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Directors Report of Tamil Nadu Newsprint And Papers Ltd.

Mar 31, 2015

Dear MEMBERS

The Company's Directors are pleased to present the 35th Annual Report of the Company along with Audited Accounts for the financial year ended 31st March 2015.

1. FINANCIAL RESULTS

The Financial Results for the year under review are summarized below:

(Rs. in crore)

Particulars 2014-15 2013-14

Revenue from operations 2135.73 2285.22

Other income 16.64 16.72

Operating Profit (PBIDT) 522.36 523.21

Finance cost 154.93 128.21

Gross Profit (PBDT) 367.43 395.00

Depreciation 137.30 192.32

Profit before tax 230.13 202.68

Provision for tax 63.40 41.50

Profit after tax 166.73 161.18

Balance brought forward 27.12 20.22

Less: Adjustment* 7.14 -

Profit Available for appropriation 186.71 181.40

APPROPRIATIONS

Transfer to General Reserve 100.00 100.00

Debenture Redemption Reserve 5.42 5.70

Proposed Dividend 41.53 41.53

Taxon Dividend 8.45 7.05

Balance carried forward 31.31 27.12

186.71 181.40

*Adjustment of Depreciation as per note 7(b) of Schedule II to Companies Act, 2013 (Net of Deferred Tax Liability).

During the entire year 2014-15, Indian Paper Industry was under severe strain due to unprecedented poor marketing conditions and consequent drop in prices. Despite this your company has achieved good overall results. The Management deserves commendation for their performance.

2. DIVIDEND

Your Directors recommend a dividend of 60% for the year ended 31st March, 2015. The Dividend, if approved by the shareholders at the AGM, will be paid to the equity shareholders whose names appear in the Register of Members as on 18th September, 2015. Expenditure on the proposed dividend, will be Rs. 49.98 cr. inclusive of taxes.

3. TRANSFER TO RESERVES

The Company has transferred Rs. 100 cr. to General Reserves and Rs. 5.42 cr. to Debenture Redemption Reserve out of the amount available for appropriation. Rs. 31.31 cr. is proposed to be retained in the Profit & Loss Account.

4. PERFORMANCE HIGHLIGHTS OF THE YEAR

a) Operations

1. Sales turnover crossed Rs.2000 cr mark for the second time.

2. Profit before tax of Rs.230.13 cr. was an all time record. Profit after tax of Rs.166.73 cr. exceeded the PAT achieved in 2013-14 by Rs. 5.60 cr.

3. 373259 MT of Paper and 284091 MT of Pulp were produced during the year.

4. Total sales was 337689 MT. Domestic sales constituted 78.44% and Export 21.56%.

5. 6208.84 lakh units of power were generated. 5841.57 lakh units were consumed. 367.27 lakh units were exported to the state grid. Power drawn from State Grid constitutes only 1.52% of total power consumed.

6. Received 127588 Renewable Energy Certificates (REC) for power generated from the steam produced in the Recovery Boiler. 48200 RECs were sold during the year yielding revenue of Rs. 7.12 crores (Net of exchange fees and service tax). 196381 RECs have been carried forward for sales during 2015-16.

7. Two bio-methanation plants set up within the factory premises have generated cumulatively 91.71 lakh m3 of methane gas during the year 2014 - 2015. By using the methane gas in lime kiln, TNPL has saved consumption of 5378 kl of high cost furnace oil during the year.

8. Two windfarms with an installed capacity of 35.5MW generated 469.20 lakh Kwh Units of'Green Power'.

9. The Company is involved in Farm Forestry and Plantations covering 105968 acres benefitting 20218 farmers in 29 districts of Tamilnadu.

10. Overall Water Consumption was 51 kl. Per MT of paper.

11.161910 tonnes of cement were produced during the year. TNPL is the first and only company in the Paper Industry to convert mill wastes into high grade cement.

12. The company repaid on schedule Term Loans amounting to Rs.359.89 cr.

b. New Projects

1. The company is setting up a state-of-the-art Multilayer Double Coated Board Plant with an annual capacity of 200,000 MT per annum as a green field project in Mondipatti village, Manaparai taluk, Trichy District. The project is progressing as per schedule. The project is targeted to be completed by December 2015.

2. The company is expanding the cement production capacity set up as part of Lime Sludge and Fly ash Management from 600 tpd to 900 tpd. The Project is expected to be completed by December 2015.

3. The company has acquired 38.40 acres land with an Industrial shed measuring 11,248 Sq.Mts at Mayanur in Karur District for setting up paper conversion centre and setting up units related to paper industry. The conversion centre will be made available for setting up conversion units. This project is also expected to be completed by December 2015.

c. Contribution to Environment

1. During January'15, M/s. TuV India Limited, a subsidiary of TuV NORD, Germany carried out Surveillance Audit of TNPL's Environmental Management System and recommended to maintain the certificate till February 2017 as TNPL is conforming to the requirements of ISO 14001:2004 standards.

2. TNPL has launched a new "Eco-friendly" product during the year under the brand name "GreenPal". This paper is produced from Bagasse and recycled fibres. No tree is cut for production of this product, thus making it a totally environmental friendly product.

3. TNPL's treated effluent water is used for irrigation of around 1700 acres of land under TNPL Treated Effluent Water Lift Irrigation Scheme (TEWLIS) and 306 acres of land under Captive Plantation scheme.

4. The bio-gas generated in Bio-methanation plant using bagasse wash effluent with high COD is being used in the lime kilns in lieu of furnace oil .

5. TNPL celebrated the "World Environment Day" on 5th June, 2014 in Kagithapuram unit. 5000 tree saplings were planted in and around cement plant unit for improving green cover. Environment awareness rally was conducted in Unit II at Mondipatti village, Manapparai Taluk involving school children.

d. Corporate Social Responsibility (CSR)

The company has constituted a Committee called

"Corporate Social Responsibility Committee" comprising of

5 Independent Directors. The Committee monitors CSR

activities. 1

1. The Company aims to spend 2% of the average net profit of the company before tax in the last three financial years . The company spent Rs.3.73 cr. on CSR activities during the year under review.

2. The Company has undertaken CSR activities as per the CSR policy (available on your company's website www.tnpl.com) The details are contained in the Annual Report on CSR activities vide Annexure -1, forming part of this Report. The CSR activities are mainly focused on Education, Health care, Socio-economic development, Environmental sustainability and Culture & Heritage promotion.

e. Contribution to Innovation and New knowledge development

1. The company nurtures creativity and innovation through its R & D activities which are carried out largely in-house. A few activities are outsourced when warranted.

2. The R & D activities focus on product development, process improvement, raw material substitution, development of new products and protection of the environment.

3. The company spent Rs. 6.12 Cr. on R & D activities during the year.

f. Awards

* The Company has received " IPMA Paper Mill of the year Award" for the year 2013-14 from Indian Paper Manufacturers' Association (IPMA).The company has received the above award Fourth time and for the Second time in a row.

* Dun & Bradstreet, Mumbai, has selected TNPL as the "Top Indian Company" under the sector paper for Dun & Bradstreet Corporate Awards 2015 for the Fourth time in a row.

* Confederation of Indian Industry (CII) in its 15th National Award for Excellence in Energy Management 2014, has selected TNPL as one of the 49 companies for the 'Excellent Energy Efficient Unit'Award.

5. MARKET TRENDS

a. General

The installed capacity of Paper industry in India is approximately 12.75 million tonnes. The Industry's average capacity utilization is 89%. The overall consumption inclusive of imports and net of exports is 13.10 million tonnes.

The average per capita consumption in India is around 11 kgs. against the global average consumption of 56 kgs. The world demand growth for paper is around 1.5%. With greater emphasis on education and literacy rate and positive trend in the growth of the economy, the demand growth for paper in India is estimated to be around 6%. Excise duty and Import duty on paper remained unchanged at 6% and 10% respectively.

b) Printing & Writing Paper

Between 2008 and 2011, many mills added capacity and supplies exceeded demand. Consequently, paper prices dropped in 2012. During 2013, Paper industry faced scarcity in supplies of pulpwood leading to mills importing wood logs and chips at higher prices impacting margins. Consequent to the steep increase in input costs, paper prices increased during 2013. The price rise did not last long. With the paper prices declining in the International market and Rupee strengthening against USD, large volume consumers and traders started importing paper in large volume under Free Trade Agreements (FTA). The domestic industry thus faced unprecedented challenges, both on cost front and on market front during 2014-15. Prices and sales declined eroding margins.

With seasonal demand from the Education Sector and positive sign in the economic growth, the market started showing signs of improvement since April 2015.

c) Packaging Boards

The market for Packaging Board is estimated at 2.4 Million tonnes. Grey-back Boards account for 1.08 million tonnes (45%), White-back Coated Boards and other high-end varieties like Folding Boxboard, Solid Bleached Sulphate Boards, etc. account for the remaining 1.32 million tonnes (55%) The demand growth in the high end segments is estimated at 11.5% per annum.

d) Outlook

With the demand growth anticipated at 6% per annum, the domestic consumption is expected to rise to 23.50 mtpa. by 2024-25 . There is good potential for domestic manufacturers for adding capacity in Paper and Board about 1 mtpa.

Consistent growth in the economy and greater emphasis on education and literacy by the Government are considered the key drivers for demand growth in printing & writing paper. Demand for better quality packaging of food & health care products and high value consumer products are the key demand drivers for growth in Paper Board.

e) TNPL response to Market Trends

TNPL has increased its production capacity consistently, keeping in pace with Industry growth. The Company is now setting up a Multilayer Double Coated Board Plant with a capacity of 2 lakh MT per annum. With this, the total production capacity of the company will rise to 6 lakh MT per annum from the Financial Year 2016-17.

6. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors have extended the service of Thiru R Mani as Director (Operations) on contract basis for one year from 27th February, 2015. Thiru R Mani will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director at the AGM.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Thiru T Udhayachandran IAS, Director and Thiru Mahesan Kasirajan IAS, Director retire by rotation at the forthcoming Annual General Meeting. They are eligible for reappointment as Directors. The Board of Directors, at its meeting held on 29th May, 2014 appointed Thiru V Sivakumar as the Company Secretary - a key managerial person in accordance with the provisions of Section 203 of the Companies Act, 2013.

6.1 Declaration from Independent Directors on Annual Basis

The Independent directors have submitted their disclosure to the Board confirming that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of Section 149 of the Companies Act, 2013 as well as Clause 49 of the Listing Agreement. The Board confirms that the said independent directors meet the criteria as laid down under the Companies Act, 2013 as well as Clause 49 of the Listing Agreement.

6.2 Remuneration Policy

The Board, on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

6.3 Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, Eight Board Meetings and Seven Audit Committee Meetings were convened and held, the details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

6.4 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, the directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

7. INTERNAL COMPLAINTS COMMITTEE

In accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 & the Rules made thereunder the Company has constituted an Internal Complaints Committee (ICC) as per section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with its Rules. The ICC will comprise the following Members:

(i) Tmt.R.S.Tamilarasy, Deputy Manager (Lab) - Presiding Officer

(ii) Thiru.P.Sundaram, MSW, Manager - HR (Member)

(iii) Tmt.M.Pemila Beham, MSW, Assistant Officer - HR (Member)

The above members are amongst employees preferably committed to cause of women or who have had experience in social work or have legal knowledge.

During the year under review, there were no complaints referred to the Committee.

8. AUDITORS

a) Statutory Auditors

The Comptroller and Auditor General of India appointed M/s. Raman Associate, Chartered Accountants, Chennai, as the Statutory Auditors of the Company for the Financial year 2014-15

b) Cost Auditors

Pursuant to Sec.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 cement activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s Raman & Associates, to audit the cost accounts of the company for the year 2014-15. The cost audit report for the year 2014-15 will be submitted to the Central Government before the due date. Cost Audit report for the financial year 2013-14 was filed on schedule.

c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act,2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s R. Sridharan & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the company. The Report of the secretarial audit is annexed herewith as "Annexure II".

9. NON- CONVERTIBLE DEBENTURES

During the year, the Non-Convertible Debentures Series- II aggregating Rs. 50 Crore were fully redeemed.

In the year 2014-15, the company has paid their installments to the debenture holders for NCD Series-I and II aggregating to Rs. 34.72 cr. which was within the stipulated time as per schedule.

As on 31st March, 2015, Non-Convertible Debentures Series-I aggregating Rs. 5.56 cr. remain outstanding.

10. FIXED DEPOSITS

The company has stopped accepting fresh deposits from 1st June, 2002 and renewals from 1st August, 2005. There was no outstanding deposit as on 31st March, 2015 compared to Rs.0.45 Lakhs in the previous year. The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptances of Deposits) Rules, 2014.

11. RISK MANAGEMENT FRAMEWORK

TNPL has established a Risk Management Framework under which the risks covering the entire operation have been identified and categorized as high, medium and low.

All the risks are discussed periodically in the Senior Management Committee meetings and appropriate actions are taken pro-actively.

The risk details and mitigation plans are placed before the Audit Committee and the Board, bi-annually.

12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

TNPL has instituted adequate internal control procedures commensurate with the size of its operations. TNPL has also prepared an 'Internal Control Procedure Manual' to ensure that the control procedures are followed by all departments. The departments concerned in the company are complying with the stipulations in the manual without deviating the procedures. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Internal controls are supported by internal audit and management reviews. The Audit Committee meets periodically the Management, External-Internal auditors, Internal auditors, Statutory Auditors and reviews the Annual Audit plans and internal controls. All significant observations of the Auditors are acted upon. The Audit Committee met 7 times during the financial year. The review of Management Response to Audit Observations, constitutes an important aspect of the Agenda for each meeting.

13. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The company has framed a vigil mechanism / whistle blower policy, the details of such Policy are explained in the Corporate Governance Report and also posted on the website of the Company at www.tnpl.com.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

15. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred Rs. 11,03,649/- being the Dividend and Fixed Deposit amount which were due and payable and remained unclaimed and unpaid for a period of seven years, to the Investor Education and Protection Fund, as required under Section 205A (5) of the Companies Act, 1956.

16. UNPAID DIVIDEND STATUS

Dividends were remaining unpaid due to non-confirmation of their new addresses by the concerned shareholders. The unpaid dividends were returned by the postal authorities. Effective follow-up by the Company has resulted in Unpaid Dividends being consistently below 0.5% of the total dividends. As and when the shareholders communicate the new address, the dividend is sent to the shareholders. At the end of seven years, the unpaid dividend is transferred to Investor Education & Protection Fund. The table and graph given below summarize the status of Unpaid Dividends.

DIVIDEND STATUS FOR THE LAST 7 YEARS

(Rs. In lakhs)

SL YEAR SHARE DIVIDEND DIVIDEND DIVIDEND No. CAPITAL AMOUNT PAID %

1. 2007-08 6921.06 25 1730.27 1724.77

2. 2008-09 6921.06 45 3114.48 3106.60

3 2009-10 6921.06 45 3114.48 3103.07

4. 2010-11 6921.06 50 3460.53 3448.99

5. 2011-12 6921.06 50 3460.53 3448.09

6. 2012-13 6921.06 50 3460.53 3446.28

7. 2013-14 6921.06 60 4152.63 4134.30



SL YEAR DIVIDEND % OF PAID % OF UNPAID No. UNPAID AS ON DIVIDEND DIVIDEND 31.3.2015

1. 2007-08 5.50 99.68 0.32

2. 2008-09 788 99.75 0.25

3 2009-10 11.41 99.63 0.37

4. 2010-11 11.54 99.67 0.33

5. 2011-12 12.44 99.64 0.36

6. 2012-13 14.25 99.59 0.41

7. 2013-14 18.33 99.56 0.44

17. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 134(3)(m) of the Companies Act 2013, read with the Rule 8 of The Companies (Accounts) Rules, 2014, is furnished in Annexure III to this Report.

18. HEALTH

To render Medical Assistance for the employees and their dependents, company run Occupational Health Centre (OHC). OHC is functioning on round the clock basis in housing colony. In addition, specialist doctors from various fields visit the OHC every Sunday.

The company bears the entire medical expenses for 7 Serious Ailments viz. Heart Ailment, Cancer, Kidney Transplantation, Paralysis, Leprosy, Tuberculosis and Brain Surgery. Under a Special Medical Assistance Scheme, 50% of the hospitalization expenses for employee and their dependants are borne by the company.

Comprehensive Master Health Check-up is being carried out for employees thrice in their service period.

19. SAFETY

TNPL has adopted a clearly defined Occupational Health and Safety Policy. Suitable Personal Protective Equipments are provided to all employees. Periodical Training Programs are conducted to improve safety awareness among the employees including contract workmen. Caution boards, posters, slogans, Do's and Dont's etc. are displayed at prominent places to promote safety at work places. Periodical medical checkups are organized for the employees to identify occupational health hazards. Safety Committee has been constituted and meetings are conducted periodically and suggestions given to improve safety aspects are implemented. Accidents and incidents are investigated and preventive / corrective actions are taken to avoid recurrence. Safety Audit, HAZOP study and Risk Analysis are carried out periodically through safety experts and the recommendations are implemented.

Testing of Pressure Vessels, Lifting tackles, Conveyor Systems, Building Stability, etc., are carried out as per statutory requirements through competent person. On-site/Off-site Emergency Plans are available to mitigate emergencies. Periodic mock drills for hazardous chemical leakages and fire incident are conducted to ensure the effectiveness of emergency preparedness. Toxic gas leak sensors and smoke detectors with alarms are installed at hazardous material storage and process areas. The entire Mill is covered with fire hydrant points with pressurized water ring mains for fire fighting. Also different types of fire extinguishers according to the nature of fire are provided at strategic points for use in the event of fire. In addition, two mobile fire tenders and one portable fire pump are available to tackle fire emergency. Since inception, TNPL has maintained an excellent safety record.

20. PARTICULARS OF EMPLOYEES

None of the employees of the company was in receipt of remuneration in excess of the limits prescribed under the Companies Act, 2013 and the rules framed thereunder. The information as required under Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company, is annexed as Annexure V.

21. CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement prepared in accordance with the Accounting Standard (AS-3) issued by the Institute of Chartered Accountants of India is attached to the Balance Sheet.

22. EXPORT HOUSE STATUS

The Company continues to enjoy "Trading House" status, awarded by the Government of India, in recognition of its export performance.

23. INDUSTRIAL AND PERSONNEL RELATIONS

The Company continues to have healthy industrial and employee relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the company to remain at the forefront of the Industry.

Your Company continued to receive co-operation and unstinted support from the distributors, retailers, stockists, suppliers and others associated with the Company as its trading partners. The Directors wish to place on record their appreciation for the same and your Company will continue in its endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other and consistent with consumer interest.

24. ENHANCING SHAREHOLDERS'VALUE

Your Company believes in the importance of its Members who are among its most important stakeholders. Accordingly, your Company's operations are committed to the goal of achieving high levels of performance and cost effectiveness, growth building , enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its stakeholders by ensuring that its corporate actions have positive impact on the socio-economic and environmental growth and development.

25. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the directors had selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period;

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

4. That the Annual Accounts were prepared for the financial year ended 31st March, 2015 on a going concern basis;

5. That the directors have laid down proper internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively;

6. That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

26. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure IV"

27. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and the Report on Corporate Governance forming part of Directors' Report are enclosed as "Annexures VI and VII".

As required by the Listing Agreement, an Auditor's Certificate on Corporate Governance and a Declaration by the Chairman & Managing Director with regard to Code of Conduct are attached to the Report on Corporate Governance.

28. RELATED PARTY TRANSACTIONS

There are no materially significant transactions with related parties during the year with Promoters, Directors, Key Managerial Personnel or other designated persons which are potentially conflicting with the interest of the Company at large.

The Board of Directors have framed the policy on Related Party Transactions and the same is uploaded on the Company's website.

None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company.

Accordingly, the disclosures of Related Party Transactions required under section 134 (3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

30. CEO/CFO CERTIFICATION

As required by Clause 49 of the Listing Agreement, a Certificate on the Financial Statements and Cash Flow statement of the company for the year ended March 31, 2015 duly signed by the Chairman & Managing Director and Deputy Managing Director was submitted to the Board of Directors at the meeting held on May 28, 2015.

31. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation for the assistance, co-operation and support extended to the company by the Govt. of Tamil Nadu, Commercial Banks, Financial Institutions, Sugar Mills and Dealers.

The Board also places on record its sincere appreciation of the positive response received from the Company's valued customers and thanks them for their continued support .

The company is grateful to all employees for their exemplary co-operation during the year. Their contribution has been truly outstanding. The Directors place on record their appreciation of the excellent effort made by every employee to enhance the company's performance in adverse market conditions.

Finally, the Board of Directors sincerely thanks the shareholding community for their solid support and for the confidence they have reposed in the Company.

32. CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. The Company cannot guarantee the accuracy of assumptions and the projected future performance of the Company. The actual results may materially differ from those expressed or implied in this report. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

For and on behalf of the Board

C VSANKAR CHAIRMAN AND MANAGING DIRECTOR Date: 3rd August, 2015 Place: Chennai 600 032


Mar 31, 2014

TO THE MEMBERS

The Company''s Directors are pleased to present the 34th Annual Report of the Company along with Audited Accounts for the financial year ended 31st March 2014.

1. FINANCIAL RESULTS

The Financial Results for the year under review are summarized below:

(Rs. in crore) Particulars 2013-14 2012-13

Revenue from operations 2285.22 1861.26

Other income 16.72 19.92

Operating Profit (PBIDT) 523.21 422.06

Finance cost 128.21 120.97

Gross Profit (PBDT) 395.00 301.09

Depreciation 192.32 174.98

Profit before tax 202.68 126.11

Provision for tax 41.50 34.63

Profit after tax 161.18 91.48

Balance brought forward 20.22 20.93

Profit Available for appropriation 181.40 112.41

APPROPRIATIONS

Transfer to General Reserve 100.00 46.00

Debenture Redemption Reserve 5.70 5.70

Proposed Dividend 41.53 34.61

Tax on Dividend 7.05 5.88

Balance carried forward 27.12 20.22

181.40 112.41

The overall Results are satisfactory as the Company had to contend with severe raw material shortages, steep escalation in costs and a progressive reduction in Market Demand during the year. The Management deserves commendation for their performance despite the adverse external environment.

2. DIVIDEND

Your Directors recommend a dividend of 60 % for the year ended 31.3.2014. The Dividend, if approved by the shareholders at the AGM, will be paid to the equity shareholders whose names appear in the Register of Members as on 15.9.14. Expenditure on the proposed dividend, will be Rs.48.58 crores, inclusive of taxes.

3. TRANSFER TO RESERVES

The Company has transferred Rs. 100 cr. to General Reserves and Rs. 5.70 crores to Debenture Redemption Reserve out of the amount available for appropriation. Rs.27.12 cr. is proposed to be retained in the Profit & Loss Account.

4. PERFORMANCE HIGHLIGHTS OF THE YEAR a) Operations

1. Sales turnover crossed Rs.2000 cr. mark for the first time. At Rs. 2285 cr, sales were 22% higher than in the previous year.

2. Profit before tax of Rs.202.68 cr. was an all time record. Profit after tax of Rs.161.18 cr. exceeded the PAT achieved in 2012-13 by 76%.

3. Sales volume of 391843 MT was the highest achieved by the Company in its history. This was made possible by the record production of 387714 MT by the Kagithapuram Factory.

The company once again achieved ZERO stock of Printing and Writing paper at the end of the year.

4. The Directors have recommended a Dividend of 60% compared to 50% in each of the last three years. This rate of Dividend is the highest since the company began operations in 1986.

The Dividend reflects the confidence that the Directors and Management have in the future of the company.

5. The Company generated 5650.80 lakh units of power and consumed 5532.06 lakh units. The excess of 118.74 lakh units were exported to the State Grid.

TNPL self-generates 99.2% of its power requirements and draws only 0.8% from the State Grid. This is an unparalelled performance compared to other mills in the paper industry in India and all industries in Tamil Nadu.

6. The company received 128043 Renewable Energy Certificates (REC) for generating power using steam produced in the Recovery Boiler. Of these 66854 RECs were sold during the year yielding revenues of Rs.10 cr.

7. The Bio-methanation plants generated 96.64 lakh cubic metres of methane gas, the consumption of which in the lime kilns saved use of furnace oil valued at Rs. 24.54 cr.

8. 113904 tonnes of cement were produced using waste material - lime sludge and fly ash generated in the Paper Mill. TNPL is the first and only company in the Paper Industry in India to convert mill wastes into useable high grade cement .

9. 257524 tonnes of Hardwood and Chemical Bagasse Pulp were produced during the year.

The Company is involved in Farm Forestry and Plantations covering over 100185 acres benefitting 18709 farmers in 29 districts of Tamil Nadu.

10. The company repaid on schedule Term Loans amounting to Rs.375 cr.

b. New Projects

1. The Company has begun work on setting up a state- of-the-art Multilayer Double Coated Board Plant with an annual capacity of 200,000 tonnes at a greenfield site in Manaparai Taluk, Trichy District (Tamil Nadu State). The capital outlay for this project is estimated at Rs.1500 cr. and is scheduled to be completed by December 2015.

2. A De-inking pulp plant with a capacity of 300 tonnes per day was commissioned during the year to augment inhouse pulp production.

3. A 125 tonnes per hour capacity high pressure boiler and a 41MW capacity Turbo Generator (TG) were commissioned during the year. As a consequence, the company is now almost self-sufficient in power.

4. A 100 tonnes per day Wet Ground Calcium Carbonate

(WGCC) plant has been completed on a Build, Own Operate basis (BOO) through M/s OMYA, Switzerland. The total requirement of WGCC for manufacture of paper will be met from this source at a substantially lower cost.

5. A 200 tonnes per day Precipitated Calcium Carbonate

(PCC) Plant is being set up through M/s OMYA, Switzerland on a Build, Own Operate basis(BOO). The plant will become operational in July 2014 and when completed, will lower costs for the Company .

c. Contribution to Environment

1. The company has adopted Eco friendly ECF bleaching in Pulp manufacture. The switch over from conventional chlorine bleaching to ECF bleaching involved a capital outlay of Rs.316 cr.

2. The Company has introduced ''OZONE TREATMENT '' as a tertiary step in the effluent treatment plant, substantially improving the quality of discharged water TNPL is the first and only company in the paper industry to have introduced Ozone treatment technology, to improve the quality of its effluent water.

3. The company has implemented several water conservation measures. The overall water consumption per mt of paper during the year was 42 Kl., one of the lowest in the industry.

4. Waste products (i.e lime sludge and fly ash) generated in paper manufacture is being converted into high grade cement.

5. The company has installed a continuous air quality monitoring system at the factory.

6. The windfarms at Devarkulam and Perungudi with an installed capacity of 35.5MW generated 522.07 lakh Kwh Units of ''Green Power''.

d. Corporate Social Responsibility (CSR)

1. The Company is committed to being a socially responsible corporate citizen. The CSR activities focus primarily on two areas - EDUCATION & HEALTH CARE

2. The CSR projects promote and enrich Economic, Social, Environmental and Cultural growth of the community living in areas near the factory.

3. The Company aims to spend approximately 3% of the profit of the previous year on CSR activities, in the following year. The Company spent Rs. 3.27 cr. on CSR activities during the year under review.

e. Contribution to Innovation and New knowledge development

1. The company nurtures creativity and innovation through its R & D activities which are carried out largely in-house. A few activities are outsourced when warranted.

2. The R & D activities focus on product development, process improvement, raw material substitution, development of new products and protection of the environment.

3. The company spent Rs. 4.04 cr. on R & D activities during the year.

f. Awards

The Company has received "Environmental Best Practices Award 2013" from the Confederation of Indian Industry(CII).

The company has received the National Award for Excellence in Cost Management 2013 [First Award under the category of Private - Manufacturing: Organisation (Large)] from the Institute of Cost Accountants of India.

Dun & Bradstreet, Mumbai, has selected TNPL as the Top Company in the Indian Paper Industry as one of the Dun & Bradstreet Corporate Awards for 2014.

5. MARKET TRENDS

a. General

The global paper production is estimated at 430 Million tonnes and in India 12 Million tonnes. India accounts for only 2.79% of World production. Demand growth in developed countries is expected to be flat. Growth in developing countries is likely to account for the worldwide growth of 1.5% - 2% per annum.

With the population growth of 1.9% and the increase in the literacy rate, India is expected to be the fastest growing market in the world with an overall growth rate of 6% per annum. Paper consumption in India is expected to reach around 14 Million tonnes by 2015-16.

Excise Duty and Import Duty remained unchanged at 6% and 10% respectively during the year.

b) Printing & Writing Paper (PWP)

Between 2008 and 2011, paper production capacity increased by approximately 60% over the capacity in 2007 against the then demand growth of about 8% per annum. Supplies were in excess of demand during 2011 and 2012. Paper prices therefore declined steeply during these years . Raw materials shortage and steep increase in input costs from the third quarter of financial year 2012-13 increased the cost of production substantially. Consequent to this, paper prices increased from December 2012. Printing and Writing paper now accounts for 35% of total demand , with a growth rate of 6% per annum . No major capacity addition has been announced by mills after the expansion between 2008 and 2011.

c) Packaging Boards

The market for Packaging Board is estimated at 2.2 Million tonnes. Grey-back Boards account for 1.05 million tonnes, White-back Coated Boards and other high-end varieties like Folding Boxboard, Solid Bleached Sulphate Boards, account for the remaining 1.15 million tonnes. The demand growth in the high end segments is estimated at 11.6% per annum.

d) Outlook

Despite slow economic recovery and continued erosion in demand by electronic media, global paper consumption is expected to reach 445 million tons by 2015, with a growth rate of 1.5 - 2% per annum. With consistent demand from the education sector, changes in lifestyle and overall economic growth there is potential for capacity addition and fresh investments in the Industry in the coming years.

As the demand for pulpwood exceeded supplies pulp wood prices have increased by about 60% during the year. Hit by the steep increase in pulpwood cost, the industry has stepped up plantation activities to augment pulp wood supplies. The shortage of pulpwood is expected to recede in a couple of years.

e) TNPL response to Market Trends

TNPL has increased the production capacity consistently keeping in pace with Industry growth. The company is now setting up a multilayer double coated Board Plant with a capacity of 2 lakh tonnes per annum. With this, the total production capacity of the company will rise to 6 lakh MT per annum from financial year 2016-17.

During the year domestic sales constituted 83 % and Export 17%.

6 DIRECTORS

Pursuant to the orders issued by the Government of Tamil Nadu Thiru C V Sankar IAS is holding full additional charge of the post of Chairman and Managing Director, TNPL vice Thiru N S Palaniappan IAS w.e.f. 25.10.2013. Thiru C V Sankar, IAS will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director.

Thiru Mahesan Kasirajan, IAS, has been transferred from the post of Director of Sugar. Consequently he relinquished his position as Director in TNPL.

The Board of Directors have extended the services of Thiru A Velliangiri, Deputy Managing Director on contract basis for a period of two years w.e.f. 19.12.2013 . Thiru A Velliangiri will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director at the AGM.

The Board of Directors have extended the service of Thiru R Mani as Director(Operations) on contract basis for a further period of one year from 27.2.2014. Thiru R Mani will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director at the AGM.

Thiru T Udhayachandran IAS, Director retires by rotation at the forthcoming Annual General Meeting. He is eligible for reappointment as Director.

In accordance with Sec.149 and other applicable provisions of the Companies Act, 2013, SEBI guidelines , the company has to appoint at least one half of the Board as Independent directors with specific mention of tenure. Accordingly, the following non-executive and independent directors are proposed to be appointed as Independent directors for a tenure of three years i.e. upto 31.3.2017 :

1.Thiru V Narayanan

2.Thiru N Kumaravelu

3.Thiru M R Kumar

4.Thiru V Nagappan

5.Tmt.Sarada Jagan

Independent directors are not liable for retirement by rotation.

7. AUDITORS

a) Statutory Auditors

The Comptroller and Auditor General of India appointed M/s. Raman Associate., Chartered Accountants,

Chennai as the Statutory Auditors of the Company for the Financial year 2013-14.

b) Cost Auditors

Pursuant to Sec.233B of the Companies Act, 1956, the Central Government has ordered that the company carries out audit of cost accounts for every year relating to Paper, Cement and Energy. M/s S Mahadevan & Co, were appointed as Cost Auditors 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. Cost Audit report for the financial year 2012-13 was filed on schedule.

c) Secretarial Auditor

M/s R. Sridharan & Associates have carried out Secretarial Audit of the company for the year ended March 2014 .The company has complied with all applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreement with the Stock Exchanges and all the regulations of SEBI as applicable to the company.

8. FIXED DEPOSITS

The company has stopped accepting fresh deposits from 1.6.2002 and renewals from 1.8.2005.The outstanding deposits as on 31.3.2014 was Rs.0.45 Lakhs against Rs.1.64 Lakhs in the previous year. The number of depositors on 31.3.2014 was 2 against 10 in the previous year. The outstanding deposits remain unpaid as the depositors have not made known their new addresses to the Company.

9. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred Rs.8,44,419/- being the Dividend and Fixed Deposit amount which were due and payable and remained unclaimed and unpaid for a period of seven years, to the Investor Education and Protection Fund, as required under Section 205A(5) of the Companies Act , 1956.

10. UNPAID DIVIDEND STATUS

Dividends were remaining unpaid due to non-confirmation of their new addresses by the concerned shareholders. The unpaid dividends were returned by the postal authorities. Effective follow-up by the Company has resulted in Unpaid Dividends being consistently below 0.5% of the total dividends. As and when the shareholders communicate the new address, the dividend is sent to the shareholders. At the end of seven years the unpaid dividend is transferred to Investor Education & Protection Fund. The table and graph given below summarize the status of Unpaid Dividends





DIVIDEND STATUS FOR THE LAST 7 YEARS

(Rs. In lakhs) SL YEAR SHARE DIVIDEND DIVIDEND DIVIDEND No. CAPITAL AMOUNT PAID % 1. 2006-07 6921.06 25 1730.27 1724.25 (Final Dividend)

2 2007-08 6921.06 20 1384.21 1379.71 (Interim Dividend) 2007-08 6921.06 25 1730.27 1724.7 (Final Dividend)

3. 2008-09 6921.06 45 3114.48 3106.50

4. 2009-10 6921.06 45 3114.48 3102.73

5. 2010-11 6921.06 50 3460.53 3448.57

6. 2011-12 6921.06 50 3460.53 3447.61

7. 2012-13 6921.06 50 3460.53 3445.74

YEAR DIVIDEND % OF PAID % OF UNPAID UNPAID AS ON DIVIDEND DIVIDEND 31.3.2014

2006-07 6.02 99.65 0.35 (Final Dividend)

2007-08 4.50 99.67 0.33 (Interim Dividend) 2007-08 (Final Dividend) 5.57 99.67 0.33

2008-09 7.98 99.74 0.26

2009-10 11.75 99.62 0.38 2010-11 11.96 99.65 0.35

2011-12 12.92 99.62 0.38

2012-13 14.78 99.57 0.43

11. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 217(1)(e) of the Companies Act. 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in Annexures I and II to this Report.

12. STATEMENT OF EMPLOYEES REMUNERATION (217(2A)Companies Act 1956)

None of the employees drew remuneration of more than Rs.60,00,000/- per annum during the year. This information is furnished as required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

13. CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement prepared in accordance with the Accounting Standard (AS-3) issued by the Institute of Chartered Accountants of India is attached to the Balance Sheet.

14. EXPORT HOUSE STATUS

The Company continues to enjoy "Two Star Export House" status, awarded by the Government of India, in recognition of its export performance.

15. INDUSTRIAL RELATIONS

Industrial relations during the year continued to be cordial.

16. 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:

1. That the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period;

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

4. That the Annual Accounts were prepared for the financial year ended 31st March 2014 on a going concern basis.

17. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and the Report on Corporate Governance forming part of

Directors'' Report are enclosed as Annexures III and IV.

As required by the Listing Agreement, an Auditor''s Certificate on Corporate Governance and a Declaration by the Chairman & Managing Director with regard to Code of Conduct are attached to the Report on Corporate Governance.

18. CEO/CFO CERTIFICATION

As required by Clause 49 of the Listing Agreement, a Certificate on the Financial Statements and Cash Flow statement of the company for the year ended March 31, 2014 duly signed by the Chairman & Managing Director and Deputy Managing Director was submitted to the Board of Directors at the meeting held on May 29, 2014.

19. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation for the assistance, co-operation and support extended to the company by the Govt. of Tamil Nadu, Commercial Banks, Financial Institutions, Sugar Mills and Dealers.

The Board also places on record its sincere appreciation of the positive response received from the Company''s valued customers and thanks them for their continued support .

The company is grateful to all employees for their exemplary co-operation during the year. Their contribution has been truly outstanding. The Directors place on record their appreciation of the excellent effort made by every employee to enhance the company''s performance in adverse market conditions.

Finally, the Board of Directors sincerely thanks the shareholding community for their solid support and for the confidence they have reposed in the Company.

For and on behalf of the Board

C V SANKAR CHAIRMAN AND MANAGING DIRECTOR

Date: 29th May 2014 Place:Chennai 600 032


Mar 31, 2013

TO THE MEMBERS

The Directors have pleasure in presenting the Thirtythird Annual Report and the Audited Accounts of the Company for the financial year ended 31.3.2013.

1. FINANCIAL RESULTS

The Financial Performance of the company for the year under review is summarized below :

(Rs. in crore)

Particulars 2012-13 2011-12

Revenue from operations 1861.26 1522.92

Other income 19.92 16.07

Operating Profit (PBIDT) 422.06 335.54

Finance cost 120.97 141.26

Gross Profit (PBDT) 301.09 194.28

Depreciation 174.98 169.05

Profit before exceptional item and tax 126.11 25.23

Exceptional item - 99.88

Profit after exceptional item and before tax 126.11 125.11

Provision for tax 34.63 16.17

Profit after tax 91.48 108.94

Balance brought forward 20.93 20.91

Profit Available for appropriation 112.41 129.85

APPROPRIATIONS

Transfer to General Reserve 46.00 63.00

Debenture Redemption Reserve 5.70 5.70

Proposed Dividend 34.61 34.61

Tax on Dividend 5.88 5.61

Balance carried forward 20.22 20.93

112.41 129.85

Despite the sluggish demand for Printing 8i Writing Paper during the period April-November 2012 and a significant increase in input costs in all four quarters of the year, the company has earned a PBT of Rs.126.11 crores. The corresponding figure in the previous year - excluding exceptional items - was Rs.25.23 crores. This performance, in an adverse environment, is a commendable achievement by the Management.

Tax expenses provided for the year is Rs.34.63 cr. This includes an additional Rs. 13.21 cr. provided for deferred tax due to increase in surcharge on Income-tax from 5% to 10% in the Finance Act, 2013.

2. DIVIDEND

Your Directors recommend a dividend of 50% (Rs. 5.00 per share) for the year ended 31.3.2013. The Dividend, after approval by the shareholders at the AGM, will be paid to the equity shareholders whose names appear in the Register of Members as on 19.9.13. Expenditure on the proposed dividend of 50%, will be Rs.40.49 crores, inclusive of taxes.

3. TRANSFER TO RESERVES

The Company has transferred Rs. 46.00 crores to General Reserves and Rs.5.70 crores to Debenture Redemption Reserve out of the amount available for appropriation. Rs.20.22 crores is proposed to be retained in the Profit & Loss Account.

4. PERFORMANCE HIGHLIGHTS OF THE YEAR a) Operations

1. Sales turnover crossed Rs.1800 crores for the first time

2. Paper production increased to 371637 tonnes, 28331 MT higher than the previous year

3. Hardwood and Chemical bagasse pulp production increased to 275226 tonnes, an increase of 1543 tonnes over 2011-12.

4. The Wind Farm generated 586.59 lakh units of''Green Power'' and earned a profit of Rs.5.82 cr.

5. The Company is involved in pulpwood plantation in 91,711 acres benefiting 17021 farmers in 28 Districts of Tamil Nadu.

6. The Bio-methanation plants generated 101.33 lakh cubic metres of methane gas. The bio-gas generation is higher by 13.98 lakh cubic meters compared to the previous year. The methane gas was consumed in the lime kilns saving 5966 KL of furnace oil valued at Rs.23.89 crores.

7. 136738 Renewable Energy Certificates (REC) were received by the company for generating power using exclusively steam produced in the recovery boiler. TNPL is the FIRST in the paper industry to have received this benefit. 94678 RECs were sold upto 31.3.2013, and the balance has been carried forward to 2013-14.

8. Substantial progress was achieved in the implementation of the 300 tpd De-inking Plant and the Revamping of Power 8i Steam System.

9. The company received the following Awards and Accolades during the Year:

(a)'' The Green Energy and Bio fuel Award 2012'' from PPI (Pulp and Paper International) Magazine. Many global players competed for this award and TNPL came out on top receiving worldwide acclamation for the performance.

(b) "IPMA Paper Mill of the Year Award" for the year 2012 from Indian Paper Manufacturers Association, New Delhi. TNPL has received this award for the third time.

(c) The Green Award 2012 from the Dept. of Environment and Forests, Government of Tamil Nadu.

(d) Award of "Excellent Energy Efficient Unit" for the year 2012 from Confederation of Indian Industry (CII).

10. Forest Stewardship Council (FSC), an independent, non- government, non-profit organization, has awarded the prestigious Forest Management and Chain of Custody Certificate (RA-FSC-FM/CoC-006000) to TNPL. This certificate is valid for five years upto 5th July 2017. The Certificate covers 19561 Hectares of land. This is the largest area certified by FSC in India accounting for approximately 50% of the total area certified by them. TNPL can henceforward use the FSC label on its products made from FSC certified wood.

11. Your Company has initiated action to set up a state-of- the-art Multilayer Double Coated Board Plant of a capacity of two lakh tonnes per annum at a capital outlay of Rs.1200 crore in Mondipatti village,Manaparai Taluk in Trichy District. This greenfield project will be funded through internal accruals and term loans. The project will be set up in three years latest by March 2016.

12. The Directors have proposed a Dividend of 50% (Rs. 5.00 per share) The proposed dividend reflects the confidence that the Directors and Management have in the company''s future.

b. Contribution to Environment

1. The company has adopted Eco friendly ECF bleaching in Pulp manufacture. The switch over from conventional chlorine bleaching to ECF bleaching involved a capital outlay of Rs.316 Crores.

2. The Company has introduced ''OZONE TREATMENT'' as a tertiary step in the effluent treatment plant, substantially improving the quality of discharged water. TNPL is the first and only company in the paper industry to have introduced Ozone treatment of its effluent waste water.

3. As part of its conservation effort, TNPL consumes the lowest amount of water per ton of paper produced in the country.

4. By setting up the 600 tpd cement plant, TNPL converts waste products(lime sludge and fly ash) generated in paper manufacture into high grade cement.

5. A continuous air quality monitoring system has been installed at the factory.

6. The windfarms at Devarkularm and Perungudi with an installed capacity of 35.5 MW generated 586.59 lakh Kwh Units of''Green Power'' during 2012-2013.

c. Corporate Social Responsibility (CSR)

1. The company is committed to being a socially responsible corporate citizen and has spent Rs.3.71 crores on its Corporate Social Responsibility Programmes in 2011-2012 and Rs.5.36 Crores in 2012-2013

2. The CSR projects promote Economic, Social, Environmental and Cultural growth of the community living in areas near the factory. The CSR activities are equitable and focus primarily on providing Education and Health care.

3. The company aims to spend approximately 3% of the profit of the previous year on CSR activities, in the following year.

d. Contribution to Innovation and New knowledge development

1. The company nurtures creativity and innovation through its R & D activities which are carried out largely in-house. A few activities are outsourced when warranted.

2. The expenditure on R&D activities is Rs.4.90 cr. The long term objective is to increase R&D investment from the current level of 0.27% to 1% of sales turnover.

3. The R&D activities focus on product development, process improvement, raw material substitution, development of new products and protection of the environment.

e. Others

1. During the year the company has generated and consumed 5233.31 lakh units of power through TG. Power drawn from State Grid constitutes only 1.63% of the power consumed.

2. The Company has tied up term loans with banks for financing the De - inking Pulp Plant Project.

Of the funds availed, the company has temporarily utilised Rs 30.91 Crores for its business operations. The funds would be applied ultimately for the designated purpose.

5. MARKET TRENDS a. General

Global Production of paper is estimated at 430 Million tons and in India 12 million tons. India accounts for 2.79% of world production. Per capita consumption of paper is approximately 10 kgs. in this country against the global average of 60 kg.

The Excise duty and Import duty have remained unchanged at 6% and 10% respectively.

b) Printing & Writing Paper (PWP)

Between 2008 and 2010, paper capacity in the country increased by about 1.50 million tonnes, higher approximately by 60% over the capacity in 2007. Demand growth however continued only at 8-9% per annum. As a consequence, supplies were in excess of demand for about 2 years. Paper prices therefore declined steeply during 2010-11 and 2011-12 even though input costs increased. The market has improved since December 2012 and is now stable.

c) Packaging Boards

The total market for packaging board is estimated at 2.40 million tonnes. About 50% of the market relates to grey back boards and the remaining 50% relates to white coated back high end varieties. The demand growth in the higher segments is of the order of 12- 13% per annum.

d) Outlook

Growth in the education sector, a buoyant economy, changes in lifestyle and low per capita consumption of paper in India are the major growth drivers of the Industry.

With the increase in paper production capacity, the demand for pulpwood has increased. However, pulpwood supplies are less than the demand. Pulpwood prices have increased by about 40% in the last one year.

Volatility in the exchange rates has increased the cost of imported raw materials and fuel.

e) TNPL response to Market Trends

In the first eight months of 2012-13, TNPL domestic sales were moderate because of sluggish market. A revival in demand enabled the company to increase sales significantly in the last four months of the year.

Export sales constituted 17.34% of total sales.

6 DIRECTORS

Pursuant to the orders of Government of Tamil Nadu:

(a) Thiru Md.Nasimuddin IAS was placed in full additional charge of the post of Managing Director, TNPL vice Thiru Santosh K Misra IAS, MD, TNPL w.e.f. 31.5.2012.

(b) Thiru Vikram Kapur IAS was nominated as Chairman of TNPL in the place of Dr.N Sundaradevan IAS, who retired on 30.9.2012.

(c) Thiru N S Palaniappan, IAS was co-opted as an Additional Director w.e.f.13.12.2012 in place of Thiru Vikram Kapur IAS. Thiru N S Palaniappan, IAS will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director.

Further, vide Government Order dt 11.12.2012, Thiru N S Palaniappan, IAS has been nominated in the place of Thiru Md.Nasimuddin, IAS as Chairman and Managing Director of the Company.

(d) Thiru Mahesan Kasirajan, IAS was co-opted as an Additional Director w.e.f.6.11.2012 vice Thiru N Mathivanan IAS. Thiru Mahesan Kasirajan, IAS will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director.

The Board in its meeting held on 7th December 2012 extended the services of Thiru A Velliangiri, Dy. Managing Director on a contractual arrangement for a further period of one year w.e.f. 19.12.2012 on the existing terms and conditions. Thiru A Velliangiri will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director at the AGM. The contract extending his services is renewable for a period of one more year.

The Board in its Meeting held on 8.2.2013 appointed Thiru R Mani as Director(Operations) on contractual arrangement for a period of one year from 8.2.2013. Thiru R Mani will hold office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as Director at the AGM. The contract extending his services is renewable for a period of one more year.

Thiru V Nagappan was co-opted as an Additional Director w.e.f.9.4.2013. Thiru V Nagappan will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as Director at the AGM.

Thiru N Kumaravelu and Thiru M R Kumar, Directors retire by rotation at the forthcoming Annual General Meeting. They are eligible for reappointment as Directors.

7. AUDITORS

a) Statutory Auditors The Comptroller and Auditor

General of India appointed M/s. P.B Vijayaraghavan & Co., Chennai as the Statutory Auditors of the Company for the Financial year 2012-13

b) Cost Auditors Pursuant to Sec.233 B of the

Companies Act, 1956, the Central Government has ordered that the company carries out audit of cost accounts for every year relating to Paper, Cement and Energy, M/s S Mahadevan & Co, were appointed as Cost Auditors for the year 2012-13. The cost audit report for the year 2012-13 will be submitted to the Central Government before the due date.

Cost Audit report for the financial year 2011-12 was filed well before the due date.

c) Secretarial Auditor M/s R. Sridharan & Associates have carried out Secretarial

Audit of the company for the year ended March 2013. The company has complied with all applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreement with the Stock Exchanges and all the regulations of SEBI as applicable to the company

8. FIXED DEPOSITS

The company has stopped accepting fresh deposits from 1.6.2002 and renewals from 1.8.2005. The outstanding deposits as on 31.3.2013 was Rs.1.64 Lakhs against Rs.2.45 Lakhs in the previous year. The number of depositors on 31.3.2013 was 10 against 14 in the previous year. The outstanding deposits remain unpaid as the depositors have not made known their new addresses to the company.

9. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred Rs. 13,02,880/- being the dividend and Fixed Deposit amount which were due and payable and remained unclaimed and unpaid for a period of seven years, to the Investor Education and Protection Fund, as required under Section 205A(5) of the Companies Act, 1956.

10. UNPAID DIVIDEND STATUS

Unpaid Dividends are primarily due to Postal Returns. Effective follow-up by the Company has resulted in Unpaid Dividends being consistently below 0.5% of total. This effort is continuous till the need for transfer to Investor Education & Protection Fund arises after seven years. The table and graph given below summarise the status of Unpaid Dividends.

DIVIDEND STATUS FOR THE LAST 7 YEARS

(Rs. In lakhs)

SL YEAR SHARE DIVIDEND DIVIDEND DIVIDEND No. CAPITAL AMOUNT PAID %

1 2005-06 6921.06 15 1038.16 1034.38 (Final Dividend)

2 2006-07 6921.06 15 1038.16 1034.07 (Interim Dividend)

2006-07 6921.06 25 1730.27 1723.55 (Final Dividend)

3 2007-08 6921.06 20 1384.21 1379.28 (Interim Dividend) 2007-08 6921.06 25 1730.27 1724.09 (Final Dividend)

4 2008-09 6921.06 45 3114.48 3105.78

5 2009-10 6921.06 45 3114.48 3101.75

6 2010-11 6921.06 50 3460.53 3447.36

7 2011-12 6921.06 50 3460.53 3446.15



DIVIDEND % OF PAID % OF UNPAID UNPAID AS ON DIVIDEND DIVIDEND 31.3.2013

3.78 99.64 0.36

4.09 99.61 0.39

6.72 99.61 0.39

4.93 99.64 0.36

6.18 99.64 0.36

8.70 99.72 0.28

12.73 99.59 0.41

13.17 99.62 0.38

14.38 99.58 0.42

11. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 217(l)(e) of the Companies Act. 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in the Annexures to this Report (Annexure I and II).

12. STATEMENT OF EMPLOYEES'' REMUNERATION (217(2A)Companies Act 1956)

None of the employees drew remuneration of more than Rs.60,00,000/- per annum during the year. This information is furnished as required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

13. CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement prepared in accordance with the Accounting Standard (AS-3) issued by the Institute of Chartered Accountants of India is attached to the Balance Sheet.

14. EXPORT HOUSE STATUS

The Company continues to enjoy "Two Star Export House" status, awarded by the Government of India, in recognition of its export performance.

15. INDUSTRIAL RELATIONS

Industrial relations during the year continued to be cordial.

16. 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:

1. That the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period;

3. That the Directors have taken proper and sufficient care for the Maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the Annual Accounts were prepared for the financial year ended 31st March 2013 on a going concern basis.

17. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and the Report on Corporate Governance forming part of Directors'' Report are enclosed as Annexure III and IV.

As required by the Listing Agreement, an Auditor''s Certificate on Corporate Governance and a Declaration by the Chairman & Managing Director with regard to Code of Conduct are attached to the Report on Corporate Governance.

18. CEO/CFO CERTIFICATION

As required by Clause 49 of the Listing Agreement, a Certificate on the Financial Statements and Cash Flow statement of the company for the year ended March 31, 2013 duly signed by the Chairman & Managing Director and Deputy Managing Director was submitted to the Board of Directors at the meeting held on May 27, 2013.

19. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation for the assistance, co-operation and support extended to the company by the Govt, of Tamil Nadu, Commercial Banks, Financial Institutions, Sugar Mills and Dealers.

The Board also places on record its sincere appreciation of the positive response received from the Company''s valued customers and thanks them for their continued support.

The company is grateful to all employees for their exemplary co-operation during the year. Their contribution has been truly outstanding. The Directors place on record their appreciation of the excellent effort made by every employee to enhance the company''s performance in adverse market conditions.

Finally, the Board of Directors sincerely thanks the shareholding community for their solid support and for the confidence they have reposed in the Company.



For and on behalf of the Board



N S PALANIAPPAN

CHAIRMAN AND MANAGING DIRECTOR

Date: 27th May 2013

Place:Chennai 600 032


Mar 31, 2012

The Directors have pleasure in presenting the Thirtysecond Annual Report and the Audited Accounts of the Company for the financial year ended 31.3.2012.

1. FINANCIAL RESULTS

The Financial performance of the company for the year under review is summarized in the table below :

(Rs. in crore)

Particulars 2011-12 2010-11

Revenue from operation 1522.92 1208.50

Other income 16.07 16.54

Operating Profit (PBIDT) 435.43 362.75

Finance cost 141.26 44.24

Gross Profit (PBDT) 294.16 318.51

Depreciation 169.05 123.37

Profit before tax 125.11 195.14

Provision for tax 16.17 46.14

Profit after tax 108.94 149.00

Balance brought forward 20.91 20.83

Profit Available for appropriation 129.85 169.83

APPROPRIATIONS

Transfer to General Reserve 63.00 103.00

Debenture Redemption Reserve 5.70 5.70

Proposed Dividend 34.61 34.61

Tax on Dividend 5.61 5.61

Balance carried forward 20.93 20.91

129.85 169.83



The year 2011-12 was a challenging year for the Paper Industry in India. The overall slowdown in the economy reduced demand for paper substantially. At the same time, capacity increases by almost all paper mills increased supplies enormously. As a consequence, prices declined steeply in the market - while input costs, labour costs and interest rates escalated. Profit margins of all paper mills - including TNPL - were therefore dramatically eroded and were at the lowest in recent history. Despite the adverse market environment, the operating profit of TNPL was higher than in the previous year. This performance is indeed a commendable achievement by the Management.

2. DIVIDEND

Your Directors recommend a dividend of 50% for the financial year ended 31.3.2012. The dividend, if approved by the shareholders, will be paid to all the equity shareholders whose names appear in the Register of Members as on 21.9.2012. The proposed dividend of 50%, will cost the company Rs.40.22 crores, inclusive of taxes.

3. PERFORMANCE HIGHLIGHTS OF THE YEAR

a) Operations

1. Sales turnover crossed Rs.1500 crores for the first time in the Company's history

2. Export sales reached an all time high of 80459 tons - 24% over the previous year

3. Paper production increased from 265044 Mts. to 343306 Mts., made possible by the completion of the Mill Expansion Plan (MEP) during the year.

4. Hardwood Pulp production increased from 97492 Mts. to 107769 Mts.

5. Chemical bagasse pulp production increased by 24% from 133978 Mts. to 165914 Mts.

6. The wind farm generated 500.64 lakh units of "GREEN POWER" and earned a profit of Rs.2.86 cr.

7. The cumulative area under plantation was increased to 82025 acres. 15218 acres were added during the year benefiting 3006 farmers.

8. The Bio-meth nation Plant generated 87.35 lakh cubic metres of methane gas enabling the company to reduce consumption of furnace oil by 5207 KL valued at Rs.19.07 crores.

9. 27680 RENEWABLE ENERGY CERTIFICATES (REC) were received by the company for generating power exclusively using steam produced in the recovery boiler. TNPL is the FIRST in the paper industry to have been awarded this benefit.

10. Substantial progress has been achieved in the implementation of three important projects, i.e. setting up a 300 tpd De-inking Plant, Revamping of power and steam system and Construction of a 600 tpd mini cement plant to consume the highly polluting fly ash and lime sludge generated as waste by the factory. All three projects will be completed in 2012-2013.

11. The company received the following awards and accolades:

(a) The 'Environmental Strategy of the Year award for 2011' from PPI (Pulp and Paper International) magazine. Many global players competed for this prestigious award and TNPL emerged as the sole winner

(b) The National Award for "Excellence in Water Management 2011" from the Confederation of Indian Industry (CII) for the best water management in India in the industrial sector

(c) The Emergent Ventures India Green Business Survey has ranked TNPL No.5 among High

Energy Intensive Industries . TNPL was the only company in the Paper Industry to receive this accolade. This is in recognition of the adoption of new technologies by TNPL for value addition and all-round sustainability .

12. Despite the adverse market conditions, the Directors have proposed a Dividend of 50%. The proposed dividend is an indication of the confidence that the Directors and Management have in the company's future Financial Performance .

b) Contribution to Environment

1. The company has now fully adopted Eco friendly ECF bleaching of paper. The switch over from conventional chlorine bleaching involved a capital outlay of Rs.316 Crores.

2. The Company is now using a 'OZONE TREATMENT SYSTEM' as a tertiary step in the effluent treatment plant substantially improving the quality of effluent discharge. TNPL is the first and only company in the paper industry to make use of this 'state of the art' technology.

A Research project has been assigned to Tamilnadu Water Investment Company to identify further areas of improving the quality of effluent discharge. This will be an ongoing Research effort and the first phase will cost Rs.2.80 crores.

3. Continuous effort to reduce water consumption at the factory has paid handsome dividends. TNPL consumes the lowest amount of water in its manufacturing process compared to any other paper producer in India.

4. The commissioning of a 600 tpd high grade mini cement plant at a cost of Rs.67.46 crores has as its primary objective the consumption of highly polluting lime sludge and fly ash generated by the paper mill as waste by-products.

5. To improve the 'Air quality' in the mill area, a continuous air quality monitoring system has been installed at the factory.

6. The windfarms at Devarkulam and Perungudi with an installed capacity of 35.5 MW generated 500.64 lakh KWH Units of "GREEN POWER" during 2011-2012.

c) Corporate Social Responsibility (CSR)

1. The company is committed to being a socially responsible corporate citizen and has spent Rs.3.71 crore on its Corporate Social Responsibility Programmes in 2011-2012.

2. The objective of the company is to spend approximately 3% of the profit of the previous year for CSR activities, in the subsequent year.

3. The CSR projects focus on promoting Economic, Social, Environmental and Cultural growth in an equitable and sustainable manner, of the community living in areas surrounding the factory .

d) Contribution to Innovation and New knowledge development

1. The company is focused on creativity and innovation in its Research and Development activities. R & D activities are carried out largely in-house. A few activities are outsourced when necessary and warranted.

2. The expenditure on R&D activities has increased to Rs.5.77 Cr. from Rs.4.12 Cr. in the previous year. The long term objective is to increase R & D investment from the current level of 0.39% to 1% of sales turnover.

3. The R&D activities focus on product development, process improvement, raw material substitution, development of new products and protection of the environment.

e) Other Highlights

1. The company is unique in India as it draws only 1.73% of its power needs from the State Grid. The company generates 98.27% of its power consumption and is also a nett exporter of power to the grid (98.98 lakh units in 2011-2012).

2. The installed production capacity has been increased during the year from 245000 tons per annum to 400000 tons per annum by the installation of a new Paper Machine (PM3). PM3 was commissioned in January 2011 and because of initial teething troubles, overall capacity utilization was only 85.83% in 2011-12.

For profitability reasons no Newsprint was produced during the year.

3. The company has repaid all the loans borrowed for implementation of the Mill Development Plan (MDP).

4. During the year, the company has unwound the hedge instruments relating to Long Term Foreign Currency loans availed of for the purpose of acquisition of depreciable Fixed Assets and received upfront cash flow of Rs.106.68 Crore from banks, being the exchange gains from the date of hedge till unwind. As per AS11 (amended) vide Notification No.GSR 913(E) and 914(E) dated 29.12.2011, the effects of changes in the Foreign Exchange rates of Rs.85.92 Crores during the year on the Foreign Currency Loans, has been capitalized. Against the cash flow realized on unwinding of hedges, the exchange gain from 01.04.2011 till unwind amounting to Rs.99.88 Crore has been recognized as income under "Exceptional Item" in the Statement of P&L.

5. The Company has tied up term loans with Banks for financing the ongoing projects viz.Deinking Plant, Revamping of Power and Steam System and the mini cement plant. Of the funds availed, pending crystallization of expenditure, the company has temporarily used the loan of Rs.89.37 crore in general business operations. The unspent loan funds will be used for the projects, when the expenditure crystallizes.

4. MARKET TRENDS

a) General

Estimated Global Production of paper in 2011-12 was 400 million tons and in India 11 million tons. India accounts for 2.75% of world production. The Per capita consumption of paper in India is approximately 10 kgs, against the global average of 57 kg.

The rate of Excise duty was increased from four to five percent in March 2011 and further increased to six percent in March 2012. Import duty, however, has been retained at 10%.

b) Printing & Writing Paper (PWP)

Between 2008 and 2010, paper mills in India increased production capacity PWP by 60% - an increase of 1.5 million tons. This was an exceptionally high increase because growth in demand is only 8-9% per annum. The Market accepted additional supplies upto June 2011. Thereafter demand declined sharply and prices crashed. Finished stocks piled up with all players in the industry. First signs of revival in demand were seen only in January 2012.

Coincidentally , Export prices also declined during the period June to December 2011.

c) Newsprint

The Newsprint prices continued to be volatile. Production in India has become economically unviable. The country imports approximately 1 million tons every year.

d) Outlook

Government spending on education will increase demand for PWP exponentially . Increasing business activities will increase demand for cut-size copy papers. The demand for PWP is expected to grow by 9% in 2012-2013. Newsprint will continue to be unviable for production in India.

In the global market, paper prices have increased by USD 80 per MT. since March 2012 . Soft wood pulp prices have increased by USD 50 per MT. and hard wood pulp prices by USD 100 .

e) TNPL response to Market Trends

In the first nine months of 2011-12 TNPL sales were level with the previous year. Because of increased production, stocks were 37,000 tons at the end of December. In terms of PBT, the company could only breakeven in the first nine months.

A revival in domestic demand from existing customers, new domestic customers and an accelerated demand growth in exports enabled the company to increase sales by 65% in the final quarter. Profitability also improved in the last quarter and was helped by a one time contribution from unwinding of the hedging on long term loans.

Finished stocks were reduced to 5816 tons.

The company's prices have been increased by Rs.2500/- per metric ton effective April 2012 and Export prices by USD 70-80 per MT. The increase in demand in both Domestic and Export markets and higher margins through price increases should result in an improved performance in 2012-13.

5. DIRECTORS

Pursuant to the orders of Government of Tamil Nadu, Thiru G Prakash IAS was co-opted as an Additional Director w.e.f.9.1.2012 in place of Thiru T K Ramachandran IAS, Managing Director.

Pursuant to the orders of Government of Tamil Nadu, Thiru Santosh K Misra IAS was appointed as Managing Director of the company vice Thiru G Praksh IAS who was holding additional charge as Managing Director. Thiru G Prakash IAS relinquished his office w.e.f.25.1.2012.

Pursuant to the orders of Government of Tamil Nadu, Thiru S Krishnan IAS was co-opted as an Additional Director w.e.f.15.9..2011 vice Thiru R Thiagarajan IAS who has retired on 31.7.2011. Thiru S Krishnan IAS will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as Director .

Pursuant to the orders of Government of Tamil Nadu, Thiru N Mathivanan IAS was co-opted as an Additional Director w.e.f.11.11.2011 vice Thiru Rajeev Ranjan IAS. Thiru N Mathivanan IAS will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as Director.

Thiru M R Kumar, Executive Director(Personnel), LIC of India has been co-opted as Additional Director w.e.f.15.9.2011 in place of Thiru D Krishnan, who resigned w.e.f.15.8.2011. Thiru M R Kumar will hold office upto the date of forthcoming Annual General Meeting and being eligible offers himself for appointment as Director.

Thiru V Narayanan , Director retires by rotation and being eligible offers himself for reappointment.

7. FIXED DEPOSITS

The company has stopped accepting fresh deposits from 1.6.2002 and renewals from 1.8.2005. The outstanding deposits as on 31.3.2012 was Rs.2.45 Lakhs against Rs.2.63 Lakhs in the previous year. The number of depositors on 31.3.2012 was 14 against 15 in the previous year. The outstanding deposits remain unpaid because the 14 depositors have not made known their new addresses to the company.

8. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred a sum of Rs.5,62,470/- being the dividend amount which was due and payable and remained unclaimed and unpaid for a period of seven years, to the Investor Education and Protection Fund, as required under Section 205A(5) of the Companies Act, 1956.

9. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 217(1)(e) of the Companies Act. 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in the Annexure to this Report (Annexure I and II).

10. STATEMENT OF EMPLOYEES' PARTICULARS

None of the employees drew remuneration of Rs.60,00,000/- or more per annum / Rs.5,00,000/- or more per month during the year. This information is furnished as required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 .

11. INDUSTRIAL RELATIONS

Overall industrial relations during the year were cordial.

12. 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:

1. That the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period;

3. That the Directors have taken proper and sufficient care for the Maintenance of adequate accounting records in accordance with the provisions of the Companies Act , 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Annual Accounts were prepared for the financial year ended 31st March 2012 on a going concern basis.

13. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and the Report on Corporate Governance forming part of Directors' Report are enclosed as Annexures.

As required by the Listing Agreement, an Auditor's Certificate on Corporate Governance and a Declaration by the Managing Director with regard to Code of Conduct are attached to the Report on Corporate Governance.

14. CEO/CFO CERTIFICATION

As required by Clause 49 of the Listing Agreement, a Certificate on the Financial Statements and Cash Flow statement of the company for the year ended March 31, 2012 duly signed by the Managing Director and Deputy Managing Director was submitted to the Board of Directors at the meeting held on May 29, 2012.

15. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation of the assistance, co-operation and support extended to the company by the Govt. of Tamil Nadu, the Commercial banks, Financial Institutions, the Depositors, Sugar Mills and the Indenters. The Board also places on record its sincere appreciation towards the Company's valued customers for their continued support .

The company thanks all employees for their co- operation during the year. The Directors place on record their appreciation of the excellent effort made by every employee to enhance the company's performance in an extraordinarily adverse market. Their contribution has been exemplary .

Finally, the Board of Directors are grateful for the confidence reposed in them by the shareholders. The Board salutes the shareholding community for their solid support.

For and on behalf of the Board

DR.N SUNDARADEVAN

CHAIRMAN

Date: 29th May 2012

Place:Chennai 600032.


Mar 31, 2011

TO THE MEMBERS

The Directors have pleasure in presenting the Thirtyfirst Annual Report and the Audited Accounts of your Company for the financial year ended 31.3.2011.

1. FINANCIAL RESULTS

The Financial performance of your company for the year under review is summarized in the table below:

(Rs. in crore)

Particulars 2010-11 2009-10

Sales 1184.44 1025.68

Other income 40.59 47.94

Operating Profit (PBIDT) 362.75 319.80

Interest and Finance charges 44.24 46.18

Gross Profit (PBDT) 318.51 273.62

Depreciation 123.37 115.56

Profit before tax 195.14 158.06

Provision for tax 46.14 32.00

Profit after tax 149.00 126.06

Balance brought forward 20.83 21.77

Profit Available for appropriation 169.83 147.83

APPROPRIATIONS

Transfer to General Reserve 103.00 85.00

Debenture Redemption Reserve 5.70 5.68

Proposed Dividend 34.61 31.14

Tax on Dividend 5.61 5.17

Balance carried forward 20.91 20.84

169.83 147.83

The company has achieved a higher PBDT and PAT compared to the previous year despite adverse conditions in the domestic and export markets and increase in input costs. This financial performance is indeed a commendable achievement by the Management.

2. DIVIDEND

Your Directors are pleased to recommend a dividend of 50% for the financial year ended 31.3.2011. The dividend, if approved by the shareholders, will be paid to all the equity shareholders whose names appear in the Register of Members as on 15.9.11. The dividend of 50 % for the year 2010-11 will cost the company Rs.40.22 crore, inclusive of taxes.

3. PERFORMANCE HIGHLIGHTS OF THE YEAR

1. Sales crossed Rs.1000 Cr. for the third consecutive year. Current year sales of Rs. 1184.44 Cr. is the highest ever achieved so far.

2. The Profit after tax has increased by 18.20% from Rs. 126.06 crore to Rs. 149.00 crore despite increase in input costs.

3. The dividend has been increased to 50% from 45% in the previous year.

4. The production capacity is increased from 245,000 tonnes per annum to 400,000 tonnes per annum and the inhouse Pulp capacity from 720 tpd to 880tpd.

5. Exports Sales leaped dramatically from 50,394 MTs. to 64,776 MTs.

6. Hardwood Pulp production increased to 97,492 MTs. from 95,514 MTs in the previous year.

7. The wind farm generated 598.70 lakh units of Wind Power and earned a profit of Rs.4.56 cr.

8. Pulp wood plantation touched a new peak of 15,379 acres in a single year.

9. The Bio-methanation Plant generated 59.34 lakh cubic metres of methane gas enabling the company to save consumption of 3,545 KL of furnace oil.

10. Achieved capacity utilization of 99.91 % in PM 1 & PM 2 and 60.92% in PM 3 in the first 72 days of operation with no introductory discount for new products.

11. Adjudged as the best performer at the National level in Pulp & Paper category in the EVI Green Business Survey.

12. a) Received FSC Chain of Custody (C-o-C) and Controlled Wood Certificate from M/s Smart Wood Program of Rainforest Alliance, USA for complying with FSC-STD-40-004 and FSC-STD-40-005 standards.

b) Received National Award for "Excellence in Water Management 2010" from Confederation of Indian Industry (CII) for the best performance in Water Management in India among the Industrial Sectors.

13. The Mill Expansion Plan was completed during the year and the commercial production was commenced on 19.1.2011. Three other projects viz. setting up of a 300 tpd De-inking Plant, Revamping of power and steam system and setting up of a 600 tpd cement plant under lime sludge and fly ash management system are taken up for implementation during the year. The Cement Plant is likely to be completed by December 2011, De- inking plant by March 2012 and Revamping of power and steam system by April 2012.

4. CONTRIBUTION TO ENVIRONMENT/ POLLUTION CONTROL.

1. Your company has switched over completely from conventional bleaching to environmentally friendly ECF bleaching involving a capital outlay of Rs. 316 crore.

2. Reduction in water consumption has made your Company the lowest in water consumption in manufacture of fine paper.

3. Your Company has introduced 'Ozone Treatment System' in the effluent treatment as a tertiary treatment for improving the quality of effluent discharge .

4. A Research project has been assigned to Tamilnadu Water Investment Company, Chennai for further improving the quality of effluent discharge. The pilot plant involving capital expenditure of about Rs.2.00 crore is under erection.

5. Project work relating to converting waste lime sludge and fly ash generated in the paper mill into high grade cement has been taken up for execution. This will make TNPL one of the most eco-friendly companies in India.

6. Continuous ambient air quality monitoring system has been commissioned to monitor the quality of air in the mill area.

7. Your Company's windfarm with a total installed capacity of 35.5 MW at Devarkuarm and Perungudi in Tirunelveli District has generated 598.70 lakh kWh Units of "Green Power".

5. CONTRIBUTION TO SOCIETY

1. Your company is committed to being a socially responsible corporate body and has spent Rs.3.24 crore under its Corporate Social Responsibility Programme (CSR) during the year.

2. The CSR Policy of your company has as its aim, an expenditure of 3% of the profit of the previous year for CSR activities in the subsequent year.

3. The CSR projects focus on promoting Economic, Social, Environmental and Cultural growth of the community at large in an equitable and sustainable manner in the areas surrounding the factory and in peripheral areas around the factory.

6. CONTRIBUTION TO INNOVATION AND NEW KNOWLEDGE DEVELOPMENT

1. Your company gives great importance to all creative ideas in its Research and Development activities.

2. The expenditure on R&D activities has increased to Rs.4.12 Cr. from Rs.3.53 Cr. in the previous year. The long term plan is to increase R&D investment to atleast 1% of the turnover, from the current level of 0.34%.

3. The R&D activities focus on product development, process improvement, raw material substitution, development of new products and environment protection.

4. R & D projects are carried out in-house. Projects are outsourced when necessary and warranted.

7. OVERALL PERFORMANCE- OTHER HIGHLIGHTS

The production and capacity utilization are given hereunder;

(Figures in MTs)

Particulars 2010-11 2009-10

PMI PMII PMIII Total PMI PMII Total

Newsprint - - - - - - -

PWP 116921 127861 20262 265044 114610 130398 245008

Total 116921 127861 20262 265044 114610 130398 245008

Capacity 99.91% 60.92% l00.00%

Utilisation (%)

Your company has achieved an overall capacity utilization of 99.91% in Paper Machines 1 & 2 and 60.92% in Paper Machine 3 in its first 72 days of operation. During the year, your company has not produced Newsprint. The entire resources were utilised to produce Printing & Writing Paper in order to improve profitability.

Power Exports during the year was 295.37 lakh units against 158.10 lakh units in the previous year. Total power generation during the year was 4561.23 lakh units against 4103.81 lakh units in the previous year During the year, your company has drawn only 16.01 lakh units of power from the State grid, equivalent to 1% of the total consumption. Your company is therefore generating almost its entire requirements of power.

Bagasse stock at the end of the year was 3,39,837 MTs. With the implementation of several water conservation measures, water consumption stands reduced to 55 kl. per metric tonne, of finished production, the lowest in manufacture of fine paper using virgin fibre.

The Company has tied up term loans with Banks for financing the ongoing projects viz.De-inking Plant , Revamping of Power and Steam System and 600 tpd Cement Plant. Of the funds availed, pending crystallization of expenditure, the company has temporarily applied the loan proceeds of Rs.37.58 crore for general business operation. The unspent loan funds would be applied for the purpose when the expenditure crystallizes.

8. MARKET TRENDS

a) Printing and Writing Paper

The printing and writing paper demand and prices were affected adversely by the global economic slowdown since October 2008. Demand started improving from February 2010. The prices declined to about USD 700-750 per MT during October- December 2008 and remained at that level until January 2010. Export prices started firming up slowly from February 2010. Your company has exported 64,776 MTs. of Printing & Writing Paper during the year against 50,394 MTs. in the previous year.

Since 2008, many major players in the Indian Paper Industry have expanded their capacities. With the significant growth in consumption, the additional capacities have been fully absorbed.

Import duty on printing and writing paper has been retained at 10% The excise duty was reduced from 8% to 4% effective 7th December 2008. This has subsequently been increased to 5% from 1st March 2011. Simultaneously, excise exemption allowed on the first 3500 MTs of PWP produced out of non-conventional raw material has also been withdrawn.

TNPL Copier Brand has become a household name in the copier segment.

b) Newsprint

Newsprint which registered a sharp price increase between July 2008 and January 2009 started declining since February 2009 and stabilized at about USD 600 per MT till May 2010. For most part of the current year, the imported newsprint was being traded at about USD 650 pmt. and since April 2011 being traded at about USD 690 pmt. The newsprint prices are volatile and uneconomical. In view of the low profitability, your company resorted to manufacture of printing and writing paper only.

9. OUTLOOK

a) Printing and Writing Paper

The per capita paper consumption is estimated at 9.2 kg. The demand has picked up from January 2011 in both the domestic market and exports.

Increase in spending by the Government on Education is likely to boost demand for writing paper from the academic segment. With the consistent economic growth, demand for packaging paper will also show improvement.

There has been a sharp increase in fuel and pulp prices during the year. Coal price increased by about 25%, Hardwood pulp by 15% and Softwood pulp by 25% during the year. The spiralling cost has prompted the Industry to increase prices to sustain margins.

b) Newsprint

The Newsprint production in the country during the year grew by about 3.2%. The growth in newsprint production is very low as majority of the demand is being met by imports. The imported newsprint is considered good in quality and lower in price.

10. FIXED DEPOSITS

Your company has stopped accepting fresh deposits from 1.6.2002 and renewals from 1.8.2005. The outstanding deposits as on 31.3.2011 was Rs.2.63 Lakhs against Rs.4.43 Lakhs in the previous year. Number of depositors as on 31.3.2011 was 15 against 25 depositors in the previous year. Since the depositors are not available in the given addresses, the outstanding remains undisbursed.

11. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred a sum of Rs.5,81,760/- to the Investor Education and Protection Fund, the dividend amount which was due and payable and remained unclaimed and unpaid for a period of seven years , as required under Section 205A(5) of the Companies Act, 1956.

12. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in the Annexures to this Report (Annexure I and II).

13. STATEMENT OF EMPLOYEES' PARTICULARS

None of the employees drew remuneration of Rs.60,00,000/- or more per annum / Rs.5,00,000/- or more per month during the year. This information is furnished as required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

14. DIRECTORS

Pursuant to the orders of Government of Tamil Nadu, Dr.N Sundaradevan IAS has been co-opted as an Additional Director w.e.f.27.5.2011 in place of Thiru Rajeev Ranjan IAS who has taken charge as Commissioner of Sugar. Dr.N Sundaradevan IAS will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as Director in the Annual General Meeting . Further, vide Government Order dt.26.5.2011, Dr.N Sundaradevan IAS has been nominated as Chairman of the Company.

Vide Government Order dt.25.5.2011, Thiru Rajeev Ranjan IAS has been nominated as a Director on the Board of TNPL in place of Thiru Vikram Kapur IAS.

Tvl . N Kumaravelu and D.Krishnan, Directors retire by rotation and being eligible are seeking for re- appointment as Directors at the next Annual General Meeting.

15. COST AUDITORS

Pursuant to orders of the Department of Corporate Affairs, M/s S Mahadevan & Co, Cost Accountants, Chennai have been appointed as Cost Auditors of your Company for the year 2010-2011.

16. STATUTORY AUDITORS

The Comptroller and Auditor General of India has appointed M/s. P.B Vijayaraghavan & Co., Chartered Accountants, Chennai as the Auditors of your Company for the year 2010-2011.

17. SECRETARIAL AUDITOR

Secretarial Audit of the company for the financial year ended March 31, 2011 has been carried out through M/s R. Sridharan & Associates, Practising Company Secretaries. The Secretarial Audit Report confirms that the company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreement with the Stock Exchanges and all the regulations of SEBI as applicable to the company.

18. INDUSTRIAL RELATIONS

Overall industrial relations during the year were cordial. The Directors place on record their appreciation of the valuable contribution made by the employees of your Company towards the performance and growth of your Company.

19. 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:

1. That the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period;

3. That the Directors have taken proper and sufficient care for the Maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the annual accounts were prepared for the financial year ended 31st March 2011 on a going concern basis.

20. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and Report on Corporate Governance are forming part of Directors' Report and are annexed as Annexure III and Annexure IV.

As required by the Listing Agreement, an Auditor's Certificate on Corporate Governance and a Declaration by the Managing Director with regard to Code of Conduct are attached to the said report.

21. CEO/CFO CERTIFICATION

As required by Clause 49 of the Listing Agreement, a Certificate on the financial statements and Cash Flow statement of the company for the year ended March 31, 2011 duly signed by the Managing Director and Deputy Managing Director was submitted to the Board of Directors at the meeting held on May 27, 2011.

22. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation of the assistance, co-operation and support extended to your company by the shareholders, the Govt, of Tamil Nadu, the Commercial banks, Financial Institutions,the Depositors, Sugar Mills and the indentors. The Board also places on record its sincere appreciation towards the Company's valued customers for the support and confidence reposed by them in the organization and looks forward to the continuance of this mutually supportive relationship in future.

For and on behalf of the Board

DR.N SUNDARADEVAN

CHAIRMAN

Date: 27th May 2011

Place:Chennai 600032.


Mar 31, 2010

The Directors have pleasure in presenting the Thirtieth Annual Report and the Audited Accounts of your Company for the financial year ended 31.3.2010.

1. FINANCIAL RESULTS

The Financial performance of your company in the year under review is summarized in the table below :

(Rs. in crore)

Particulars 2009-10 2008-09

Sales 1025.68 1066.46

Other income 47.94 33.84

Operating Profit (PBIDT) 319.80 307.92

Interest and Finance charges 46.18 49.27

Gross Profit (PBDT) 273.62 258.65

Depreciation 115.56 100.80

Profit before tax 158.06 157.85

Provision for tax 32.00 50.47

Profit after tax 126.06 107.38

Balance brought forward 21.77 22.42

Profit Available for

appropriation 147.83 129.80

APPROPRIATIONS

Transfer to General Reserve 85.00 68.00

Debenture Redemption Reserve 5.68 3.60

Proposed Dividend 31.14 31.14

Tax on Dividend 5.17 5.30

Balance carried forward 20.84 21.76

147.83 129.80

The company has achieved a higher PBDT and PAT compared to the previous year - despite extremely adverse conditions prevailing in the domestic and export markets. This financial performance is indeed a commendable achievement by the Management.

2. DIVIDEND

Your Directors are pleased to recommend a dividend of 45% for the financial year ended 31.3.2010. The dividend, if approved by the shareholders, will be paid to all the equity shareholders whose names appear in the Register of Members as on 8th September 2010. The dividend of 45% for the year 2009-10 will cost the company Rs. 36.31 crore, inclusive of taxes.

3. PERFORMANCE HIGHLIGHTS OF THE YEAR

1. Sales crossed Rs. 1000 crore for the second consecutive year in the companys history.

2. The Profit after tax has increased by 17.39% from Rs. 107.38 crore to Rs. 126.06 crore - despite the adverse economic environment.

3. The dividend has been maintained at 45%

4. Substantial progress has been made in the execution of the Mill Expansion Plan (MEP) to increase capacity from 2,45,000 tonnes to 4,00,000 tonnes per annum. The project is likely to be completed by October 2010. The overall cost of MEP will be Rs.1000 crore.

5. Copier production during the year was 57395 tonnes.

6. 50394 Mts. of Printing & Writing Paper were exported during the year to 44 countries - an increase of 50.6% over 2008-09.

7. Hardwood Pulp production was 95514 Mts. against 84854 mts in the previous year

8. The wind farm earned a profit of Rs.588.34 lakh during the year through the generation of 644.30 lakh units of windpower.

9. Cumulatively 51220 acres of land has been brought under this companys Farm Forestry Scheme and Captive Plantation Scheme, benefiting over 10,008 farmers.

10. The Bio-methanation Plant generated 57.98 lakh cubic metres of methane gas enabling the company to reduce consumption of 3,459 KL of furnace oil.

11. Life Cycle Extension Project of Paper Machine I was completed by April 2009 at a capital investment of Rs.81.93 crore.

12. Your company has achieved an overall capacity utilization of 100%.

4. CONTRIBUTION TO ENVIRONMENT/POLLUTION CONTROL

1. Your company has switched over from conventional bleaching to environmentally friendly ECF bleaching at a capital cost of almost Rs.400 crore.

2. Water consumption has been substantially reduced and is now the lowest in the Indian Paper Industry.

3. An Ozone Treatment System is under implementation for the first time in the Indian Paper Industry. The project will be completed by June 2010 and will clean up the effluent discharge.

4. A new Research project has been awarded to TWIC (Tamilnadu Water Investment Company) to improve the quality of effluent discharge even further.

5. Steps are being taken to convert the waste lime sludge and fly ash generated in the paper mill into good quality cement. This will make TNPL one of the most ecofriendly companies in India.

6. Energy conservation and Rain Harvesting have been given the highest priority. Your company has received an award from CII for being the most Energy Efficient Unit in 2009.

5. CONTRIBUTION TO SOCIETY

1. Your company spent Rs.2.52 crore under its Corporate Social Responsibility Programme (CSR). The expenditure will be increased to Rs.3.78 crore in 2010-11.

2. Your Directors are committed to increase the spend level on CSR progressively to 3% of the total profits.

3. The CSR projects focus on providing education, improving health care and supporting the under privileged sectors of society in the community in and around the Kagithapuram factory.

4. The CSR Award was given to the company by Government of Tamil Nadu for the year 2007-08.

6. CONTRIBUTION TO INNOVATION AND NEW KNOWLEDGE DEVELOPMENT

1. Investment in R&D is the cornerstone through which the company becomes a leader in Innovation and Knowledge Development.

a 2. The expenditure on R&D activities has increased by

110% in 2009-10 compared to the previous year.

3. The long term plan of the Board is to increase R&D investment to atleast five times the current level.

4. The R&D activities will focus on product development, process improvement, raw material substitution, new products and environment protection.

5. R&D projects will be carried out in-house. However, projects will be outsourced when necessary and warranted.

7. OVERALL PERFORMANCE - OTHER HIGHLIGHTS

The production and capacity utilization are given hereunder:

(Figures in MTs)

Particulars 2009-10 2008-09 PMI PMII Total PMI PMII Total

Newsprint - - - - 1514 1514

PWP 114610 130398 245008 112556 140833 253389

Total 114610 130398 245008 112556 142347 254903

Capacity

Utilisation

(%) 100.00 105.37

Your company has achieved an overall capacity utilization of 100.00%. The strategy of keeping the entire production as printing and writing paper has helped maintaining the profitability during the year.

With the rise in coal price, export of power under normal tariff was uneconomical. Therefore, power export during the year was restricted to the barest minimum of 158.10 lakh units against 208.93 lakh units in the previous year. Total power generation during the year was 4103.81 lakh units against 3994.88 lakh units in the previous year. During the year, your company has drawn 21.72 lakh units of power from the State grid, equivalent to less than 1% of the total consumption.

Bagasse stock at the end of the year was 286734 MT. With the company switching over to ECF bleaching and implementation of various water conservation measures, water consumption was reduced to an average of 66 kl. per MT of finished production during the year. On implementation of Mill Expansion Plan during 2010-11, water consumption would be further reduced.

TNPL has already registered two Clean Development Mechanism (CDM) Projects with United Nations Framework Convention on Climate Change (UNFCCC), one in the waste management sector (bio gas) and another in the renewable energy sector (wind farm). These two projects generate about 54000 Certified Emission Reduction (CER) per annum. TNPL is presently working on three more CDM projects viz. Energy efficiency improvement in Chemical Recovery boiler, generation of biogas from mill waste for replacing the usage of furnace oil and wind farm. These projects are likely to be registered with UNFCCC during the current financial year.

The Company has spent Rs.840.79 crore for MEP upto 31.3.2010. The Project is expected to commence operation by October 2010. During the year, the Company temporarily utilized short term funds Rs.50.67 crore for the Project. This portion has eventually been tied up in the form of long term loans with banks as on 31.3.2010.

8. MARKET TRENDS

a) Printing and Writing Paper

The global economic slowdown has impacted the printing and writing paper demand and prices adversely across all grades. The prices declined from USD 900-950 per MT to about 700-750 per MT during November-December 2008 and remained at that level until January 2010. The export market started firming up slowly from February 2010. In spite of the tough market conditions for most of the year, your company has exported 50394 MT of Printing & Writing Paper against 33461 MT in the previous year.

Since 2008, many major players in the Indian Paper Industry have expanded the capacity. Consequently, supply has been much higher than demand during the year. This, coupled with the global economic crisis, has adversely impacted Indian Paper Industry for about 15 months since November 2008.

In the domestic market, the mills reduced the Printing & Writing Paper prices by about Rs.3000-4000 per MT. during the year, as the market was sluggish and the mills were holding huge inventory till the end of the year. Import duty on printing and writing paper remained at 10% during the year and with effect from 7th December 2008, the Govt, of India have reduced the excise duty from 8% to 4% to improve the paper consumption and this continues till date. No excise duty is levied on the first 3500 MT of PWP produced primarily out of non-conventional raw material.

Capacity addition during 2010-11 is likely to be about 5 lakh MT. Capacity addition during 2011-12 is likely to be very marginal.

TNPL Copier has become a household name in the copier segment. During the year 2009-10, your company produced 57395 MT and sold 57172 MT of Copier. This is the seventh year in a row in which your company has increased the copier production. However, this segment is likely to face competition in the coming years as more players, including recycled paper manufacturers have entered the market. In order to cater different end- customers, your company has launched 4 different varieties of copier papers namely TNPL Commander (70 gsm), TNPL Runner (75 gsm), Copy Crown (75 gsm) and Perfect Copier (85 gsm).

b) Newsprint

Newsprint which registered a sharp price increase between July 2008 and January 2009 started declining since February 2009. Newsprint price was about USD 520 per

MT during April-June 2009, USD 480 per MT during July- Aug 2009 and thereafter stabilized between USD 550 - USD 600 per MT till March 2010. In line with the imported newsprint price, domestic newsprint also witnessed a steep fall in price during 2009-10.

9. OUTLOOK

Printing & writing paper consumption is expected to grow by 7% per annum and Newsprint by 4-5% per annum. The literacy drive supported by the Govt, and consistent economic growth at 7-8% per annum are the key drivers of growth in the printing and writing paper. Within the printing & writing paper, branded copier is fast growing at about 19% per annum while non-surfaced paper growing at 5-6% and surfaced size maplitho at 8-9% per annum.

Waste paper prices in the global market hardened from December 2009. Hardwood pulp prices increased from about USD 400 per ADMT in April 2009 to about USD 850 per ADMT in March 2010 and softwood pulp prices from USD 458 per ADMT in April 2009 to USD 950 per ADMT in March 2010 due to short supplies. Pulp prices are likely to remain at the current level for few more months till demand supply mismatches are narrowed down.

The spurt in the waste paper and pulp prices and the general increase in demand have helped demand for paper and paper products both in the domestic market and export. Impacted by the increase in cost and improvement in the demand scenario, the mills have increased the Printing & Writing Paper prices since April 2010 in the domestic market and export.

If the demand scenario in domestic and export markets continues, 2010-11 should be a good year for TNPL.

10. FIXED DEPOSITS

Your company has stopped accepting fresh deposits from 1.6.2002 and renewals from 1.8.2005. The outstanding deposits as on 31.3.2010 was Rs.4.43 Lakh against Rs.6.44 Lakh in the previous year. Number of depositors as on 31.3.2010 was 25 against 39 depositors in the previous year.

11. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred a sum of Rs.569693/- to the Investor Education and Protection Fund, the dividend amount which was due and payable and remained unclaimed and unpaid for a period of seven years, as provided in Section 205A(5) of the Companies Act, 1956.

12. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 217(l)(e) of the Companies Act. 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in the Annexures to this Report (Annexure I and II).

13. STATEMENT OF EMPLOYEES PARTICULARS

The statement of employees, referred to in sub-section (2A) of Section 217 of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 is given in Annexure-III and forms part of this report. The employee shown therein is not a relative of any director of the company.

14. DIRECTORS

Pursuant to the orders of Government of Tamil Nadu, Thiru Rajeev Ranjan IAS has been co-opted as an Additional Director in place of Thiru M F Farooqui IAS w.e.f.22.12.09. Thiru Rajeev Ranjan IAS will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as Director in the Annual General Meeting. Further, vide Government Order dt.7.12.09 Thiru Rajeev Ranjan IAS has been nominated as Chairman of the company.

Pursuant to the orders of Government of Tamil Nadu, Thiru Vikram Kapur IAS, has been appointed as an Additional Director w.e.f. 28.4.2010 in place of Thiru Dayanand Kataria IAS. Thiru. Vikram Kapur IAS will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as Director in the Annual General Meeting.

Tvl. V.Narayanan and V.R.Mehta, Directors retire by rotation and are being eligible for re-appointment as Directors in the forthcoming Annual General Meeting.

15. COST AUDITORS

Pursuant to orders of the Department of Company Affairs, M/s Sam Services, Cost Accountants, Chennai have been appointed as Cost Auditors of your Company for the year 2009-2010.

16. STATUTORY AUDITORS

The Comptroller and Auditor General of India has appointed M/s. P.B Vijayaraghavan & Co., Chartered Accountants, Chennai as the Auditors of your Company for the year 2009-2010.

17. SECRETARIAL AUDITOR

Secretarial Audit of the company for the financial year ended March 31, 2010 has been carried out through M/s R. Sridharan & Associates, Practicing Company Secretaries. The Secretarial Audit Report confirms that the company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreement with the Stock Exchanges and all the regulations of SEBI as applicable to the company.

18. INDUSTRIAL RELATIONS

Overall industrial relations during the year were cordial. The Directors place on record their appreciation of the valuable contribution made by the employees of your ; Company towards the performance and growth of your

Company.

19. 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:

a) That the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

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

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

d) That the annual accounts were prepared for the financial year ended 31st March 2010 on a going concern basis.

20. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and Report on Corporate Governance are forming part of Directors Report and are annexed as Annexure - IV and Annexure V.

As required by the Listing Agreement, an Auditors Certificate on Corporate Governance and a Declaration by the Managing Director with regard to Code of Conduct are attached to the said report.

21. CEO/CFO CERTIFICATION

As required by Clause 49 of the Listing Agreement, a certificate on the financial statements and Cash Flow statement of the company for the year ended March 31, 2010 duly signed by the Managing Director and Deputy Managing Director was submitted to the Board of Directors at the meeting held on May 25, 2010.

22. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation of the assistance, co-operation and support extended to your company by the shareholders, the Govt, of Tamil Nadu, the Commercial banks, Financial Institutions, the Depositors, Sugar Mills and the indentors. The Board also places on record its sincere appreciation towards the Companys valued customers for the support and confidence reposed by them in the organization and looks forward to the continuance of this mutually supportive relationship in future.

For and on behalf of the Board

RAJEEV RANJAN, IAS

CHAIRMAN Date: 25th May 2010

Place: Chennai 600 032

 
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