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Directors Report of West Coast Paper Mills Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 60th Annual Report of the Company, together with the audited accounts for the year ended 31st March 2015.

FINANCIAL RESULTS (Amount in Lacs) 2014-15 2013-14

Gross Profit 24,561.94 21,436.92

Balance brought forward 60.52 70.21

Transferred from General Reserve - 100.00

24.622.46 21,607.13 ALLOCATIONS:

Finance Cost 6,708.99 7,322.53

Depreciation 12,220.09 12,719.40

Exceptional items 5,159.50 -

Taxation - Current - 166.29

- MAT Credit Entitlement - (153.82)

- Deferred 361.86 719.47

General Reserve - -

Proposed Dividend - 660.49

Tax on Dividend - 112.25

Balance carried forward 172.02 60.52

24.622.46 21,607.13

DIVIDEND

Your Directors have not recommended any dividend in view of inadequacy of profit.

PERFORMANCE

For the year under review, the Company has recorded satisfactory outcomes in its working results, even in the midst of adverse circumstances of the reduction in production of the Paper and Paperboards and stagnancy in sale prices. This performance is due to the improved working of the cable division and a decrease in the cost of raw material as a consequence of the higher usage of the imported wood chips in production, thereby reducing the dependency on the local markets and also because of a reduction in other input costs.

The Company posted gross profit of Rs. 126.93 Crores (after writing off inter corporate deposit of Rs. 51.60 Crores extended to Shree Rama Newsprint Ltd., and the waiver of interest of Rs. 6.81 Crores both totaling to Rs. 58.41 Crores) as against Rs. 141.14 Crores in the previous year-lower by Rs. 14.21 Crores (10%) whereas there was a net profit of Rs. 1.11 Crores as against Rs. 6.63 Crores in the previous year.

DIVISION WISE PERFORMANCE A) Paper and Duplex Board Divisions

The production of Paper, Paperboard and Hardwood Pulp was 3,00,514 MT (94% capacity utilization) against 3,10,002 MT in the last year (97% capacity utilization) i.e., lower by 9,488 MT. The sale of paper, paperboard and hardwood pulp was 3,02,978 MT against 2,98,682 MT in the last year i.e., higher by 4,296 MT.

The turnover during the year was Rs. 1,643.68 Crores as against Rs. 1,610.74 Crores in the previous year (both inclusive of excise duty), i.e., higher by Rs. 32.94 Crores, due to higher sales quantity.

B) Cable Division - Mysore

The production and sales of optical fibre cable in terms of quantity was 30438 kms and 30368 kms during the year as against 20,686 kms and 21,053 kms in the previous year, respectively. Sale of optical fibre cable in terms of value, was higher at Rs. 103.16 Crores as against Rs. 43.76 Crores (both inclusive of excise duty) during the previous year due to execution of more fibre count cable.

EXPORTS

Export of Paper, Paperboard and Duplex board reduced from 6,539 MT worth Rs. 33.68 Crores (FOB) in 2013-14 to 5,348 MT worth Rs. 28.12 Crores (FOB) in 2014-15 due to non-remunerative prices. Further, 733 km of Cable worth Rs. 0.52 Crores was exported in 2014-15 compared to 1,925 km of Cable worth Rs. 1.70 Crores in 2013-14.

RAW MATERIALS

The Company has started the import of wood chips from Australia, South Africa, Brazil etc., from June 2013, by creating the required infrastructure for efficient handling of the cargoes and during the year under report the company imported 4.20 Lacs MT of wood chips against 3.55 Lacs MT in the previous year. The use of wood chips has been well absorbed in our process and now the Company is geffing direct and indirect advantages of its usage.

The Company has also focused on Social forestry and cultivated Farms on more than 45,000 acres of land so far within a radius of 250-300 kms so as to enhance the availability of wood. The Company is also distributing seedlings to the farmers at concessional rates so that plantations are taken up by them without any commitment for its supply to the Company. However, this is bound to increase the overall availability of raw material for the industry.

EXCHANGE RATE VARIATION

The Company has reinstated Foreign Currency Loans/External Commercial Borrowings of USD 43.64 Million at the exchange rate prevailing as on 31st March 2015 and the exchange rate difference of Rs. 78.29 Crores has been added to the cost of Fixed Assets, as per Accounting Standard AS-11 issued vide Notification No.G.S.R. 225(E) dated 31.03.2009 (as last amended vide Notification No GSR 913 (E) dated 29.12.2011) by the Ministry of Corporate Affairs.

RISK MANAGEMENT POLICY

The Board of Directors had adopted risk policy for Forex exposure in the meeting held on 28.06.2004. The foreign exchange exposure of the Company is reviewed from time to time by the Board. The Company has taken Industrial All Risk Policy to insure

its fixed assets and inputs which cover known and unknown risk including Fire, Loss of Profit.

RELATED PARTY DISCLOSURE AND TRANSACTIONS

The details of related party disclosure and transactions as prescribed in Form AOC-2 are given in the Note No.2.28 of Notes on Financial Statements. All the transactions are done at arms length and pertain to FY 2014-15 period only and as approved in the Board Meeting held on 13.05.2014.

EXTRACT OF THE ANNUAL RETURN

Extract of the Annual return in the Form No. MGT 9 is attached and forms a part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has framed a Corporate Social Responsibility (CSR) Policy as required under Section 135 of the Companies Act, 2013. Pursuant to rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual report on CSR in the prescribed format is attached and forms a part of this report & policy may be accessed on the Company's website at the link "http://westcoastpaper. com/index.php?q=node/6".

Even though the company is not required to contribute towards CSR as it has incurred net loss of Rs. 8.82 Crores in the preceding 3 years. It has contributed Rs. 15.72 Lacs towards CSR activities in 2014-15.

MEETINGS OF THE BOARD

The number of meetings of the Board held and details thereof are mentioned in the Report on Corporate Governance forming part of this Annual Report.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 is annexed hereto and forms a part of this report.

Criteria for performance evaluation of Independent Directors' as required by the Listing Agreements also forms part of this report.

MANAGERIAL REMUNERATION

The requisite details as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith forming part of this report.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING/ OUTGO

The information required under Section 134(3)(m) of the Companies Act, 2013 is annexed hereto and forms a part of this report.

PARTICULARS OF EMPLOYEES

The particulars of employees, as required under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in a separate Annexure to this Report.

MANAGEMENT'S DISCUSSION AND ANALYSIS

A comprehensive Management's Discussion and Analysis Report, forming a part of the Corporate Governance is carried elsewhere in this annual report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Corporate Governance Report is made a part of this annual report.

A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreements is attached with this report.

The Company is complying with Clause 49 of the Listing Agreements with regard to Corporate Governance and reports to that effect are being regularly filed with the Stock Exchanges. The Company has obtained declaration from the Directors and Senior Management members of the Company for compliance of Code of Conduct and the Certificate from CEO/ CFO was placed before the Board of Directors at the meeting held today.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility State- ment, as required under Section 134(5) of the Companies Act, 2014, is attached and forms a part of this report.

DIRECTORS

Shri Saurabh Bangur retires from the office by rotation in terms of Article 143 of the Articles of Association of the Company, but being eligible offers himself for re-appointment. Pursuant to Section 152 Shri M. P. Taparia, Lt. Gen. (Retd.) Utpal Bhattacharyya and Shri Krishna Kumar Karwa have been appointed as Independent Directors at the Meeting of the Board of Directors held on 02.02.2015 subject to approval of Members at the ensuing Annual General Meeting. Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, names of Companies in which they holds Directorships and Memberships of Board Committees, shareholding, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, are provided in the Notice to Members, forms a part of this Annual Report.

Shri Sanjay Kothari resigned from the Board during the year and the Board of Directors place on record their highest sense of appreciation for the valuable advice and guidance rendered by him during his tenure as Director of the Company.

DECLARATION BY DIRECTORS

The Company has received declaration from all the independent Directors under Section 149(7) of the Companies Act, 2013 in respect of meeting the criteria of independence provided under Section 149(6) of the said Act.

SECRETARIAL AUDIT

The Secretarial Audit Report in the Form No. MR 3 issued by Mr. Srikant R. Gudi, is annexed hereto and forms a part of this report.

AUDITORS

Messers Batliboi & Purohit, Chartered Accountants, will retire at the end of the 60th Annual General Meeting of the Company and offer themselves for re-appointment for the ensuing year.

As regards qualifications of the Auditors, we refer to Note no. 2.38, 2.39 & 2.40 which are self explanatory. The Company will account loss on sale of shares of Shree Rama Newsprint Ltd., on completion date as per Share Purchase Agreement dt. 21.05.2015 as detailed in Note no. 2.38 whereas investment in Jayashree Chemicals Ltd., is a long term trade investment hence not provided, whereas amount advanced to Speciality Coatings & Laminations Ltd., will be recovered on disposal of its assets hence no provision is made.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

There are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inputs and availing of services and fixed assets and for the sale of goods & providing of services. Full fledged Internal Audit department carries out pre and post audit of all significant transactions throughout the year.

SHREE RAMA NEWSPRINT LTD (SRNL)

The Company has entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd., for Rs. 0.75 Lacs against book value of Rs. 4,540.86 Lacs subject to release of

Corporate Guarantees of Rs. 24,625.00 Lacs given to various banks by the Company and the Acquirer complying with the requirement of the Open Offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any other statutory approval.

Since the transaction will be completed on fulfillment of the above conditions, loss of Rs. 4,540.11 Lacs will be accounted by the Company in the Accounting Year 2015-16 on the date of completion of transaction.

The Company has agreed to accept payment of Rs. 70 Lacs on completion date of Share Purchase Agreement (SPA) dated 21.05.2015 executed between the Company and Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") against the outstanding inter corporate deposits of Rs. 5,229.50 Lacs given to Shree Rama Newsprint Ltd (SRNL) as per books of accounts and balance amount of Rs. 5,159.50 Lacs has been written off. This has also been confirmed by SRNL & acknowledged by the Acquirer on the letter dated 21.05.2015, written by the Company in pursuance of the said SPA.

LOANS, GUARANTEES & INVESTMENTS

The Company extended Inter Corporate Deposit of Rs. 1.25 Crores to SRNL (total Rs. 52.30 Crores) and Rs. 2.90 Crores to Speciality Coating & Laminations Ltd. (total Rs. 7.36 Crores) during FY 2014-15. However, no investment was made in any body corporate during FY 2014-15.

ACKNOWLEDGEMENT

Your Directors would like to thank the Union and State Governments, Banks, Financial Institutions, Customers,

Suppliers and Shareholders for their continued support.

For and on behalf of the Board

Place : Mumbai S. K. Bangur Dated : 27th May 2015 Chairman & Managing Director


Mar 31, 2013

The Directors are pleased to present the 58th Annual Report of the Company, together with the audited accounts for the year ended 31st March 2013.

FINANCIAL RESULTS

(Amount in Rs. Lacs) 2012-13 2011-12

Gross Profit 27,341.25 23,015.14

Balance brought forward (779.54) 2,815.39

26,561.71 25,830.53

Allocations: Finance Cost 7,257.21 7,149.57

Depreciation 13,635.33 14,315.46

Exceptional items 3,993.95 6,219.78

Taxation-Current 371.65

MAT Credit Entitlement (335.03)

Deferred 606.85 (1,313.84)

General Reserve 181.13

Proposed Dividends

- Preference Shares

-Equity Shares 660.49

-Shortfall of Tax on Dividends 112.25

-Shortfall of 2011-12

Balance carried forward 70.21 (779.54)

26,561.71 25,830.53

DIVIDENDS

Your Directors recommend a dividend of Re.l/- per equity share (50%) on 6,60,48,908 Equity Shares of Rs.2/- each, subject to members'' approval for the accounting year 2012-13.

PERFORMANCE

The working results of the Company were satisfactory on a robust performance reflected in the full utilization of expanded capacity of production of Pulp & Paper Board coupled with favourable change in the product mix. However, the working results of the Company continued to be adversely affected by the overriding sluggish market conditions coupled with a steep hike in the cost of raw materials together with deteriorating quality, chemicals, coal and furnace oil. The upward revision in minimum wages, hike in VDA, finance charges etc., also affected the buoyancy of the working results.

However, Paper market has taken a positive turn from December 2012 and the Company expects that results for the current year should improve, barring unforeseen circumstances due to higher sales realization.

The Company posted gross profit of Rs.200.84 Crores as against Rs.158.66 Crores in the previous year - higher by Rs.42.18 Crores (27%) whereas there was a net profit of Rs.18.13 Crores as against loss of Rs.33.56 Crores in the previous year.

DIVISION WISE PERFORMANCE

A) Paper and Duplex Board Divisions

The production of paper, paperboard and hardwood pulp was 3,17,808 MT (99.32% capacity utilization) (including 1,47,110 MT on new Paper M/c No.VI) against 3,08,230 MT in the last year (96.32% capacity utilization) (including 1,43,990 MT on new Paper Machine No.VI) i.e., higher by 9,578 MT. The sale of paper, paperboard and hardwood pulp was 3,21,018 MT against 3,05,818 MT in the last year i.e., higher by 15,200 MT.

The turnover during the year was Rs.1,499.07 Crores as against Rs.1,322.77 Crores in the previous year (both inclusive of excise duty), i.e., higher by Rs.176.30 Crores, due to increased production and sale and revision in sales prices.

There was no change in excise duty on paper & paperboard which was last revised from 5% to 6% on 17.03.2012.

B) Cable Division-Mysore

Production and sales of optical fibre cable in terms of quantity was 20,242 kms and 20,160 kms during the year as against 20,184 kms and 20308 kms in the previous year, respectively. Sale of optical fibre cable in terms of value, was higher at Rs.41.67 crores as against Rs.28.82 crores (both inclusive of excise duty) during the previous year due to execution of more fibre count cable.

The production in control cable plant was started in 2010-11 however the production & sales during the year was NIL as against 341 kms & 337 kms with sales value of Rs.4.64 crores in the previous year. Total turnover of cable division during the year was Rs.41.67 crores as against Rs.33.46 crores (both inclusive of excise duty) during the previous year.

EXPORTS

Export of paper, paperboard and duplex board reduced from 23,404 MT worth Rs.98.07 Crores (FOB) in 2011-12 to 10103 MT worth Rs.49.07 Crores (FOB) in 2012-13 due to unremunerative prices. Further, 437 km of Cable worth Rs.0.75 crores was exported in 2012-13 compared to 876 km of Cable worth Rs.2.12 crores in 2011-12.

RAW MATERIALS

The Company has procured 7.92 Lacs MT of pulpwood and bamboo as against 10.31 Lacs MT in the previous year, with the Company geared to source more than 10 Lacs MT of raw material per annum on sustained basis ensuring smooth operations for expanded capacity.

In the past one year, the raw material costs have risen by about 20% due to demand-supply imbalance; upward revision of Railway freight in 2012-13, urbanization, diversion of land for agricultural purposes, diversion of labour on Government Schemes (MNREGA) to attain social security, shortage of man power for pulpwood extraction, transportation cost on account of steep rise in petroleum prices, upward revisions of royalty by State Forest Department Forest Corporations and procurement rates by APMC''s, caused a serious strain on the procurement of Pulpwood.

The anticipated shortfall in availability of pulpwood is around 20 Lacs MT and is expected to continue till 2015. For the survival of pulp and paper industries, importing wood/chips remains the only alternative as the procurement cost of the local material is going to be at par with the imported material. Though the Indian ports are not fit for importing wood chips, Company has made arrangements to handle the chips at Marmagoa Port by installing mobile conveyors.

The material locally available is of substantially low quality due to harvesting of immature plantations, indirectly pushing the problem to the next year. With the consumption of poor quality material the process losses are immense and needs urgent attention to arrest the same.

Notwithstanding all these constraints procurement of pulpwood has been consistent and commensurate to the process and stocking requirements at optimum costs on par with market standards.

The Company- taking the cognizance of the raw material scarcity many years earlier-had taken up Contract for Farming in the local region of within 250-300 Kms radius of our works at Dandeli. The results of this endeavor have been realized in as much as the harvesting has contributed around 36274 MT during 2012-13. The tempo has gathered momentum. The landowners are happy and are renewing the contracts for farming for next rotation crop.

PLANTATIONS

To sub-serve 1988 National Forest Policy guidelines of the Government of India, WCPM involved itself for the first time in pulpwood plantation during the year 2005-06. The Company has envisaged an Afforestation project to harness the degraded, unproductive and barren lands within the vicinity of 250-300 Kms of Dandeli for augmentation of raw material and for the benefits all stake holders have proven to be a boon to the communities in this region. They have the fruits in their hands now of the consistent & sustained perseverance of the company in this unique Contract for Farming model. The faith of the communities has multiplied and expressed in the form of renewed contracts.

Under Contract for Farming model, clonal plantation programme continued to progress with the production of more than 75 Lacs clonal Eucalyptus and Subabul saplings and subsequent planting of the quality clonal planting stock on farmers unproductive/barren land covering an area of 3,800 Ha during the year 2012. Besides this, Company also distributes 2 million quality Casuarina seedlings to the farmers in Cuddalore (AP) region. The high rate of survival and growth of clonal plantations has led to improved productivity of wood biomass and higher returns to farmers, resulting in a growing demand for the clones.

As of now 44,056 acres area is under Contract for Farming with crop of different ages which is duly certified by FSC (Forest Stewardship Council) and hereafter every year 10,000 acres of certified plantation will be added.

In this Afforestation project all the statutes are taken care of and there is a win-win situation for the Company and community including Scheduled Castes and Scheduled Tribes people. No title, rights, ownership or possession shall be transferred or alienated or vest in the contract farming sponsor i.e. Company or his successor.

The Company provides ready market for the harvested product at pre-determined prices. The land owning families thus earned substantial income from their otherwise barren and unproductive land and the entire society gets advantage of employment in their own locality and enjoys the hassle free earnings from such lands with nil encumbrances, which subsequently uplifted their socio-economic status.

To reduce the dependence of wood based industries on the natural forests National Forest Policy envisioned to source their raw material by encouraging plantations amongst farming community on their lands have been rightfully achieved from this project.

This model project proved as a boon to the farming fraternity that led other pulpwood based industries in our adjacent region to follow this scheme by modifications to their local conditions.

The scheme has successfully generated rural employment for 250 man-days per hectare annually and another 100 person- days / per hectare employment in harvesting operations to the local population, this has led to prevention of migration of rural youth to cities for jobs. The provision of Lops & Tops as fuel wood at free of costs to the land owners/ local community has significantly reduced the pressure on natural forests. The scheme has led to the availability of high protein fodder for livestock grown in the plantation area. With the increase in green cover, the soil erosion reduced and the productivity enhanced. The assured employment for women in the plantation operations during lean period empowered them in the society. The 1 Ha of Captive plantations raised by Company can save 20 Ha of natural forests thus conserving national resources. The Afforestation drive is earning precious carbon credits on account of carbon sequestered.

Given that pulpwood availability is a major challenge for the paper industry, Company continues with its policy of promoting social forestry plantations for pulpwood in Karnataka, Tamilnadu and Andhra Pradesh to enhance the overall availability of raw material within the catchment area. The Company has distributed 328 Lacs seedlings during 2012-13.

EXCHANGE RATE VARIATION

The Company has reinstated Foreign Currency Loans/External Commercial Borrowings of USD 103.20 Million at the exchange rate prevailing as on 31st March 2013 and the exchange rate difference of Rs.100.23 Crores has been added to the cost of Fixed Assets, as per Accounting Standard AS-11 issued vide Notification No.G.S.R. 225(E) dated 31.03.2009 (as last amended vide Notification No GSR 913 (E) dated 29.12.2011) by the Ministry of Corporate Affairs.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company supported Society for Afforestation, Research & Allied works (SARA) has been certified by Forest Stewardship Council (FSC) for "Well Managed Group Plantation Certification" for an area of 17,622 Hectares of plantations raised in Karnataka, Maharastra and Andhra Pradesh between 2000 & 2012. Further the 3080 Ha of 2013 are in the process of being certified and thereafter every fresh 4,000 Ha will be certified enabling the Company to perpetually source substantial quantity of FSC 100% pure wood through SARA. The FSC Chain of Custody and FSC Controlled Wood certifications already obtained by Company further supplement increased quantum of FSC certified paper being floated in the niche markets. SARA has conducted India''s First FSC-FM 1st Surveillance audit under observation of A.S.I (Accreditation Services International-Germany). Lead auditor from S.C.S (Scientific Certification System, USA) and A.S.I, has successfully conducted this year audit. SARA has once again successfully passed international standards for responsible forest management and left its mark as a pioneer in the Indian forestry and plantation sectors. The uniqueness of the SARA working model was lauded by the auditors and stated to be fit for replication in the small and medium farm forestry sectors worldwide.

ISO 9001 (2008) QUALITY MANAGEMENT SYSTEM

The Company is Certified to the revised ISO 9001 (2008) international standard Quality Management System (QMS) by Det Norske Veritas, the Netherlands. The validity of this certification is up to May 2013. The Company remains fully committed to continually improve upon the implemented QMS for the various operational processes and services under the scope of the prevailing change management scenario.

ISO 14001 (2004) ENVIRONMENTAL MANAGEMENT SYSTEM

The Company is certified to ISO 14001 (2004) international standard by Det Norske Veritas, the Netherlands. The validity of this certification is up to January 2015. The Company stands committed to continually improve upon the implemented EMS at its existing site using the best available technology and ensure full compliance with relevant environmental enactments,

which apply to its existing operations and also as a commitment towards corporate responsibility on environmental protection and fulfillment of corporate governance as well.

OHSAS 18001 (2007) OCCUPATIONAL HEALTH AND SAFETY ASSESSMENT SERIES

Occupational Health and Safety has been recognized as an Integral part of the Company''s Business Process. In consequence the Company continues to maintain its OHSAS 18001(2007) certification from Det Norske Veritas, the Netherlands. The validity of this certification is up to January 2015. An unstinted compliance of all the required elements of the OHSAS management system further reinforces our commitment to comply with Health and Safety standards and legislations.

CORPORATE SOCIAL RESPONSIBILITY

The Company has been, over the years, pursuing as part of its corporate philosophy, CSR policy voluntarily that goes beyond mere cosmetic philanthropic gestures and integrates the interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership and mutual trust for inclusive development. Compliance to Corporate Social Responsibility Voluntary Guidelines 2009 issued by Ministry of Corporate Affairs, Government of India, in December 2009 and our honouring of these guidelines in letter and spirit, is as under:

1) Caring for total stakeholders

The corporate culture of the Company has been continually stakeholder-centric, keeping their well-being and their holistic development as the ultimate goal of its endeavors thereby creating value for all concerned.

The Company Secretariat has a special cell, which is ever sensitive to the concerns as well as the complaints of the shareholders, be it the ones expressed at the Annual General Meeting or those brought to notice through continuous correspondence and feedback. A highly vigilant and responsive Welfare Cell takes care of the welfare needs of the employees and their families with round the year welfare activities such as centrally monitored colony maintenance of roads, lighting, water supply, drainage and sanitation. The safety and security of the colony dwellers is constantly supervised by the respective departments. Civic amenities such as Hi-tech hospital facilities, Temples, Playgrounds, Health Gym, The Shopping Complex, The Employees'' and Officers'' Clubs, The West Coast Paper Mill Employee''s Souhardha Credit Co-operative Ltd., a 1200-seater Auditorium, the Cable TV etc., are maintained making the colony a compact, self- contained township for a comfortable, peaceful habitation. The Company has also extended civic facilities in satellite colony areas such as Sudarshan Nagar, and Vinayak Nagar bordering the colony, where the employees are provided residential quarters by the company. Customers'' cares and concerns are duly attended by the Marketing Division as well as by the Quality Control department. The countrywide chain of Company''s paper dealers reaches out to the end- customers to ensure their satisfaction. Paper dealers'' conclaves are organized periodically to take care of their problems along with those of the customers. The Company''s supply line operates smoothly with adequate transport and communication facilities along with parking and night halt facilities for road transporters.

Support to Rural Communities

A significant dimension of the Company caring for its stake holders is the support extended to the far off poor farmers whom it supports with technology and genetically engineered saplings for the cultivation of trees on dry and fallow lands. As a result of this, Hundreds of farmer families in the region are able to take up farming on wasteland as a profitable commercial venture. Caring for the farmers is a cardinal principle of our corporate social responsibility.

The Company is thus constantly in touch with its various stakeholders and its operations are carried out in tandem with them and ensuring their involvement, inclusive development and growth.

2) Ethical Functioning

The corporate governance of the Company is primarily based on time-honoured practices of business ethics, accountability, and transparency. The Company opens itself up to public audit during Public Hearings at the time of the launching of new Projects. Frequent Press Meets are held to ensure transparency to the public in addition to clarifications to members at Annual General and Extra-ordinary General Meetings.

3) Respect for Workers'' Rights and Welfare

The Company has created a good, clean and healthy workplace ambience which assures safety and security where the workers can work with human dignity. Freedom of association is guaranteed to the labour force and the Company enters into Agreement with the Joint Negotiations Committee directly elected by the workers in the factory as their representatives through a secret ballot conducted in the presence of officials from the Labour Department of the Government of Karnataka. Child labour exploitation and discriminatory practices in recruitment and employment are scrupulously avoided.

4) Respect for Human Rights

All care and precautions are taken to avoid any cases of complicity with human rights abuses in workplaces and operational areas.

5) Respect for Environment

Being an ISO 14000 (2004) certified Company has increased our commitment to preservation of environment. With the commissioning of the expansion programme and the installation of the state-of-the-art Effluent Treatment Plant, pollution and waste are being minimized. It is noteworthy that the Company has carried out the expansion programme in its existing premises only without claiming any additional land thereby contributing to the optimal use and preservation of precious natural resources. With the new equipments and environment friendly technologies, particularly Elementary Chlorine Free (ECF) Fibre Line in place, the requirement of water for the mill operations is also reduced proportionately. The Company''s commitment to environmental issues and re-greening of the earth can be explicitly seen in its plantation programme, which has covered 29,824 acres of land in surrounding regions of Dandeli. Under this programme 125 lakh genetically superior seedlings are distributed to farmers in the rural areas along with the technical know-how to grow crops from sowing to harvesting. This has resulted in the greening of large tracts of barren/degraded land.

6) Social and Inclusive Development Activities

The Company has a very impressive track record of social and economic development of the community in whose vicinity it operates. Through Dandeli Education Society, the Company''s educational outstretch, quality education has been made available to the students of Dandeli and the surrounding areas right from Nursery level to Post Graduate level. Dandeli Education Society, through various institutions run by it in this backward tribal area has produced Doctors, Engineers and other professionals in large numbers. During the year under review the Company continued to support the educational

activities of the said Society by creating necessary infrastructural facilities and learning resources. It also supported the educational institutions financially. It is worth mentioning that Bangurnagar Colleges of Dandeli Education Society have introduced job-oriented and skill enhancement courses like Computer Training, Industrial Chemistry, Microbiology and Functional English. The unique and the first of its kind four-year B.A.Sc. Pulp and Paper Science Degree course and M.Sc. (Tech.) programme in Pulp & Paper Science which are basically run on company''s financial support, produce graduates who are assured of 100% placement in Paper & Allied industries. Running of these courses purely on company support holds out a vibrant testimony to its passionate commitment towards social development of the region. Further the Company has supported the Institutions of Dandeli Education Society in holding National level seminars and symposiums on issues of contemporary relevance.

The high quality, selfless educational services rendered by Dandeli Education Society have been formally acknowledged and acclaimed by national level quality accreditation agency-NAAC (National Assessment and Accreditation Council)in its reports.

Company''s community support programmes include distribution of subsidised exercise Note Books to the students of Dandeli and financial assistance to High School & College Students of Dandeli under Vidya Vardhak Student''s Financial Assistance Scheme. During the year under review subsidised Note Books and financial assistance was distributed to 13000 and 800 student-beneficiaries, respectively.

Supply of Portable Drinking Water

The Company partnered with The Energy Research Institute (TERI), Panjim, the University of Rhode Island, USA, and Bangurnagar Degree College, Dandeli to carry out long term tests of Riverbank Filtration (RBF) technology to provide good quality drinking water from Kali River to some of the villages situated on the river bank. The RBF filtrated water meets all drinking water standards. This community Operated Water Treatment System has initially been extended to the villagers of Kariampalli and Mynaal villages and in the coming years same will be extended to the nearby villages of Harnoda, Sakshalli and Kerwad where at present the Company is supplying drinking water from Dandeli through pipe lines.

In addition to the supply of potable water to these rural areas, the Company has also introduced rural health visits by Doctors and medical staff periodically to these surrounding villages as a measure of rural health care.

Reaching out to the Local Community

The city of Dandeli which looks up to the Company as its life line. The city of Dandeli has drawn much from West Coast for its cleanliness, health, beautification, as well as for its social and cultural life. The Company has been a major supporter in the developmental activities of Dandeli city networking with the City Municipal Council and NGOs and service organizations such as the Rotary Club, the Lions Club, Indian Medical Association (IMA), the Kamataka Sangha, Kannada Sahitya Parishat, etc. In association with the local Rotary Club the company felicitates the top rank holders to the city in various public examinations annually. The Company has traditionally supported substantially to the Medical Camps, Eye Operation Camps organized by service organizations like the Rotary Club, Lions'' Club and the local unit of the Indian

Medical Association. It contributes regularly to the Public Library and Reading Room maintained by the local Kamataka Sangha for the benefit of the public and the ex-employees of the Company.

Innumerable socio-cultural and religious programmes organized by the local organizations and government departments are inevitably sponsored/supported by the Company.

The Company has also taken up the maintenance of a public garden of City Municipal Council, an impressive aesthetic Welcome Arch to the city of Dandeli is erected by the Company on behalf of the City Municipality. Several Social, Cultural, Sports and Spiritual events in Dandeli are supported by the company by providing Shri Ranganath Auditorium and Deluxe Grounds along with financial and other infrastructural support.

Contribution to Tribal/Vanvasi''s development

Located in a Tribal/Adivasi region, the Company has been, since its inception, contributing to the development of Tribal/Adivasi communities. As mentioned above, the Company has made arrangements for drinking water supply to some of these villages. To empower them with education in the course of the year under review, the Company has built a Hostel for Tribal/Vanvasi''s girls students.

Community around Dandeli is generally dependent on the Company for most of their day to day needs also. The Company is sensitive to the needs of the local community and helps it throughout the year for satisfying the basic needs like water supply as well as in emergencies such as extinguishing fire and medical emergencies. The Company is sensitive to these needs of the local community and helps it round the year. Thanks to these good Samaritan activities, the Company has been able to synthesize its own interests and activities with the general needs of the community and in the process become a part of the dreams and aspirations of the local society.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING/OUTGO

The information required under Section 217(1) (e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of the Board of the Directors) Rules, 1988, is annexed hereto and forms a part of this report.

PARTICULARS OF EMPLOYEES

The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956, are given in a separate Annexure to this Report.

MANAGEMENT''S DISCUSSION AND ANALYSIS

A comprehensive Management''s Discussion and Analysis Report, forming a part of the Corporate Governance is carried elsewhere in this annual report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Corporate Governance Report is made a part of this annual report.

A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreements is attached with this report.

The Company is complying with Clause 49 of the Listing Agreements with regard to Corporate Governance and reports to that effect are being regularly filed with the Stock Exchanges. The Company has obtained declaration from the Directors and senior Management members of the Company for compliance of code of conduct and the Certificate from CEO/CFO was placed before the Board of Directors at the meeting held today.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors'' Responsibility Statement, as required under Section 217(2AA) of the Companies Act, 1956, reporting the compliance with the accounting standards, is attached and forms a part of this report.

DIRECTORS

Smt. Shashi Devi Bangur, Shri M. P. Taparia and Shri Utpal Bhattacharyya retire from the office by rotation in terms of Article 143 of the Articles of Association of the Company, but being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, names of Companies in which they hold directorships and memberships of Board Committees, shareholding, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, are provided in the Notice to Members, forming part of this Annual Report.

AUDITORS

Messers Batliboi & Purohit, Chartered Accountants, will retire at the end of the 58th Annual General Meeting of the Company and offer themselves for re-appointment for the ensuing year.

COST AUDIT

The audit of the cost accounts of the Company for the year ended 31st March 2013 is being carried out by Shri Umesh N. Kini, Management Consultants, Sirsi, and after completion of the audit he will be submitting his report to the Central Government.

The cost audit report for the Financial Year 2011-12 which was due to be filed with the Ministry of Corporate Affairs on or before January 31, 2013, was filed on January 23, 2013.

SHREE RAMA NEWSPRINT LTD (SRNL)

The Company holds 36.32% of the equity share capital of SRNL with an investment of Rs.45.41 Crores (market value Rs.15.82 Crores as on 31.3.2013) whereas other group entities hold 12.83% of its share capital and thus the promoter group of the Company holds 49.15% of the Equity. The Company has executed Corporate Guarantees of Rs.246.25 Crores in favour of lenders of SRNL.

The Company has extended Inter Corporate Deposits from time to time to SRNL and amount outstanding as on 31.03.2013 was Rs.33.65 Crores.

INDUSTRIAL RELATIONS

The Company has entered into Tripartite long-term wage revision settlement with Joint Negotiation Committee of Unions on 29.03.2012 for the period from 01.01.2011 to 31.12.2014. The Company''s industrial relations are cordial. Your Directors acknowledge the support and co-operation from employees at all levels.

ACKNOWLEDGEMENT

Your Directors would like to thank the Union and State Governments, Banks, Financial Institutions, Customers, Suppliers and Shareholders for their continued support.

On behalf of the Board

Place :Mumbai S. K. Bangur

Date : 29th May 2013 Chairman & Managing Director


Mar 31, 2012

The Directors are pleased to present the 57th Annual Report of the Company, together with the audited accounts for the year ended 31st March 2012

(Rs. in Lacs)

FINANCIAL RESULTS: 2011-12 2010-11

Gross Profit 23015.14 24523.62

Balance brought forward 2815.39 3301.74

25830.53 27825.36 ALLOCATIONS:

Finance Cost 7149.57 5605.73

Depreciation 14315.46 9610.55

Exceptional items 6219.78 3301.74 Taxation - Current - 1898.50

- MAT Credit Entitlement (1809.22)

- Deferred (1313.84) 209.88

Capital Redemption Reserve - 6500.00

General Reserve - 900.82

Proposed Dividends - Preference Shares 80.23 552.50

- Equity Shares 125.50 1254.98

Tax on Dividends 33.37 286.23

Balance carried forward (779.54) 2815.39

25830.53 27825.36

Dividends

Preference Shares were redeemed on 24th May 2011 and Interim Dividend @ 8.5% for the period 01.04.2011 to 23.05.2011 on 65,00,000 Cumulative Redeemable Preference Shares of Rs.100 each was declared and paid along with redemption amount. Further, your Directors recommend a dividend of Rs. 0.20 per equity share (10%) on 6,27,48,908 Equity Shares of Rs. 2/- each, subject to members' approval for the accounting year 2011-12. Payment of dividend is made out of balance in Profit & Loss Account as on 31.03.2011.

PERFORMANCE

The working results of the Company is a meta-narrative saga of a strong and solid performance in the physical parameters of expanded capacity of production of Pulp & Paper Board subverted by adverse conditions. The full fruitioning of the capacity in terms of the achievement of production of Pulp and Paper & Paper Board is significantly witnessed. However, the working results of the Company were adversely affected by the overriding sluggish market conditions coupled with a steep hike in the cost of raw materials, chemicals, coal, furnace oil, finance charges etc., and the incidence of the settlement with unions for the period of 15 months i.e., from 01.01.2011 to 31.03.2012. This was compounded by the breakdown of 34.5 MW Turbine for a period of about two months as well as trappings during the year not only affected the production but also resulted in higher power and fuel cost. Remedial measures and corrective actions have been initiated by the company to avoid such technical snags in consultation with machinery suppliers.

However, Paper market has taken positive turn from February 2012 and Company expects that results for the current year should improve, barring unforeseen circumstances due to higher sales realisation and increased production of Paper & Paperboard.

The Company posted gross profit of Rs. 158.66 Crores as against Rs. 189.18 Crores in the previous year - lower by Rs. 30.52 Crores (16%) whereas there was a net loss of Rs. 33.56 Crores as against profit of Rs. 90.08 Crores in the previous year due to change in method of calculation of depreciation on new fibre line & chemical recovery island of Paper & Paperboard division resulting in higher depreciation/exceptional item by Rs. 104.42 Crores.

DIVISION-WISE PERFORMANCE

A) PAPER AND DUPLEX BOARD DIVISIONS

The production of paper, paperboard and hardwood pulp was 3,08,230 MT (96.32% capacity utilisation) (including 1,43,990 MT on new Paper M/'c No.VI) against 2,67,005 MT in the last year (83.44% capacity utilisation) (including 95,475 MT on new Paper Machine No.VI) i.e., higher by 41,225 MT. The sale of paper, paperboard and hardwood pulp was 3,05,818 MT against 2,67,992 MT in the last year i.e., higher by 37,826 MT.

The turnover during the year was Rs. 1,322.77 Crores as against Rs. 1,079.41 (Tores in the previous year (both inclusive of excise duty), i.e., higher by Rs. 243.36 Crores, due to increased production/sale.

Excise duty on paper and paperboard has been increased from 5% to 6% with effect from 17.3.2012, which was passed on to the market.

B) CABLE DIVISION - MYSORE

Production and sales of optical fibre cable in terms of quantity has reduced during the year under review to 20184 km and 20308 km, as against 27951 km and 27985 km in the previous year, respectively. Sale of optical fibre cable in terms of value, was of Rs. 28.82 crores as against Rs. 27.78 crores (both inclusive of excise duty) during the previous year. During 2011-12, the production was lower on account of manufacture of more high fibre count which however, increased realisation compared to previous year.

Part of the facilities of the non- operating PIJF plant were, utilised for manufacturing Control Cable and its production and sale was 341 kms and 337 kms respectively as against both production & sale being 248 km in the last year. Total turnover of cable division during year was Rs. 33.46 Crores as against Rs. 29.03 Crores (both inclusive of excise duty) during the previous year.

EXPORTS

Export of paper, paperboard and duplex board increased from 13650 MT worth Rs.53.07 Crores (FOB) in 2010- 11 to 23404 MT worth Rs.98.07 Crores (FOB) in 2011-12. Further, 876 km of Cable worth Rs,2.12 Cr was exported in 2011-12 compared to 1519 km of Cable worth Rs.1.57 Cr in 2010-11.

RAW MATERIALS

The Company has procured 10.31 lakhs MT of wood and bamboo as against 6.89 lakhs MT in the previous year, with the Company geared to source more than 10 Lakhs MT of raw material per annum on sustained basis for ensuring smooth operations for expanded capacity.

Enhanced costs of procurement by 13% compared to previous year was influenced by various factors including diversion of pulp wood as commercial poles & as bio fuel; redefining of tariff parameters by railways resulting in an upward revision of freight by almost 21.5% in 2011-12, continued inadequacy of harvesting & debarking labour, Logistics issues (transport) on account of Petroleum prices revisions as well as single axle trucks fading from operations causing cost additions for haulage of harvested wood from plantation sites to motorable roads, upward revisions of royalty by forest departments, forest corporations and procurement rates by APMCs, caused strain on the sourcing of pulpwood.

The "Thane" cyclone which hit coasts of Tamilnadu and Pondicherry in December 2011 has had its own share of strains on the supply side. The adverse impact of "Thane" is likely to spill over for another harvesting rotation.

Import of wood is also being explored by the Company. Internationally wood for pulping is in the process of being traded in chip form. Our ports are yet to be equipped for handling chips, so also the process equipments in the works of different pulping units. Large corporations have taken up high tech pulpwood plantations in south East Asia, Australia, South America & African continents to offer chips as a product. Like the pulpwood marketing India has taken a Pan India status the pulpwood in chip form would be 'Product' of coming years.

Not withstanding all these constraints. procurement of pulpwood has been consistent and commensurate to the process and stocking requirements at optimum costs on par with market standards.

The Company, having envisaged this situation many 5/ears earlier had taken up Contract for Farming in the local region of within 300 Kins radius of our works at Dandeli. The fruits of this endeavour have realised in as much as the first rotation harvesting have contributed around 13,000 MT within the two months of beginning of harvesting. The tempo has gathered momentum. The land owners are happy and are renewing the contracts for farming.

PLANTATIONS

The Company's long term vision of harnessing the degraded, unproductive and barren lands within the vicinity of 300 Kms of Dandeli for augmentation of raw material and for the benefits for all stake holders have proven to be a boon to the communities in this region. They have the fruits in their hands now of the consistent & sustained perseverance of the company in this unique Contract for Farming model. The faith of the communities has multiplied and expressed in the form of renewed contracts and farmers vision has changed from poverty to prosperity under the Contract for Farming Project.

As of now, 30,375 acres are under Contract for Farming with crop of different ages and year to year 10,000 acres are being added.

This proactive scheme of the Company, tailor made for the specific situations of this region, with an understanding of the socio-economic conditions of the land owning families, their resources, their regional culture, geographical conditions - be it steep slopes of degraded lands in south western Maharashtra or barren abandoned lands of Koppal areas of Karnataka - and agricultural practices has synergised with their life in such a way that they own the scheme.

The land owning families were constrained on account of their economic weakness to grow and sustain with their own finance the multi year gestation crops. The alternate vocation/ commercial crop to engage them was a challenge too. Our scheme has mitigated all these issues to their fulfilment.

The national forest policy's vision of wood based industries sourcing their raw material from encouraging agro forestry amongst the farming community and phasing out of sourcing the raw material from the forests are rightfully achieved from this scheme.

Our model scheme is being replicated by other pulp wood based industries in our adjacent region. Other wood based industries are adopting this scheme by modifications to their local conditions.

Fibre security is assured not only on account of the contractual arrangement but also on account of ethical and best plantations management practices. The contributions to reduction of global warming in so far as drastic reduction in long distance haulage of wood through trucks; apart from saving the precious foreign exchange of petroleum imports is considerable.

The scheme has the following other salient features

- Rural employment for 250 person -days per hectare annually

- Another 100 person-days /per hectare employment in harvesting operations

- Prevention of migration of rural youth to cities for jobs

- Women get employment in their neighbourhood during lean period

- Enhanced family income and standard of living

- Enhance sub soil moisture

- Raising of ground water table

- Improved productivity

- Lops & tops provided free of costs to the land owners/ locals, thereby reducing pressure on natural forests

- l Ha of plantations saves 20 Ha of natural forests

- Prevents soil erosion k Enhanced net income to the land owners

- Debt free operations for the land owners

The overall increase in green cover and sustained basis has its own contribution for carbon sequestration. As only the growing trees enable carbon sequestration.

Apart from action on this front, the Company is also engaged in social forestry/ extension services in Karnataka & Tamilnadu to enhance the overall availability of raw material within the catchment area. The company has distributed 267.10 Lakhs seedlings during 2011-12.

EXCHANGE RATE VARIATION

The Company has reinstated Foreign Currency Loans/External Commercial Borrowings of USD 141.49 Million at the exchange rate prevailing as on 31st March 2012 and the exchange rate difference of Rs. 100.49 Crores has been added to the cost of Fixed Assets, as per Accounting Standard AS-11 issued vide Notification No. G.S.R. 225(E) dated 31.03,2009 (as last amended vide Notification No. GSR 913 (E) dated 29.12.2011) by the Ministry of Corporate Affairs.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The company supported Society for Afforestation Research & Allied works (SARA) has been certified by- Forest Stewardship Council (FSC) for "Well managed Group Plantation Certification" for an area of 10,643 Hectares of plantations raised in Karnataka, Maharashtra and Andhra Pradesh between 2000 & 2010. Further the 3255 Ha of 2011 are in the process of being certified and thereafter every year fresh 4,000 Ha will be certified enabling the Company to perpetually source substantial quantity of FSC 100% Pure wood through SARA. The FSC Chain of Custody and FSC Controlled Wood certifications already obtained by company further supplement increased quantum of FSC certified paper being floated in the niche markets.

ISO 9001 (2008) QUALITY MANAGEMENT SYSTEM

The company is certified to the revised ISO 9001 (2008) international standard Quality Management System (QMS) by Det Norske Veritas, the Netherlands. The validity of this certification is upto May 2013. The company remains fully committed to continually improve upon the implemented QMS for the various operational processes and services under the scope of the prevailing change management scenario.

ISO 14001 (2004) ENVIRONMENTAL MANAGEMENT SYSTEM

The company is certified to ISO 14001 (2004) international standard by Det Norske Veritas, the Netherlands. The validity of this certification is up to January 2015. The company stands committed to continually improve upon the implemented EMS at its existing site using the best available technology and ensure full compliance with relevant environmental enactments, which apply to its existing operations and also as a commitment towards corporate responsibility on environmental protection and fulfilment of corporate governance as well.

OHSAS 18001 (2007) OCCUPATIONAL HEALTH AND SAFETY ASSESSMENT SERIES

Occupational Health and Safety has been recognised as an integral part of the company's Business Process. In consequence, the company continues to maintain its OHSAS 18001(2007) certification from Det Norske Veritas, the Netherlands. The validity of this certification is up to January 2015. An unstinted compliance of all the required elements of the OHSAS management system further reinforces our commitment to comply with Health and Safety standards and legislations.

CORPORATE SOCIAL RESPONSIBILITY

The Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes beyond mere cosmetic philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself in an environment of partnership and mutual trust for inclusive development. Compliance to Corporate Social Responsibility Voluntary Guidelines 2009 issued by Ministry of Corporate Affairs, Government of India, in December 2009 and our honouring of these guidelines in letter and spirit , is as under:-

1) Caring for total stakeholders

The corporate culture of the company- has been continually stakeholder- centric, keeping their well-being and their holistic development as the ultimate goal of its endeavours and creating value for all concerned.

The Company Secretariat has a special cell, which is ever alive to the concerns as well as the complaints of the shareholders, be it the ones expressed at the Annual General Meeting or those brought to notice through continuous correspondence and feedback. A highly vigilant and responsive Welfare Cell takes care of the welfare needs of the employees and their families with round the year welfare activities such as centrally monitored colony, maintenance of roads, lighting, water supply, drainage and sanitation. The safety and security of the colony dwellers is constantly supervised by the respective departments. Civic amenities such as Hi-tech hospital facilities, Temples, Playgrounds, Health Gym, The Shopping Complex, The Employees' and Officers' Clubs, The West Coast Paper Mill Employee's Souhardha Credit Co-operative Ltd., a 1200-seater Auditorium, the Cable TV etc., are maintained making the colony a compact, self-contained township for a comfortable peaceful habitation. The Company has also extended civic facilities in satellite colony areas such as Sudarshan Nagar and Vinayak Nagar bordering the colony, where the employees are provided residential quarters by the company. Customers' cares and concerns are duly attended by the Marketing Division as well as the Quality Control department. The countrywide chain of Company's paper dealers reaches out to the end-customers to ensure their satisfaction. Paper dealers' conclaves are organised periodically to take care of their problems along with those of the customers. The Company's supply line operates smoothly with .adequate transport and communication facilities along with parking and night halt facilities for road transporters.

A significant dimension of the Company caring for its stake holders is the support extended to the far off poor farmers whom it supports with technology and genetically superior saplings for the cultivation of trees on dry and fallow lands. As a result of this, hundreds of farmer families in the region are able to take up farming on wasteland as a profitable commercial venture apart from ensuring fodder security for live stock together with fibre security. Caring for the farmers is a cardinal principle of our corporate social responsibility.

The Company is thus constantly in touch with its various stakeholders and its operations are carried out in tandem with them and ensuring their involvement, inclusive development and growth.

2) Ethical Functioning

The corporate governance of the Company is primarily based on time-honoured practices of business ethics, accountability and transparency. The company opens itself up to public audit during Public Hearings at the time of the launching of new Projects. Frequent Press Meets are held to ensure transparency to the public in addition to clarifications to members at Annual General and Extra-ordinary General Meetings.

3) Respect for Workers' Rights and Welfare

The Company has created a good, clean and healthy workplace environment which assures safely and security where the workers can work with human dignity. Freedom of association is guaranteed to the labour force and the Company enters into Agreement with the Joint Negotiations Committee directly elected by the workers in the factory as their representatives through secret ballot conducted in the presence of officials from the Labour Department of Government of Karnataka. Child labour exploitation and discriminatory practices in recruitment and employment are scrupulously avoided.

4) Respect for Human Rights

All care and precautions are taken to avoid any cases of complicity with human rights abuses in workplaces and operational areas.

5) Respect for Environment

Being an ISO 14000 (2004) certified company has increased our commitment to preservation of environment. With the commissioning of the Expansion programme and the installation of the state-of-the-art Effluent Treatment Plant, pollution and waste are being minimised. It is noteworthy that the Company has carried out the expansion programme in its existing premises only without claiming any additional land thereby contributing to the optimal use and preservation of precious natural resources. With the new equipments and environment friendly technologies, particularly Elementary Chlorine Free (ECF) Fibre Line in place, the requirement of water for the mill operations is also reduced proportionately. The Company's commitment to environmental issues and re-greening of the earth can be explicitly seen in its plantation programme, which has covered 29,824 acres of land in surrounding regions of Dandeli. Under this programme, 125 lakh genetically superior seedlings are distributed to farmers in the rural areas along with the technical know-how to grow crops from sowing to harvesting. This has resulted in the greening of large tracts of barren / degraded land.

6) Social and Inclusive Development

Activities

The Company has a very impressive track record of social and economic development of the community in whose vicinity it operates. Through Dandeli Education Society, the Company's educational outstretch, quality education has been made available to the students of Dandeli and the surrounding areas right from Nursery level to Post Graduate level. Dandeli Education Society, through various institutions run by it in this backward tribal area has produced Doctors, Engineers and other professionals in large numbers. During the year under review, the company continued to support the educational activities of the said Society by creating necessary infrastructural facilities and learning resources. It also supported the educational institutions financially. It is worth mentioning that Bangurnagar Colleges of Dandeli Education Society have introduced job-oriented and skill enhancement courses like Computer Training, Industrial Chemistry, Microbiology and Functional English. The unique and the first of its kind four-year B.A.St:. Pulp and Paper Science Degree course and M.Sc. (Tech.) programme in Pulp & Paper Science which are basically run on company's financial support, produce graduates who are assured of 100% placement in Paper & Allied industries. Running of these courses purely on company support holds out a vibrant testimony to its passionate commitment towards social development of the region.

The high quality, selfless services rendered by Dandeli Education Society have been highly commended by national quality accreditation agency-NAAC (National Assessment and Accreditation Council).

Company's student support programmes include distribution of subsidised exercise note books to the students of Dandeli and financial assistance to High School & College Students of Dandeli under Vidya Vardhak Student's Financial Assistance Scheme. During the year under review, subsidised note books and financial assistance was distributed to 13000 and 700 student-beneficiaries, respectively.

The Company partnered with The Energy Research Institute (TERI), Panjim, the University of Rhode Island, USA, and Bangurnagar Degree College, Dandeli and carried out long term tests of Riverbank Filtration (RBF) technology to provide good quality drinking water from Kali River to some of the villages situated on the river bank. The RBF filtrated water meets all drinking water standards. This community Operated Water Treatment System has initially been extended to the villagers of Kariampalli and Mynaal villages and in the coming years will be extended to the nearby villages of Harnoda. Sakshalli and Kerwad where at present the Company is supplying drinking water from Dandeli through pipe lines.

In addition to the supply of potable water to these rural areas, the Company has also introduced rural health visits by Doctors and medical staff periodically to these surrounding villages as a measure of rural health care.

The city of Dandeli which looks up to the company as its life line has also drawn much from West Coast for its cleanliness, health, beautification, as well as social and cultural life. The Company has been a major supporter in the developmental activities of Dandeli city networking with the City Municipal Council and NGOs and service organisations such as the Rotary Club, the Lions Club, Indian Medical Association (IMA), the Karnataka Sangha, Kannada Sahitya Parishat, etc. In association with the local Rotary Club, the Company felicitates the top rank holders to the city in various public examinations annually. The Company has supported substantially the Medical Camps, Eye Operation Camps organized by Rotary Club, Lions' Club and IMA. It contributes regularly to the Public Library and Reading Room maintained by the local Karnataka Sangha for the benefit of the public and the ex- employees of the company.

Innumerable socio-cultural and religious programmes organised by the local organisations are inevitably sponsored/supported by the company. During the year under report, the Company has supported the organisation of the (Jttara Kannada District Level Sahitya Samelan held in Dandeli.

The Company has also taken up the maintenance of a public garden of City Municipal Council. Recently an impressive aesthetic Welcome Arch to the city of Dandeli is erected by the Company on behalf of the City Municipality. Several Social, Cultural, Sports and Spiritual events in Dandeli are supported by the Company by providing Shri Ranganath Auditorium and Deluxe Grounds along with financial and other support.

Contribution to Tribal/Vanvasi's development

Located in a Tribal/Adivasi region, the Company has been, since its inception, contributing to the development of Tribal/Adivasi communities. As mentioned above, the Company has made arrangements for drinking water- supply to some of these villages. To empower them with education in the course of the year under review, the Company has built a Hostel for Tribal/ Vanvasi's girls students.

The West Coast Paper Mills has been the lifeline of the city of Dandeli. Community around Dandeli is generally dependent on the Company for most of their day-to-day needs also. The Company is sensitive to the needs of the local community and helps it throughout the year for satisfying the basic needs like water supply as well as in emergencies such as extinguishing fire and medical emergencies. The Company is sensitive to these needs of the local community and helps it round the year. Thanks to these good Samaritan activities, the Company has been able to synthesise its own interests and activities with the general needs of the community and in the process become a part of the dreams and aspirations of the local society.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING/ OUTGO

The information required under Section 217(1) (e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of the Board of the Directors) Rules, 1988, is annexed hereto and forms a part of this report.

PARTICULARS OF EMPLOYEES

The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956, are given in a separate Annexure to this Report.

MANAGEMENT'S DISCUSSION AND ANALYSIS

A comprehensive Management's Discussion and Analysis Report, forming a part of the Corporate Governance is carried elsewhere in this annual report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Corporate Governance Report is made a part of this annual report.

A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreements is attached with this report.

The Company is complying with Clause 49 of the Listing Agreements with regard to Corporate Governance and reports to that effect are being regularly filed with the Stock Exchanges. The Company has obtained declaration from the Directors and senior Management members of the Company for compliance of code of conduct and the Certificate from CEO/ CFO was placed before the Board of Directors at the meeting held today.

DIRECTOR' RESPONSIBILITY STATEMENT

The Directors' responsibility statement, as required under Section 217(2AA) of the Companies Act, 1956, reporting the compliance with the accounting standards, is attached and forms a part of this report.

DIRECTORS

Shri C.K. Somany, Director of the Company liable to retire in the Annual General Meeting to be held on 31.07.2012 has informed that he is not seeking re-appointment. Hence, he will be director till 31.07.2012.

Further, Shri Haigreve Khaitan, was appointed as additional Director of the Company from 29.05.2012.

Shri Saurabh Bangur, Shri Krishna Kumar Karwa and Shri Sanjay Kothari retire from the office by rotation in terms of Article 143 of the Articles of Association of the Company, but being eligible offer themselves for re- appointment at the ensuing Animal General Meeting. Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, names of Companies in which they hold directorships and memberships of Board Committees, shareholding, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, are provided in the Notice to Members, forming part of this Annual Report.

AUDITORS

Messrs Batliboi & Purohit, Chartered Accountants, will retire at the end of the 57th Annual General Meeting of the Company and offer themselves for re- appointment for the ensuing year.

COST AUDIT

The audit of the cost accounts of the Company for the year ended 3 1st March 2012 is being carried out by Shri Umesh N. Kini, Management Consultants, Sirsi, and after completion of the audit he will be submitting his report to the Company Law Board.

RAMA NEWSPRINT & PAPERS LTD.

The Company holds 36.32 per cent of the equity share capital of RNPL with an investment of Rs.45.41 Crores (market value Rs.16.46 Crores as on 31.3.2012) whereas other group entities hold 12,83% of the share capital of RNPL and thus the promoter group of the Company holds 49.15% of the Equity. The Company has executed Corporate Guarantees of Rs.197.21 Crores in favour of lenders of RNPL.

The Company has extended Inter Corporate Deposits from time to time to RNPL and amount outstanding as on 31.03.2012 was Rs.11.50 Crores.

INDUSTRIAL RELATIONS

The Company has entered into Tripartite long term wage revision settlement with Joint Negotiation committee of unions on 29.03.2012 for the period from 01.01.2011 to 31.12.2014. The Company's industrial relations are cordial. Your Directors acknowledge the support and co-operation from employees at all levels.

ACKNOWLEDGEMENT

Your Directors would like to thank the Union and State Governments, banks. financial institutions, customers, suppliers and shareholders for their continued support.

FOR AND ON BEHALF OF THE BOARD.

KL CHANDAK MP TAPARIA

Executive Director Director

Place: Mumbai,

Dated: 29th May 2012.


Mar 31, 2010

The Directors are pleased to present the 55th Annual Report of the Company, together with the audited accounts for the year ended 31st March 2010.

(Rs. in Lacs) 2009-10 2008-09

Gross Profit 10524.26 12036.19

Balance brought forward 493.21 316.58

11017.47 12352.77

ALLOCATIONS:

Depreciation 2377.05 1990.28

Taxation - Current 1400.00 1149.00

- MAT Credit Entitlement (1370.17) --

- Deferred 2647.17 (156.91)

Proposed Dividends - Preference Shares 552.50 3.03

-Equity Shares 1254.98 1254.98

Tax on Dividends 307.18 213.80

Debenture Redemption Reserve - 6500.00

General Reserve 547.02 905.38

Balance carried forward 3301.74 493.21

11017.47 12352.77

DIVIDENDS

For the year ended 31- March 201.0. your Directors recommended dividend @ 8.5> on 65.00,000 Cumulative Redeemable Preference Shares of Rs.lOO/- each and a dividend of Rs.2/- per equity share ! iQOm on 6.27.48.908 Equity Shares of Rs.2/- each, subject to members approval.

PERFORMANCE

The working results of the Company were marginally affected owing to prevailing sluggish paper market conditions which compelled the Company to reduce its sale prices. On the other hand, the cost, of production lias been on the Increase due to hike in the rates of several inputs, viz., raw material (wood), fuel. chemicals, besides increased interest charges. The trial runs of the new equipments installed u/iderthe expansion programme, particularly their synchronisation with the existing ones have obviously resulted in lower production. Now that the trial runs are over and expansion programme is completed and the new equipments successfully commissioned and poised to yield the desired benefits in terms of speedier and higher production of superior quality paper, further with the paper market conditions looking up. the working results of the current year are expected to gear up.

The Company posted gross profit of Rs. 105.24 Crores as against

Rs.120.36 Crores in the previous year - lower by Rs.15.12 Crores (13 per cent). The net profit also decreased from Rs. 90.54 Crores to Rs.54.70 Crores - by Rs.35.84 Crores (40 per cent) due to higher provision of depreciation and deferred tax on account of commissioning of equipments under the expansion programme, the benefits of which will be derived in the current year.

DIVISIONWISE PERFORMANCE

A) PAPER AND DUPLEX BOARD DIVISIONS

The production of paper, paperboard and Elemental Chlorine Free (ECF) bleached Hardwood Puip was 1,73,638 MT against 1,73,682 MT in the last year i.e.. lower by 44 MT only. The Company has been producing Bleached Hardwood Pulp for captive consumption from its old fibreline. However, on commissioning of the new ECF Fibreline it could produce 5,369 MT of ECF bleached Hardwood Pulp for sale in the market. The sale of paper, paperboard and ECF bleached Hardwood Pulp was 1,75,194 MT against 1,70,686 MT in the last year i.e., higher by 4508 MT.

The turnover during the year was Rs.611.81 Crores as against Rs.61.8.91 Crores in the previous year (both inclusive of excise duty), i.e.. lower by Rs.7.10 Crores, due to sluggish paper market conditions. However, paper market has started improving from April 2010 and the Company could revise sale prices in April and May 2010. Multilayer board market was, however, favourable throughout 2009-10 and the Company has also increased its sales prices in April 2010,

B) CABLE DIVISION - MYSORE

Production and sales of Optica! Fibre Cable has increased during the year under review to 18,003 km and 17,790 km as against 16,787 km and 16,762 km in the previous year, respectively. The turnover, in terms of value, amounted to Rs.38.13 Crores as against Rs.43.44 Crores (both inclusive of excise duty) during the previous year.

EXPORTS

The export of paper, paperboard and duplex board increased from 4,291 MT worth Rs. 16.20 Crores (FOB) in 2008-09 to 4,881 MT worth Rs.17.07 Crores (FOB) in 2009-10 even though realisation was at lower side. The Company exported 1,808 km of Cable worth Rs.3.78 Crores in 2009-10 compared to 2,361 km of Cable worth Rs.8.26 Crores in 2008-09.

RAW MATERIALS

The Company has procured 4.41 Lac MT of wood and bamboo against 3.80 Lac MT in the previous year. The procurement has gone up keeping in view the increased requirement of raw material which will be 9 Lac MT per annum post-expansion. All arrangements have been made including the development of infrastructure for procurement of above quantity of wood from the states of Karnataka, Andhra Pradesh, Tamil Nadu and Maharastra.

The cost of wood has gone up consecutively in the seventh year by 5% on account of increase in royalty, procurement rates as well as freight charges. The transportation cost of raw material by road as well as by rail has increased due to hike in freight. Procurement rates are also likely to go up further in the current year on account of stiff competition.

PLANTATIONS

The Company continues its efforts to mitigate Climate Change and create Economic Development within a radius of 250 Kms through a very popular scheme named as Contract for Farming, wherein it is envisaged to cover around 10,000 acres of plantations during 2010 rains through sustained plantation management efforts. This enables the Company to create economic benefits for the communities who have come forward voluntarily and have consented for providing their unproductive agricultural land for plantation crop of fast growing tree species.

Companys popular scheme has improved the employment opportunity for 180 man-days per acre annually to local population, enhanced their income and thereby their standard of living as well as family life. Additionally another 100 man-days per hectare employment is generated annually for harvesting operations. The lops & tops are provided free of cost to the locals as fuel. With growth of fodder in the interspacing within the plantations, the local cattle have been provided with abundant fodder.

Our plantation efforts have supplemented soil conservation efforts in the area of our operations on account of scientific land management techniques of creation of check bunds, etc., preventing soil erosion/degradation and enhancing water retention.

These efforts have contributed in improving the yield per acre of wood mass, which in turn enhanced the income of the landowner. All this being visible has encouraged more and more landowners coming into the fold of this popular scheme within the target area.

We have established mosaic plantations in synchronisation with the local vegetation/farming operations, without converting land use to ensure long-term ecological principles of conservation.

Till now an area of 16,200 acres of degraded/wastelands have been covered under Core plantation Scheme within a radius of 250 kms of Dandeli. For the 2010 rains, preparations are in progress to cover an area of about 10,000 acres.

Distribution of seedlings to the farmers in parts of Karnataka & Tamil Nadu has also been contributing to the overall availability of raw material within the catchment area. The Company has distributed 125 lac seedlings during 2009-10.

Gall and Little leaf diseases continue to be problems for the Eucalyptus grown in drier areas and affected the overall availability, dampening the spirit of farmers. The chemical and biological controls have not given desired results and therefore dedicated research work is required to counter this menace.

Company has evolved a strategy, wherein gall resistant varieties & variants are only grown in the catchment areas. In order to improve the productivity of Eucalyptus, Acacia, Casuarina and Leucaena (Subabul), dedicated research is required by all the users and necessary steps are being taken to evolve a strategy for the benefit of all the users.

EXPANSION PROGRAMME

The Company has taken up the expansion programme to increase paper production capacity from 1.80 Lac TPA to 3.20 Lac TPA and thermal power generation capacity from 40.3 MW to 70.3 MW. Trials of the new ECF Fibreline were started from October 2009 and after overcoming teething problems, the plant was taken into regular operation from February 2010. The old Fibreline has been kept shut since then. The Company started sale of ECF bleached Hardwood Pulp in the market, including to major industrial consumers. Thus, the Company commissioned ECF Fibreline and Chemical Recovery Island sections in 2009- 10, whereas Power Plant and Paper M/c No.VI have been commissioned in the month of April and May 2010, respectively, and with this the expansion programme has been completed. The Company has incurred expenditure of Rs.1354.21 Crores on the expansion programme till 31st March 2010, out of which Rs.616.38 Crores was capitalised for the Fibreline and Chemical Recovery Island sections and the balance is carried forward for capitalisation in the current year.

SHARE CAPTIAL

As a part of the expansion programme, equity share capital of Rs.200 Crores was to be raised, whereas Rs.135.49 Crores has been raised from equity issue (including Rs.11.50 Crores in June 09) and balance Rs.65 Crores, from Preference Share issue, totalling to Rs.200.49 Crores. The entire amount has been utilised for expansion programme.

The Company intends to replace the Preference Share Capital of Rs.65 Crores by Equity Share Capital in the current accounting year 2010-11. The Company has decided to raise up to Rs.75 Crores by Qualified Institutions Placement for redeeming preference shares and other purposes, subject to approval by members in the Extra-ordinary General Meeting to be held on 28th June 2010.

EXCHANGE RATE VARIATION

The Company has reinstated Foreign Currency Loans/External Commercial Borrowings of USD 164.92 Million at the exchange rate prevailing as on 31s March 2010 and the exchange gain of Rs.5.47 Crores has been reduced from the cost of Fixed Assets, as per Accounting Standard AS-11 issued vide Notification No.G.S.R. 225(E) dated 31.03.2009 by the Ministry of Corporate Affairs.

ISO 9001(2008> QUALITY MANAGEMENT SYSTEM

Certified to ISO 9001 (2000) international standard Quality Management System(QMS) by Det Norske Veritas, the Netherlands, the Company in 2010 has successfully transited itself to the revised standard of ISO 9001(2008) Quality Management System. The validity of this certification shall be up to May 2013. In consequence the Company remains fully committed to continually improve upon the implemented QMS for various operational processes and services.

ISO 14001 (2004> ENVIORNMENTAL MANAGEMENT SYSTEM

The Company is certified to ISO 14001 (2004) international standard by Det Norske Veritas, the Netherlands. The validity of this certification is upto January 2012, The Company remains committed to continually improve upon the implemented Environmental Management. System at its existing site with best available technologies and ensure full compliance with relevant. environmental enactments, which apply not only to its existing operations but also as a commitment towards corporate responsibility on environmental protection and fulfillment of corporate governance.

ISO 18001 <2007> ENVIRONMENTAL MANAGEMENT SYSTEM

The Company continues to maintain Its OHSAS 18001(2007) certification from Det Norske Veritas, the Netherlands. The validity of this certification is up to January 2012. These standards supplemented with the Companys own occupational health and safety management system, further reinforcing our commitment to comply with Health and Safety standards and legislations,

CORPORATE RESPOSIBILITY

The Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development. Compliance to Corporate Social Responsibility Voluntary Guidelines 2009 issued by Ministry of Corporate Affairs. Government of India, in December 2009. is as under:-

1) Caring for total stakeholders:

The corporate activities of the Company have been continually stakeholder-centric, keeping their well-being and holistic development as the ultimate goal and creating value for all concerned.

The Company Secretariat has a special ceil, which is ever alive to the concerns as well as the complaints of the shareholders, be it the ones expressed at the Annual General Meeting or those brought to notice through correspondence. A vigilant and responsive Welfare Cell takes care of the welfare needs of the employees and their families with round-the-year activities such as centrally monitored colony maintenance of roads, lighting, water supply, drainage and sanitation. The safety and security of the colony dwellers is constantly supervised by the respective departments. Civic amenities such as Hi-tech hospital facilities, Temples, Playgrounds. Health Gym, The Shopping Complex, The Employees and Officers Clubs, the Employees Credit Co- operative Society, a 1200-seater Auditorium, the Cable TV etc.. are maintained making the colony a compact, self contained township. The Company has also extended civic facilities in satellite colony areas of Sudarshan Nagar and Vinayak Nagar where the employees are provided residential quarters by the company. Customers cares and concerns are duly attended by the Marketing Division as well as the Quality Control department. The countrywide chain of Companys paper dealers reaches out. to the end-customers to ensure their satisfaction. Paper dealers conclaves are organised periodically to take care of their problems along with those of the customers. The Companys supply line operates smoothly with adequate transport and communication facilities along with parking and night halt facilities for road transporters.

The Company is thus constantly In touch with its various stakeholders and its operations are carried out in tandem with them and ensuring their involvement, inclusive development and growth,

2) Ethical Functioning:

The corporate governance of the Company is primarily based on time-honoured practices of business ethics. accountability and transparency. The Company opens itself up to public audit during Public Hearings at. the time of launching new Projects, frequent Press Meets in addition to clarifications to members at Annual General and Extra- ordinary General Meetings.

3) Respect for Workers Rights and Welfare

The Company has created good, clean and healthy workplace environment which assures safety and security where workers can work with human dignity. Freedom of association is guaranteed to the labour force and the Company enters into Agreement with the Joint Negotiations Committee directly elected by the workers in the factory as their representatives through secret ballot conducted in the presence of officials from the Labour Department of Government of Karnataka. Child labour exploitation and discriminatory practices in recruitment and employment are scrupulously avoided.

4) Respect for Human Rights

All care and precautions are taken to avoid any cases of complicity with human rights abuses in workplaces and operational areas.

5) Respect for Environment

Being an ISO 14000 (2004) certified company has increased our commitment to preservation of environment. With the commissioning of the Expansion programme and the installation of the state-of-the-art Effluent Treatment Plant, pollution and waste are being minimised. It is noteworthy that the Company has carried out the expansion programme in its existing premises only without claiming any additional land thereby contributing to the optimal use and preservation of precious natural resources. With the new equipments and environment friendly technologies, particularly Elementary Chlorine Free (ECF) Fibre Line in place the requirement of water for the mill operations is also reduced proportionately. The Companys commitment to environmental issues can be explicitly seen in its plantation programme, which has covered 16,200 acres of land in surrounding regions of Dandeli. Under this programme 125 lac genetically superior seedlings are distributed to farmers in the rural areas along with the technical know-how to grow crops from sowing to harvesting. This has resulted in the greening of large tracts of barren / degraded land.

6) Social and Inclusive Development Activities:

The Company has a very impressive track record of social and economic development of the community in whose vicinity it operates. Through Dandeli Education Society, The Companys educational outstretch, quality education has been made available to the students of Dandeli and the surrounding areas right from Nursery level to Post Graduate level. During the year under review, the Company continued to support the educational activities of the said Society by creating necessary infrastructural facilities and learning resources. It also supported the Educational Institutions financially. It is worth mentioning that Bangurnagar Colleges of Dandeli Education Society have introduced job-oriented and skill enhancement courses like Computer Training, Industrial Chemistry, Microbiology, Functional English and

Global Skill Enhancement and are also running a unique four-year B.A.Sc. Pulp and Paper Science Degree course and M.Sc. (Tech.) programme in Pulp & Paper Science producing graduates who are assured of 100% placement in Paper & Allied industries. .

Dandeli Education Societys Bangur Nagar Degree College has adopted a unique system of elections to the Students Union, where each Class elects its representative by "opinion poll" and the so elected class representatives from among themselves elect the General Secretary of the Students Union. This eliminates fierce campaigning and associated untoward incidents, generally seen in College Student Unions elections.

Companys student support programmes include distribution of subsidised exercise Note Books to the students of Dandeli and financial assistance to High School & College Students of Dandeli under Vidya Vardhak Students Financial Assistance Scheme. During the year under review subsidised Note Books worth Rs.18 lacs and financial assistance to the tune of the Rs.5 lacs was distributed to 7500 and 541 student-beneficiaries, respectively.

The Company partnered with The Energy Research Institute (TERI), Panjim, the University of Rhode Island, U.S., and Bangurnagar Degree College, Dandeli and carried out long term tests of Riverbank Filtration (RBF) technology to provide good quality drinking water from Kali river to some of the villages situated on the river bank. The RBF filtrated water meets all drinking water standards. This community Operated Water Treatment System has initially been extended to the villagers of Kariampalli and Mynaal villages and in the coming years will be extended to nearby villages of Harnoda. Sakshalli and Kerwad where at present the Company is supplying drinking water from Dandeli through pipe lines.

In addition to the supply of potable water to these rural areas, the Company has also introduced rural health visits by Doctors and medical staff periodically to these surrounding villages as a measure of rural health care.

The city of Dandeli which looks up to the Company as its life line has also drawn much from West Coast for its cleanliness, health, beautification as well as social and cultural life. The Company has been a major supporter in the developmental activities of Dandeli city networking with the City Municipal Council and NGOs and service organisations such as the Rotary Club, the Lions Club, Indian Medical Association (IMA), the Karnataka Sangha, Kannada Sahitya

Parishat. etc. The Company has supported substantially the Medical Camps and Eye Operation Camps organised by Rotary Club. Lions Club and IMA. It contributes regularly to the Public Library and Reading Room maintained by the local Karnataka Sangha for the benefit of the public and the ex- employees of the Company. The Company has also taken up the maintenance of a public garden of City Municipal Council. Recently an impressive aesthetic Welcome Arch to the city of Dandeii is erected by the company on behalf of the City Municipality. Several Social, Cultural. Sports and Spiritual events in Dandeii are supported by the Company by providing Shri Ranganath Auditorium and Deluxe Grounds along with financial and other support.

The information required under Section 21?(l)(e! of the Companies Act. 1956, read with Companies (Disclosure of particulars in the report of the Board of the Directors) Rules, 1988, is annexed hereto and forms a part of this report.

The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956. are given in a separate Annexure to this Report.

A comprehensive Managements Discussion and Analysis Report. forming a part of the Corporate Governance is carried elsewhere in this annual report.

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Corporate Governance Report is made a part of this annual report.

A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreements is attached with this report.

The Company is complying with Clause 49 of the Listing Agreements with regard to Corporate Governance and reports to that effect are being regularly filed with the Stock Exchanges. The Company has obtained declaration from the Directors and senior Management members of the Company for compliance of code of conduct and the Certificate from CEO/CFO was placed before the Board of Directors at the meeting held on 29th May 2010.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors responsibility statement, as required under Section 217(2AA) of the Companies Act, 1956, reporting the compliance with the accounting standards, is attached and forms a part of this report.

DIRECTORS

Smt. Shashi Devi Bangur, Shri Saurabh Bangur and Shri CK Somany retire from the office by rotation in terms of Article 143 of the Articles of Association of the Company, but being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting. Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships of Board Committees, shareholding, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, are provided in the Notice to Members, forming part of this Annual Report.

Shri Krishna Kumar Karwa has been appointed as additional Director by the Board of Directors under the provisions of Section 260 of the Companies Act, 1956, with effect from 30th October 2009. He holds the office up to the date of ensuing Annual General Meeting of the Company and is eligible for reappointment as Director of the Company. The Company has received a Notice under Section 257 of the Companies Act, 1956 proposing his candidature for appointment as Director of the Company, subject to retirement by rotation.

Shri Sanjay Kothari has been appointed as additional Director by the Board of Directors under the provisions of Section 260 of the Companies Act, 1956, with effect from 27- January 2010. He holds the office up to the date of ensuing Annual General Meeting of the Company and is eligible for reappointment as Director of the Company. The Company has received a Notice under Section 257 of the Companies Act, 1956 proposing his candidature for appointment as Director of the Company, subject to retirement by rotation.

Shri V.N. Somani resigned from the Board on 22nd February 2010. The Directors place on record their appreciation of the valuable advice given by Shri V.N. Somani from time to time during the long period of 23 years on the Board.

AUDITORS

Messers Batliboi & Purohit, Chartered Accountants, will retire at the end of the 55th Annual General Meeting of the Company but offer themselves for re-appointment for the ensuing year.

COST AUDIT

The audit of the cost accounts of the Company for the year ended 31st March 2010 is being carried out by Shri Narottam L. Tola, Cost Accountant, Mumbai, and after completion of the audit he will be submitting his report to the Company Law Board.

RAMA NEWSPRINT & PAPERS LTD

Rama Newsprint & Papers Ltd (RNPL) has produced 1,04,931 MT of newsprint and paper (80% capacity utilisation) as against 1,24,508 MT (94% capacity utilisation) achieved in the previous year. The working results of this Company were affected due to non-remunerative prices of newsprint on account of sluggish market conditions and increase in the cost of raw material and other inputs, which has resulted into cash loss before depreciation and tax of Rs.33.50 Crores as against cash loss before depreciation and tax of Rs.14.19 Crores in the previous year. Net Loss of Rs.56.65 Crores was incurred in the year under review as against net loss of Rs.27.27 Crores in the previous year.

The Company holds 36.32 per cent of the equity share capital of RNPL with an investment of Rs.45.41 Crores (market value Rs.45.84 Crores as on 31.3.2010) whereas other group entities hold 16.84% of the share capital of RNPL and thus the promoter group of the Company holds 53.16% of the Equity. The entities in the Promoter Group of the Company had acquired 15.93% of equity shares from the entities in Vashu Group (erstwhile promoter of RNPL) on 22nd January 2010. Further voting rights of remaining entities in Vashu Group held by the Company is 2.69% of the share capital of RNPL and thus the shares/voting rights held by the Company and Promoter Group is 55.84% of equity share capital of RNPL.

RNPL has discharged term debt of Rs.7.82 Crores In 2009-10 and consequently the amount of Corporate Guarantee given by the Company has been reduced to Rs.100.07 Crores against realigned debt of Rs. 210 Crores.

INDUSTRIAL RELATIONS

The Companys industrial relations are cordial. Your Directors acknowledge the support and co-operation from employees at aii levels.

ACKNOWLEDGEMENT

Your Directors would like to thank the Union and State Governments, banks, financial institutions, customers, suppliers and shareholders for their continued support.

FOR AND ON BEHALF OFTHE BOARD,

K.L. CHANDAK P.N. KAPADIA

Executive Director Director

Place : Mumbai, Dated : 29th May 2010.

 
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