DIRECTORS' REPORT  

TO  

THE MEMBERS

The Directors present the 49'" Annual Report on the working of the Company for the year ended 31s1 March, 2014 together with the statement of Accounts for that year.

CONSOLIDATED FINANCIAL STATEMENTS

As required by Listing Agreements with the Stock Exchanges, the Consolidated Financial Statements prepared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India are attached.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has not been any material departure;

b. that the Directors have 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 as at the end of the financial year on 31st March, 2014 and of the profit of the Company for that period;

c. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956/2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that the Directors have prepared the annual accounts on a going concern basis.

DIVIDEND

The Directors recommend for your consideration the payment of Dividend for the year ended 31st March, 2014 at the rate of Rs.0.30 per share. If approved, the Equity Dividend will, subject to the provisions of Section 126 of the Companies Act, 2013, be paid to those shareholders whose names stand on the Register of Members on 13th day of September, 2014.

OPERATIONS

The paper manufacturing activity of the Company showed improvement both in terms of revenue and profits when compared with the last year. Though steep depreciation of Rupee seen during the year did put considerable pressure on input cost, the impact, to a considerable extent was mitigated by judicious mix of inputs without adversely affecting the quality of Specialty Paper and marginal upward revision in prices of paper. Judicious pricing also softened the blow from unrestricted imports which helped in improvement of capacity utilization resulting in improved profitability of the operations.

The expansion project at Mahad has been put on hold temporarily in view of the prevailing recessionary conditions to minimize the impact of fixed costs pending study of new investment plans. Consequently an expenditure of Rs. 311 lacs from 1st April, 2013 has been treated as revenue expenses in the current year's accounts instead of being capitalized.

The Directors believe that with the new Governmental policies leading to change in recessionary market sentiments, would help improve overall economy and Company's continuous efforts on cost reduction and the new product development accompanied by review of existing products and marketing strategy would enable further improvement in capacity utilization and profitability.

The Real Estate Business of the firm in which the Company is a Partner, has been satisfactorily progressing despite the business in the industry facing some recessionary pressure elsewhere. The accounts include Company's share of profit of Rs. 1143 lacs in respect of a building completed during the year and stock of few flats sold by the firm as against a profit of Rs1660 lacs in the last year in respect of two buildings then completed.

The Company has commenced development of land for constructing residential / commercial complex having saleable area of about 1,50,000 sq.ft for which purpose the land has been treated as stock-in-trade at a fair market value of Rs.1441 lacs, by crediting the difference over cost, to Capital Reserve of the Company. The labour relations continued to remain peaceful. Out of 83 Fixed Deposits amounting to Rs. 27,31,000 which had matured for payment as at the close of 31st March, 2014, out of this, 7 deposits of the value of Rs. 2,03,000 have been claimed upto 6th May, 2014.

DIRECTORS

On 11th May, 2014 the Company suffered an irreparable loss in the sad demise of Mr. Rusi Nussarwanji Sethna, an eminent Solicitor who was associate with the Company as an Independent Director for over 20 years and to whom the Company owes a deep debt of gratitude for the keen interest he took in the affairs of the Company. The Directors will always remember him for his legal acumen and guidance which he so willingly gave to the Company.

Mr. Gautam Khaitan has been appointed as an Independent Additional Director on the Board of the Company, with effect from 23rd October, 2013. According to the provisions of Section 161 of the Companies Act, 2013 he will cease to hold the office on the date of the ensuing Annual General Meeting. A Resolution has been proposed for his appointment as an independent who will not be liable to retire by rotation. The Directors commend the resolution for your approval.

Messrs. V.O. Somani, B.C. Dalal and V.K. Beswal are other Independent Directors under the Companies Act, 2013 and therefore, not liable to retire by rotation.

Messrs. A.K. Jatia, V.P. Leekha and S.K. Bansal are the non-independent Directors and will be liable to retire by rotation and accordingly Mr. A.K. Jatia retires by rotation and being eligible offer himself for re-appointment.

A Special Resolution has been proposed for appointment and remuneration payable to Mr. A.K. Jatia, whole-time Director designated as Executive Chairman of the Company for a period of 5 years with effect from 1st June, 2014.

Special Resolution has been proposed for re-appointment of Mr. V.P. Leekha as Managing Director of the Company for a period of 5 years with effect from 01.04.2014 and the remuneration and other perquisites and benefits payable to him for an initial period of 3 years.

Special Resolution has been proposed for re-appointment of Mr.S.K. Bansal as Whole-time Director of the Company for a period of 5 years with effect from 01.04.2014 and the remuneration and other perquisites and benefits payable to him for an initial period of 3 years. These resolutions are commended for your approval.

AUDITORS

Members are requested to appoint Statutory Auditors to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the 51st Annual General Meeting and to fix their remuneration.

STATEMENTS UNDER SECTION 217(1)(e) & 217(2A).

Statement giving details as required by the aforesaid provisions of the Companies Act, 1956 are annexed hereto and marked Annexure "A" & "B" respectively.

REPORT ON CORPORATE GOVERNANCE

The report on Corporate Governance in accordance with the guidelines of the Securities & Exchange Board of India and amended Clause 49 of the Listing Agreements with the Stock Exchanges is attached and marked Annexure "C".

On behalf of the Board of Directors,

A.K. Jatia

Chairman

Place :Mumbai,

Dated : 17th May, 2014