Directors Report of Emami Paper Mills Ltd.

Mar 31, 2017

Dear Shareholders

The Directors take pleasure in presenting their Thirty Fifth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2017.

FINANCIAL SUMMARY (Rs. in Lacs)

Particulars		2016-17	2015-16
Operational Income		113835.48	53880.49
Profit before interest and depreciation		14485.35	5363.11
Less: Interest		5701.73	1613.78
Profit Before Depreciation & Tax		8783.62	3749.33
Depreciation		5484.67	2668.05
Profit Before Taxation		3298.95	1081.28
Less : Provision for Current taxation (MAT) MAT Credit entitlement Income Tax for earlier year Provision for deferred tax	695.40 (695.40) - 705.44	705.44	(1710.63)
Profit after Tax		2593.51	2791.91
Add : Surplus brought forward		3351.51	1586.25
Balance available for appropriation		5945.02	4378.16
Appropriations Proposed Dividend on Equity Shares*			363.00
Proposed Dividend on Preference Shares*		-	490.00
Tax on Dividend*		-	173.65
Transfer to General Reserve		-	-
Balance carried forward		5945.02	3351.51
		5945.02	4378.16

*Your Company has not accounted for proposed dividend as a liability as at March 31, 2017 as per revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance Sheet date’.

Proposed Dividend was however accounted for as a liability as at March 31, 2016 in line with the existing Accounting Standard applicable at that time.

PERFORMANCE HIGHLIGHT

This year has been very encouraging for your Company continuing to report impressive topline growth. Your Company delivered record earnings during the year and achieved its highest ever revenue of Rs. 1138.35 Crores as compared to Rs.538.80 crores in 2015-16 registering a jump of 111%. Earnings before Interest and Tax (EBIDTA) increased by 170% to Rs.144.85 crores as against Rs.53.63 crores in 2015-16. During the year under review, the combined production from newsprint, writing & printing paper and packaging board stood at 2,78,489 MT and the capacity utilisation stood at 100%. Your Company was able to capitalize on the market conditions through its operational excellence and higher efficiency.

Your Company has gained prestigious position in the high end packaging product segment through its newly installed ‘Multi-Layer Coated Board’ plant. Your Company also continued to enjoy dominant position being one of the preferred suppliers of Newsprint in India being world class quality manufacturer of Newsprint.

OPERATIONS AND OUTLOOK

The year witnessed remarkable performance with all-round growth coming from the newly setup MultiLayer Coated Board plant. The newly commissioned plant is designed to produce 132,000 TPA of high grade paperboard which finds its usage in pharmaceutical, healthcare, food, cosmetics and other consumer product industries in various sizes and gsms ranging from 170-450. The board plant has recorded 136691 MT of production thereby contributing 55% to overall sales and has achieved over 100% of capacity utilisation in the very first year of its commercial production.

The demand for Value Added Paperboards (VAP) is expected to grow at a CAGR of around 11-12% during the next 5 years. The faster rate of growth in VAP is expected to be driven by the increased demand for branded packaged products; growth in organised retail; increasing awareness on food safety & hygienic packaging and use of packaging as a key differentiator specially in the FMCG sector, food, pharmaceutical, garments and beverages.

Despite heightened competitive intensity, your Company established its leading position in the VAP segment during the year. This was achieved through focus on product quality, process innovation, improved manufacturing efficiencies and enhanced service delivery level with better logistic arrangements.

The year 2016-17 was very challenging for the domestic newsprint industry particularly during the last two quarters. The lower growth in GDP and decrease in the number of pages per newspaper due to lower advertising spend, has resulted in a sharp decline for the demand of newsprint. The used newspaper being the main raw material for newsprint has a cascading impact on its availability and consequently the price of waste paper has started moving upwards. The impact was more severe on newsprint industry due to lower sales realization on account of cheaper imports coupled with rupee appreciation. The newsprint industry is also expected to witness a decline in demand going forward primarily on account of increasing adoption of digital media and proliferation of smart phone usage.

Writing & Printing segment particularly branded copier paper is expected to grow at a CAGR of 9.7%. Growth in this segment is primarily attributed to continued government support towards increase in literacy rate and corporate spending. Considering the sluggish newsprint demand and to capitalize the opportunity in writing & printing segment, your Company has decided to convert its existing Paper Machine (PM) 2 towards more demand & profit driven writing & printing paper.

Despite challenges like erratic demand due to demonetisation and competitive market scenario your Company has been able to put forth a remarkable performance. During the year, various measures were undertaken by your Company to enhance product efficiency and reduce costs. To mitigate the risk of increase in the prices of raw material your Company went ahead to keep sufficient stock of waste paper & other raw material and forward booking of raw materials. Your Directors believe that these initiatives will be beneficial for the Company in the long-run.

Your Directors believe that the performance of the Company has been satisfactory despite varied economic and industry challenges. With the long awaited strategic and economical reforms on the anvil the paper industry is poised to grow further. Emami Paper being a catalyst and pioneer in the paper industry is attractively positioned to take benefit of this growing opportunity and looks to the future with optimism and confidence.

DIVIDEND

Your Directors are pleased to recommend dividend of 60% (Rs.1.20 per share) on Equity shares to Rs.2/- each and 8% p.a. dividend on Preference shares of Rs.100/each for the financial year ended 31st March, 2017. The Dividend, if approved by the shareholders, will absorb Rs.1,463.55 Lacs (Including the dividend tax of Rs.247.55 Lacs).

ENVIRONMENT MANAGEMENT

Your company’s approach towards environmental protection is guided by Environmental Policy, commitment towards a sustainable planet and a clean environment as well as a healthy workplace for employees. The Company focuses on environmental management not only to comply with the applicable regulatory regime but also strives to contribute positively to the communities around its operations through varied community initiatives, encouraging biodiversity and natural resource conservation

To meet its environmental objectives, the Company adopts:

- Compliance with all relevant legislative requirements.

- Minimum Pollution Load in terms of Liquid Discharge and Air Emission.

- Stimulate rational use of resources through behavioural and technological improvements.

- Minimizing waste and maximizing recycling/ reuse.

- Creating Human Awareness in Environment, Safety and Health.

- Promoting comprehensive programs for continual improvement of Environmental performance.

- Reduce specific energy consumption and associated greenhouse gas emission.

Your Company has adopted one of the best Integrated Management Systems (IMS) certified by DNV (Det Norske Veritas AS, the Netherlands) through their rigorous surveillance and recertification audits, encompassing the following:

- ISO 9001:2015 - Quality Management System - ISO 14001:2015 - Environment Management System

- OHSAS 18001:2007 - Occupational Health & Safety Management System.

- Practicing TPM with an objective to achieve zero defect, zero breakdown, zero pollution, and zero loss.

At Emami Paper, there has been substantial development in energy conservation by installing energy efficient equipment. Key environmental control equipments, mechanism and monitoring instruments maintained by the company are as below:

- Online Ambient air quality monitoring system (3 nos)

- Online stack emission monitoring system (3 nos)

- State-of-the-art effluent treatment plant (ETP)

- Use of ETP final water for agricultural and plantation purpose

- 100% sludge used as co-fuel in the power boiler in Balasore Plant

- Decanter for secondary sludge dewatering

- Rainwater harvesting through 17 nos of recharge well

- Air pollution control through ESP, Ash conveying system pneumatically through close pipe line, Dust Suppression System, Water Sprinkling System

- Fly ash is used in making fly ash bricks.

- Green belt development

These systems and assets have enabled the Company to safeguard the environment by meeting all statutory norms. As a measure of sustainable growth policy of the company, it continuously gears up its resources to provide better protection to environment and natural resource conservation.

SHARE CAPITAL

The company has neither issued shares with differential voting rights nor granted stock options or sweat equity.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of section 125 of the Companies Act, 2013, the unclaimed or unpaid Dividend is due for remittance to the Investor Education and Protection Fund established by the Central Government in accordance with the schedule given below:-

(Rs. in Lacs)

Financial year	Dividend ID No.	Last date of Payment of dividend	Total Amount of Dividend	Unclaimed Dividend as on 31.03.2017	Last date for transfer to I.E.P.F. on
2009-10	28th	28/08/2010	363.00	0.66	02/09/2017
2010-11	29th	09/09/2011	363.00	0.73	14/09/2018
2011-12	30th	11/09/2012	363.00	0.68	16/09/2019
2012-13	31st	11/09/2013	363.00	1.05	16/09/2020
2013-14	32nd	09/09/2014	363.00	0.89	14/09/2021
2014-15	33rd	09/09/2015	363.00	0.98	14/09/2022
2015-16	34th	08/09/2016	363.00	0.99	13/09/2023
Total :			2541.00	5.98

DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES

The Company does not have any Subsidiary or Joint Venture/ Associate Companies.

DETAILS OF DEPOSITS

The Company has neither accepted nor renewed any deposits under section 73 of the Companies Act, 2013 during the year under review.

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

The information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure I and is attached to this Report.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in form MGT - 9 is given in Annexure II to the Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The company has formulated the policy for development and implementation of Corporate Social Responsibility as also required under Section 135 of the Companies Act, 2013.

Further, the information pursuant to Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 are given in Annexure III outlining the main initiatives during the year under review.

GROWTH WITH SOCIAL RESPONSIBILITY:

Emami Paper Mills Limited through its CSR activities takes up programs that benefit the communities in & around its place of work and ensure over a period of time, enhancement in the quality of life & economic well-being of the local people and thereby establishing its presence as a good corporate citizen.

EPML is committed to help the inhabitants of the surrounding villages by taking part in drinking water supply schemes, laying and improving roads, culverts, providing lighting facilities, development of parks, supply of equipment and instruments to Fair Price Shops, improving infrastructure facilities in Government Schools, conducting medical camps, providing financial assistance to needy people, contributing for cultural programmes, sports activities, construction / renovation works in the place of worship etc. This has paved the way for establishing a harmonious relationship with the surrounding neighborhood.

EPML undertakes Community Development activities by categorizing the needs of the community under various heads, viz., Infrastructure and basic amenities, providing drinking water supply, education, medical camps and environment, promotion of Oriya literature, Art & Culture, assistance for the differently - abled, training of unemployed youth, Organizing sports and talent competitions etc.

The company takes pride for its sense of responsibility towards the community and environment and the way it is duty bound for enrichment of the life of less privileged people and protection of the environment around its area of operation. The company has taken its social responsibility as a part of its operating policy and gearing its social activities to promote inclusive and sustained growth.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Your Company has laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timey preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

AUDITORS AND AUDITORS REPORT

1. STATUTORY AUDITORS

As per section 139 and other applicable provisions of the Companies Act, 2013 the Company has appointed M/s. Agrawal Subodh & Co. Chartered Accountants (Registration No. 319260E) as the Statutory Auditors of the Company, for a period of five years till the conclusion of 40th Annual General Meeting of the Company, subject to ratification by the shareholders in every AGM of the company on the remuneration and other terms and conditions as may be fixed by the Board of Directors. The Board recommends the approval by the shareholders regarding the appointment of M/s Agrawal Subodh & Co, Chartered Accountants as Statutory Auditors of the Company

The present Statutory Auditors, M/s S. K. Agrawal & Co., Chartered Accountants and M/s Salarpuria Jajodia & Co., Chartered Accountants, Unit Auditors (Kolkata Unit) will continue their office till the conclusion of ensuing 35th Annual General Meeting of the Company.

2. COST AUDIT

Your Company has appointed M/s. V. K. Jain & Co. Cost Accountant as Cost Auditors of the Company for the Financial Year 2016-17 for both the units at Balasore and Kolkata under section 148 of the Companies Act, 2013, at the Board Meeting held on 24th May, 2016 to audit cost accounting records as may be applicable to the Company for the financial year 2016-17 and their remuneration was approved at the last Annual General Meeting.

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, M/s V.K.Jain & Co. Cost Accountant, have been reappointed as Cost Auditor for the year 201718 as required under the Companies Act, 2013, the remuneration payable to Cost Auditor is required to be placed before the members in General Meeting for their ratification. As such, a resolution seeking members’ ratification for the remuneration payable to them is included in the Notice convening the Annual General Meeting.

3. SECRETARIAL AUDIT

Pursuant to the provisions of section 204(1) of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s MKB & Associates, Company Secretary in practice for the financial year 2016-17 to undertake the Secretarial Audit of the company. The Secretarial Audit Report is annexed herewith as Annexure IV.

AUDITORS’ REPORT/ SECRETARIAL AUDIT REPORT

The observations made in the Auditors’ Report read together with relevant notes thereon are self-explanatory and hence do not call for any further explanations or comments by the Board under Section 134 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

1) The company has not given Inter Corporate loan to any Body corporates covered under the provisions of section 186 of the Companies Act, 2013 during year ended 31st March, 2017.

2) The loan and advances given to employees are covered under the remuneration policy of the company. Hence section 186 of the Companies Act, 2013 is not applicable.

3) The company has not provided any guarantee.

4) The details of the investments made by the company are given in the notes to the financial statements

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with promoters, Key managerial personnel or other designated persons which may have potential conflict with interest of the company at large.

Necessary disclosure regarding transactions with related parties has been made in the Notes to the Audited Accounts.

The related party transactions policy has been given on the website of the company under the head Investors-Corporate Governance.

Web link: http://www.emamipaper.in/downloads related-party-policy-tr.pdf

COMPOSITION OF AUDIT COMMITTEE

The composition of Audit Committee of the company is mentioned in the Corporate Governance Report attached to this report.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

As per requirement of section 177 (9) of the Companies Act, 2013, the company has established a Vigil mechanism for the directors and employees to report genuine concerns, as recommended by the Audit Committee and approved by the Board of Directors in their meeting held on 21st January, 2014.

The Company’s Whistleblower Policy encourages Directors and employees to bring to the Company’s attention, instances of unethical behavior, actual or suspected incidents of fraud or violation of the Code of Conduct that could adversely impact the Company’s operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. It is the Company’s Policy to ensure that no employee is victimized or harassed for bringing such incidents to the attention of the Company.

The practice of the Whistleblower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The Whistleblower Policy is available on the Company’s corporate website www.emamipaper.in

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

Pursuant to section 134(3)(n) of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has adopted Risk Management policy for identification and implementation of Risk Mitigation Plan which is reviewed by the Management, Audit Committee and the Board on half yearly basis. In the opinion of the Board there is no such risk which may threaten the existence of the company.

DIRECTORS & KEY MANAGERIAL PERSONNEL

A) Directors retirement by rotation

Shri M.B.S.Nair, Director (Operations) and Smt. Richa Agarwal (Director) would retire by rotation and, being eligible, offer themselves for re-appointment.

B) Declaration by an Independent director(s) and reappointment, if any

All Independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time).

C) Key Managerial Personnel

During the year there was no change in the Key Managerial Personnel of your Company.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Pursuant to section 178 of the Companies Act, 2013, the Board of the directors of the company has approved the revised Nomination and Remuneration policy as recommended by the Nomination and Remuneration Committee in their meeting held on 27th January, 2015.

The policy is disclosed in the Corporate Governance Report.

ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of section 134(3)(p) of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time), the Board has carried out the annual performance evaluation of its own performance, its committees and individual directors on 16th May, 2017, on the basis of agreed norms for evaluation.

Further, the independent directors have evaluated the performance of non-independent directors at a separate meeting held on 31st January, 2017.

The manner in which the evaluation carried out has been explained in the Corporate Governance Report.

Meetings of the Board and Committee thereof

The details have been covered in the Corporate Governance Report.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial personnel and employees of the company is attached herewith in Annexure V.

RECEIPT OF COMMISSION BY THE DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY UNDER SECTION 197(14)

Not Applicable

CORPORATE GOVERNANCE

The Corporate Governance Report and Management’s Discussion & Analysis Report are set out as Annexure VI in this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of section 134(5) of the Companies Act, 2013 the Directors would like to state that:-

1. In the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

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

4. The Directors had prepared the annual accounts on a going concern basis;

5. The Directors had laid down internal financial controls to be followed by the company and such controls are adequate and operating effectively; and

6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;

MISCELLANEOUS

1. Industrial Relations: During the year under review, the Company enjoyed cordial relationship with the workers and employees at all levels.

2. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future:

No such orders passed during the year under review.

ACKNOWLEDGEMENT

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the

Board of Directors

Place : Kolkata A.V. AGARWAL

Date : 16th May, 2017 Executive Chairman

---

Mar 31, 2014

Dear Shareholders

The Directors take pleasure in presenting their Thirty Second Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2014.

FINANCIAL RESULTS

(Rs in Lacs) 2013-14 2012-13

Operational Income 54,656.51 51,001.61 Profit before interest and depreciation 7,383.71 7,348.31

Less : Interest 1,902.80 3,022.16

Profit Before Depreciation & Tax 5,480.91 4,326.15

Depreciation 3,208.53

Less : Transfer from Revaluation Reserve 42.62 3,165.91 3,032.90

Profit Before Taxation 2,315.00 1,293.25

Less : Provision for Current Taxation (MAT) 477.15

MAT Credit entitlement (235.93)

Provision for deferred tax 212.48 453.70 137.77

Profit after Tax 1,861.30 1,155.48

Add : Surplus brought forward 1,170.32 941.58

Balance available for Appropriation 3,031.62 2,097.06

Appropriations :

Proposed Dividend on Equity Shares 363.00 363.00 Proposed Dividend on Preference Shares 243.55 1.75 Tax on Dividend 103.08 61.99 Transfer to General Reserve 500.00 500.00 Balance carried forward 1,821.99 1,170.32

3,031.62 2,097.06

FINANCIAL PERFORMANCE

Your Company continued to maintain its leadership position in the Indian Newsprint industry as a preferred supplier to the leading newspaper publishers. Emami Paper''s firm Commitment of delivering superior quality products at competitive price has been a major factor for its prestigious position in the industry.

During the year, your Company registered a growth in the turnover from Rs 499.89 crores in 2012-13 to Rs 545.38 crores in 2013-14. By achieving continued operational efficiency enhancements at all levels of operations, your Company''s profit after tax (PAT) has shown growth from Rs 11.55 crores in 2012-13 to Rs 18.61 crores in 2013-14.

Despite poor performance of the paper industry particularly newsprint, the performance of your Company should be considered satisfactory.

DIVIDEND

Your Directors are pleased to recommend dividend of 30% (Rs 0.60 per share) on Equity Shares of Rs 2/- each and 8% pro-rata dividend on Preference shares of Rs 100/- each for the financial year ended March 31, 2014. The Dividend, if approved by the shareholders, will absorb Rs 709.62 Lacs (including the dividend tax of Rs 103.08 Lacs).

MILL EXPANSION AND DEVELOPMENT PLAN

The Company''s diversification project for setting up 1,32,000 TPA paper machine for manufacturing Multi Layer Coated Board at its existing location at Balasore is progressing satisfactorily and will be completed by March, 2015.

Your Company will emerge as the largest manufacturer of Multi Layer Coated Board in eastern India and one of the largest in the country.

Multi-layer coated board (comprising grey back, white back, folding box board, solid bleached board and liquid packaging board) is one of the fastest growing segments of the paper industry, growing at an annual rate of between 14-20 percent per year, even faster than the overall rate of growth of the domestic paper industry at about 10 percent.

Multi-layer coated board is used in several industries such as FMCG, pharmaceuticals and several other packaging-centric industries and with the upcoming boom in retail, especially enabled by the 49% FDI being permitted into the industry, the demand for duplex/ coated boards is expected to increase to 3.2 Million Tonne by 2016-17, up from 2.2 Million Tonne in 2012-13.

ISSUE OF PREFERENCE SHARES

During the year the Company has issued 22,50,000, 8% Cumulative Redeemable, Non-Convertible Preference Shares on preferential basis to the promoters of the face value of Rs 100/- each at a premium of Rs 300/- each aggregating to Rs 90.00 Crores as promoters contribution for Mill Expansion and Development Plan.

ENVIRONMENT MANAGEMENT

Your Company''s approach towards environmental protection is guided by Environmental Policy, commitment towards a sustainable planet and a clean environment as well as a healthy workplace for employees. The Company focuses on environmental management not only to comply with the applicable regulatory regime but also strives to contribute positively to the communities around its operations through varied community initiatives, encouraging biodiversity and nature conservation.

Towards achieving its environmental objectives, the Company is focused on:

. Cleaner production.

. Resource conservation.

. Responsible waste management.

. Minimum pollution load.

Your Company is among the few in the industry to have adopted one of the best Integrated Management Systems (IMS) certified by DNV (Det Norske Veritas AS, the Netherlands) through their rigorous surveillance and recertification audits, encompassing the following :

. ISO 9001:2008 - Quality Management System.

. ISO 14001:2004 - Environment Management System.

. OHSAS 18001:2007 - Occupational Health & Safety Management System.

At Emami Paper, there has been substantial development in energy conservation by installing energy efficient equipment and during the year a continuous (real time) ambient air quality monitoring system was installed. Some of the environmental assets possessed by the Company include :

. Ambient air quality monitoring system.

. State-of-the-art effluent treatment plant (ETP).

. Sludge dewatering system.

. Solid waste recycling.

. Feeding of ETP sludge to boiler for power generation.

. Rainwater harvesting.

These assets have enabled the Company to achieve declining water consumption per tonne of paper produced to benchmarks even lower than the standards. To optimise chemical and water consumption even further, the Company undertook the following measures :

. Conducted detailed study of water and wastewater management practices in different processes and domestic level assessing the opportunities for water and cost savings by performance enhancement of existing and future facilities.

. Integrated the water management with process needs by adopting the ''Reduce, Re-use and Recycle'' concept to optimize discharge quantities.

. Explored opportunities for reducing energy and chemical consumption in water and wastewater treatment systems.

. Adopted the latest water and wastewater treatment technologies.

. Propagated water saving equipment and devices besides organising training programmes on water management.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR projects focus on promoting Economic, Social, Environmental and Cultural growth of the community at large in an equitable and sustainable manner in the peripheral areas around the factories. Over the years, we have worked with dedication towards enriching lives across the community. The company is consistently taking up various community welfare initiatives for the benefit of the people. A sense of responsibility towards society is inherent to Emami''s concept of entrepreneurship. Under CSR, the major thrust areas include education, health care, drinking water and community service schemes to neighbouring villages and supporting them during natural calamities.

Education :

. Funded the building and Science Section of Remuna College, Balasore.

. Provided scholarships to deserving students (including tribals).

. Emphasized and funded girl education.

. Commissioned Bal Vikas Kendras, providing free education to the poor.

. Provided free meals and Exercise Note Books to school children.

. Donated desks, tables and water coolers to schools.

. Infrastructural support to 30 schools in the neighbouring villages covering 2500 students.

. Contribution to Friends of Tribals Society (FTS).

Health :

. Conducted free health camps (diagnosis and medicines).

. Started rural mobile health camps.

. Started free Ayurveidc, Homeopathic and Allopathic health camps.

. Built toilets for tribals.

Community Service :

. Built roads in the area, constructed temples.

. Installing and maintaining tube wells, street lights.

. Sponsoring sports activities.

. Extending helping hand to orphanage homes.

Natural Calamities and Disaster Relief :

. Contribution to Chief Minister''s Relief Fund for natural calamities ''Pheline''.

. Organized flood relief camps and distribution of dry foods, essential household and waterproof shelters.

General :

. Trained women with tailor competence.

. Provided firewood to tribals.

. Started free veterinary services for animals.

The Company''s CSR activities and its continuing policy of social and community services have made a visible impact in the upliftment of local villages in the vicinity of its plant at Balgopalpur and surrounding areas.

AWARDS & RECOGNITION

It is a matter of great pride that Company''s endeavor and commitment to achieve higher level of operational performance and environmental excellence has been recognized at various forums. Company has earned number of awards and honors as mentioned below :

. Environmental Best Practices Award-2013 by Karnataka State Pollution Control Board in November, 2013 for the process modifications made to the ''Effluent Treatment Plant (ETP)'' and endorsed by the Confederation of Indian Industries (CII) as an ''Innovative Environmental Project''.

. Greentech Safety Award-2013 under Silver category in the paper sector for the strides made in the areas of safety management.

. Greentech Environment Award-2013 under Silver category in the paper sector for the efforts made in environmental protection.

. Gold Award 2013-14 for CSR by Greentech Foundation for effort by Company to serve the community as a good corporate citizen.

CORPORATE GOVERNANCE

The sections of Corporate Governance and Management''s Discussion & Analysis are set out as Annexure-III in this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors have :

1. Followed the applicable accounting standards in the preparation of the Annual Accounts;

2. Selected prudent accounting policies;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company as well as preventing fraud and other irregularities; and

4. Prepared the annual accounts on a going concern basis.

DIRECTORS

Dr. Y. S. P. Thorat was appointed as an Additional Director in the category of Non-Executive Independent Director with effect from 8th November, 2013 under section 260 of the Companies Act, 1956 and he resigned w.e.f. 23rd February, 2014. Your Directors place on record their gratitude for his guidance and advice during his tenure of Director.

Shri M. B. S. Nair was appointed as an Additional Director (Whole-Time Director) designated as Director (Operations) of the Company with effect from 25th April, 2014 under section 161 of the Companies Act, 2013 to hold office till the date of ensuing Annual General Meeting. Notice under section 160 of the Companies Act, 2013 was received by the Company from members signifying their intention to propose Shri M.B.S.Nair as candidate for the Office of Directors.

Out of present five independent directors Shri U.G.Bhat, Shri H.M.Marda and Shri J.K.Khetawat would retire by rotation at the ensuing Annual General Meeting under the provision of the erstwhile Companies Act, 1956, and they are eligible, offer themselves for re- appointment. In terms of Section 149 and any other applicable provisions of Companies Act, 2013, they will be appointed for a term of 5 years and not liable to retire by rotation.

In order to comply with the provisions of section 149 of the Companies Act, 2013, the Board recommends for appointment of all the present five Independent Directors including the retiring directors for a consecutive period of 5 years and seek approval by the shareholders of the company at the next General Meeting.

1) Shri U. G. Bhat

2) Shri H. M. Marda

3) Shri J. K. Khetawat

4) Shri J. Godbole

5) Shri S. Balasubramanian

AUDITORS'' REPORT

The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.

AUDITORS

M/s S. K. Agrawal & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. M/s Salarpuria Jajodia & Co. have expressed their willingness to continue as Unit Auditors for the Gulmohar unit, if appointed.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 are given in Annexure-I to the Report.

DELISTING OF EQUITY SHARES

As no trading of the Company''s shares has been reported in U. P. Stock Exchange and trading volume in Calcutta Stock Exchange is very insignificant, Equity Shares of the Company have been voluntarily delisted from U.P.Stock Exchange and Calcutta Stock Exchange, under clause 6(a) of SEBI (Delisting of Equity Shares Regulation, 2009).

PERSONNEL

Information pursuant to Section 217(2A) of the Companies Act, 1956 is given in Annexure-II attached to this Report. ACKNOWLEDGEMENT

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the Board A. V. Agarwal Executive Chairman

Place : Kolkata Date : 25th April, 2014

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Mar 31, 2013

The Directors take pleasure in presenting their Thirty First Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2013.

FINANCIAL RESULTS Rs./iacs

2012-13 2011-12

Operational Income 51001.61 49507.76

Profit before interest and depreciation 7348.31 6514.37

Less: Interest 3022.16 2637.15

Profit Before Depreciation & Tax 4326.15 3877.22

Depreciation 3082.14

Less :Transfer from revaluation reserve 49.24 3032.90 2716.22

Profit Before Taxation 1293.25 1161.00

Less : Provision for current taxation (MAT) 253.83 - 230.11

MAT Credit entitlement (253.83) - (230.11)

Provision for deferred tax 137.77 137.77 330.30

Profit after Tax 1155.48 830.70

Add : Surplus brought forward 941.58 1032.76

Balance available for appropriation 2097.06 1863.46

Appropriations

Proposed Dividend on Equity Shares 363.00 363.00

Proposed Dividend on Preference Shares 1.75

Tax on Dividend 61.99 58.88

Transfer to General Reserve 500.00 500.00

Balance carried forward 1170.32 941.58

2097.06 1863.46

Financial Performance

Your Company continued to reinforce its leadership position in the Indian newsprint industry and remained one of the lowest cost manufacturers of Newsprint. Emami Paper''s commitment of delivering superior quality products to a wide segment of pride-enhancing customers has been a major reason for the Company in maintaining an impressive position in the industry.

Despite several obstacles of challenging economic environment, high interest rates, stubborn inflation levels and an overall suppressed consumer demand, your Company registered a growth in the turnover from Rs. 493.50 crores in 2011-12 to Rs.499.89 crores in 2012-13. By achieving continued operational efficiency enhancements and tight cost structures, your Company''s operating profit (PBDIT) increased 12.77% from Rs.65.14 crores in 2011-12 to Rs.73.46 crores in 2012-13. The company has achieved record production of 145816 tonne for the year 2012-13 which is more than 100% of installed capacity.

This performance is testimony to the Company''s inherently robust business and operating model, enabling it to continue to outperform the industry average. With the increased focus on literacy by the Government of India through such grassroots programmes as Sarva Siksha Abhiyan and allocation of large funds for the education and the print media sector, demand for newsprint in the country is expected to continue to report substantial growth of between 8-10 percent over the next decade.

Dividend

Your Directors are pleased to recommend dividend of 30% (Re.0.60 per share) on Equity Shares of Rs.2/- each and 8% pro-rata dividend (Re.0.09 per share) on Preference shares of Rs.100/- each for the financial year ended March 31, 2013. The Dividend, if approved by the shareholders, will absorb Rs.426.74 lacs (including the dividend tax of Rs.61.99 lacs).

Mill Expansion And Development Plan

Leveraging a rich experience of over 30 years in the business of manufacturing and marketing various grades of paper, readymade and well-laid infrastructure in terms of land, energy (captive power and grid transmission and distribution), water availability, MOEF clearance and skilled resources, your Company is undertaking a landmark expansion by setting-up a 100,000 TPA paper machine for manufacturing multi-layer coated board (packaging paper grades) at its existing location in Balasore. With a view to reinforce its competitiveness in the market and secure energy availability, the new mill complex will also have a 10 MW captive power plant, providing 100 percent self-reliance.

When completed by March 2015, your Company will emerge as the largest manufacturer of Multi-Layer Coated Board in Eastern India and one of the largest in the country.

Multi-layer coated board (comprising grey back, white back, folding box board, solid bleached board and liquid packaging board) is one of the fastest growing segments of the paper industry, growing at an annual rate of between 14-20 percent per year, even faster than the overall rate of growth of the domestic paper industry at about 10 percent.

Multi-layer coated board is used in several industries such as FMCG, pharmaceuticals and several other packaging-centric industries and with the upcoming boom in retail, especially enabled by the 49 percent FDI being permitted into the industry, the demand for duplex/ coated boards is expected to increase to 3.2 million tonne by 2016-17, up from 2.2 million tonne in 2012-13.

The project capital cost is optimally funded through a mix of promoter funds and foreign currency debt (ECB/ FCNR).

Issue Of Preference Shares

During the year the Company has issued 20,00,000, 8% Cumulative Redeemable, Non-Convertible Preference Shares of the face value of Rs.100/- each at a premium of Rs.300/- each aggregating to Rs.80.00 Crores.

Environment Management

Emami Paper Mills has embraced several proactive environmental measures to mitigate the risks of its operations on the environment. The Company promoters are of the firm belief that they are as much environmentalists as industrialists and as such, have contributed to the development of several state-of-the-art environmental assets across its manufacturing facilities. your Company believes in achieving growth but not at the expenses of the environment. The Company has undertaken necessary steps and actions for ensuring high levels of environmental management by ensuring health, hygiene and safety for surrounding communities in all the locations where it operates.

Towards achieving its environmental objectives, the Company is focused on:

- Cleaner production

- Resource conservation

- Responsible waste management

- Minimum pollution load

your Company is among the few in the industry to have adopted one of the best Integrated Management Systems (IMS) certified by DNV (Det Norske Veritas AS, the Netherlands) through their surveillance and recertification audits, encompassing the following:

- ISO 9001:2008 - Quality Management System

- ISO 14001:2004 - Environment Management System

- OHSAS 18001:2007 - Occupational Health & Safety Management System.

At Emami Paper, there has been substantial development in energy conservation by installing energy efficient equipment. Hundred percent of the energy requirement of the Balasore plant is sourced from the mill''s 20 MW captive power plant. Some of the other environmental assets possessed by the Company include:

- State-of-the-art effluent treatment plant (ETP)

- Sludge dewatering system

- Solid waste recycling

- Feeding of ETP sludge to boiler for power generation

- Rainwater harvesting

These assets have enabled the Company to achieve declining water and energy consumption per tonne of paper produced to benchmarks even lower than the standards. To optimise chemical and water consumption even further, the Company undertook the following measures:

- Conducted detailed study of water and wastewater management practices in different processes and domestic level assessing the opportunities for water and cost savings by performance enhancement of existing and future facilities

- Integrated the water management with process needs by adopting the ''Reduce, Re-use and Recycle'' concept to optimise discharge quantities

- Explored opportunities for reducing energy and chemical consumption in water and wastewater treatment systems

- Adopted the latest water and wastewater treatment technologies

- Propagated water saving equipment and devices besides organising training programmes on water management

Corporate Social Responsibility (CSR)

At Emami Paper Mills, we are not just another business organization driven by the sole objective of our bottomline. We are a positive change initiator, touching people''s lives, enhancing incomes and creating a happier society. The company''s conviction is in line with a maturing governance culture that no company can hope to succeed as a profitable island in an underprivileged environment.

It is with this conviction that Emami Paper engaged in corporate social responsibility when it went into business in 1983. The company directed its CSR for the benefit of those living in the vicinity of its Balasore plant, benefiting the tribal community. The Company''s CSR initiatives were conducted with the singular objective to extend the benefits of its corporate growth to its societal stakeholders.

Over the years, the company made relevant interventions in the areas of education, health and general welfare. The result is that Emami Paper has emerged as a responsible corporate citizen in the locations of its presence.

At Emami, our corporate social responsibility is not an adhoc response; this institutionalized initiative is driven by a CSR committee comprising eight executives. The result is that the company''s footprint and portfolio have progressively increased, benefiting around 30,000 people.

Youth

Over the years, Emami Paper has increasingly invested in youth-building through a larger investment in schools and youth-centric activities. During the year under review, the company allocated 24% of its CSR budget on youth.

Miscellaneous

Emami Paper also intends to invest in schemes related to animal welfare, grass and food cultivation, biogas generation, power and electricity and solar energy in Balasore. The company intends to engage in research related to water management, waste management and superior land utilization.

CSR initiatives, 2012-13

Education

- The company funded the building of Remuna College, Balasore.

- Provided scholarships to deserving students (including tribals).

- Funded the entire science section of Remuna College.

- Emphasised and funded girl education.

- Commissioned Bal Vikas Kendras, providing free education to the poor.

- Provided free meals and exercise books to school children.

- Donated desks, tables and water coolers to schools.

Health

- Conducted free health camps (diagnosis and medicines).

- Adopted 57 families of Fulkiari village; provided health insurance, benefiting tribals.

- Started rural mobile health camps.

- Started free ayurvedic, homeopathic and allopathic health camps.

- Built toilets for tribals; provided tube wells for drinking water.

Infrastructure

Built roads in the area; constructed temples.

General

- Trained women with tailor competence.

- Provided firewood to tribals.

- Started free veterinary services for animals.

- Supported victims of burnt houses, failed marriages and orphans; distributed free clothes to villagers.

Corporate Governance

The sections of Corporate Governance and Management''s Discussion & Analysis are set out as Annexure-III in this Report.

Directors'' Responsibility Statement

Your Directors have:-

1. Followed the applicable accounting standards in the preparation of the Annual Accounts;

2. Selected prudent accounting policies;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company as well as preventing fraud and other irregularities; and

4. Prepared the annual accounts on a going concern basis.

Directors

Shri R. S. Goenka resigned from the Board as Executive Chairman with effect from 13th August, 2012. Your Directors wish to place on record their gratitude for his excellent and valuable service to the Company by his commendable leadership during his tenure as Executive Chairman of the Company.

Shri R. S. Agarwal was appointed as Director with effect from 26/03/1994 and he resigned with effect from 13th August, 2012. your Directors wish to place on record their gratitude for his excellent and valuable service to the Company by his commendable leadership during his tenure as Director of the Company.

Shri P. S. Patwari, Shri Aditya Vardhan Agarwal and Shri S. Balasubramanian retire by rotation and being eligible, offer themselves for reappointment.

Auditors'' Report

The observations made in the Auditors'' Report are self- explanatory and therefore do not call for any further comments.

Auditors

M/s S. K. Agrawal & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. M/s Salarpuria Jajodia & Co. have expressed their willingness to continue as Unit Auditors for the Gulmohar unit, if appointed.

Energy, Technology And Foreign Exchange

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 are given in Annexure-I to the Report.

Delisting Of Equity Shares

The Company''s Equity Shares are listed with Bombay Stock Exchange, Calcutta Stock Exchange and U.P.Stock Exchange.

Bombay Stock Exchange Limited (BSE) provides a nationwide trading terminals and unrestricted, unhindered access to the investors to trade in the Shares of the Company. As no trading of the Company''s shares has been reported in U. P. Stock Exchange and trading volume in Calcutta Stock Exchange is very insignificant, the Board has approved delisting of the Equity Shares of the Company from U.P.Stock Exchange and Calcutta Stock Exchange.

Personnel

Information pursuant to Section 217(2A) of the Companies Act, 1956 is given in Annexure-II attached to this Report.

Acknowledgement

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the Board

Kolkata A.V. AGARWAL

April, 30, 2013 Executive Chairman

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Mar 31, 2012

The Directors take pleasure in presenting their Thirtieth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2012.

FINANCIAL RESULTS Rs./Lacs 2011-12 2010-11

Operational Income 48,969.00 42,984.01

Profit before interest and depreciation 6,943.07 7,207.68

Less: Interest 3,065.85 2,740.35

Profit Before Depreciation & Tax 3,877.22 4,467.33

Depreciation 2,773.19

Less: Transfer from Revaluation Reserve 56.97 2,716.22 2,657.59

Profit Before Taxation 1,161.00 1,809.74

Less : Provision for Current Taxation -

Income tax for earlier years 98.51

Provision for deferred tax 231.79 330.30 423.22

Profit after Tax 830.70 1,386.52

Add : Surplus brought forward 1,032.76 568.13

Balance available for appropriation 1,863.46 1,954.65

Appropriations

Proposed Dividend 363.00 363.00

Tax on Dividend 58.88 58.89

Transfer to General Reserve 500.00 500.00

Balance carried forward 941.58 1,032.76

1,863.46 1,954.65

Financial Performance

Your Company strengthened its leadership in the newsprint segment and continued to be the lowest cost manufacturer in the country. The Company's commitment in delivering high quality products to customers has been a major reason for maintaining prestigious position in the industry and allowed the Company to achieve better sales realization against the stiff competition with imported newsprint.

Your Company registered a considerable growth of 13.92% in the turnover from Rs.429.84 crores in 2010-11 to Rs.489.69 crores during the year under review. The Company achieved another landmark by registering a record production of 144920 MT for the year. Operating profit (PBDIT) was marginally lower at Rs.69.43 crores as against Rs.72.08 crores last year despite sharp increase in the cost of raw material, coal and financing charges. Directors are pleased to inform that in spite of turbulent business environment, your company, based on its intrinsic strength, has maintained its performance and outperformed the industry.

With the increased focus on the literacy by the Government and allocation of large funds for education and print media sector, demand of the company's products is expected to be very promising. Therefore, overall performance of your Company is expected to be improved substantially in the coming years.

Dividend

Your Directors are pleased to recommend a dividend of 30% for the financial year ended March 31, 2012. The Dividend, if approved by the shareholders, will absorb Rs.421.88 lacs (including the dividend tax of Rs.58.88 lacs).

Environment Management

Your Company continued with its commitment towards ensuring a safe and healthy workplace for all employees, guests and visitors, by maintaining the highest levels of safety and occupational health standards. Manufacturing units of your Company have best-in-class infrastructure, competent resources and state-of-art protection measures. The Environment, Occupational Health and Safety Management Systems conform to the best international standards.

Emami Paper Mills Limited (EPM) has adopted one of the best Integrated Management Systems (IMS), duly certified by M/s DNV, through their Surveillance and Recertification Audits, covering the following:

- ISO 9001:2008 - Quality Management System

- ISO 14001:2004 - Environment Management System

- OHSAS 18001:2007 - Occupational Health & Safety Management System.

EPM committed to its responsible manufacturing practices and has implemented several environment-friendly processes under its well-defined Environment Policy. The occupational health and safety process is implemented through periodic safety audit, safety observation and environment audit. EPM always makes constant efforts to better the stipulated standards, ensuring sufficient energy conservation with higher waste recycling. EPM has implemented its policies as under:

- Complying with all relevant legislative requirements

- Reducing pollution load in terms of liquid discharge, air emission and land conservation

- Saving energy and preserving natural resources like water, raw material, fuels

- Generating awareness on environment, safety and health

- Minimizing unsafe acts and working conditions

- Promoting comprehensive programmes to propagate health and environmental safety

- Adoption of superior technology and equipment with respect to resource conservation, energy and eco-friendliness.

The Company is well-renowned for its environmental management practices. It possesses:

- State-of-art effluent treatment plant

- Sludge dewatering system

- Feeding of ETP sludge to FBC boiler for power generation

- Recharging cum Rainwater harvesting system

- Development of green belt.

The aforesaid steps have resulted in declining water and energy consumption, reflected in the data submit- ted for energy conservation in this report.

Corporate Social Responsibility (CSR)

The CSR projects focus on promoting Economic, Social, Environmental and Cultural growth of the com- munity at large in an equitable and sustainable manner in the peripheral areas around the factories. Over the years, we have worked with dedication towards enriching lives across the community. The company is consistently taking up various community welfare initiatives for the benefit of the people. A sense of responsibility towards society is inherent to Emami's concept of entrepreneurship. Under CSR, the major thrust areas include education, health care, drinking water and community service schemes to neighbouring villages and supporting them during natural calamities.

Health Care: Our healthcare activities range from operating local first aid centers, free health care services and health camps through which we also provide ayurvedic, homeopathic and allopathic medicines.

Education: Infrastructural support has been provided to 30 schools in the neighbouring villages covering 2500 students and distributed notebooks, given scholarship to meritorious students, supplied accessories like desks, benches, fans, water filter etc. Besides, regular contribution made to the Friends of Tribals Society (FTS) for education to tribals in rural areas and also to various schools and Colleges. The company also sponsored tribal students for their better education.

Villages Adoption: The company adopted Fulkiari village, comprising 200 villagers living below the poverty level, having single-room temporary houses with no toilets, for onward development with a significant expenditure covering the following activities: Toilets, insurance cover, safe drinking water with water filters, bore wells, education for children, medical and health camps and women's self-employment.

Community Service: In the community service schemes, Emami is always ahead in installing and maintaining tube wells, street lights, road repairs, road construction, sponsoring sports activities, mass marriages, distributing blankets in winter, extending helping hand to orphanage homes to meet their requirements, religious and social activities through local groups. The Company undertook the construction and renovation of Temples in the nearby villages.

The Company's CSR activities and its continuing policy of social and community services have made a visible impact in the upliftment of local villages in the vicinity of its plant at Balgopalpur and surrounding areas.

Awards

The Company received the following awards during the year under review:

Energy Award:

2011- 'National Award for Excellence in Energy Management- 2011' by CII - GBC Hyderabad. This prestigious award was received from Dr. Ajay Mathur, Director General, and Bureau of Energy Efficiency in 10th Energy Efficiency Summit 2011.

For Energy Management, Emami has also received the First Prize for "NATIONAL ENERGY CONSERVATION AWARD" for the Pulp & Pa- per Sector from the Ministry of Power, Government of India for the year 2009-10

Excellence Award:

2011- Silver Certificate of Merit of The Economic Times India Manufacturing Excellence Award 2011 for the efforts taken by the Plant and its personnel in enhancing manufacturing and supply chain excellence. This award is jointly hosted by The Economic Times in collaboration with Frost & Sullivan.

Group for Interse Transfer of Shares

As required under Clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid Regulations, are given in the Annexure IV attached herewith and forms part of this Annual Report.

Corporate Governance

The sections of Corporate Governance and Management's Discussion & Analysis are set out as Annexure-III in this Report.

Directors' Responsibility Statement

Your Directors have:-

1. Followed the applicable accounting standards in the preparation of the Annual Accounts;

2. Selected prudent accounting policies;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1 956 for safe- guarding the assets of your Company as well as pre- venting fraud and other irregularities; and

4. Prepared the annual accounts on a going concern basis.

Directors

Shri R.C. Mall was appointed as Director in the category of Executive with effect from 11th August 2011 under section 260 of the companies Act, 1956 and he resigned with effect from 23rd April, 2012. Your Directors wish to place on record their gratitude for his guidance and advice during his tenure as Director in the category of Executive.

Shri J.K. Khetawat was appointed as Additional Di- rectors of the Company with effect from 11th August 2011 under section 260 of the companies Act, 1956 to hold office till the date of ensuing Annual General Meeting. Notice under section 257 of the Companies Act, 1956 was received by the Company from members signifying their intention to propose Shri J.K. Khetawat as candidate for the Office of Directors.

Shri Manish Goenka and Shri J. Godbole retire by rotation and being eligible, offer themselves for re-appointment. Shri S. K. Todi and Shri N. Mishra would also retire by rotation at the ensuing Annual General Meeting but they do not seek / offer for reappointment in the ensuing Annual General Meeting.

Auditors' Report

The observations made in the Auditors' Report are self- explanatory and therefore do not call for any further comments.

Auditors

M/s S. K. Agrawal & Company, Chartered Account- ants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. M/s Salarpuria Jajodia & Co. have expressed their willingness to continue as Unit Auditors for the Gulmohar unit, if appointed.

Energy, Technology and Foreign Exchange

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 are given in Annexure-I to the Re- port.

Personnel

Information pursuant to Section 217(2A) of the Companies Act, 1956 is given in Annexure-II attached to this Report.

Acknowledgement

The Board acknowledges the understanding and sup- port shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.



For and on behalf of the Board

Kolkata R. S. Goenka

May, 17, 2012 Executive Chairman

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Mar 31, 2011

The Directors take pleasure in presenting their Twenty-Ninth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2011.

Financial Results (Rs. in Lacs)

2010-11 2009-10

Operational Income 43,218.24 39,789.42

Profit before interest and depreciation 6,626.09 6,512.20

Less: Interest (net) 2,157.87 2,393.45

Profit Before Depreciation & Tax 4,468.22 4,118.75

Depreciation 2,723.61

Less:Transfer from Revaluation Reserve 66.02 2,657.59 2,940.90

Profit Before Taxation 1,810.63 1,177.85

Less : Provision for Current taxation 359.90

Income tax for earlier years 2.49

Provision for deferred tax 420.73

MAT Credit entitlement (359.01) 424.11 478.91

Profit after Tax 1,386.52 698.94

Add : Surplus brought forward 568.13 793.88

Balance available for appropriation 1,954.65 1,492.82

Appropriations

Proposed Dividend 363.00 363.00

Tax on Dividend 58.89 61.69

Transfer to General Reserve 500.00 500.00

Balance carried forward 1,032.76 568.13

1,954.65 1,492.82

Financial performance

Your Company reported another strong performance this year as it extended its leadership in newsprint segment. Your Company continued its dominance in being the lowest cost newsprint manufacturer and extended its market presence. This allowed the company to deliver superior value to the stakeholders.

Net Sales grew 11.42% from Rs. 385.78 crores in 2009-10 to Rs. 429.84 crores in 2010-11 due to significant increase in existing business volumes. The Company also achieved a record production of 144712 MT during the year achieving plant capacity utilization of almost 100%.

Your company registered a 54% growth in profit before tax to Rs. 18.11 crores in 2010-11 against Rs. 11.78 crores in 2009-10. Profit after taxation also jumped over 98% from Rs. 6.99 crores in 2009-10 to Rs. 13.87 crores.

In view of the paper market condition looking much favorable, the working results of the company are expected to be significantly better in the coming years.

Dividend

Your Directors are pleased to recommend a dividend of 30% for the financial year ended March 31, 2011. The Dividend, if approved by the shareholders, will absorb Rs. 423.29 lacs (including the dividend tax of Rs. 60.29 lacs).

Operations and outlook

Your Company is the largest manufacturer of Newsprint in ndia and registered an overall improved performance in 2010-11, where all business verticals and sub-segments grew at a robust pace. The average realization in newsprint and writing and printing paper increased by 17 per cent over 2009-10.

Emami Papers philosophy is to actively engage with the customers not only in providing them with the right quality of products but also to provide solutions to their need through its dedicated technical service team. This has helped in attaining quick market penetration in high end newsprint sector.

The Company continued its excellence in operations with modernized technology, backed by efficient intellectual capital - resulting in zero breakdowns or rejections.

Paper industry is poised for growth and has a linear relationship with GDP of our economy. With the GDP expected to be at around 9 percent during 2011-12, the paper industry will grow simultaneously at 8 per cent over the next 10 years. This will translate into positive results for the Company and higher returns for our stakeholders.

Environment management

Emami Paper Mills Limited (EPML) continues to be committed to its responsible manufacturing practices and has implemented several environment-friendly processes under its well-defined Environment Policy. Some of its environmental policies are:

- Clean production

- Resource conservation

- Responsible waste management

- Minimum pollution load

EPML always makes constant efforts to better the standards set by the Pollution Control Board, ensuring sufficient energy conservation with higher waste recycling.

EPML has adopted one of the best Integrated Management Systems (IMS), duly certified by M/s DNV (M/s Det Norske Veritas AS, Netherlands) through their Surveillance and Recertification Audits, covering the following:

1. ISO 9001:2008 - Quality Management System

2. ISO 14001:2004 - Environment Management System

3. OHSAS 18001:2007 - Occupational Health & Safety Management System.

The management is committed to saving the environment and upholding human safety and health. EPML has implemented its policies and focuses on environment, health and safety, quality and energy as under:

- Complying with all relevant legislative requirements

- Reducing pollution load in terms of liquid discharge, air emission and land conservation

- Saving energy and preserving natural resources like water, raw material, fuels

- Generating awareness on environment, safety and health

- Minimising unsafe acts and working conditions

- Promoting comprehensive programmes to propagate health and environmental safety.

The Company is well-renowned for its environmental management practices. It possesses:

- State-of-art effluent treatment plant

- Sludge dewatering system

- Managing solid wastes through recycling

- Feeding of ETP sludge to boiler for power generation

- Rainwater harvesting

The aforesaid steps have resulted in declining water and energy consumption, reflected in the data submitted for energy conservation in this report.

Mill expansion plans

In line with the planned expansion projects, the Company has firmed up plans for installing Printing & Writing Paper Machine of 175,000 tpa and Elemental Chlorine Free (ECF) Bamboo/Wood Pulp Mill of 150,000 tpa, Captive Power Plant of 32 MW along with required Water Intake and Treatment facilities at a project cost of Rs. 1,225 crores in the 1st Phase. Approvals are in process for land acquisition, environment clearance, water clearance and financial tie-up among others.

As a part of above, the Company has acquired state of the art used Paper Machine from Sweden. It has also floated global tender for the main process equipment. Location of the these facilities adjacent to the existing mill at Balasore provides advantage in terms of utilization of available resources, well established infrastructure and proximity to the coalfield, port, railway siding and highway facilities.

New vista -agro-forestry

In line with Companys plans to install an Integrated Pulp & Paper Plant to produce high end Printing & Writing graphic papers from virgin pulp out of bamboo/wood as pulpable raw materials, the Company has set up a full fledged department known as Agro-Forestry Division at Balasore to develop a sound raw material base within its catchment area.

Nurseries in various districts of Orissa and West Bengal have been established to provide saplings of Eucalyptus, Acacia & Casuarina to farmers for pulp wood tree plantations under farm forestry schemes. Apart from the seed root origin based saplings, the Company has planned to use higher technology aided clonal saplings to increase productivity. A Research and Development Centre for multiplication of clones of Eucalyptus and Casuarinas has started functioning at Balasore with an initial capacity of 10 lacs clonal saplings per year which will be increased to 50 lacs clonal saplings.

The above programme will mean the following direct and indirect advantages to the region.

1. It will provide productive use of the farmers land particularly in the non-irrigated areas.

2. It will provide 200 man days per Ha per annum of employment to the rural population.

3. Apart from bringing in the dramatic change in the earning capacity of farmers, it will improve soil condition of the arid land which can help arrest of degradation and erosion.

4. It will also work as huge carbon sink to reduce the GHG problem.

The Agro-Forestry Division has also taken up activities to motivate the farmers/villagers to practice inter-cropping of vegetables, pulses, etc. along with tree plantation to get more interim revenue out of these fast growing crops.

Community responsibility

We at Emami Paper, extend our responsibility, not only to our employees and shareholders but also to the community. Over the years, we have worked with dedication towards enriching lives across the community. A sense of responsibility towards society is inherent to Emamis concept of entrepreneurship. Under CSR, the major thrust areas include health care, drinking water, education and community service schemes to neighbouring villages and supporting them during natural calamities.

Our healthcare activities range from operating local first aid centres, free health services and health camps through which we provide ayurvedic, homeopathic and allopathic medicines. In the community service schemes, Emami is always ahead in installing and maintaining tube wells, street lights, road repairs, sponsoring sports activities, mass marriages, religious and social activities through local groups. With regards to education, the Company makes regular contribution to the Friends of Tribals Society (FTS)

for education to tribals in rural areas and also to various schools and colleges. During the year, the Company adopted Fulkiari, a village with a population of 200 and provided them with basic amenities to raise living standards.

The Companys CSR activities and its continuing policy of social and community services have made a visible impact in the upliftment of local villages in the vicinity of its plant at Balgopalpur and surrounding areas.

Awards

The Company received the following awards during the year under review :

- First Prize for "NATIONAL ENERGY CONSERVATION AWARD" for the Pulp & Paper Sector from the Ministry of Power, Government of India for the year 2009-10.

- First Prize for "ENERGY CONSERVATION AWARD" from the Indian Paper Manufacturers Association for the year 2009-10.

- The years of excellence by our CEO & Executive Director Mr. P.S. Patwari resulted in him recognized as "CA Business Achiever Award" in the SME category for excellent management for the year 2010 by the Institute of Chartered Accountants of India.

- Excellence Award for excelling in the field of "Corporate Social Responsibility" by All India Small & Medium Newspapers Federation, New Delhi, Orissa Unit.

Group for interse transfer of shares

As required under Clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid Regulations, are given in the Annexure IV attached herewith and forms part of this Annual Report.

Corporate governance

The sections of Corporate Governance and Managements Discussion & Analysis are set out as Annexure-III in this Report.

Directors responsibility statement

Your Directors have:-

1. Followed the applicable accounting standards in the preparation of the Annual Accounts;

2. Selected prudent accounting policies;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company as well as preventing fraud and other irregularities; and

4. Prepared the annual accounts on a going concern basis.

Directors

Shri U.G. Bhat, Shri A.V.Agarwal, Shri R.S.Goenka and Shri H.M. Marda retire by rotation and being eligible, offer themselves for re-appointment.

Auditors report

The observations made in the Auditors Report are self- explanatory and therefore do not call for any further comments.

Auditors

M/s S. K. Agrawal & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. M/s Salarpuria Jajodia & Co. have expressed their willingness to continue as Unit Auditors for the Gulmohar unit, if appointed.

Energy, technology and foreign exchange

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 are given in Annexure-I to the Report.

Personnel

Information pursuant to Section 217(2A) of the Companies Act, 1956 is given in Annexure-II attached to this Report.

Acknowledgement

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the Board

Kolkata

May, 30, 2011 R.S. Goenka

Executive Chairman

---

Mar 31, 2009

FINANCIAL RESULTS

Rs./ Lakhs

2008-09 2007-08

Operational Income 43497.46 22053.91 Profit before interest, dereciation and exceptional items 9346.19 3712.13

Less: Interest (net) 3609.77 773.21

Profit Before Depreciation & Tax 5736.42 2938.92

Depreciation 2547.86

Less:Transfer from Revaluation Reserve 89.77 2458.09 1170.36

Profit Before Taxation 3278.33 1768.56

Less : Provision for Current taxation 368.68

Provision for fringe benefit tax 25.00

Income tax for earlier years 4.12

Provision for deferred tax 976.50

MAT Credit entitlement (314.23) 1070.07 408.48

Profit after Tax 2208.26 1360.08

Add : Surplus brought forward 10.33 1432.22

Balance available for appropriation 2218.59 2792.30 Appropriations

Proposed Dividend 363.00 604.99

Tax on Dividend 61.69 102.82

Transfer to General Reserve 1000.00 2074.16

Balance carried forward 793.90 10.33

2218.59 2792.30

DIVIDEND

Your Directors are pleased to recommend a dividend of 30% for the financial year ended March 31, 2009. The Dividend, if approved by the shareholders, will absorb Rs.424.69 lac (including the dividend tax of Rs.61.69 lac).

OPERATIONS AND OUTLOOK

Your Directors are pleased to inform that the Company’s investment in ‘the-state-of-art’

Newsprint plant (PM-3) which commenced commercial production in March 2008, has contributed significantly to the domestic demand

gap for newsprint in India and contributed to the productivity and profitability of the company substantially. During the year, the company has achieved a record production of 136869 MT, compared to 82499 MT in the previous year showing an increase of 65.90%. Turnover for the year recorded a quantum jump of 97.23% at Rs.434.97 crores over the year 2007-08. The Profit before depreciation and tax has increased substantially by 95.17% from Rs. 29.39 crores in 2007-08 to Rs.57.36 crores in 2008-09.

The company’s performance has been satisfactory despite stiff competition from the imported newsprint and recessionary trend in the global economy. The company continued its thrust to streamline and optimize its operations during the year and expects to further improve its production and operational efficiency at all the levels of its activities.

ENVIRONMENT MANAGEMENT

Emami Paper Mills Limited continues to attach a high importance of clean production in paper manufacturing. The management is committed to save the Environment, uphold Human Safety and Health. EPML has defined its policies and focus on Environment, Health and Safety, Quality and Energy as under:

- Compliance with all relevant legislative requirements.

- Reducing Pollution Load in terms of Liquid Discharge, Air Emission and Land Conservation.

- Saving Energy & preserving natural resources like Water, Raw material, Fuels.

- Generating Human Awareness in Environment, Safety and Health.

- Minimising the Unsafe Acts & Unsafe working conditions.

- Promoting comprehensive programs to propagate Health and Environmental Safety.

M/s DNV ( M/s Det Norske Veritas AS, Netherland ) has renewed its Certification for the following Integrated Management System (IMS) in February 2008 and regularly visiting both the plants at Balasore – Orissa and Kolkata to conduct their Surveillance Audit twice in a year:

1) ISO 9001:2000 – Quality Management System

2) ISO 14001:2004 - Environment Management System - EMS

3) OHSAS 18001:1999 - Occupational Health & Safety Management System.

SILVER JUBILEE CELEBRATION

Srimad Bhagwat Saptah, Raslila and Silver Jubilee celebration was organized at our Balasore factory with great revelation. The entire factory and atmosphere was alive with an unbelievable spirit of happiness and gaiety; responsibility and service was palpable in all spheres all – from each workmen, staff, executive to each director.

STATUS OF EXPANSION PLANS

Your company has signed Memorandum of Agreement with the Government of West Bengal for setting up a wood based integrated pulp and paper mill with a production capacity of 600 TPD (200000 TPA) along with necessary infrastructural facilities and ancillaries. Steps are being taken for evaluation of all the parameters including land acquisition,utility feasibilities, cultivation of plantation, discharge of water, availability of skilled and unskilled workmen. Your Company is optimistic that with the right support of Government of West Bengal, the project will be successfully implemented.

Besides above the company is also planning to increase the capacity of Newsprint and Writing & Printing paper at its unit at Balasore, Orissa.

GROUP FOR INTERSE TRANSFER OF SHARES

As required under Clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 persons constituting “Group” (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid Regulations, are given in the Annexure IV attached herewith and forms part of this Annual Report.

CORPORATE GOVERNANCE

The sections of Corporate Governance and Management’s Discussion & Analysis are set out as Annexure-III in this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors have :-

1. Followed the applicable accounting standards in the preparation of the Annual Accounts;

2. Selected prudent accounting policies;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company as well as preventing fraud and other irregularities; and

4. Prepared the annual accounts on a going concern basis.

DEPOSITS

There were no unclaimed or unpaid deposits at the close of the year under review.

DIRECTORS

Shri H.M.Marda was appointed as an Additional Director of the Company with effect from 27th January 2009 under section 260 of the Companies Act, 1956 to hold office till the date of ensuing Annual General Meeting. Notice under section 257 of the Companies Act, 1956 was received by the Company from members signifying their intention to propose Shri H.M.Marda as a candidate for the Office of Directors.

Shri R. S. Goenka, Shri Manish Goenka, Shri S.K.Todi and Shri N.Mishra retire by rotation and being eligible, offer themselves for re-appointment.

AUDITORS’ REPORT

The observations made in the Auditors’ Report are self-explanatory and therefore do not call for any further comments.

AUDITORS

M/s S. K. Agarwal & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. M/s Salarpuria Jajodia & Co. have expressed their willingness to continue as Unit Auditors for the Gulmohar unit, if appointed.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 are given in Annexure-I to the Report.

PERSONNEL

Information pursuant to Section 217(2A) of the Companies Act, 1956 is given in Annexure-II attached to this Report.

ACKNOWLEDGEMENT

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the Board

Kolkata

R. S. GOENKA

June 3, 2009 Executive Chairman