Directors Report of Saffron Industries Ltd.

Mar 31, 2013

To the Members of SAFFRON INDUSTRIES LIMITED

The Directors have pleasure in presenting their Tewntieth Annual Report and Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS:

(RUPEES)

SALES AND OTHER INCOME 28,03,68,137

Profit/(Loss) before Finance Cost & Depreciation (1,52,33,655)

Less : Finance Cost 3,69,36,242

Depreciation 2,36,05,254

6,05,41,496

Profit/(Loss) Before Tax and Exceptional items (7,57,75,151)

Less: Provision For Taxation NIL

Profit/(Loss) after Tax (7,57,75,151)

Add : Prior Period Items (96,637)

Add: Exceptional Items NIL

Prior year adjustments 23,18,505

Profit /(Loss) for the Year (7,35,53,282)

Add: Profit/(Loss) Brought Forward from pervious year (3,83,11,451)

Balance carried forward (11,18,64,733)

REVIEW OF OPERATIONS:

During the year under review the Sales Turnover of your company was Rs. 27.95 Crore as against Sales Turnover of Rs. 24.23 Crore in the previous financial year. Due to increase in cost of material consumed and increase in other manufacturing expenses, the loss incurred during the year under review was Rs. 7.35 Crore as compared to loss Before tax and exceptional items of Rs. 6.78 Crore during the previous financial year.

Your company is trying to overcome losses by way of using various efforts to reduce the overall cost and to increase its sustainability by planning for better prospects of the company using various new avenues to avail the low cost raw material and by trying for better price gains for its products in the market and by continuing efforts for its growth as well.

FUTURE OUTLOOK:

In this scenario of high cost market, you will appreciate the hardship the company is facing. However, we are hopeful for a change in this scenario soon and also hope that the domestic paper market shall buoyant further, and also hopeful for better sales realisations and profitability, which will take care of company''s subsistence and growth in the market.

DIVIDEND:

In absence of profits the Directors have not recommended any dividend for the year under review.

DIRECTORS:

Shri Vinod Maheshwari, who retires by rotation and being eligible, offer himself for re-appointment.

AUDIT COMMITTEE:

The Company has already constituted an Audit Committee of its Board of Directors with specified terms of reference. Shri Vinay Pansari is the Chairman of the Audit Committee. Shri Vinod Maheshwari and Shri Anantrai Rawell are the other members of the Audit Committee.

DIRECTOR''S COMMENTS ON AUDITORS QUALIFICATION & ADVERSE REMARKS IN AUDITORS REPORT:

The Auditors has made qualifications and marked adversely in their Report in the Para iii) c), Para iii)d), Para ix) b) and Para xi) of clause 02 in respect of the Report under Companies (Auditors Report) Order, 2003.

The Directors comment on these qualifications and remarks as - the Management is engineering necessary funds to regularise the payment of dues/overdues to the concerned Bankers. Also Employees Provident Fund/Profession Tax and other Taxation Dues are going to be regularised shortly.

DEMATERIALISATION OF SHAREHOLDING:

The Company has already established electronic connectivity with both the depositories viz. National Depository Securities Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through its Registrar and Transfer Agent, M/s. Adroit Corporate Services Pvt. Ltd. As such, the shares of the Company are available for dematerialisation with both the Depositories.

LISTING OF SECURITIES:

The shares of the Company are presently listed on the Stock Exchange, Mumbai and the Stock Exchange, Ahmedabad.

CORPORATE GOVERNANCE:

Areporton corporate governance including Auditors'' Certificate on compliance with the conditions of corporate governance under clause 49 of the listing agreement, is appended to this report as Annexure "B"

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors to the best of their knowledge and belief hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently, and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2013 and of the profits of the Company for the year ended 31 st March, 2013;

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

iv) the annual accounts have been prepared on a going concern basis.

AUDITORS:

M/s. Khatri & Iyer, Chartered Accountants, Nagpur will retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDIT:

The Ministry of Company Affairs (MCA), GOi, Cost Audit Branch has issued a General Circular 15/2011 dated 11thApril2011whichamongstotherrequirementsforappointmentofCostAuditor mandates the company to disclose full particulars of its Cost Auditors and also requires the company to disclose the due date and actual date of filing of Cost Audit Report by the Cost Auditors with the MCA for each relevant financial year in its Annual Report.

According to the above Circular of MCA the company would like to inform to its members that The Board of Directors has appointed M/s Manisha & Associates, Cost Accountants, Nagpur, as the CostAuditors of the company for the financial year ending on 31st March 2013, in place of M/s Shriram & Company, Nagpur, the former CostAuditors of the company.

The due date for filing of Cost Audit Report for the financial year ending 31 st March 2012 (previous financial year) was 31st January 2013.

The CostAudit Report in respect of financial year ending 31st March 2012 was actually filed by the Cost Auditors on 29th January 2013.

Further to inform that the CostAudit Report for the financial year ending on 31 st March 2013 shall be submitted by the Cost Auditors of the Company to the Ministry of Corporate Affairs Government of India.

PARTICULARS OF EMPLOYEES:

None of the employees were in receipt of remuneration of Rs. 5,00,000/-or more per month (as amended by the Companies (Particulars of Employees) Amendment Rules, 2011) during the year. Therefore the particulars of employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975are not furnished.

OTHER PARTICULARS:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956'' read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement annexed hereto (Annexure A'') and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are pleased to place on record their sincere gratitude to the State Bank of India, Government Authorities, Suppliers, Customers and Shareholders for their continued support and co-operation extended to the Company during the year.

Your Directors also express their deep appreciation for the sincere and devoted services rendered during the year by the workers, staff and executives at all levels of operations of the Company.

For and on behalf of the Board,

Place: Nagpur Vinod Maheshwari

Date : August 14, 2013 Chairman

---

Mar 31, 2012

To The Members of ''SAFFRON INDUSTRIES LIMITED (Formerly -known as ''MADHYADESH PAPERS LIMITED'')

The Directors have pleasure in presenting their Nineteenth Annual Report and Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS:

(RUPEES)

SALES AND OTHER INCOME 24,30,75,710

Profit/(Loss) before Finance Cost & Depreciation (57,30,710)

Less : Finance Cost 4,08,78,150

Deprecation 2,40,55,970

6,49,34,120

Profit/(Loss) Before Tax (7,06,64,830)

Less : Provision For Taxation NIL

Profit/(Loss) after Tax (7,06,64,830)

Add : Prior Period Items NIL

Add: Exceptional Items 3,23,53,370

Profit/(Loss) for the year (3,83,11,460)

Add: Profit/(Loss) Brought Forward from previous year (5,85,05,840)

Balance carried forward (9,68,17,300)

REVIEW OF OPERATIONS :

During the year under review the Sales Turnover of your company was Rs. 24.30 Crore as against Sales Turnover of Rs. 25.99 Crore in the previous year. The scarcity and high cost of the raw material and other market factors in respect of cost of production has affected the scope of profit margin for the company. However, the loss during the Financial Year 2011-12 has reduced to Rs. 3.83 Crore as compared to loss of Rs. 6.39 Crore during the previous financial year.

Your company is trying to overcome losses by way of using various efforts to reduce the overall cost and to increase its sustainability by planning for better prospects of the company using various new avenues to avail the low cost raw material and by trying for better price gains for its products in the market and by continuing efforts for its growth as well.

FUTURE OUTLOOK:

In this scenario of hiqh cost market, you will appreciate the hardship the company is facing. However, We are hopeful for a change in this scenario soon and also hope that the domestic paper market shall buoyant further, and also hopeful for better sales realisation and profitability, which will take care of company''s subsistence and growth in the market.

DIVIDEND:

In absence of profits the Directors have not recommended any dividend for the year under review.

DIRECTORS:

Shri Vinay Pansari, who retires by rotation and being eligible, offer himself for re-appointment.

AUDIT COMMITTEE:

The comoanv has already constituted an Audit Committee of its Board of Directors with specified Sms Vinay Pansari is the Chairman of the Audit Committee. Shn Vmod Maheshwari and Shri Anantrai Rawell are the other members of the Audit Committee.

DIRECTOR''S COMMENTS ON AUDITORS QUALIFICATION & ADVERSE REMARKS IN AUDITORS REPORT:

The Auditors has made qualifications and marked adversely in the clause 7(iii)(c) & (d) Clause 7(ixKa) & (b) 7%™Rs.Auditors Report accompanied with the Balance Sheet and Profit & Loss Account for the year under review.

The Directors comment on these qualifications and remarks as -the Management is engineering necessary funds to regularize the payment of dues/overdoes to the concerned Bankers. Also Employees Provident Fund/Profession Tax and other Taxation Dues are going to be regulansed shortly.

DEMATER1ALISAT10N OF SHAREHOLDING:

The Company has already established electronic connectivity with both the depositories vfc Natal name positron Securities Limited (NSDL) and Central Depository fences (India) Limited (CDSL) through its Registrar and Transfer Agent, M/s. Adroit Corporate Services Pvt. Ltd. As such the shares ofhe Company are available for dematerialization with both the Depositions.

LISTING OF SECURITIES:

The shares of the Company are presently listed on the Stock Exchange, Mumbai and the Stock Exchange, Ahmedabad.

CORPORATE GOVERNANCE:

A report on corporate governance including Auditors'' Certificate on compliance with the conditions of corporate governance under clause 49 of the listing agreement, is appended to this report as Annexure"B"

DIRECTORS" RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors to the best of their knowledge and belief hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently, and have 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 at 31 st March, 2012 and of the profits of the Company for the year ended 31 st March, 2012;

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

iv) the annual accounts have been prepared on a going concern basis.

AUDITORS:

M/s. Khatri & Iyer, Chartered Accountants, Nagpur will retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDIT:

The audit of the cost Account of the company for the year ended 31 st March 2012 is being conducted by the Cost Auditors and their report will be submitted to the Ministry of Corporate Affairs, Government of India.

PARTICULARS OF EMPLOYEES:

None of the employees were in receipt of remuneration of Rs. 5,00,000/- or more per month (as amended by the Companies (Particulars of Employees) Amendment Rules, 2011) during the year. Therefore the particulars of employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not furnished.

OTHER PARTICULARS:

Information in accordance with the provisions of section 217 (1) (e) of the companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement annexure here to (Annexure ''A'') and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are pleased to place on record their sincere gratitude to the State Bank nf India, Government Authorities, Suppliers, Customers, and Shareholders for their continued support and co- operation extended to the company during the year.

Your Directors also express their deep appreciation for the sincere and devoted services rendered during the year by the workers, staff and executive at all levels of operations of the company.

For and on behalf of the Board,

Place: Nagpur

Date : August 14, 2012 Vinod Maheshwari

Chairman

---

Mar 31, 2011

To the Members of 'MADHYADESH PAPERS LIMITED'

The Directors have pleasure in presenting their Eighteenth Annual Report and Audited Statement of Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS:

(RUPEES)

SALES AND OTHER INCOME 25,99,24,617

Loss before Financial Charges & Depreciation (70,44,036)

Less: Financial Charges 33032777

Depreciation 23991472

5,70,24,249

(6,40,68,285) Add : Prior Period Adjustments NIL

Profit/(Loss) Before Tax (6,40,68,285)

Less: Provision For Taxation NIL

Profit/(Loss) after Tax (6,40,68,285)

Add : Prior Period Adjustments 1,31,097

Add: Surplus Brought Forward 5431 345

Balance carried forward 5,85,05,842

REVIEW OF OPERATIONS:

During the year under review the Sales Turnover of your company during current year was Rs. 25.88 Crore as against Rs. 24.92 Crore in previous year. However, the high cost and scarce availability of raw material in the market continued this year also, resulting into availability of small margins between sales turnover and the raw material consumed, which ultimately resulted into the loss of Rs. 6.40 Crore as compared to loss of Rs. 5.97 Crore in the last year.

However your company has achieved marginally better sales turnover amount this year as against the sales turnover amount of last year. Your company is trying to overcome the adverse situation by way of using various efforts to reduce the overall cost and to increase its sustainability by planning for better prospects of the company using various new avenues to avail the low cost raw material and by always trying for better price gains for its product in the market and by continuing efforts for its growth as well.

FUTURE OUTLOOK:

In this scenario of high cost market, you will appreciate the hardship the company is facing However, we expect this scenario to change by the end of this year and the domestic newsprint market is expected to become buoyant once again which would augment in improving sales realisations and profitability which will again take care of company's subsistence and qrowth in the market.

CHANGE IN NAME OF THE COMPANY:

The Directors believe that the existing name of the company is not suitable for expansion of its business area accros the length of India. Hence the Board of Directors are of view to change the name of the Company from 'Madhyadesh Papers Limited" to 'Saffron Industries Limited'.

The Registrar of Companies, Maharashtra has made available the name 'Saffron Industries Limited' vide its letter dated 10th June 2011 to the company. However, consent of the Shareholders by passing Special Resolution in general meeting and subsequent approval of Central Government is necessary for change in name of the Company. The Directors recommend the Change in name of the company to 'Saffron Industries Limited'.

DIVIDEND:

In absence of profits the Directors have not recommended any dividend for the year under review.

DIRECTORS :

Shri Anantrai Rawell, who retires by rotation and being eligible, offer himself for re-appointment.

AUDIT COMMITTEE:

The Company has already constituted an Audit Committee of its Board of Directors with specified terms of reference. Shri Vinay Pansari is the Chairman of the Audit Committee. Shri Vinod Maheshwari and Shri Anantrai Rawell are the other members of the Audit Committee.

DIRECTOR'S COMMENTS ON AUDITORS QUALIFICATION & ADVERSE REMARKS IN AUDITORS REPORT:

The Auditors has made qualifications and marked adversely in the clause 7 (iii) (c) &(d) Clause 7(ix)(a) (b) and (xi) of the Auditors Report accompanied with the Balance Sheet and Profit & Loss Account for the year under review.

The Directors comment on these qualifications and remarks as - the Management is engineering necessary funds to regularise the payment of dues/overdues to the concerned Bankers Aso Employees Provident Fund/Profession Tax and otherTaxation Dues are going to be regularised

DEMATERIAUSATION OF SHAREHOLDING:

The Company has already established electronic connectivity with both the depositories viz.National Depository Securities Limited (NSDL) and Central Depository Services(India) Limited (CDSL) through its Registrar and Transfer Agent, M/s. Adroit Corporate Services Pvt Ltd As such, the shares of the Company are available for dematerialisation with both the Depositories.

LISTING OF SECURITIES:

The shares of the Company are presertly listed on the Stock Exchange, Mumbai and the Stock Exchange, Ahmedabad.

CORPORATE GOVERNANCE:

A report on corporate governance including Auditors' Certificate on compliance with the conditions of corporate governance under clause 49 of the listing agreement, is apended to this report as Annexute "B"

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors to the best of their knowledge and belief hereby confirm that:

i) in the prepration of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently, and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profits of the Company for the year ended 31st March, 2011 ;

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

iv) the annual accounts have been prepared on a going concern basis.

AUDITORS:

M/s. Khatri & Iyer, Chartered Accountants, Nagpur will retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDIT:

The audit of the Cost Accounts of the Company for the year ended 31st March 2011 is being conducted by the Cost Auditors and their report will be submitted to the Ministry of Corporate Affairs, Government of India.

The Board of Directors has appointed M/s Shriram & Co., Cost Accountants, as Cost Auditors of the Company for the Financial Year 2011-12. The Company shall make necessary application to Central Government for approval of his appointment within time prescribed.

PARTICULARS OF EMPLOYEES:

None of the employees were in receipt of remuneration of Rs. 2,00,000/- or more per month during the year. Therefore the particulars of employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not furnished.

OTHER PARTICULARS:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement annexed hereto (Annexure 'A') and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are pleased to place on record their sincere gratitude to the State Bank of India, The Federal Bank Limited, Government Authorities, Suppliers, Customers and Shareholders for their continued support and co-operation extended to the Company during the year.

Your Directors also express their deep appreciation for the sincere and devoted services rendered during the year by the workers, staff and executives at all levels of operations of the Company.

For and on behalf of the Board,

Vinod Maheshwari Chairman

Place : Nagpur Date : June 15,2011

---

Mar 31, 2010

The Directors have pleasure in presenting their Seventeenth Annual Report and Audited Statement of Accountsfor the year ended 31st March, 2010.

FINANCIAL RESULTS: (RUPEES)

SALES AND OTHER INCOME 25,43,94,348

Loss before Financial Charges & Depreciation (49,81,658)

Less: Financial Charges 3,00,16,879

Depreciation 2,39,92,493

5,40,09,372

(5,89,91,030)

Add : Prior Period Adjustments (7,78,808)

Net Loss (5,97,69,838)

Add : Surplus Brought Forward 6,52,01,182

Balance carried forward 54,31,345

REVIEW OF OPERATIONS:

India has shown a remarkable resilience in recovering from the global economic slow down during the financial year 2009-10. Thelndian Paper Industry has also shown a similar response to the global economic turmoil.

However, during the year under review the Sales Turnover of your company declined to Rs. 24.92 Crore as against Rs. 50.97 Crore in previous year due to high cost and scarce availability of raw material in the market which resulted into reduced production and the sales turnover as compare to pervious year. The fixed cost in the nature of depreciation, financial charges and the administration charges completely wiped out the profits of the company due to lack of sales realisation against the fixed cost which ultimately resulted into net loss of Rs. 5.97 Crore in current year against Profits of Rs. 13.77 Lac in last year.

However your company is trying to overcome the adverse situation byway of using various efforts to reduce the overall cost and to increase its sustainability by using new avenues to avail the low cost raw material and by always trying for better price gains for its product in the market and by continuing efforts for its growth as well.

FUTURE OUTLOOK:

In this scenario of high cost market, you will appreciate the hardship the company is facing. However, we expect this scenario to change by the end of this year, the market prices of raw material used in production process is expected to come under control and the domestic newsprint market is also expected to become buoyant further which would augment in improving sales realisations and profitability which would again take care of companys subsistence and growth in the market.

DIVIDEND:

In absence of profits the Directors have not recommended any dividend for the year under review.

DIRECTORS :

Shri Vinod Maheshwari, who retires by rotation and being eligible, offer himself for re-appointment. Shri Nimish Maheshwari was re-appointed as Managing Director of the Company for a further period of 5years effective from 1st April 2010.

AUDIT COMMITTEE:

The Company has already constituted an Audit Committee of its Board of Directors with specified terms of reference. Shri Vinay Pansari is the Chairman of the Audit Committee. Shri Vinod Maheshwari and Shri Anantrai Rawell are the other members of the Audit Committee.

DEMATERIALISATION OF SHAREHOLDING:

The Company has already established electronic connectivity with both the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through its Registrar and Transfer Agent, M/s. Adroit Corporate Services Pvt. Ltd. As such, the shares of the Company are available for dematerialisation with both the Depositories.

LISTING OF SECURITIES:

The shares of the Company are presently listed on the Stock Exchange, Mumbai and the Stock Exchange, Ahmedabad.

CORPORATE GOVERNANCE:

A report on corporate governance including Auditors Certificate on compliance with the conditions of corporate governance under clause 49 of the listing agreement, is appended to this report as Annexure"B"

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors to the best of their knowledge and belief hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently, and have made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31 st March, 2010 and of the profits of the Company for the year ended 31 st March, 2010;

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

iv) the annual accounts have been prepared on a going concern basis.

AUDITORS:

M/s. Khatri & Iyer, Chartered Accountants, Nagpur will retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

PARTICULARS OF EMPLOYEES:

None of the employees were in receipt of remuneration of Rs. 2,00,000/- or more per month during the year. Therefore the particulars of employees as required under the provisions of section 217 (2A) of the CompaniesAct, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not furnished.

OTHER PARTICULARS:

Information in accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement annexed hereto (Annexure A) and forms part of this report.

ACKNOWLEDGEMENTS

Your Directors are pleased to place oh record their sincere gratitude to the State Bank of India, The Federal Bank Limited, Government Authorities, Suppliers, Customers and Shareholders for their continued support and co-operation extended to the Company during the year.

Your Directors also express their deep appreciation for the sincere and devoted services rendered during the year by the workers, staff and executives at all levels of operations of the Company.

For and on behalf of the Board,

Place: Nagpur Vinod Maheshwari

Date .August 14, 2010 Chairman

---

Mar 31, 2009

The Directors have pleasure in presenting their Sixteenth Annual Report and Audited Statement of Accounts for the year ended 31st March, 2009.

FINANCIAL RESULTS :

(RUPEES)

SALES AND OTHER INCOME 51,08,50,530

Gross Profit 6,37,52,910

Less: Financial Charges 3,83,61,642

Depreciation 2,37,38,393

6,21,00,035

16,52,875

Add : Prior Period Adjustments (12,117)

Profit Before Tax 16,40,758

Less : Provision For Taxation 2,64,250

Profit After Tax 13,76,508

Add : Surplus Brought Forward 6,38,24,674

Balance carried forward 6,52,01,182

REVIEW OF OPERATIONS :

The Indian Economy has seen significant changes during the financial year 2008-09, owing to the global economic turmoil and overall recessionary trend prevailing in all segments of industry. The Paper Industry has also seen a sharp and continuous decline in gross sales realisations affecting the margin of operations.

During the year under review your Company registered a growth in production capacity from 20881.684 MT in the previous year to 23376.165 MT in the current year. Consequentially, there was a rise in the Sales Turnover of your company from Rs. 40.58 Crores in the previous year to Rs. 50.97 Crores in the current year. However, the rise in Sales Turnover did not have a corresponding effect on the Net profits of the Company which fell from Rs. 21.22 Lacs in the previous year to Rs. 13.77 Lacs in the current year owing to rise in raw material cost and financial charges. But, your Company is evaluating and implementing strategies to sustain its growth both in terms of production and profitability.

FUTURE OUTLOOK :

In this scenario of global economic crisis, you will appreciate the hardship the company is facing. However, we expect this scenario to change by the end of this year and the domestic newsprint market is expected to become buoyant once again which would augment in improving sales realisations and profitability.

DIVIDEND :

In view of reduced profitability and the current need for sustaining growth of your Company, the Directors have not recommended any dividend for this year.

DIRECTORS :

Dr. S.L. Keswani & Shri Vinay Pansari who retire by rotation and being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE :

The Company has already constituted an Audit Committee of its Board of Directors with specified terms of reference. Dr. S. L. Keswani is the Chairman of the Audit Committee. Shri Vinod Maheshwari, Shri Vinay Pansari and Shri Anantrai Rawell are the other members of the Audit Committee.

DEMATERIALISATION OF SHAREHOLDING :

The Company has already established electronic connectivity with both the depositories viz. National Depository Securities Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through its Registrar and Transfer Agent, M/s. Adroit Corporate Services Pvt. Ltd. As such, the shares of the Company are available for dematerialisation with both the Depositories.

LISTING OF SECURITIES :

The shares of the Company are presently listed on the Stock Exchange, Mumbai and the Stock Exchange, Ahmedabad.

CORPORATE GOVERNANCE :

A report on corporate governance including Auditors Certificate on compliance with the conditions of corporate governance under clause 49 of the listing agreement, is appended to this report as Annexure "B".

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors to the best of their knowledge and belief hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently, and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2009 and of the profits of the Company for the year ended 31st March, 2009;

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

iv) the annual accounts have been prepared on a going concern basis.

AUDITORS :

M/s. Khatri & Iyer, Chartered Accountants, Nagpur will retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDIT :

The audit of the Cost Accounts of the Company for the year ended 31 st, March 2009 is being conducted by the Cost Auditors and their report will be submitted to the Ministry of Company Affairs, Government of India.

PARTICULARS OF EMPLOYEES :

None of the employees was in receipt of remuneration of Rs. 2,00,000/- or more per month during the year. Therefore, the particulars of employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not furnished.

OTHER PARTICULARS :

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement annexed hereto (Annexure A) and forms part of this report.

ACKNOWLEDGEMENTS :

Your Directors are pleased to place on record their sincere gratitude to the State Bank of India, The Federal Bank Limited, SICOM Limited, Government Authorities, Suppliers, Customers and Shareholders for their continued support and co-operation extended to the Company during the year.

Your Directors also express their deep appreciation for the sincere and devoted services rendered during the year by the workers, staff and executives at all levels of operations of the Company.

For and on behalf of the Board,

Place : Nagpur Vinod Maheshwari

Date : July 31, 2009 Chairman