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Directors Report of Shree Bhawani Paper Mills Ltd.

Mar 31, 2015

Dear Members,

We have pleasure in presenting our 36th Annual Report together with the audited accounts of the Company for the year ended 31st March, 2015.

Performance

The working of the Company during the year under review has been highlighted below: 15 Months

Year Ended Ended 31.03.2015 31.03.2014

Production (Tonnes) 7499 32886

Rs. in Lacs Rs. in Lacs

Sales 2828 11961

Other Income 81 235

2909 12196

Gross Profit/(Loss) -2583 -1986

Less : Interest 2056 2406

Depreciation for the year 912 949

Profit Before Exceptional Items -5551 -5341 and Tax

Exceptional Items - 1468

Profit for the year before Tax -5551 -6809

Less : Provision for taxation - -

Profit / (Loss) after taxation -5551 -6809

Profit / (Loss) brought forward -14463 -7654 from last year

Loss carried to Balance Sheet -20014 -14463

Operation & Reason for Losses

During the year under review, the Company has manufactured 7499 tons of paper with net sale of Rs.28.28 crores. In October, 2014, the Central Pollution Control Board (CPCB) vide its Letter No.D-23012/1/PCI-III/5944-5948 stopped the production on all the three paper machines of the Company. Due to which, the financial position further deteriorated due to Nil production in last five months of this financial year. Conditional clearance of the Pollution Board was received in March, 2015. The Company is exploring various avenues to infuse the funds for revival of the Company.

Regarding market scenario, we would like to inform, that, due to unrestricted duty free import of Newsprint, the price of Newsprint has gone down by nearly 10% during the year. The new plant set up is mainly for Newsprint and favorable market condition is a necessity to restart the plant. The Company is making all effort to comply with Pollution Control norms, which now required continuous online monitoring and investment.

Compliance of Sick Industrial Companies (Special Provisions) Act, 1985

The Company has filed a Reference Application under Section 15 (1) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) with Hon'ble BIFR which was registered as Case No. 29/2013. In the hearing held on 26th September, 2013, the Hon'ble BIFR declared the Company as 'Sick' u/s 3 (1) (o) of SICA and appointed Bank of Baroda as the Operating Agency (OA) u/s 17 (3) of the Act to prepare a Rehabilitation Scheme for the Company. The Company has submitted the Draft Rehabilitation Scheme (DRS) to Bank of Baroda (OA) and other stakeholders with a copy to Hon'ble BIFR. The last date of hearing was to be held on 24th April, 2014, was postponed sine die.

Indian Bank has sold its loan to the ARC M/s JM Financial Asset Reconstruction Company Pvt. Ltd who have filed miscellaneous application with Hon'ble BIFR substitution of its name in place of Indian Bank.

The revival of the Company is dependent on approval of Draft Rehabilitation Scheme at the earliest.

Share Capital

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 34,82,72,240/-. During the year under review, the Company has not issued shares with differential voting right nor granted stock options or sweat equity.

Directors

Shri Badri Vishal Tandon, Director, is retiring by rotation, being eligible for re-election, has given his consent for the same.

Pursuant to Sections 161 of the Companies Act, 2013, Smt Lakshmi Kumari (DIN: 07134683) was appointed as Additional Director by the Board in the category of Non-Executive Director who is liable to retire by rotation with effect from 31st March, 2015. Smt Lakshmi Kumari will hold the office up to the date of ensuing Annual General Meeting of the Company and is eligible, offers herself for re-appointment.

The Brief resume and other details relating to the Directors, who are to be appointed/ re-appointed as stipulated under Clause 49 of the Listing Agreement, are furnished in the Annual Report.

Further, all independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. None of the Director is disqualified under Section 164 (2) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange.

Corporate Governance Code

Your Company has complied with all the mandatory requirements of Corporate Governance. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Bombay Stock Exchange forms an integral part of the Directors' Report.

The Statutory Auditors of the Company have examined the Company's compliance to the Code of Corporate Governance and have certified the same, as required under SEBI guidelines. The certificate is reproduced with Corporate Governance Report to the Members.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Bombay Stock Exchange, is presented in a separate section forming part of the Annual Report.

Auditors and Auditor's Report

Statutory Auditors

M/s. P.L.Gupta & Co., Chartered Accountants, Statutory Auditors of the Company, retire from their Office at the conclusion of ensuing Annual General Meeting. They are, however, eligible for re-appointment and have furnished certificate to the effect that their appointment, if made, will be in accordance with the limits specified in Sub- Section (I-B) of Section 139 of the Companies Act, 2013. Your Directors recommend their re-appointment up to the conclusion of next annual general meeting.

Auditor's Qualification/ Remarks

With regard to qualifications/ remarks in Auditor's report and Annexure thereto, (a) as mentioned in Note No. 41 of financial statements, the balances of some of the trade receivables, trade payables, lender and loans and advances are subject to confirmation/ reconciliation and subsequent adjustments, if any. Due to closure of the Plant, necessary verification has been delayed, however, the Management is of the view that there is no material adjustment in this regard.

With respect to qualification (b) as mentioned in Note No. 43 of financial statements, the Company became a sick industrial company within the meaning of Section 3 (1) (o) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) due to erosion of its entire net worth and the Company was declared a Sick Industrial Company by Hon'ble BIFR on 26th September, 2013. The Company has submitted the Draft Rehabilitation Scheme (DRS) to operating agency, Bank of Baroda. The Company has provided interest on Term Loan and other loans of Indian Bank and Bank of Baroda @ 10.50% with effect from 1st January, 2013 in accordance with Guidelines and Checklist for preparation of Draft Rehabilitation Scheme as provided by Hon'ble BIFR.

With respect to qualification (c) as mentioned in Note No. 29 of financial statements, the Company has not recognized additional net Deferred Tax Asset during the year. Net Deferred Tax Assets of Rs.14 crores was recognized for the year ended 31st March, 2012 based on the future profitability projections by the management. The financial statement has been drawn upon going concern assumption.

Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its paper activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Shri Rakesh Mishra, Cost Accountant, as Cost Auditor for auditing the cost accounts of the Company for the Financial Year 2015-16 at a remuneration of Rs.25,000/- (Rupees twenty five thousand only). As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in the general meeting for ratification. Accordingly, a Resolution seeking member's ratification for the remuneration payable to Shri Rakesh Misra , Cost Auditor is included in the Notice convening the Annual General Meeting.

The Company has received a letter from him to the effect that his re-appointment would be within the limits prescribed under Section 141(3)(g) of the Companies Act, 2013 and that he is not disqualified for such re-appointment within the meaning of Section 141 of the Companies Act, 2013.

Secretarial Auditor

The Board of Directors of the Company have appointed M/s. Adesh Tandon & Associates, Company Secretaries , as the Secretarial Auditor of the Company for the financial year 2014-15, in terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Report of the Secretarial Audit is annexed herewith as Annexure A and forms an integral part of this Report. The comments mentioned in Secretarial Audit Report are self explanatory.

Extract of Annual Return

Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Company (Management & Administration) Rules, 2014, extract of Annual Return of the Company is annexed herewith as Annexure B in Form MGT-9 to this Report.

Particulars of Employees

None of the Employee of the Company was in receipt of total remuneration of Rs.60,00,000/- during the financial year under review or Rs.5,00,000/- per month.

Information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure C and form an integral part of this Report.

Deposits

The Company has not accepted any deposit under Section 73 or Section 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review.

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

Particulars with respect to conservation of energy, technology absorption and foreign earnings and outgo pursuant to Section 134(3)(m) read with the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2015 are provided in Annexure D to this Report.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed:

I) that in the preparation of the annual accounts for the year ending 31st March, 2015 the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

II) that such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2015 and of the profit or loss of the Company for that period;

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

IV) that the annual financial statements for the year ending 31st March, 2015 have been prepared on a 'going concern' basis;

V) that proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

VI) that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

Disclosures

Audit Committee

The Audit Committee comprises of five Directors namely Shri Badri Vishal Tandon, non-executive non independent Director and four independent directors, namely Shri C.M. Krishna, Brig. (Retd.) Shri Rajeev Lochan Singh SC, Shri Saran Vinod and Shri Atul Seth. All the recommendations made by the Audit Committee were accepted by the Board.

Particulars of Loans, Guarantees or Investments

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

Risk Management Policy

In compliance of Clause 49 of the Listing Agreement, the Board of Directors has constituted a Risk Management Committee to monitor and review the risk management plan and apprised the Board about Risk Management framework, methodology for categorization of risk and mitigation plan and such other function as directed by Board from time to time. The main objective of this policy is to ensure sustainable business growth with stability and to promote a proactive approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative.The common risks inter alia are Regulations, competition, Business risk,Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

Vigil Mechanism

Pursuant to provisions of Section 177 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement with stock exchange, the Company has adopted Vigil Mechanism of the Company, which also incorporates a whistle blower policy may be accessed on the Company's website at www.shbhawani.com

Unclaimed Dividend

Pursuant to the provisions of Section 205A (5) and 205C of the Companies Act, 1956, the Company has transferred the unpaid or unclaimed dividends for the financial year up to 2006-07 from time to time on due dates, to the Investor Education and Protection Fund (the IEPF) established by the Central Government. The Company has not declared any dividend thereafter till the year under review.

Contracts and Arrangements with related parties

During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.shbhawani.com

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 are disclosed in Form No. AOC -2 is annexed herewith as Annexure E.

Your Directors draw attention of the members to Note 31 to the financial statement which sets out related party disclosures.

Meetings of the Board

Six meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance of this Annual Report.

Subsidiary and Associate Companies

The Company does not have any Subsidiary / Associate Company.

Appointment Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key managerial Personnel, Senior Management and their remuneration. The appointment Policy is stated in the Corporate Governance Report and is available on website of the Company at www.shbhawani.com

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its Committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.

Listing with Stock Exchange

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited. The annual listing fees for the financial year 2015-16 have been paid to the Bombay Stock Exchange.

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

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the sexual harassment of women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Till date, the Company has not received any complaint there under.

Acknowledgement

The Directors would also like to record their appreciation to the members of staff and workers, who in spite of constraints have been working hard for the Company and are maintaining cordial relations.

FOR AND ON BEHALF OF THE BOARD

GIRISH TANDON ALANKAR TANDON MANAGING DIRECTOR EXECUTIVE DIRECTOR

PLACE: ALLAHABAD DATED: 11th AUGUST, 2015


Mar 31, 2014

Dear Members

We have pleasure in presenting our 35th Annual Report together with the audited accounts of the Company for the fifteen months period ended 31st March, 2014.

PERFORMANCE

The working of the Company during the period under review has been highlighted below :

15 Monhts 9 Months Ended Ended 31.03.2014 31.12.2012

Production (Tonnes) 32886 28479

Rs. in Lacs Rs. in Lacs

Sales 11961 9526

Other Income 235 56

Total 12196 9582

Gross Profit/(Loss) -1986 -1711

Less : Interest 2406 1385

Depreciation for the year 949 491

Profit Before Exceptional Items and Tax -5341 -3587

Exceptional Items 1468 506

Profit for the year before Tax -6809 -4093

Less : Provision for taxation _ - Profit/(Loss) after taxation -6809 -4093

Profit/(Loss) brought forward from last year -7654 -3561

Loss carried to Balance Sheet -14463 -7654

OPERATIONS & REASON FOR LOSSES

During the period under review, the Company has manufactured 32886 tons of paper with net sale of Rs.119.61 crores. Your Company could not arrest its losses due to stalemate of finalization and approval of the Draft Rehabilitation Scheme as per orders of Hon''ble BIFR. This has prevented the Company from raising any funds for Working Capital which has resulted to below 50% capacity utilization. Paper industry is a continuous process Industry, it can only generate profits at high capacity utilization. More than Rs. 40 crores investment in Chemical Recovery Plant and balancing equipments is lying idle and desired Production could not be achieved due to pending No Objection Certificate of Central Pollution Control Board for Agro Pulp Mill.

COMPLIANCE OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

Due to continuous losses, the net worth of the Company was completely eroded as per the Audited Balance Sheet as at 31.12.2012 and the Company has filed a Reference application under Section 15 (1) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) with Hon''ble BIFR seeking registration of the unit as a Sick Industrial Company and requesting for appropriate measures to revival of the Company in interest of all stakeholders and public at large. The said reference was registered as Case No.29/2013.

In the hearing held on 26.09.2013, the Hon''ble BIFR declared the Company as ''Sick'' under Section 3 (1) (o) of SICA and appointed Bank of Baroda as the Operating Agency (OA) under Section 17 (3) of the Act to prepare a Rehabilitation Scheme for the Company. The Company has submitted the Draft Rehabilitation Scheme (DRS) to Bank of Baroda (OA) and other stakeholders with a Copy to Hon''ble BIFR

In accordance with the Direction of Hon''ble BIFR, meeting of all stake holders of the Company was held on 26th March, 2014. Despite of order of Hon''ble BIFR to finalise the DRS, no progress could be made due to negative strategy adopted by Indian Bank. Indian Bank has also sold its loan to M/s J. M .Financial Assets Reconstruction Pvt. Ltd., Mumbai. The next date of hearing was to be held on 24th April, 2014, was postponed sin die.

CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT

During the period under review, the Company has received 41504 CERs for prior period activity up to 31st December, 2012 from Cogeneration Power Project I and Project II which has been transferred to the Belgian State, proceeds thereof of Rs 347.71 lacs has been received.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required 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, is enclosed as per Annexure-I.

DIRECTORS

Shri Badri Vishal Tandon, Director, is retiring by rotation, being eligible for re-election, has given his consent for the same.

Shri C.M. Krishna, Brig (Retd) Shri Rajeev Lochan Singh SC, Shri Atul Seth and Shri Saran Vinod, are the Independent Directors of the Company who are liable to retire by rotation under the provisions of the Companies Act, 1956.

Your Directors have decided to adopt the provisions with respect to appointment and tenure of Independent Directors which is consistent with the Companies Act, 2013 and the amended Clause 49 of the Listing Agreement with Bombay Stock Exchange. The necessary Resolutions for their appointment as Independent Director under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement to hold the office for a term of 5 (five) consecutive years up to for a term with effect from 26th September, 2014.

AUDITOR''S QUALIFICATION/REMARKS

1. With regard to qualifications/remarks in Auditor''s report and Annexure thereto, with respect to qualification (a) as mentioned in Note No.41 of financial statements, the balances of some of the trade receivables, trade payables, lender and loans and advances are subject to confirmation/reconciliation and subsequent adjustments, if any. The Management is of the view that there is no material adjustment in this regard.

2. With respect to qualification (b) as mentioned in Note No .42 of financial statement, the Company became a sick industrial company within the meaning of Section 3 (1) (O) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), due to erosion of its entire net worth and the Company was declared a Sick Industrial Company by Hon''ble BIFR on 26th September, 2013. The Company has submitted the Draft Rehabilitation Scheme (DRS) to operating agency, Bank of Baroda. The Company has provided interest on Term Loan and other loans of Indian Bank and Bank of Baroda @ 10.50% with effect from 1st January, 2013 in accordance with Guidelines and Checklist for preparation of Draft Rehabilitation Scheme as provided by Hon''ble BIFR.

3. With respect to qualification (c) as mentioned in Note No. 29 of financial statements, the Company has not recognized additional net Deferred Tax Asset during the year. Net Deferred Tax Assets of Rs.14 crores was recognized for the year ended 31.03.2012 based on the future profitability projections by the management. The financial statement has been drawn upon ''going concern'' assumption.

4. Regarding the over dues of Statutory Liabilities of Rs. 190 Lacs approx., the Directors have to inform, that, the same has accrued due to shortage of working capital caused by non finalization of DRS by Banks. All efforts are being made to liquidate the same at the earliest.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956 and Company Law Board Order No.52/165/CAB-92 dated 14.09.1992 directing Cost Audit, the Company carries out an audit of cost accounts relating to paper every year. Shri Rakesh Mishra. Cost Accountant, was appointed as Cost Auditor for the year 2013-14. The Cost Audit Report for the year 2013-14 will be submitted to the Central Government before the due date.

AUDITORS

M/s. P.L.Gupta & Co., Chartered Accountants, Statutory Auditors of the Company, retire from their Office at the conclusion of ensuing Annual General Meeting. They are, however, eligible for re-appointment and have furnished certificate to the effect that their appointment, if made, will be in accordance with the limits specified under Section 139 of the Companies Act, 2013. Your Directors recommend their re-appointment for the accounting year 2014-15.

PARTICULARS OF EMPLOYEES

None of the Employee of the Company was in receipt of total remuneration of Rs. 60,00,000/- during the financial year under review or Rs.5,00,000/- per month. Hence, the information under Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not required to be furnished.

CORPORATE GOVERNANCE CODE

Your Company has complied with all the mandatory requirements of Corporate Governance. A detailed Report on Corporate Governance and Management Discussion and Analysis forming part of the Directors'' Report is enclosed as Annexure II.

The Statutory Auditors of the Company have examined the Company''s compliance to the Code of Corporate Governance and have certified the same, as required under SEBI guidelines. The certificate is reproduced with Corporate Governance Report to the Members.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed.

(i) that in the preparation of the annual accounts for the fifteen months period ended 31st March, 2014, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the period and of the profit or loss of the Company for the period under review.

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

(iv) that the Directors had prepared the accounts for the fifteen months period ended 31st March, 2014 on a ''going concern'' basis.

ACKNOWLEDGEMENT

Your Directors would like to express their thanks to the Bank of Baroda for its co-operation and assistance from time to time. The Directors would also like to record their appreciation to the members of staff and workers, who in spite of constraints have been working hard for the Company and are maintaining cordial relations.



FOR AND ON BEHALF OF THE BOARD

GIRISH TANDON ALANKAR TANDON MANAGING DIRECTOR EXECUTIVE DIRECTOR

PLACE: ALLAHABAD DATED: 14th AUGUST, 2014


Dec 31, 2012

The have pleasure in presenting our 34th Annual Report together with the audited accounts of the Company for the year ended 31st December, 2012.

PERFORMANCE

The working of the Company during the year under review has been highlighted below :

Nine Months Ended Year ended 31.12.2012 31.03.2012

Production (Tonnes) 28479 30767 Rs. in Lacs Rs. in Lacs

Sales 9526 9448

Other Income 56 248

9582 9696

Gross Profit/(Loss) -1711 -887

Less : Interest 1385 1592

Depreciation for the year 491 620

Profit Before Exceptional Items and Tax -3587 -3099

Exceptional Items 506

Profit for the year before Tax -4093 -3099

Less : Provision for taxation -1400

Profit / (Loss) after taxation -4093 -1699

Profit / (Loss) brought forward from last year -3561 -1862

Loss carried to Balance Sheet -7654 -3561

During the period under review, the Company has manufactured 28479 tons of paper with a gross sale of Rs.104.02 crores as compared to 19992 tons of paper with gross sale of Rs.70.35 crores during the corresponding period in previous year. The main reason for losses is high interest, under utilization of plant capacity because of working capital constraint and implementation of CRP Capex I, which has necessitated periodic shut down of existing plant for synchronizing with the new equipments. Your company is facing severe cash crunch from last several years because of high interest rates charged by the banks and repayment of loans. During the period under review, the Company has paid Rs.13.85 crores towards interest and Rs. 3.81 crores towards installments to the Banks. Power failure in July/ August, 2012 further worsened the production of the Company.

The promoters have brought in funds in the form of equity and long term unsecured funds amounting to approx. Rs. 54 crores approx and paid Rs 83 crores approx to the banks towards interest and repayment of Loans over the past 4 years.

The market condition for writing, printing paper is stable and the industry is looking forward to see a better promising growth. The Company is actively involved in Government tender and education sector printing paper supplies. There is good demand of newsprint and other cultural varieties of paper in addition to writing printing segment. The Company is maintaining very low finished goods inventory.

CAPITAL EXPENDITURE SCHEME

The Capital expenditure scheme for Chemical Recovery Plant (CRP) 120 PD was successfully installed, however, CRP could not run on commercial basis due to power shortage because of grid failure in July/August, 2012, is now ready to commence operations.

Capex II will be implemented on stabilization of the operation of the Company at the earliest.

COMPLIANCE OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

Your Directors, at their meeting held on 18th March, 2013, took a note of the fact that the net worth of the Company has become negative by virtue of which Company has become sick in terms of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Board unanimously, decided to close the financial year on 31.12.2012 for nine months period .Thereafter, Reference in Form A was filed with Board for Industrial and Financial Reconstruction (BIFR) pursuant to provisions of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 for speedy determination by the Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to sickness of the Company in interest of all stakeholders and public at large.

The main reasons for sickness are briefed as under:

1 During 2007-2008, the Company had undertaken further capacity expansion by installing most modern new

equipments for manufacturing paper, thereby increasing their manufacturing capacity from 21000 MT to 72000 MT per annum. Post implementation of the same, the Company faced certain initial hurdles with respect to de- inking plant that affected the quality of the pulp and gave lower yield, forcing higher expenditure on trial runs to the extent of approx. Rs.12-14 cr. Although it was rectified later, the Company could not achieve the desired production levels post commissioning as planned in FY 2009 and FY 2010 leading to depressed sales and profitability in that period. However, unfortunately at that time, due to collapse of Lehman Brothers, the global economy fell into the severe recession trap which drastically affected the Newsprint Market and paper industry thereby leading the Company also into severe economic crisis. Due to these unforeseen circumstances, the project completion of the Company got delayed as a result of which the Company incurred heavy losses.

2. In April 2010, due to Pollution Control Board (PCB) directives, the Company could not continue to operate the agro pulp mill without installing the Chemical Recovery Plant (hereinafter referred to as "CRP"). Resultantly, the Company had to shut down operations of its existing 50 Tonnes Per Day agro pulp mill. Due to this, the overall production in FY11, FY12 and FY13 also suffered adversely impacting the financial and operational performance of the Company. As per the PCB directives, a Chemical Recovery Plant (120 TPD) was successfully installed in July, 2012 however, CRP could not run on commercial basis due to power shortage after June 2012. Subsequent Power Grid failure in July/August 2012 further worsened the production of the Company. Further, during the year 2012, the implementation of the CRP necessitated periodic shutdowns of existing plant for synchronizing with the new equipments, which has adversely affected the capacity utilization and production at the plant in that year. However, the CRP has now been implemented and is ready to commence operations.

3. In 2005-06, the Capital Expansion Plan of the Company which included setting up of Waste paper based Pulp Mill and New Paper Machine i.e. PM-3 was financed by Indian Bank & Bank of Baroda (Consortium) via Term Loan of Rs. 24 crores each at a rate of interest @ 10% p.a. on the basis of which the appraisal was undertaken by the banks. However, over the years, by 2011-12, the banks revised the said interest rate to 14.5% p.a. thereby burdening the Company with an additional 4.5% interest cost.

4. In May 2011, in order to stabilize the finances of the Company, the Promoters divested 50% of their stake to the new co-promoters i.e. Shri O.P.Goenka & others and infused Rs. 25 crores in the form of equity and debt. However, due to high interest rates charged by the banks, substantial amount of the said infused money was used in paying up the accumulated dues of the Banks. Thereafter, in June 2011, the Company submitted its proposal to the Banks for infusion of fresh capital which, after many efforts of management of the Company, was cleared by the banks in mid January 2012 i.e. after 6 months delay. Due to this delay, during the intervening period of June 2011 to January 2012, the production of the Company dropped significantly to less than 900 tons per month in November – December 2011. In last 4 years, on all proposals submitted by the Company, the banks have delayed beyond reasonable time in appraisal and sanction, resulting huge losses to the Company. All these delays have resulted in lower capacity utilization of the Company and huge cash losses.

5. The promoters are fully committed towards the Company and have shown their conviction by bringing in funds in the form of equity and long term unsecured funds over the past 4 years amounting to Rs. 54 crores approx.

6. One of the external factors responsible for loss is that in the past four years, the value of Rupee has depreciated from Rs. 42/- per dollar in 2008 to Rs. 57/- per dollar in August 2012. This depreciation in rupee lead to higher import costs of waste paper. The Company uses imported waste paper in a mix with domestic paper for producing higher quality of paper like newsprint (front page), writing and printing paper and special grade paper.

7. Due to continuous liquidity constraints over recent past, the Company is unable to have timely release of its imported waste paper at the container terminal, leading to additional burden of detention and demurrage charges, affecting Company''s profitability. The Company has paid about Rs. 10 cr. over the past 3 years towards these charges.

8. SBPML has been caught in a vicious business cycle of Global meltdown coupled with higher import, falling rupee vis-à-vis U.S. dollar. This has been compounded by very high Interest rate regime.

9. The Company manufactures news print, which is import substitution. In the last 4 years, it has saved more than Rs. 300 crores in foreign exchange by its news print production at a nominal cost of imported raw-material. Demand of news print is increasing.

10. SBPML has commissioned the Chemical Recovery Plant which will increase its capacity to manufacture own pulp and reduce dependence of imported raw-material.

The Company has submitted a request of restructuring of Loans to the Consortium bankers viz Indian Bank & Bank of Baroda on 27th September, 2012. A detailed proposal was submitted to the banks on 2nd November 2012 that requested as under:

a) To consider realignment of the outstanding debt obligations, by undertaking a comprehensive debt restructuring of the Company as per the restructuring scheme submitted to them.

b) To permit holding-on-operations till the final resolution is obtained in the form of approval of final proposal for debt realignment. This will enable the Company to conserve cash flows and to sustain its level of operations.

CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT

During the year under review, the Company has received 13264 CERs for an activity from 1st January, 2010 to 31st December, 2010 from Cogeneration Power Project I and 11509 CERs from Cogeneration Power Project II under verification and is likely to be finalised.

We expect to receive further 26855 CERs for an activity up to 31st December, 2012 from both Cogeneration Power Projects. However, revenue generated from sale of these CERs will be accounted on actual receipt.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required 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, is enclosed as per Annexure-I.

PUBLIC DEPOSIT UNDER SECTION 58-A

During the year, because of continuous losses, the Company has not accepted/ renewed fixed deposits from public and shareholders and as on 31st December, 2012, fixed deposits received from the public and shareholders as on 31.12.2012 stood at Rs.93.62 lacs.

DIRECTORS

Shri Badri Vishal Tandon, Director, is retiring by rotation, being eligible for re-election, has given his consent for the same.

Shri Murari Lal Jalan resigned from Directorship of the Company and ceased to be Director with effect from 10th November, 2012. Your Directors expressed their deep appreciation for his valuation association and contributions to the Company.

Under the provisions of Section 260 of the Companies Act, 1956 and the Articles of Association of the Company, Shri Atul Seth and Shri Saran Vinod were appointed as Additional Directors of the Company on 18th March, 2013 to hold the office until the conclusion of ensuing Annual General Meeting.

The Company has received a notice in writing along with requisite deposit under Section 257 of the Companies Act, 1956 from a member of the Company signifying his intention to propose the appointment of Shri Saran Vinod and Shri Atul Seth as Directors of the Company. Accordingly, the Resolutions proposing the appointment of Shri Saran Vinod and Shri Atul Seth shall be placed before the shareholders for their approval at the ensuing Annual General Meeting.

Your Directors recommend the re-appointment of Shri Girish Tandon as Managing Director, for a further period of three years and Shri Alankar Tandon as Executive Director, for further period of five years on revised terms subject to requisite approvals.

AUDITOR''S QUALIFICATION/ REMARKS

With regard to qualification/remarks in the Auditor''s Report and Annexure thereto, your Directors wish to state that with respect to the qualification of Auditors in Point No. 2 (e) of the Report regarding the Liability for gratuity and leave encashment has been made on the basis of liability determined by the Management, the Company accounts for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year. As the Company has changed current accounting year from 1st April, 2012 to 31st December, 2012 whereas the previous accounting year was for twelve months ended 31st March, 2012. The Company has not received any advice of premium amount payable to Life Insurance Corporation of India for nine months period ended 31st December, 2012. Gratuity liability amounting to Rs.16,03,306/- has been provided for the period on estimated basis. Actuarial report for compensated Absence (PL) Plan valuation for the period ended 31st December, 2012 could not be obtained, hence the liability for leave encashment amounting to Rs. 14,50,000/- has been provided for the period ended 31st December, 2012 on estimated basis.

AUDITORS

M/s. P.L.Gupta & Co., Chartered Accountants, Statutory Auditors of the Company, retire from their Office at the conclusion of ensuing Annual General Meeting. They are, however, eligible for re-appointment and have furnished certificate to the effect that their appointment, if made, will be in accordance with the limits specified in Sub- Section (I-B) of Section 224 of the Companies Act, 1956. Your Directors recommend their re-appointment for the accounting year 2013-14.

PARTICULARS OF EMPLOYEES

None of the Employee of the Company was in receipt of total remuneration of Rs.60,00,000/- during the financial year under review or Rs.5,00,000/- per month. Hence, the information under Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees ) Rules, 1975 are not required to be furnished.

CORPORATE GOVERNANCE CODE

Your Company has complied with all the mandatory requirements of Corporate Governance. A detailed report on Corporate Governance and Management Discussion and Analysis forming part of the Directors'' Report is enclosed as Annexure II.

The Statutory Auditors of the Company have examined the Company''s compliance to the Code of Corporate Governance and have certified the same, as required under SEBI guidelines. The certificate is reproduced with Corporate Governance Report to the Members.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

(i) that in the preparation of the annual accounts for the nine months period ended 31st December, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the period and of the profit or loss of the Company for the period under review;

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

(iv) that the Directors had prepared the accounts for the nine months period ended 31st December, 2012 on a ''going concern'' basis.

ACKNOWLEDGEMENT

Your Directors would like to express their thanks to the Banks for their co-operation and assistance from time to time. The Directors would also like to record their appreciation to the members of staff and workers, who in spite of constraints have been working hard for the Company and are maintaining cordial relations.

FOR AND ON BEHALF OF THE BOARD

GIRISH TANDON ALANKAR TANDON MANAGING DIRECTOR EXECUTIVE DIRECTOR

PLACE : ALLAHABAD

DATED: 15TH MAY, 2013


Mar 31, 2012

The have pleasure in presenting our 33rd Annual Report together with the audited accounts of the Company for the year ended 31st March, 2012.

PERFORMANCE

The working of the Company during the year under review has been highlighted below :

Year ended Year ended 31.03.2012 31.03.2011

Production (Tonnes) 30767 42773 Rs. in Lacs Rs. in Lacs

Sales 9448 12271

Other Income 248 237

9696 12508

Gross Profit/(Loss) -887 834

Less : Interest 1592 1351

Depreciation for the year 620 609

Profit for the year before tax -3099 -1126

Less : Provision for taxation -1400 -78

Profit / (Loss) after taxation -1699 -1048

Profit / (Loss) brought forward from last year -1862 -814

Loss carried to Balance Sheet -3561 -1862

During the year 2012, the Company has manufactured 30,767 tons of paper with a net sale of Rs. 94.48 crores excluding taxes. The main reasons for loss are high interest cost, steep fall in margin of news print due to severe recession in demand and high level of duty free imports. Further, the prices of fuel and raw materials increased abruptly thereby increasing the cost of production. The Company faced severe cash crunch because of high interest rates charged by the banks & repayment of Loans. During the year under review, the Company has paid Rs 15.92 crores towards interest and Rs. 11.04 crores towards installments to the Banks.

There has been an improvement in production and sales between April & June 2012 with production at 13,658 tons and gross sales at Rs. 48.24 crores. The plant is running at around 75% capacity and can achieve over 100% capacity very shortly. The main drawback in increasing capacity utilization is severe weather condition and implementation of ongoing Capital Expenditure programme, which has necessistated periodic shut down of existing plant to synchronize the new equipments.

Your Company manufactures writing, printing, news print and packaging paper on its three machines. The market condition for writing and printing paper is stable, however, MG varieties of paper is facing demand recession due to lower consumption of Packaging Industry. In case of news print, due to depreciation in rupee, the landed price of imported news print has increased and should give better price realisation for our newsprint in current year.

The Company has been facing severe financial crunch despite induction of more than Rs. 30 crores by the promoters and increase in Working Capital Limits by the Banks. The major cause for the same is investment of Rs. 9.17 crores in the Capital Expenditure Programme as own contributuion and utilization of nearly Rs. 20 crores for Banks over dues. It should be appreciated, that, more than Rs. 80 crores has been paid by the Company during the last 4 years as interest and Term Loan repayment despite continued losses and very adverse industry scenario.

CAPITAL EXPENDITURE SCHEME

The Company has been sanctioned Term Loan of Rs 19 crores from Indian Bank Consortium for completion of Chemical Recovery Project Capex I and upgrdation of Agro Pulp Mill Capex II.

The Capital Expenditure Scheme for Chemical Recovery Plant is under trial run. We have been able to successfully recover Soda Ash of commercial grade from our Chemical Recovery Plant. The Plant will not only solve the pollution control problem, but also will generate net revenue when fully operational, which will help in improving the financials of the Company.

Capex I has been implemented in part and Capex II for Rs 10 crores will be implemented at the earliest.

OPEN OFFER

The Promoters of the Company, Shri Badri Vishal Tandon group and Shri Om Prakash Goenka group, have received permission for purchase of equity shares in open offer as per SEBI guidelines. The open offer was opened on 6th June 2012, closed on 25th June 2012 and 9,09,033 shares were successfully tendered to Shri Badri Vishal Tandon group and Shri Om Prakash Goenka group. This has resulted in increase in joint promoters' holding by 69.44%.

CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT

During the year under review, the Company would receive 24473 CERs for an activity from 1st January, 2010 to 31st December, 2010 from both Cogeneration Power Projects. The CDM Verification for Project II (Ref No. 0802, Monitoring Period 01/01/2011 to 31/12/2012) is likely to be started.

DISCLOSURE OF PARTICULARS UNDER SECTION 217 (1) (E)

Under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the detailed information is enclosed as per Annexure-I.

PUBLIC DEPOSIT UNDER SECTION 58-A

During the year, because of continuous losses, the Company has not accepted/ renewed fixed deposits from public and shareholders and as on 31st March, 2012, fixed deposits from the public and shareholders aggregated to Rs.197.66 lacs. The repayment of two deposits amounting to Rs 2.00 lacs could not be made for want of instruction thereof from depositors.

DIRECTORS

Shri C M Krishna and Brig.(Retd.) Shri Rajeev Lochan Singh SC, Directors of the Company, are retiring by rotation.

Shri C M Krishna and Brig.(Retd.) Shri Rajeev Lochan SC, being eligible for re-election, have given their consent for the same.

AUDITORS

M/s. P.L.Gupta & Co., Chartered Accountants, Auditors of the Company, retire from their Office. They are, however, eligible for re-appointment and have furnished certificate to the effect that their appointment, if made, will be in accordance with the limits specified in Sub- Section (I-B) of Section 224 of the Companies Act, 1956. Your Directors recommend their re-appointment for the accounting year 2012-13.

PARTICULARS OF EMPLOYEES

None of the Employee of the Company was in receipt of total remuneration of Rs.60,00,000/- during the financial year under review or Rs.5,00,000/- per month. Hence, the information under Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees ) Rules, 1975 are not required to be furnished.

CORPORATE GOVERNANCE CODE

Your Company has complied with all the mandatory requirements of Corporate Governance. A detailed report on Corporate Governance and Management Discussion and Analysis forming part of the Directors' Report is enclosed as Annexure-II.

The Statutory Auditors of the Company have examined the Company's compliance to the Code of Corporate Governance and have certified the same, as required under SEBI guidelines. The certificate is reproduced with Corporate Governance Report to the Members.

DIRECTORS' RESPONSIBILITY STATEMENT

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

(i) that, in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

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

(iv) that, the Directors had prepared the accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

ACKNOWLEDGEMENT

Your Directors would like to express their thanks to the Banks for their co-operation and assistance from time to time. The Directors would also like to record their appreciation to the members of staff and workers, who in spite of constraints have been working hard for the Company and are maintaining cordial relations.

FOR AND ON BEHALF OF THE BOARD

GIRISH TANDON ALANKAR TANDON

MANAGING DIRECTOR EXECUTIVE DIRECTOR

PLACE: ALLAHABAD

DATED: 14th AUGUST, 2012


Mar 31, 2011

Dear Members,

We have pleasure in presenting our 32nd Annual Report together with the audited accounts of the Company for the year ended 31st March, 2011.

PERFORMANCE

The working of the Company during the year under review has been highlighted below :

Year Year ended ended 31.03.2011 31.03.2010

Production (Tonnes) 42773 45548 Rs. in Rs. in Lacs Lacs

Sales 12271 12592

Other Income 237 212

12508 12804

Gross Profit/(Loss) 834 1118

Less : Interest 1351 1171

Depreciation for the year 609 593

Profit for the year before tax -1126 -647

Less : Provision for taxation -78 -183

Profit / (Loss) after taxation -1048 -464

Profit / (Loss) brought forward from last year -814 -1188

Transfer from General Reserve - 838

Loss carried to Balance Sheet -1862 -814

During the financial year under review, 2010-11, the Company has manufactured 42,773 tons of paper with a gross sale of Rs. 130.88 crores including taxes. The production could have been higher by more than 15,000 tons, but due to very adverse raw-material and financial conditions, the Company had to slow down production from November 2010.

The major reasons for loss in the year are:

1. Increase in waste paper price due to shortage of fiber.

2. Increase in price of fuel, that is, husk and coal.

3. Lower realization of sale per ton due to excess supply of writing printing paper and excessive import of newsprint.

4. High Interest cost.

During the period April-June 2011, the production was 7,997 tons and sales were 7,463 tons, amounting to Rs.26.72 crores. The production has picked up only in June. We manufactured 4,230 tons of paper versus combined production of 3,993 tons of April and May,2011.

Paper prices have improved from February 2011 and though July-October is off season for paper, still we expect to sell our entire production due to pending Government Orders and good demand of newsprint. After registering increase the domestic waste paper prices now coming down. Imported waste paper prices are high but steady. We are trying to reduce dependence on imported waste paper after implementation of Chemical Recovery plant and further capital expenditure.

Availability of Agro residue is expected to be good in coming months.

COMPLIANCE OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

Pursuant to provisions of Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985, we are required to report the shareholders and the Board for Industrial and Financial Reconstruction (BIFR) regarding the erosion of net worth of the Company.

The major reasons for losses are the severe recession in paper market in previous years, increase in price of raw material & fuel, high interest cost. Despite the losses, the Company has been paying the term loan installments/bank dues by raising short term loans. This has led to shortage of working capital. Hence, the equity capital was raised for smooth operations of the Plant which is suffering due to lack of working capital.

CAPITAL EXPENDITURE SCHEME

The Capital Expenditure Scheme for Chemical Recovery Plant is under implemention. However, due to delay in equipment supplies and some electrical motors along with imported equipment from China, we expect a delay of three months in completion. In view of this, there is some time and cost over run.

Further, the Company has taken opinion from experts who have advised the immediate steps should be taken to increase the production of bleach pulp to 150 tons per day. Balancing equipment to reduce power cost and improve storage facility of agro residue and fuel is urgently required. Investment is also required in infrastructure.

Accordingly, the Company has submitted a Proposal to extend the present Capital Expenditure Scheme with request to provide Additional Term Loan to banks.

CAPITAL

Your Company has issued an aggregate of 1,84,03,224 Equity Shares of Rs. 10/- each aggregating to Rs. 18.40 crores of perferential basis as under:

(a) 22,50,000 equity shares to Mr. Badri Vishal Tandon (Karta of Ram Mohan Das Tandon (HUF)) existing promoter of the Company.

(b) 1,16,53,224 equity shares to the investor Acquirers ie Mr. Ompraksh Goenka, Mrs. Kiran Goenka, Mr. Gaurav Goenka, Mrs. Girija Goenka and Mirah Dekor Ltd.

(c) 45,00,000 equity shares to Mr. Mohit Chaturvedi, Mrs. Bina Chaturvedi and Ganges Leasing and Finance Company Private Limited.

Your Company futher entered into Share Subscription and Shareholders Agreement between the existing Promoters of the Company and Mr. Omprakash Goenka, Mrs. Kiran Goenka, Mr. Gaurav Goenka, Mrs. Girija Goenka and Mirah Dekor Ltd. (the 'Investor Acquirers'). Accordingly, Shri Badri Vishal Tandon will be the Chairman, Shri Om Prakash Goenka, Vice-Chairman and Shri Girish Tandon, Managing Director of the Company.

CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT

During the year under review, the Company received 28463 units of CERs for our contribution to reduce carbon emissions from first & second Rice Husk Based Cogeneration Power Project for activity up to 31st December, 2009. We realized a sum of Rs.217 lacs net of expenses from sale of these CERs.

We expect to receive further 24473 CERs for an activity from 1st January,2010 to 31st December,2010 from both Cogeneration Power Projects. However, revenue generated from sale of these CERs will be accounted on actual receipt.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under Section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, is enclosed as per Annexure-I.

PUBLIC DEPOSIT UNDER SECTION 58-A

During the year, the Company has accepted fixed deposits from public and shareholders and as on 31st March, 2011, fixed deposits from the public and shareholders aggregated to Rs. 378.19 lacs. There has been no unpaid/unclaimed/ overdue deposit as on date.

DIRECTORS

Shri Badri Vishal Tandon and Shri K A Pai, Directors of the Company, are retiring by rotation.

Shri Badri Vishal Tandon being eligible for re-election, has given his consent for the same.

Shri K A Pai has expressed his inability, due to old age to continue as Director, after forthcoming Annual General Meeting. Your Directors express their deep appreciation for his valuable association & contribution for more than a decade.

Under the provisions of Section 260 of the Companies Act, 1956 and Article 81 (b) of the Articles of Association of the Company, Shri Chaitanya Dhruve Mehta was appointed as an Additional Director of the Company with effect from 18th May, 2011 to hold the Office till the conclusion of ensuing Annual General Meeting.

The Company has received Notice under Section 257 of the Companies Act, 1956 and accordingly the Resolution proposing the appointment of Shri Chaitanya Dhruve Mehta shall be placed before the shareholders for their approval at the ensuing Annual General Meeting.

AUDITORS

M/s P. L. Gupta & Co., Chartered Accountants, Statutory Auditors of the Company, retire from their Office at the conclusion of ensuing Annual General Meeting. They are, however, eligible for re-appointment and have furnished certificate to the effect that their appointment, if made, will be in accordance with the limits specified in Sub- section (I-B) of Section 224 of the Companies Act, 1956. Your Directors recommend their re-appointment for the accounting year 2011-12.

PARTICULARS OF EMPLOYEES

None of the Employee of the Company was in receipt of total remuneration of Rs.60,00,000/- during the financial year under review or Rs.5,00,000/- per month. Hence, the information Under Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees ) Rules, 1975 are not required to be furnished.

CORPORATE GOVERNANCE CODE

Your Company has complied with all the mandatory requirements of Corporate Governance. A detailed report on Corporate Governance and Management Discussion and Analysis forming part of the Directors' Report is enclosed as Annexure-II.

The Statutory Auditors of the Company have examined the Company's compliance to the Code of Corporate Governance and have certified the same, as required under SEBI guidelines. The certificate is reproduced with Corporate Governance Report to the Members.

DIRECTORS' RESPONSIBILITY STATEMENT

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

(i) that, in the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

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

(iv) that, the Directors had prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

ACKNOWLEDGEMENT

Your Directors would like to express their thanks to the Banks for their co-operation and assistance from time to time. The Directors would also like to record their appreciation to the members of staff and workers, who in spite of constraints have been working hard for the Company and are maintaining cordial relations.

FOR AND ON BEHALF OF THE BOARD

GIRISH TANDON ALANKAR TANDON MANAGING DIRECTOR EXECUTIVE DIRECTOR

PLACE : ALLAHABAD DATED : 10TH AUGUST, 2011

 
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