installation of Notebook & Copier Paper plant. With this the total production capacity of the Company has gone up by 29,700 MT making the total capacity as 3,34,700 MTPA.

The project pertaining to installation of Folding Duplex Board is under progress. The proposed capacity of said plant is 132,000 MTPA. The plant is expected to be commissioned by the end of Financial Year 2015. The production from the said machine shall be used in the packaging of cosmetics, cigarettes, medicines, electrical appliances, etc.

Post installation of folding duplex board, the production capacity will be 4,66,700 MTPA by the end of F.Y. 2015.

Finance:

Your Company maintained cordial relationships with its bankers and was able to avail and negotiate favorable terms for various banking facilities.

"Zero Discharge" Strategy:

Along with backward integration, the Company has also adopted "Zero Discharge" strategy which not only improves operational efficiency but also augments earning margins. The following are the major areas forming part of this strategy:

- Efficient plant layout and different product mix allows better utilization of raw material.

- Sludge from paper plant used as raw material in paper board.

- Plastics obtained in waste -paper is converted into rooftop-corrugated sheets.

These by-products improve operating efficiency and augment earning margins.

Exports:

Your Company exported 22,222.24 MT of paper during the year under review. The export proceeds amounted to Rs. 8,354 Lacs (being 8% of Gross Sales) as compared to Rs. 9,245 Lacs during the previous year.

The main contributors for the satisfactory export performance were increased focus on export market development and product quality that matched the international standards.

With firm commitments and through sustained efforts, your Company continues to maintain good rapport with global customers. Our quality products and timely delivery have found wide acceptance in the highly competitive international market.

The Company has a strong presence in the international markets such as USA, Middle East, South-Africa and UK and exports nearly 20% of its production in these countries. The Company also has a wholly-owned subsidiary, Rainbow papers JLT, which is based in Dubai, UAE. Rainbow Papers Ltd. has been a consistent exporter of paper and also one of the leading exporter from India in the last few years.

Board of Directors:

During the year under review, Shri Rajendra Patawari resigned from the board w.e.f 21st October, 2013. The board places on record appreciation for the services rendered by him as a director of the company.

Under the provisions of the Companies Act, 2013, the Board of Directors at its meeting held on 12th August, 2014, had re-appointed Shri Rahul Maheshwari as Executive Director of the Company for a period of 3 years w.e.f. 30th August, 2014 subject to approval of members in General Meeting.

Shri Ajay Goenka, Managing Director of the Company is liable to retire by rotation at this Annual General Meeting and being eligible offers himself for re-appointment.

Shri Mahendrabhai Patel and Mrs. Aanal Trivedi had been appointed as additional directors on the Board of the Company on 21st October, 2013 and 12th August, 2014 respectively. In terms of Section 161 of the Companies Act, 2013, Shri Mahendrabhai Patel and Smt. Aanal Trivedi hold office upto the ensuing Annual General Meeting of the Company. Your Company has received requisite notices in writing from the member proposing their names for the office of Director.

As per the provisions of the Companies Act, 2013, Independent Directors are required to be appointed for a maximum term of five consecutive years and shall not be liable to retire by rotation. Accordingly, resolutions proposing appointment of Independent Directors form part of the Notice of the Annual General Meeting. The Board therefore proposes the appointment of Shri Kantibhai Patel, Shri Mahendrabhai Patel, Shri Shashikant Thakar and Smt. Aanal Trivedi as Independent Directors on the Board of the Company for consecutive period of 3 years commencing from the ensuing Annual General Meeting of the Company upto 31st Annual General Meeting of the Company. As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief profile of the Directors proposed to be re-appointed, nature of their expertise specific functional areas, names of companies in which they hold directorships and memberships/chairmanships of the Board Committees and shareholding are provided in the Report on Corporate Governance forming part of the Annual Report.

Directors'' ResponsibiIity Statement:

Pursuant to the requirements under Sub Section 2AA of Section 217 of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed:-

(1) that in the preparation of Annual Accounts, the applicable Accounting Standards (AS) have been followed along with the proper explanation relating to material departures, if any.

(2) that the Directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Profit for the year ended on that date.

(3) that the Directors to the best of their knowledge and ability have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(4) that the annual accounts have been prepared on a going concern basis.

Audit Committee:

Pursuant to the provisions of Section 292A of the Companies Act, 1956, the Board of Directors of the Company has constituted a committee of Board of Directors as Audit Committee which now consists of the following members:

1. Shri Shashikant Thakar : Chairman & Independent Director

2. Shri Mahendra Patel : Independent Director

3. Shri Kantibhai Patel : Independent Director

Audit Committee has such powers and authority as provided under the provisions of the Companies Act, 1956 as well as the Companies Act, 2013 and the rules made thereunder and Listing Agreement and acts in accordance with the terms of reference specified in writing by the Board of Directors from time to time.

Fixed Deposits:

The Company has not accepted any fixed deposits and as such, no amount of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Insurance: The Company''s properties including Building, Plant and Machinery, Stocks, Stores, etc., have been adequately insured.

Global Depository Receipts:

The total no. of GDRs outstanding for conversion as on date are 2,86,39,725.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund:

In terms of Section 125 of the Companies Act, 2013, the unclaimed dividend aggregating to Rs. 1,45,280/- lying with the Company for a period of seven years pertaining to the year ended on 31st March, 2006, was transferred during the year 2013-14, to the Investor Education and Protection Fund established by the Central Government.

Infrastructure:

The manufacturing facility of the Company is located approximately 40 kms from Ahmedabad, 350 kms from Mundra Port & 550 kms from N hava Sheva Port, thus offering good logistical advantage. It not only ensures steady raw material supply of imported waste paper but also provides easy access to global markets like Middle East, Africa, thus providing a boost to its export business. Apart from this, the Company also saves on freight cost within India which sometimes forms a major portion of the total cost.

Besides, one of the critical inputs for paper production is uninterrupted power supply. Disrupted power supply not only hampers production but also impact client manufacturing process, thus affecting the relationship. Hence, in order to ensure quality power supply, your Company has set up a 35MW captive power plant which is sufficient for the total capacity of 4,66,700 MTPA.

Awards and Accolades:

Your company has received the following awards during the year under review:

. "Excellent Achievement Award"has been conferred to our CMD, Shri Ajay Goenka at Paperex 2013 towards outstanding contribution to the growth and development of the pulp and paper industry in the country sponsored and supported by the Indian Paper Industry and co-sponsored by the Ministry of Industry & Commerce, Ministry of Small Scale Industry, Govt. of India, TAPPI, CPPRI-lndia, IIPTA-lndia etc.

. Your Company has been ranked as 108 under the India''s fastest growing mid-sized companies by Inc. India 500 for the year 2013 during the fifth Inc. India 500Awards. We were ranked as 272 for the year 2012.

. Your Company has won the Gujarat State Safety Award 2012 during the 35th Annual Safety conference. The award consists of "Certificate of Honour & Appreciation" from Gujarat Safety Council Vadodara, Directorate of Industrial Safety & Health Gujarat State.

. Your Company has been awarded Certificate of Excellence in recognition of smart innovation by Inc. India Innovative 100 for 2013.

. Your Company has received the Special Award in recognition of outstanding export performance in respect of Paper and Paper Board by CAPEXIL for the fourth consecutive year.

. Your company is ranked as 582 for 2013 in Business Standard (BS1000).

. Two employees of our company - Mr. Mukesh Kantilal Patel and Ms. Javanikaben Arvindbhai Patel have been conferred with Shram Bhusan and Shram Devi Award 2013 respectively by Labour and Employment Department, Government of Gujarat.

. "Excellence Award for Best Boiler House Operator" in Gujarat State Steamtech has been awarded to one of our employees Mr. Anil K. Patel.

. Your Company has been declared as a winner of Quality Mark Awards 2014 under the category Gujarat Pioneer Industries.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and 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 are set out in an annexure to this report.

Particulars of Employees:

The information required as per Section 217 (2A) of the Companies Act, 1956 and the rules made thereunder in respect of employees of the Company, is provided in annexure forming part of this report.

Corporate Governance: The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as set out by SEBI.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

A requisite certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49, is attached to this report.

Information Technology:

Most of the functional areas of your company are working on IT (Information Technology) platform. To name a few of them: Planning, Raw Material, Purchase, Finance, Sale, Weight Bridge, Production, HR etc.

We are working with live ERP systems, modules and functions. Our entire plant is under observation on CCTV cameras and PA System (Public Announcements) for safety and security purpose.

Environment and Safety:

The Company is conscious of the importance of environmentally clean and safe operations. The Company''s policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances, environmental regulations and preservation of natural resources.

Corporate Social Responsibility:

Over the years, we have been striving to achieve a fine balance of economic, environmental and social imperatives, while also playing attention to the needs and expectations of our internal as well as external stakeholders.

Pursuant to the provisions of Section 135 of the Companies Act, 2013, our Board of Directors at its meeting held on 12th August, 2014, have constituted Corporate Social Responsibility (CSR) Committee of the Board of Directors consisting of the following members:

1. Shri Ajay Goenka - Managing Director

2. Shri Rahul Maheshwari - Executive Director

3. Shri Kantibhai Patel - Independent Director

Accreditations & Certifications:

Your Company continues to hold the following:

a) ISO 9001 / ISO 14001 Accreditation

Your Company''s Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Company''s Environmental Management System continues to enjoy "IS014001 "accreditation.

b) OHSAS 18001 Certification

Your Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which isan International Standard which facilitates management of Occupational Health and Safety risks associated with the business of the organization.

c) Star Export House

Your Company is recognized and awarded as "Star Export House" by Director General of Foreign Trade, New Delhi.

d) Forest Stewardship Council (FSC) Certification

Scientific Certification Systems (SCS), who is accredited by the FSC, has awarded to your Company, the Forest Stewardship Council (FSC) Certification, valid till May, 2015. 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.

Credit Rating:

The current Bank Loan rating as assigned by the CARE is as under:-

Facility Rated Amount Rating (Rs. in crores)

Long-term Bank Facilities 850 BBB-

Short-term Bank Facilities 150 A3

Total 1000

BBB-'' are judged to offer a moderate degree of safety regarding timely servicing of financial obligations.

''A3'' indicates moderate degree of safety regarding timely payment of financial obligations.

Dematerialization:

The Equity shares of the Company are in compulsory demat segment and are available for trading in the depository system of both National Securities Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL). 9,79,43,395 Equity Shares forming 98.96% of the Equity Share capital of the Company stands dematerialized on 31st March, 2014.

Listing of Shares:

The equity shares of the Company are presently listed on the BSE Ltd. (BSE) and the National Stock Exchange of India Ltd. (NSE). The BSE & NSE have nation wide terminals and therefore, shareholders/investors are not facing any difficulty in trading in the shares of the Company from any part of the Country.

The GDRs'' of the Company are listed on Euro MTF Market of Luxembourg Stock Exchange.

Your Company has paid annual listing fees for financial year 2014-2015 to BSE and NSE. Annual maintenance and listing agency fee for the calendar year 2014 has also been paid by the Company to Luxembourg Stock Exchange, Luxembourg. Your Company has also paid custodial fees to National Securities Depository Ltd. and Central Depository Services (India) Ltd.

Statutory Auditors & Auditors'' Report:

M/s. Talati &Talati, had tendered their resignation pursuant to the provisions of Section 140 of the Companies Act, 2013. The said casual vacancy was filled by the appointment of M/s. P A R Y & Co., Chartered Accountants as the Statutory Auditors of the Company by the Board of Directors in its meeting held on 22nd May, 2014. They have conducted the audit for the financial year 2013-14 and they shall hold office till the conclusion of the ensuing Annual General Meeting and are eligible for appointment.

The notes to the Accounts referred to in the Auditors'' Report of M/s. P A R Y & Co., Chartered Accountants, Ahmedabad, are self explanatory and therefore do not call for any further explanation under Section 134 of the Companies Act, 2013.

Industrial Relations:

Industrial Relations remained cordial throughout the year under review. Several industrial relation initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

Appreciations and Acknowledgements:

Your Directors wish to place on record their appreciation for the contribution made by the employees at all levels without whose hard work, and support, your Company''s achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

PLACE : AHMEDABAD AJAY R. GOENKA DATE : 12th AUGUST, 2014 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2013

To, The Members of RAINBOW PAPERS LIMITED, AHMEDABAD

The Directors have great pleasure in presenting herewith the 27th Annual Report together with the audited statements for the financial year ended 31st March, 2013.

Financial Highlights:

The standalone and consolidated results of your company forthe financial year ended on 31st March, 2013 are summarized herein below:

(Rs. in Lacs)

FINANCIAL RESULTS CONSOLIDATED STANDALONE 2012-13 2011-12 2012-13 2011-12

Revenue from Operations 91548.69 61077.64 54217.24 45987.62

Profit before Exceptional, Extra ordinary items,

Depreciation, Interest & Tax 13647.56 10942.36 10675.78 9548.98

Depreciation 2662.32 2570.45 2662.31 2570.45

Profit before Interest &Tax 10985.24 8371.91 8013.47 6978.53

Interest 3669.75 2911.85 3276.29 2858.91

Profit before Exceptional & Extraordinary Items & Tax 7315.49 5460.06 4737.18 4119.62

Prior Period items / Exceptional items 12.29 (3.76) 12.29 (3.76)

Taxation: Less/(Add) Current Tax 948.28 864.15 947.80 851.73

MAT Credit Entitlement (748.17) (318.84) (748.16) (318.84)

Deferred Tax 1013.67 306.74 1013.67 306.74

NET PROFIT AFTERTAX FORTHEYEAR 6114.00 4604.25 3536.16 3276.25

Add: Balance brought forward 13244.31 9344.03 11931.69 9344.08

NETSURPLUS AVAILABLE FOR APPROPRIATION 19358.31 13948.28 15467.85 12620.33

Capital Reserve on Consolidation 15.33

Proposed Dividend/ Dividend Paid 418.87* 380.87 418.87* 380.87

Corporate Tax on Dividend 71.01 61.77 71.01 61.77

Transfer to General Reserve 270.00 246.00 270.00 246.00

Surplus carried forward to Balance Sheet 18598.43 13244.31 14707.96 11931.69 EPS (Face Value ofRs. 2 per share)

Basic 6.46 5.14 3.74 3.66

Diluted 6.30 4.95 3.64 3.52 -includes Rs. 24 Lacs paid as dividend on conversion of 60,00,000 warrants into equity shares before record date in 2012 but after approval of Annual accounts.

*Previous figures have regrouped/rearranged wherever necessary.

Dividend:

Based on Company''s performance, your Directors are pleased to recommend a Dividend @ Rs. 0.40 per Equity Share (previous year Rs. 0.40 per Equity Share) on the face value off 2/- each for the financial year 2012-13 on 9,87,17,300 equity shares of the Company. The dividend, if approved by the members would involve a total cash outflow ofRs. 394.87 Lacs and the dividend tax ofRs. 67.11 Lacs. Any new equity shares allotted on conversion of warrants, if any before the record date shall also be entitled for dividend and the total dividend amount may increase to that extent.

Transfer to Reserves

A sum ofRs. 270 Lacs is proposed to be transferred to the

General Reserves out of the total amount available for appropriations. An amount of Rs. 18598 Lacs is proposed to be retained in the statement of profit and loss.

Share Capital

The Board of Directors at its meeting held on 20th December 2012 had allotted 90,00,000 Convertible Warrants to one of the Promoters Group Company at Rs. 81/- per warrant to be convertible into Equity shares within a maximum period of 18 months from the date of allotment. Out of the said 90,00,000 convertible warrants, 15,00,000 Warrants have been opted for conversion into equity shares on March 30, 2013.

Review of Operations:

The brief highlights of the consolidated results of the Company during the year are as under:

- Your company has achieved total production of

1,49,251.23 MT as compared to 1,39,596 MT in the previous year.

- Your company has recorded Gross Sales of Rs. 921.4 Crores as compared to Rs. 613.3 Crores for FY12, a yoy growth of 50%.

- TheEBITDAforthef,nancialyear20l2-l3isRs.136.5 Crores compared to Rs. 109.4Crores last year, registering a growth of 25% yoy.

- The Net Profit is at Rs. 61.1 Crores compared to Rs. 46.1

Crores last year, a yoy growth of 33%.

Subsidiary Companies

Your company was having two wholly owned subsidiary companies viz. Rainbow Papers JLT, Dubai and Rainbow Infrabuild Private Limited, India. Both the Companies were engaged in trading of paper. The Board of Directors in its Board meeting held on 9th May,20l3,has decided to disinvest the equity share holding of the company in M/s. Rainbow Infrabuild Pvt. Ltd. at fair market value as the company intends to set up the Box Board Project in M/s. Rainbow Papers Ltd itself, instead of the subsidiary.

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss, Directors'' Report, Auditors'' Report etc. of the subsidiary companies are not attached with the Annual Report of your company.

The annual accounts of your Company''s subsidiaries as stated above and the related information shall be made available to the shareholders of the Company and its subsidiaries upon receipt of a request from them. Such statements shall also be kept open for inspection at the Registered Office of your Company and its subsidiaries during business hours.

Capacity expansion:

The present production capacity of the Company is 3,05,000 MT per annum which is utilized to manufacture among the existing product range certain other value added products such as Copier paper,Maplitho,Glazed paper, LWC, Coated

Paper etc.

Your company is further implementing ongoing expansion projects to enhance the production capacityfrom 3,05,000

MTPAto 4,66,700 MTPA.Thesaid production capacity will be enhanced by commissioning ofthe following projects:

a) Folding Duplex Board Project

Your Company has planned to install PM-9 Machine with a capacity of 132,000 MTPA at an approximate Cost ofRs. 480 Crores.The production from the said machine shall be used in the packaging of cosmetics, cigarettes, medicines, electrical appliances, etc. The plant is expected to be commissioned by Financial Year 2015.

b) Mill Modernization and Production of Notebooks & Copier Paper

Existing PM4, PM5 and PM7 will be modernized to enhance the net capacity by 29,700 MTPA. The Costs for the Modernization isn50Crores.Themodernization project is expected to be completed by financial year 2014. The company is making entry in value added Consumer Products segment by manufacturing of Notebooks and Copier Papers under"Rainbow"brand. The annual production capacity for Notebooks will be 20,000 MTPA and for Copier Paper will be 7,500 MTPA.

"Zero Discharge" Strategy:

Along with backward integration, the Company hasalso"Zero Discharge" strategy which not only improves operational efficiency but also augments earning margins. The following are the major areas forming part of this strategy:

- Efficient plant layout & different product mix allows better utilization of raw-materials.

- Innovative ideas & approaches towards productive usage of by-products.

The Company is manufacturing bricks out of the Fly ash generated as by product of plant. The residual waste segregated from imported waste paper is utilized for manufacturing laminated sheets.

Finance:

The Company was able to arrange finance at competitive rates inspite of challenging market environment to meet its funds requirement for expansion programme and working capital for day to day functioning. During the year under review, the consortium bankers of the Company have sanctioned additional term loan of Rs.369Croresforits ongoing expansion programme.

As in the past, the Company maintained cordial relationships with its bankers and was able to avail and negotiate favorable terms for various banking facilities.

Exports:

Your Company exported 25,798.73 MT of paper during the

year under review.The export proceeds amounted to Rs. 9,245

Lacs (being 10.03%of Gross Sales) as compared toRs. 10,991 Lacs during the previous year.

The main contributors for the satisfactory export performance were increased focus on export market development and product quality that matched the international standards.

With firm commitments and through sustained efforts, your Company continues to maintain good rapport with global customers. Our quality products and timely delivery have found wide acceptance in the highly competitive international market.

Our products are being exported across the globe, to name a few among them are Africa, Middle East, South East Asia, U.S.A., U.K., France, Indonesia, Sri Lanka, Egypt and Bangladesh. With the clear aim and determined focus, your Company looks forward to explore some more untapped international markets.

Imports:

Your Company imported 62,602.30 MT of waste paper and 218.67 MT of chemical during the year under review.

The imports amounted to Rs. 8047 Lacs of waste paper and Rs. 101 Lacs of chemicals as compared to Rs. 7210 Lacs of waste paper and Rs. 129 Lacs of chemicals respectively in the previous year.

Board of Directors:

Shri Kantibhai Patel and Shri Rahul Maheshwari, Directors of the Company are due to retire by rotation at this Annual General Meeting and being eligible offer themselves for re-appointment.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief piofileofthe Directors proposed to be re-appointed, nature of their expertise specific functional areas, names of companies in which they hold directorships and memberships/chairmanships of the Board Committees and shareholding are provided in the Report on Corporate Governance forming partofthe Annual Report.

Directors'' Responsibility Statement:

Pursuant to the requirements under Sub Section 2AA of Section 217of the Companies Act, 1956,with respect to the Directors'' Responsibility Statement, it is hereby confirmed:-

(1) that in the preparation of Annual Accounts, the applicable Accounting Standards (AS) have been followed along with the proper explanation relating to material departures, if any.

(2) thatthe Directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at31*March,2013and ofthe Profitforthe year ended on that date.

(3) thatthe Directorstothebestof their knowledge and ability have 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.

(4) thatthe Directors have prepared the Annual Accounts have been prepared on a "going concern basis".

Audit Committee:

Pursuant to the provisions of Section 292A of the Companies Act, 1956, the Board of Directors of the Company has constituted a committee of Board of Directors as Audit Committee which now consists ofthe following members:

1. Shri Shashikant N.Thakar: Chairman & Independent

Director

2. ShriRajendra Patawari : Independent Director

3. ShriKantibhaiPatel : Independent Director

Audit Committee has such powers and authority as provided under the aforesaid provisions and acts in accordance with the terms of reference specified in writing by the Board of Directors from time to time.

Fixed Deposits:

Your Company has not invited or accepted any fixed deposits from public in terms of provisions of Section 58-A of the Companies Act, 1956read with the Companies (Acceptance of Deposits) Rules, 1975and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

Insurance:

The Company''s properties including Building, Plant and Machinery, Stocks, Stores, etc., have been adequately insured. Global Depository Receipts:

As on 31st March, 2013, total 2,86,39,725 number of GDRs are outstanding for conversion.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund:

In terms of Section 205C of the Companies Act, 1956, the unclaimed dividend aggregating to Rs. 2,04,609/- lying with the Company for a period of seven years pertaining to the year ended on 31 "March, 2005, was transferred during the year 2012-13, to the Investor Education and Protection Fund established bythe Central Government.

Infrastructure:

The manufacturing facility of the Company is located approximately 40 kms from Ahmedabad, 350 kms from Mundra Port & 550 kms from Nhava Sheva Port, thus offering good logistical advantage. It not only ensures steady raw material supply of imported waste paper but also provides easy access to global markets like Middle East and Africa, thus providing a boost to its export business. Apart from this, the Company also saves on freight cost within India which sometimes forms a major portion of the total cost.

Besides, one of the critical inputs for paper production is uninterrupted power supply. Disrupted power supply not only hampers production but also impact client manufacturing process, thus affecting the relationship. Hence in order to ensure quality power suppl y, your Company has set up a 35MW captive power plant which is sufficient for the total capacity of 4,66,700 MTPA

Awards and Accolades:

Your company has received the following awards during the year under review:

- Two employees of our company - Mr.Tushar Patel and Mrs. Amitaben Patel have been conferred with Shram Ratna Award 2012 by Labour Ministry, Government of Gujarat.

¦ 272 Rank under the India''s fastest growing midsized companies by Inc. India 500 for the year 2012 during the Fourth Inc. India 500 Awards.

¦ Emerging Corporate India in Manufacturing Sector by SMEChamberof India.

¦ The Promoters of the Company ranked 261 as per Business World in its rating "The Rich List 2013". We were ranked as 349 in 2012 for the same.

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

The particulars as prescribed under section 217 [1] (e) of the Companies Act, 1956 read with Rule 2 of the Companies [Disclosure of particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure''A''forming partofthis Report.

Particulars of Employees:

The information required as per Sub- Section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors'' Report for the year ended 31* March, 2013 is enclosed and it is forming part of the Report.

Corporate Governance:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The

Company has also implemented several best Corporate Governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under

Clause 49 of the Listing Agreement forms part of the Annual Report.

A requisite certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of

Corporate Governance, as stipulated under clause 49, is attached to this report.

Information Technology:

Most ofthe functional areas of your company are working on IT (Information Technology) platform, to name a few:

Planning, Raw Material, Purchase, Finance, Sale, Weight Bridge, Production, HR etc.

We are working with live ERP systems, modules and functions. Our entire plant is under observation on CCTV cameras and PA System (Public Announcements) for safety and security purpose.

Occupation, Health and Safety Policy:

The Company has in place Occupational Health & Safety Policy which focuses on people, technology and facilities, supported by Management commitment as the prime driver. A dedicated

Safety ManagementTeam is working towards the prevention of Man, Machine and Material incidents at the corporate and manufacturing units level, and towards education and motivation of the employees on various aspects of Health, Safety and Environment through training programmes and seminars. The Company holds certificates on Integrated Management Systems of ISO 14001 (Environmental Management Systems) and BS OHSAS 18001 (Health and Safety).The Company recognizes its human force as the most important asset and is deeply committed to providing a safe and healthy working environment for its employees.

Corporate Social Responsibility:

During the year under review, the company had donated TV and Video CD player for the purpose of education and effective communication to Jhulasan, Vadu and RajpurGram Panchayats in Mehsana District which is nearby to the factory premises for the benefit of children studying in various schools inthe said area.

Further, the company had organized Blood Donation camp in coordinationwithTerapanthSevaSamiteeandmorethan 100 bottles was donated. The company has also conducted free medical checkup camps for the natives in the nearby vicinity.

Your Company celebrated various festivals like Ganesh Mahotsav, Independence Day etc. wherein awards were given to the Workers of the Company for encouraging productivity and efficiency at Factory and create harmonious industrial relations, sense of unity and brotherhood among local residents staying in surrounding area.

Your company has also made representation to the State authorities and the work for broadening of the road from Rajpur to Jhulasan has been approved bythe Government, which will ease out the local dwellers and school authorities hardships and facilitate smooth transportation and create accident free area by placing the Traffic Boards forthe safety and security of school going children as well as general public at large in the said area.

Quality Initiatives:

We continue our journey of delivering value to our clients through significant investments in quality programs. We have adopted several external benchmarks and certifications. Your Company is certified under various standards to meet clients'' requirements and enhancing valuable delivery.

Accreditations & Certifications:

Your Company continues to holdthe following:

a) ISO 9001 /IS014001 Accreditation

Your Companys Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Company''s Environmental Management System continues to enjoy"IS01400 V accreditation.

b) OHSAS18001 Certification

Your Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an International Standard which facilitates management of Occupational Health and Safety risks associated with the business of the organization.

c) Star Export House

Your Company is recognized and awarded as "Star Export House" by Director General of Foreign Trade, New Delhi.

d) Forest Stewardship Council (FSC) Certification

Scientific Certification Systems (SCS), who is accredited by the FSC, has awarded to your Company, the Forest Stewardship Council (FSC) Certification, valid till May, 2015.FSC is an international certification and labeling system that guarantees that paper and wood products carrying the FSC label come form environmentally and socially responsible sources.

Credit Rating:

The current Bank Loan rating as assigned by the CRISIL is as under-

Facility Rated Amount Rating (Rs.in lacs)

Cash Credit 11105 BBB /Negative

Term Loan 85345 BBB /Negative

LC & Bank Guarantee 7650 A2

Total 104100

''A2'' indicates strong degree of safety regarding timely payment of financialob''igations and there is low credit risk.

''BBB ''are judged to offer a moderate safety with regard to timely payment offinancial obligationsforthe present.

Cost Auditors:

As perthe Companies (Cost Accounting Records) Rules 2011, the Company filed the Cost Audit Report along with Cost Compliance Report for the financial year 2011-12 in XBRL format.

The board of directors, subject to the approval of the Central Government, re-appointed Mr. V.H. Shah, Cost Accountant, as a Cost Auditor for conducting the Cost Audit for the financial year 2013-14. The audit committee of directors recommended hisre-appointment.

The Company has also received a letter form the Cost Auditor, stating that the appointment, if made, will be within limits prescribed under Section 224(1B) of the Companies Act, 1956

Dematerialization:

The Equity shares of the Company are in compulsory demat segment and are available for trading in the depository system of both National Securities Depository Ltd (NSDL) and the Central Depository Services (India) Ltd. (CDSL). 9,76,69,395 nos. of equity shares forming 98.94% of the equity share capital of the Company stands dematerialized on 31st March, 2013.

Listing of Shares:

The equity shares of the Company are presently listed on the BSE Ltd. and the National Stock Exchange of India Limited (NSE). The BSE & NSE have nation wide terminals and therefore,shareholders/investorsare not facing any difficulty in trading in the shares of the Company from any part of the Country.

The GDRs'' of the Company are listed on Euro MTF Market of Luxembourg Stock Exchange

Your Company has paid annual listing fees for financial year 2013-2014toBSEand NSEAnnual maintenance and listing agency fee for the calendar year 2013 has been paid by the Companyto Luxembourg Stock Exchange, Luxembourg. Your Company has also paid custodial fees to National Securities Depository Ltd. and Central Depository Services (India) Ltd.

Statutory Auditors:

M/s.Talati&Talati,Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a letter from the Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

Auditors'' Report:

The notes to the Accounts referred to in the Auditors'' Report of M/s.Talati &Talati, Chartered Accountants, Ahmedabad, are self explanatory and therefore do not call for any further explanation under Section 217(3) of the Companies Act, 1956.

Industrial Relations:

Industrial Relations remained cordial throughout the year under review. Several industrial relation Initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

Appreciations and Acknowledgements:

Your directors wish to express their sincere appreciation of the valuable support and guidance provided by the Stock

Exchanges and other Regulatory bodies.

Your Directors also take this opportunity to acknowledge the continued assistance and co-operation received from

Banks, Government Agencies and the Shareholders.

Your Directors also wish to place on record their appreciation for the valuable services rendered and the commitment displayed by the employees of the Company and look forward to their continued support in the future as well.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

PLACE : AHMEDABAD AJAY R. GOENKA

DATE : 9th MAY, 2013 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2012

To, The Members of RAINBOW PAPERS LIMITED,

The Directors have great pleasure in presenting herewith the 26th Annual Report together with the audited statements for the financial year ended 31st March, 2012.

Financial Highlights:

The standalone and consolidated results of your company for the financial year ended on 31st March, 2012 are summarized herein below:

(Rs. In Lacs)

FINANCIAL RESULTS CONSOLIDATED STANDALONE 2011-12* 2011-12 2010-11

Revenue from Operations 61078 45988 39572

Profit before Exceptional, Extraordinary Item &

Depreciation, Interest & Tax 10888 9495 9089

Depreciation 2570 2570 2780

Profit before Interest & Tax 8318 6925 6309

Interest 2858 2805 1759

Profit before Exceptional & Extraordinary Items & Tax 5460 4120 4550

Prior Period Items / Exceptional Items (4) (4) (6)

Taxation: Less/ (Add) Current Tax 864 852 930

MAT Credit Entitlement (319) (319) (756)

Deferred Tax 307 307 660

NET PROFIT AFTER TAX FOR THE YEAR 4604 3276 3710

Add: Balance brought forward 9344 9344 6340

NET SURPLUS AVAILABLE FOR APPROPRIATION 13948 12620 10050

Capital Reserve on Consolidation 15 - -

Proposed Dividend / Dividend paid 381 381 349

Corporate Tax on Dividend 62 62 57

Transfer to General Reserve 246 246 300

Surplus carried forward to Balance Sheet 13244 11931 9344

EPS (Face Value of Rs. 2 per share)

Basic 5.14 3.66 4.25

Diluted 4.95 3.52 4.25

* Two wholly owned subsidiaries viz 1. Rainbow Papers JLT, Dubai 2. Rainbow Infrabuild Private Limited, India, incorporated in F.Y. 2011-12 only, therefore previous year consolidated figures are not given.

Dividend:

Your Directors are pleased to recommend a Dividend @ Rs. 0.40 per Equity Share (previous year 10.40 per Equity Share) on the face value of Rs.2/- each for the financial year 2011-12. The payment of the aforesaid dividend is subject to approval of the members at the 26th Annual General Meeting of the Company and shall be paid to those members whose names appear in the Register of Members on 21st September, 2012, being the record date and in respect of Equity Shares held in dematerialized form, it will be paid to the members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on 21st September, 2012.

The total dividend payout for the financial year 2011-12 is of Rs.442.66 Lacs (previous year: Rs.405.47 Lacs) including dividend distribution tax of Rs.161.79 Lacs (previous year: Rs.56.60 Lacs).

Transfer to Reserves

Your Company proposes to transfer a sum of Rs.246 Lacs to the General Reserves out of the total amount available for appropriations. An amount of 113244 Lacs is proposed to be retained in the statement of Profit and Loss.

Share Capital

During the year under review your company has made allotment of 40,00,000 equity shares of Rs.2/- each at Rs. 61/- per share and 60,00,000 convertible warrants of Rs.61/- each convertible into 60,00,000 equity shares of Rs.2/- each (convertible within a period of 18 months).

Review of Operations:

The brief highlights of operations of the Company during the year areas under:

-The Company has achieved total production of 1,39,596 MT as compared to 1,37,497 MT in the previous year. d The Company has recorded total revenue from operations of Rs.61078 lacs (including trading turnover of Rs. 16088 lacs) as compared to Rs.39572 lacs in the previous year, showing an year on year a growth of 54.35 % in the sales turnover. d The Company has earned Profit after Tax of Rs. 4604 lacs compared to Rs. 3710 lacs in the previous financial year recording an increase of 24.09%.

- The net worth of the Company was recorded to be Rs. 33009 lacs as on 31st March, 2012 in comparison to the net worth in the previous financial year of 128501 lacs. d The Company has earned EBIDTA margin of Rs.10888 lacs as compared to Rs.9089 lacs in the previous year.

Subsidiary Companies:

During the year under review, your company has incorporated two wholly owned subsidiary companies under the name of M/s Rainbow Papers JLT, Dubai and M/s Rainbow Infrabuild Private Limited, India.

Rainbow Papers JLT, Dubai has started trading business of paper and recycled waste paper whereas Rainbow Infrabuild Private Limited, India is engaged in trading of paper.

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss, Directors' Report, Auditors' Report etc. of the subsidiary companies are not attached with this Annual Report of your company.

The annual accounts of your Company's subsidiaries as stated above and the related information shall be made available to shareholders of your Company and its subsidiaries upon receipt of a request from them. They will also be kept open for inspection at the Registered Office of your Company and its subsidiaries during business hours.

Capacity expansion:

The present production capacity of the Company is 3,05,000 MTPA which is utilized to manufacture among the existing product range certain other value added products such as Copier paper, Maplitho, Glazed paper, LWC, Coated Paper etc.

Your company is further proposing to enhance the production capacity from 3,05,000 MTPA to 4,66,700 MTPA. The said production capacity will be enhanced by installing following proposed projects:

a) Folding Duplex Board with production capacity of 132,000 MTPA

Your company is planning to install a new machine to manufacture folding duplex board with a capacity 1,32,000 MTPA. The total Cost of the Project is Rs. 480 Crores out of which debt portion is approximately Rs.294 Crores and balance to be funded from Internal Accruals and Fresh Equity infusion. The said new product will enable the company to cater to high margin packaging segment used for packaging of cosmetics, cigarettes, medicines, electrical appliances & products, etc

b) Mill Modernization with production capacity of 29,700 MTPA

Some of the existing paper machines of the company will be modernized to enhance the net production capacity by 29,700 MTPA. The estimated Project Cost for the said project is t 150 Crores out of which debt portion is approximately Rs.75 Crores and balance to be funded from Internal Accruals and Fresh Equity infusion. The Mill modernization project will not only increase the production capacity but also improve the quality of products of the Company.

c) Production of Notebooks & Copier Paper

The company is also planning to make its entry in value added Consumer products segment by manufacturing of Notebooks and Copier paper under the brand name of "Rainbow".

Out of the total production capacity of 4,66,700 MTPA, notebooks and copier paper will contribute 20,000 MTPA and 7,500 MTPA respectively. The company is planning to penetrate, through building distributorship network initially in states of Gujarat, Maharashtra & Rajasthan. The company is currently evaluating market potential.

Finance:

During the year under review, the Company has serviced all its debt payment and interest obligations on the respective due dates. In order to meet the proposed cost of expansion programme, your company has approached the consortium bankers for funding its project of setting up of folding duplex board and mill modernization with a total project cost of Rs. 630 Crores wherein total debt portion will be around Rs. 369 Crores and balance through Internal Accruals and Fresh Equity infusion. The proposal is under active consideration with the bankers and financial closure shall be concluded shortly.

Exports:

Your Company exported 30,302 MT of paper during the year under review. The exports accounted to 17.92% of gross sales. The exports proceeds amounted to Rs. 10,991 Lacs as compared to Rs. 10,488 Lacs during the previous year.

Your Company was honored with the special award in recognition of its outstanding export performance in respect of paper and paper board for the year 2010-11 by CAPEXIL. This award has been received by the Company for the 3rd consecutive year.

Your Company has been awarded as the 3rd Highest Exporter at ICD-Sabarmati by M/s. Container Corporation of India Ltd. for the year 2010-11.

With firm commitments and through sustained efforts, your Company continues to maintain good rapport with global customers. Our quality products and timely delivery have found wide acceptance in the highly competitive international market.

Our products are being exported across the globe. During the year, your Company has successfully exported its products to various countries such as Africa, Middle East, South East Asia, U.S.A., U.K., France, Indonesia, Sri Lanka, Egypt and Bangladesh. With the Company's clear aim and determined focus, your Company looks forward to explore more untapped markets such as Mauritius, Philippines and Latin America.

Imports:

Your Company imported 54,278 MT of waste paper and 231.2 MT of chemical during the year under review. Your Company has been awarded as 1st largest importer at ICD, Ahmedabad by "Container Corporation of India Ltd" for year 2010-11 for the 3rd consecutive year.

The imports amounted to Rs. 7210 Lacs of waste paper and Rs. 129 Lacs of chemicals as compared to Rs. 8939 Lacs of waste paper and Rs. 259 Lacs of chemicals respectively in the previous year.

Directors:

During the year under review, Shri Bhaskar Bhatt and Shri Manish Bagadia resigned from the board w.e.f 5th October, 2011 and 30th August, 2011 respectively. The board places on record appreciation for the services rendered by them as directors of the company.

Shri Shashikant N. Thakar, Director is liable to retire by rotation under Article No. 150 of Articles of Association of the Company and being eligible offers himself for reappointment.

Directors' Responsibility Statement:

Pursuant to the requirements under Sub Section 2AA of Section 217 of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, it is hereby confirmed:-

(1) that in the preparation of Annual Accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any.

(2) that the Directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the Profit for the year ended on that date.

(3) that the Directors to the best of their knowledge and ability have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(4) that the Directors have prepared the Annual Accounts on a "going concern basis".

Audit Committee:

Pursuant to the provisions of Section 292A of the Companies Act, 1956, the Board of Directors of the Company has constituted a committee of Board of Directors as Audit Committee consisting of the following members:

Shri Shashikant N. Thakar :Chairman &

Independent Director

Shri Rajendra Patawari independent Director

Shri Bhasker Bhatt

(upto05.10.2011) independent Director Shri Kantibhai Patel

(w.e.f 12.11.2011) independent Director

Audit Committee has such powers and authority as provided under the aforesaid provisions and acts in accordance with the terms of reference specified in writing by the Board of Directors from time to time.

Fixed Deposits:

Your Company has not invited or accepted any fixed deposits from public in terms of provisions of Section 58-A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

Insurance:

The Company's properties including Building, Plant and Machinery, Stocks, Stores, etc., have been adequately insured.

Global Depository Receipts:

As on 31st March, 2012, total 2,88,89,725 number of GDRs are outstanding for conversion.

Transfer to Investor Education and Protection Fund:

Your Company sends letters to all shareholders whose dividends are unclaimed so as to ensure that they receive their rightful dues. Efforts are also made in co-ordination with the Registrar to locate the shareholders who have not claimed their dues.

During the year under review, pursuant to provisions of Section 205C(2) of the Companies Act, 1956, your Company has transferred a sum of Rs. 73,506/- for the financial year 2003-04 to Investor Education and Protection Fund, which was due & payable and has remained unclaimed and unpaid for a period of seven years, after sending reminder letters to such shareholders.

Infrastructure:

Your Company is well equipped with latest infrastructure and plant and machinery as required for smooth and efficient running of the plant. The plant is located at Village: Rajpur at a distance of approximately 500 mtrs from the State Highway and has access to the latest infrastructure facilities such as developed roads, power supply, water, availability of labour- skilled & semi skilled. Your company is also having adequate land which is sufficient for the existing plant as well as for the future expansions.

Your Company has installed three tube wells within the plant which caters to overall requirement of water. Further, Narmada Canal is also passing nearby the factory site. Necessary application has been made by the company to avail the water supply and approval of the same is awaited.

Awards and Accolades:

Your company has received the following awards during the year under review:

- Your Company has been awarded as the 1st Highest Importer for the 3rd consecutive year at ICD-Sabarmati by M/s. Container Corporation of India Ltd. for the year 2010-11.

- Your Company has been awarded as the 3rd Highest Exporter at ICD-Sabarmati by M/s. Container Corporation of India Ltd. for the year 2010-11.

- Your Company has also received the Special Award in recognition of its outstanding export performance in respect of Paper and Paper Board by CAPEXIL for the third consecutive year.

- Your Company has been upgraded by the Dalai Street from Small Cap to Mid Cap and Rainbow has been ranked as 208th among top400 Mid Cap Companies in India.

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

The particulars as prescribed under section 217 [1] (e) of the Companies Act, 1956 read with Rule 2 of the Companies [Disclosure of particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure 'A' forming part of this Report.

Particulars of Employees:

The information required as per Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors' Report for the year ended 31st March, 2012 is enclosed and it is forming part of the balance sheet.

Corporate Governance:

The Company is committed to maintain the highest standards of Corporate Governance.

Your Company continues to comply with the requirements enshrined in clause 49 of the Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, forms part of this report.

Information Technology:

Most of the functional areas of your company are working on IT (Information Technology) platform, to name a few: Planning, Raw Material, Purchase, Finance, Sale, Weight Bridge, Production, HR etc.

Our entire plant is under observation on CCTV cameras and PA System (Public Announcements) for safety and security purpose.

Health, Safety, Security and Environment:

Rainbow Papers Limited has always been emphasizing for achieving better environmental conditions at work place. From time to time various initiatives have been undertaken such as plantation, installation of latest technological equipments to reduce waste generation and to recycle and reuse the waste materials to the maximum possible extent. The mill development programme undertaken by the Company is an extension of your Company's commitment to further better our environment.

The Company takes pride in providing a healthy and safe operating environment for its employees. It is a recycled based paper unit which uses the waste paper as raw material for manufacturing its finished product. Thus, saving the forests which is already in scarcity. Constant efforts are made to conserve natural resources. During the year, the Company was able to further reduce its energy and water consumption per unit by installing new energy meters. The Company deploys eco-friendly technology to provide a safe and clean environment in its neighborhood. It has installed efficient Effluent Treatment Plants in order to protect the environment. Adequate measures are also taken for the safety of the workmen working at the plant by providing them helmets, safety belts etc.

Corporate Social Responsibility:

Corporate Social Responsibility (CSR) continues to assume an important role in the activities of the Company. It encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business. RPL, has generously donated having object for the social up liftment of the economically backward people.

The Company is also making bye-products out of its recycled activities by making Waste Fiber Sheets (WFS) used in various applications such as packing material , roofing, waste baskets and flower pots and Fly Ash Bricks of suitable strength and quality accepted and well acclaimed in the Civil Works. The Company is also making presentation to government authorities for better infrastructural facilities in the areas in the vicinity of Company's works / factory.

The Company has set up a new division under the name of "Rainbow Institute of Technology & Research" (RITR), for imparting training relating to paper and power projects.

The said institution is having motto of providing skilled training for technical up gradation for the ITI, Diploma and Degree Engineering students to enhance their ability and shop floor level skill development. This will be the value addition in their scope of work and provide employment opportunity at considerable higher remuneration in the competitive field. The Company envisages starting the activities of the same probably by end of December2012.

Quality:

In today's global competition and open economy, quality plays a vital role in marketing the products and stay ahead of others. Therefore, great emphasis is given to manufacturing products that meet high standards of quality in the global market and customer satisfaction.

Proactive efforts are directed towards determining customers' requirements and achieving all-round customer satisfaction. This is primarily achieved through automated systems (reducing manual handling to minimum), high attention to complaint resolution, online communication and information exchange, quality circles etc.

Your Company has installed latest Quality plus System which ensures and controls the Quality of its product.

Certifications:

Your Company holds various accreditation as under:

a) ISO9001/ISO 14001 Accreditation

Your Company's Quality Management Systems continue to be covered by the "ISO 9001 " accreditation. Company's Environmental Management System continues to enjoy "ISO 14001" accreditation.

b) OHSAS18001 Certification

Your Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an International Standard which facilitates management of Occupational Health and Safety risks associated with the business of the organization.

c) Star Export House

Your company is recognized and awarded as "Star Export House" by Director General of Foreign Trade, New Delhi.

d) FSC-COC certification

Your Company has been accredited with FSC- COC certification (Forest Stewardship Council-Chain of Custody).

Credit Rating:

The current Bank Loan rating as assigned by the CRISIL is as under:- Facility Rated Rating Amount (Rs. in lacs)

Cash Credit 11105 BBB /Stable

Term Loan 31369 BBB /Stable

LC&Bank Guarantee 7650 P2

Total 50124

'P2' indicates that the degree of safety regarding timely payment on the instrument is strong.

'BBB ' are judged to offera moderate safety with regard to timely payment of financial obligations for the present.

Cost Auditors:

Pursuant to Section 233-Bof the Companies Act, 1956, the Central Government has mandated the Cost Audit of cost accounts relating to Paper every year. Shri V.H. Shah, Cost Accountant, Ahmedabad has been appointed as Cost Auditor for the year 2012-13. The Cost Audit Report for the year 2011-12 will be submitted to the Central Government before the due date.

Dematerialization:

The shares of the Company are in compulsory demat segment and are available for trading in the depository system of both National Securities Depository Ltd (NSDL) and the Central Depository Services (India) Ltd (CDSL). As on 31st March 2012, 9,01,43,395 nos. of equity shares forming 98.82% of the equity share capital of the Company stands dematerialized.

Listing of Shares:

The equity shares of the Company are presently listed on the Bombay Stock Exchange Limited, (BSE) and National Stock Exchange of India Limited (NSE). The BSE & NSE have nation wide terminals and therefore, shareholders/investors are not facing any difficulty in trading in the shares of the Company from any part of the Country.

The GDR of the Company are listed on Euro MTF Market of Luxembourg Stock Exchange

Your Company has paid annual listing fees for financial year 2012-2013 to BSE and NSE. Annual maintenance and listing agency fee for the calendar year 2012 has been paid by the Company to Luxembourg Stock Exchange, Luxembourg. Your Company has also paid custodial fees to National Securities Depository Ltd. and Central Depository Services (India) Ltd.

Statutory Auditors:

The Auditors, M/s. Talati & Talati, Chartered Accountants, Ahmedabad, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re- appointment. A Certificate from the Auditors has been received to the effect that their re- appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

Auditor's Report:

The notes to the Accounts referred to in the Auditors' Report of M/s. Talati & Talati, Chartered Accountants, Ahmedabad, are self explanatory and therefore do not call for any further explanation under Section 217 (3) of the Companies Act, 1956.

Industrial Relations:

Industrial Relations remained cordial throughout the year under review. Several industrial relation initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

Appreciations and Acknowledgements:

Your directors wish to place on record their deep appreciation for the contribution made by employees at all levels without whose hard work, solidarity and support, your Company's achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the company.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

PLACE: AHMEDABAD AJAY R. GOENKA

DATE : 24th MAY, 2012 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2010

The Directors are pleased to present the 24th Annual Report together with the Audited financial statement for the financial year ended 31st March, 2010.

Financial Highlights:

Your Companys performance for the financial year 2009-10 is summarized below: f

(Rs. In Lacs)

FINANCIAL RESULTS 2009-10 2008-09

Gross Turnover 29280.79 24411.25

Profit before Depreciation, Interest & Tax 6806.41 5.241.72

Depreciation 2402.97 2496.64

Profit before Interest & Tax 4403.44 2745.08

Interest 1289.64 1042.71

Profit before Tax 3113.80 1702.37

Taxation: Less/(Add) Current Tax 527.57 190.80

Wealth Tax 0.03 0.14

MAT Credit Entitlement (185.63) (168.40)

Deferred Tax 413.17 (686.87)

Fringe Benefit Tax - 6.00

NET PROFIT AFTER TAX 2358.66 2360.70

(LessVAdd: Provisions not required, hence written back 13.57 (5.28)

Less: Prior Period Adjustments (Net) (9.30) (6.99)

BALANCE PROFIT FOR THE YEAR 2362.93 2348.43

Add: Balance brought forward 4583.28 2569.77

NET SURPLUS AVAILABLE FOR APPROPRIATION 6946.21 4918.20

Proposed Dividend 348.87 115.33

Corporate Tax on Dividend 57.94 19.60

Transfer to General Reserve 200.00 200.00

Surplus carried forward to Balance Sheet 6339.40 4583.28

Your Directors are pleased to recommend a Dividend @ Rs. 21- per share on 1,74,43,460 Equity Shares of Rs.10/- each, which is inclusive of 1,02,35,455 underlying Equity share representing GDRs, (Previous Year Rs.1.60 per share on 72,08,005 Equity shares of Rs. 10/- each ) absorbing a sum of Rs. 348.87vLacs and Corporate Dividend Tax of Rs. 57.94 Lacs) for the year ended 31st March 2010. The Dividend, when declared, at the Annual General Meeting of the Company, will be paid to those shareholders whose names appear on the Register of Members as on the date of Annual General Meeting.

Your company has entered into one of the best phase of the growth cycle and aims to be one of the dominant players in the Industry alongwith fulfilling its obligations to the shareholders, customers, employees and society as a whole. The financial performance during the year under review reflects the consistent progress made by the company inspite of the daunting challenges posed by the Economy and the Market. Your Company has successfully completed the first phase of the expansion programme by installing one of the two Paper plants imported from Germany, having production capacity of 254 TPD. The commercial production on the said machine was started in September, 2009. The Company has recently introduced new products such as Printing and writing papers, Newsprint, Red Maplitho, Indigo Newsprint, Green Creamwove, Bristol Paper. The total product range of the Company includes as many as 186 different varieties of paper. The company was successfully able to raise Rs. 12385 Lacs through GDR during the year under review.

Your directors are pleased to inform that your company has achieved a total production of 1,09,055 M.T. as compared to 85,995 M.T. in previous year. Your Company has established a new benchmark in its performance recording historically the highest annual sales during the year under review. The total turnover made is Rs. 29,281 Lacs as compared to Rs. 24,411 Lacs in the previous year. The net profit earned by the Company during the current year is Rs. 2363 Lacs as compared to Rs. 2348 Lacs in the previous year. Abalance of Rs. 6339 Lacs has been carried forward to the Balance Sheet for the next year. Your Company has earned an EBIDTA of Rs. 6806 Lacs. The cash profit has also increased during the year to Rs. 5179 Lacs. All this has been possible through cost optimization adopted by the company which resulted in better realization of margins, improved efficiency and higher productions. This combination favoured well as demand for the products in the market have also been improved positively. With such strong achievements and bold results, the Board of directors are pleased to recommend a dividend of Rs. 2/- for the shareholders on the equity shares of face value Rs. 10/-.

The promoters always focus on strengthening the company further by adding capacities and better integration. All this have been possible, only on account of continuous support of the companys employees who have made remarkable contribution towards the progress of the company.

Export and Imports

Your company Exported 22,032.59 M.T of paper during the year under review as compared to 22,904.51 M.T. in the previous year. The exports accounted to 18.41 % of total sales. The exports proceeds amounted to Rs. 5391.82 Lacs as compared to Rs.5561.14 Lacs during the previous year. The Companys products are now being exported to

various countries such as Africa, Middle East, South East Asia, U.S.A., U.K., France, Indonesia, Sri Lanka and Bangladesh. Your Company is making efforts to cater more. and more of foreign markets in the near future. During the year under review, your company has been awarded the Special Award in respect of Paper and Paper Board by CAPEXIL, by the Government of India, Ministry of Commerce, Director General of Foreign Trade, recognition of its export performance.

Your Company imported 74,324.74 M.T. of waste paper and 522.40 M.T. of chemical during the year as compared to 31,303.72 M.T. and 188.80 M.T. respectively in the previous year. The imports amounted to Rs 7143.39 Lacs of waste paper and Rs. 224.16 Lacs of chemicals as compared to Rs. 4198.33 Lacs and Rs. 71.40 Lacs respectively in the previous year. Your Company has been awarded as 1st largest importer at ICD, Ahmedabad by "Container Corporation of India Ltd" for year 2009-10.

Market Capitalization:

The market capitalization has increased substantially on account of better performance resulting into higher share prices and also due to increased Share Capital of the company. The same is indicated as below :

Status of Expansion

During the year under review, your Company has taken up the expansion programme of installation of paper plant imported from Germany. The total project cost for the said expansion programme was Rs. 32700 Lacs. The entire project cost included the cost of installation of the plant already imported from Germany with production capacity of 330 MT per day, cost of 30MW power plant, deinking plant, pulp mill, technology upgradation of the imported plant. The project is expected to be completed by March, 2011. The company has raised the funds for the said project through GDR issue of Rs. 12385 Lacs and has also arranged a debt of Rs. 20000 Lacs through a consortium of banks. The balance project cost shall be met by internal accrurals of the company. With the completion of this expansion programme, the total production capacity of the Company would be around 3,05,000 M.T. p.a. These enhanced capacities will enable increased production and sales, contributing to the improved performance of the company over the Financial year 2010-11.

On account of expansion programmes taken up by the Company from time to time, there has been substantial increase in the production capacity of the Company, which has increased from 6000 TPA to 305000 TPA. Similarly, the power generated from the power plant has also increased from 5MW to 45MW. Below graph describes the enhancement of production capacity from time to time.

The Indian economy has rebounded strongly with renewed demand for paper and paper products. The emphasis on primary education, the rise in demand for newsprint and paper used for packaging will provide a strong momentum for the demand of paper and paper products. Sensing these opportunities, your company has future plans of strategic investments and acquisitions for the purpose of installation and setting up of Packaging Board Machine and Folding Duplex Board machine. The project is under active consideration at the management level and also the technical team is analyzing the feasibility of the same. To carry out this expansion programme, the Company proposes to raise the funds to the tune of Rs. 75000 Lacs by way of suitable instruments i.e. ADR/ GDR/ FCCB issue or through equity shares etc. Your Directors would announce the project with other relevant details as soon as the final decisions are taken.

Your directors are also exploring and working on the new business lines which includes manufacturing of bricks and plain and corrugated plastic sheets. The fly ash which is one of the by product generated out of the power plant can be utilized for manufacturing of bricks and other related items. The plastic contents segregated at the time of processing, from the waste paper can be utilized for manufacturing of plain and corrugated plastic sheets and other related items. These new projects would not only increase the profitability of the company but also would contribute in keeping the environment clean as the discharge of the fly ash and unutilized plastic contents problem gets solved automatically.

During the year under review, Shri Rajendra Patawari, Shri Bhasker Bhatt and Shri ShashikantThakar were appointed as additional directors on the Board of the Company with effect from 30th January, 2010. They hold office up to the ensuing Annual General Meeting of the company.

Shri Ashwin Goswami had resigned from the Board of the Company with effect from 30th June, 2009 and Shri Shankarlal Heda resigned with effect from 30th January, 2010. Shri Gokuldas Kothari and Shri Kalpesh Oswal have resigned with effect from 26th February, 2010 and Shri Mahendra Jindal has resigned on 26th April, 2010.

Shri Champaklal Shah, Shri Radheshyam Goenka and Smt. Sangeeta Goenka, directors of the Company have also resigned with effect from 28th May, 2010.

Your Company places on record its appreciation for the valuable services rendered by the above named directors during their directorship. Your directors also extend a warm welcome to the new Directors on the Board of the Company.

Directors Resposibilty

Pursuant to the requirements under Sub section 2AA of Section 217 of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed:-

(1) that in the preparation of Annual Accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any.

(2) that the Directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the Profit for the year ended on that date.

(3) that the Directors to the best of their knowledge and ability have 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.

(4) that the directors have prepared the Annual Accounts on a "going concern basis".

Audit Committee:

The Audit Committee has also been reconstituted which now consists of following members:

1. Shri Shashikant Thakar Chairman

2. Shri Rajendra Patawari Independent Director

3. Shri Bhasker Bhatt Independent Director

Fixed Deposits:

Your Company has not invited or accepted any fixed deposits from public in terms of provisions of Section 58- A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 and, as such, no amount of principal or interest was outstanding as of the balance sheet date.

Insurance:

The Companys properties including Building, Plant and Machinery, Stocks, Stores, etc., have been adequately insured.

Issue of Global Depository Receipts:

During the year under review, your Company has issued 1,02,35,455 Global Depository Receipts (GDRs), each representing one equity share of nominal value of Rs. 10/ - each at a offer price of US$ 2.64 aggregating to US$ 2,70,21,601.20.

Your Company had issued GDRs in order to part finance, the total project cost of Rs. 32700 Lacs for the installation of machinery imported from Germany. The underlying equity shares were allotted by the Board of Directors in the Board Meeting held on 28th January, 2010.

The Global Depository Receipts issued by the Company have been listed on Euro MTF market of Luxembourg Stock Exchange.

Out of the total 1,02,35,455 GDRs issued, 97,85,455 number of GDRs are outstanding for conversion on 31st March, 2010.

Change in Share Capital:

On account of the GDR issue, the issued and paid up capital of the Company has increased from Rs. 7,20,80,050/- consisting of 72,08,005 Equity Shares of Rs. 10/- to Rs. 17,44,34,600/- (consisting of 1,74,43,460 Equity shares including 1,02,35,455 underlying Equity Shares representing GDRs which were allotted on 28th January, 2010 .

The face value of each Equity Share of Rs. 10/- is proposed to be sub-divided into the face value of Rs. 21- each by corresponding increase in the number of shares held by each shareholder on the record date.

Awards and Accolades:

Your Company is a proud recipient of the following awards during the year:

a) Your Company has been declared and awarded the Highest Importer at ICD, Ahmedabad by M/s. Container Corporation of India Ltd for the year 2009- 10. The Company has received this award for the sixth consecutive year wherein for last four years it has received the award as the 2nd largest Importer.

b) Your Company has also been awarded the Special Award in respect of Paper and Paper Board by CAPEXIL, by the Government of India, Ministry of Commerce, Director General of Foreign Trade, recognition of its export performance.

c) Your Company has also received Certificate of Recognition for superior financial performance during 2008-09 and has been ranked as 246th in Industry 2.0 top 500 SMBs, which was ranked as 461st in financial year 2007-08.

d) Your Company continues to enjoy the status of "Star Export House" by Director General of Foreign Trade, New Delhi.

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

The particulars as prescribed under section 217 [1] (e) of the Companies Act, 1956 read with Rule 2 of the Companies [Disclosure of particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure W forming part of this Report.

Particulars of Employees;

The information required as per sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors Report for the year ended 31st March 2010 is NIL

Corporate Governance;

Our board with well qualified independent directors guidance and team work and various committees constituted under corporate governance, the Company is in a position to excel in its activities with complete fair and transparent practices. The Board committees regularly scrutinize the policies and proposals made by the operating management and also provide an unbiased independent assessment of the business procedures.

Pursuant tc Clause 49 of the Listing Agreement, Management Discussion and Analysis Report and a Report on Corporate Governance are given as Annexure to this Report.

A certificate from the Statutory Auditors of the Company regarding compliance by the Company of the conditions stipulated under Clause 49 of the Listing Agreement is attached to this Report.

The Company is in process of implementing the Corporate Governance Voluntary Guidelines 2009, issued by Ministry of Corporate Affairs, in December, 2009.

Information Technology:

Your Company with its all IT initiatives is committed to ensure stable, operational and responsive- information, communication and ERP System for efficient and faster business growth.

We aim each year to enhance and associate information technology usage to simplify business processes, which in turn increases productivity and profitability.

Health, Safety, Security and

Environment- Rainbow Papers Limited takes pride in providing a healthy and safe operating environment for its employees. It is a recycled based paper unit which uses the waste paper as raw material for manufacturing its finished product. Thus, saving the forests which is already in scarcity. Constant efforts are made to conserve natural resources. During the year, the Company was able to further reduce its energy and water consumption per unit by installing new energy meters. The Company deploys eco-friendly technology to provide a safe and clean environment in its neighbourhood. It has installed efficient Effluent Treatment Plants in order to protect the environment. Adequate measures are also taken for the safety of the workmen working at the plant by providing them helmets, safety belts etc.

ISO Certifications:

ISO 9001 / ISO 14001 ACCREDITATION Companys Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Companys Environmental Management System continues to enjoy "ISO 14001" accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001

(OHSAS) which is an International Standard which facilitates management of Occupational Health and Safety risks associated with the business of the organization.

Credit Rating:

The current Bank Loan rating as assigned by the CRISIL is as under.-

Sr. No. Facility Rated Amount (Rs. in Lacs) Rating

1. Cash Credit 4500.00 BBBVStable

2. Term Loan 43465.00 BBBVStable

3. LC & Bank Guarantee 5635.00 P3

Total 53600.00

P3 indicates that the degree of safety regarding timely payment on the instrument is adequate.

BBB are judged to offer a moderate safety with regard to timely payment of financial obligations for the present.

Cost Auditors:

Pursuant to Section 233-B of the Companies Act, 1956, the Central Government has ordered that the Company carries out an audit of cost accounts relating to Paper, every year. Mr. V.H. Shah, Cost Accountant, was appointed as Cost Auditor for the year 2009-10. The Cost Audit Report for the year 2009-10 will be submitted to the Central Government on or before the due date.

Dematerialisation:

The shares of the Company are in compulsory demat segment and are available for trading in the depository system of both National Securities Depository Ltd (NSDL) and the Central Depository Services India Ltd (CDSL). As on 31st March 2010, 1,71,77,379 nos. of equity shares forming 98.47% of the equity share capital of the Company stands dematerialized.

The equity shares of the Company are presently listed on the Bombay Stock Exchange Ltd (BSE) and Ahmedabad Stock Exchange Limited (ASEL). The Bombay Stock Exchange Ltd has nation wide terminal and therefore, shareholders/investors are not facing any difficulty in trading in the shares of the Company from any part of the Country.

The GDR of the Company are Ijsted on Euro MTF Market of Luxembourg Stock Exchange.

As there is no trading activity carried out by Ahmedabad Stock Exchange Limited, your Company has already made an application to Ahmedabad Stock Exchange Limited, for getting its shares delisted from the said Exchange. All formalities pertaining to delisting have already been completed and the confirmation from Ahmedabad Stock Exchange Limited is awaited.

Your company has completed all the formalities for getting its shares listed on National Stock Exchange of India Limited (NSE) and the confirmation for getting listed at NSE is expected very soon. (The equity shares of the Company have since been listed with National Stock Exchange of India Limited w.e.f. 2nd June, 2010)

Your Company has paid annual listing fees for financial year 2009-2010 to Bombay Stock Exchange Limited, Mumbai, Ahmedabad Stock Exchange Limited, Ahmedabad, Luxembourg Stock Exchange, Luxembourg and custodial fees to National Securities Depository Ltd. and Central Depository Services (India) Ltd.

Statutory Auditors.*

M/s. Pravin M. Shah & Co., Statutory Auditors of the Company retire at the ensuing Annual General Meeting of the company and have expressed their unwillingness for reappointment as Statutory Auditors of the Company. M/s. Talati & Talati, Chartered Accountants, Ahmedabad, have given a written confirmation as per the provisions of Section 224(1B) of Companies Act, 1956, for being appointed as Auditors of your Company.

Auditors Report:

The notes to the Accounts referred to in the Auditors Report of M/s. Pravin M. Shah & Co., Chartered Accountants, are self explanatory and therefore do not call for any further explanation under Section 217 ( 3 ) of the Companies Act, 1956.

Change in Registrar and Share Transfer Agents:

Your Company has appointed M/s. Sharepro Services (India) Private Limited, as the Registrar and Share Transfer Agent w.e.f. 1st March, 2010 in place of M/s. Pinnacle Share Registry Pvt. Ltd.

Industrial Relations:

Industrial Relations remained cordial throughout the year under review. Several Industrial Relation initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

Acknowledgement:

Rainbows strong multi-cultural work force has been the bedrock of the Companys glorious past. Rainbow is confident that with the commitment and passion of our people, we will shape a bright future for the organization.

The Directors acknowledge the continued support and cooperation received from the Gujarat government, shareholders, participating banks, customers, suppliers and dealers. We look forward with confidence, as before, to their support in the years to come.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of team Rainbow.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

(AJAY R. GOENKA) PLACE:AHMEDABAD CHAIRMAN & DATE :28th May, 2010 MANAGING DIRECTOR



 
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