corporate information · 2014. 3. 13. · itc, pearson education (singapore) pte limited, shree...

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Corporateinformation

Directors Mr. G.P. Goenka

Chairman and Wholetime Director

Mr. Shiromani Sharma

Dr. B.L. Bihani

Mr. P.N. Ghatalia

Mr. Shrivardhan Goenka

Registered office 27, Biplabi Trailokya

Maharaj Sarani,

(formerly Brabourne Road)

Kolkata – 700 001

Mill Saharanpur – 247 001

(Uttar Pradesh)

Directors Mr. N.J. Jhaveri

Mr. Supriya Gupta

Mr. M.P. Pinto

Nominee of IDBI

Mr. Madhukar Mishra

Managing Director

AuditorsLodha and Company

Chartered Accountants, Kolkata

Bankers Bank of Baroda

Punjab National Bank

Registrar and sharetransfer agentsKarvy Computershare Private

Limited

Karvy House, 46, Avenue 4,

Street no.1, Banjara Hills,

Hyderabad-500034

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The year 2005-6 was toughfor Star Paper Mills. Toughfor employees. Tough forstockholders.But there is optimism toshare.We took a number ofinitiatives towards corporaterenewal that will strengthenour performance over thecoming years.

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Corporaterenewalthrough…

Strengthening ourindustry presence

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Streamlining our fiberprocurement

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Capitalising on ourmarketplace visibility

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Renewing our assets

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Against all odds

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There is no question that 2005-6

was an eventful year at Star Paper.

While we remained committed to

enhancing operational efficiencies

and improving our financial

performance, we clearly had our

share of challenges during the

financial year under review.

A runaway increase in raw material

prices on account of the rising

demand for wood, strengthening

crude prices, which in turn spiked

fuel oil prices and the shut of PM 2 –

our largest paper machine – for

retrofit, were the main contributors

to a downturn in our fortunes.

Star Paper succeeded in increasing

average product realisation by 7.5

per cent and was able to increase

gross turnover despite the handicaps

mentioned above.

However, these efforts were not

enough to offset the impact of

adverse factors and the net result

was a decline in the bottomline.

But for the stringent cost control

efforts, the situation could have

been a lot worse.

Although in the current year, I do

not foresee any respite from both

raw material and fuel oil prices, I will

take this opportunity to tell you why,

despite these challenges, I remain

optimistic about our future.

Our Rs. 85 cr modernisation and

expansion programme, to be

completed in 2006-7, will result in

improved performance down the

years. This programme envisages

investments that will not only

strengthen our efficiencies in

managing costs but also reinforce

our environmental commitment.

At Star Paper, we are optimistic that

the demand for the Company’s

products is expected to increase in

line with the country’s economic

growth, resulting in ample

opportunities for growth.

I seek your continued support in

facing the odds and scripting a

success story over the coming years.

Sincerely,

G.P. Goenka

Chairman and

Wholetime Director

Chairman’s statement

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Star Paper Mills is amongthe 15 largest virgin fiberpaper mills in India.

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PositioningStar Paper Mills Limited is an

integrated pulp and paper mill

located in Saharanpur, Uttar

Pradesh.

The Company possesses an

installed manufacturing capacity

of 75,000 tonnes per annum of

paper and paperboard.

It is a part of the Duncan Goenka

Group of companies.

PortfolioStar Paper possesses a rich

product portfolio comprising

industrial and cultural paper.

The Company manufactures a

diverse range of industrial paper –

absorbent kraft, poster ARSR and

ribbed kraft, among others.

It produces a variety of cultural

paper – various grades of

maplitho paper, MG cover paper

and business communication

paper (azurelaid and copier

variety).

PatronsStar Paper enjoys a pan-Indian

distribution network comprising

50 dealers.

The Company enjoys steady

business from reputable

customers comprising Century

Laminating, Eveready, Greenply,

Thomson Press, Hindustan Lever,

ITC, Pearson Education

(Singapore) Pte Limited, Shree

Krishna Paper and Thomson Press,

among others.

Pride-enhancingcertifications

Star Paper is recognised for its

product consistency, reflected in

its ISO 9001:2000 certification.

The Company’s environment

management is reflected in its

ISO-14001 certification.

It received the Greentech Award

in Environmental Excellence in

November 2005 and Greentech

Award for safety in paper

industries in April 2005.

Its energy conservation initiatives

were recognized through a

Certificate of Merit given by the

Indian Paper Manufacturers

Association.

Performance, 2005-6 Star Paper’s gross turnover

increased 3.02 per cent to

Rs. 218.36 cr.

The Company reported a 4.54 per

cent decline in its production to

67,875 MT.

Interest outflow declined 11.90

per cent to Rs. 5.55 cr.

Post-tax profit declined 53.99 per

cent to Rs. 9.28 cr.

PresenceStar Paper is listed on the Bombay

and National stock exchanges.

The Company’s market

capitalisation was Rs. 86.43 cr as

on 31 March 2006.

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“Our modernisation andexpansion plans areinitiatives towardscorporate renewal”

10-minutes with the Managing Director

Mr Madhukar Mishra, Managing Director, Star Paper Mills Limited, fields questions on the performance

of the Company in 2005-6 and shares his optimism for the future.

A number of investors andanalysts tracking Star PaperMills want to know the reasonsfor the decline in performancein 2005-6. There were a number of factors that

contributed to a decline in the

Company’s performance in 2005-6.

Foremost there was a steep

increase in wood prices due to a

sustained demand coming out of

the other regions and sectors.

Similarly there was a steep

increase in the global price of

crude oil, which led to a

corresponding increase in the cost

of fuel oil. Since Star is among

the few companies in the Indian

paper industry with a significant

dependence on fuel oil as

feedstock for power generation,

the Company was significantly

affected by this phenomenon.

Finally, the installation and hook-

up of the new equipment as a

part of the Company’s

modernisation programme

resulted in the plant being shut

for a certain period, resulting in

lower production.

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However, it is a credit to the

Company’s commitment that it

faced these challenges through

numerous initiatives.

What initiatives? We altered our product mix. As the

key input prices jumped manifold,

resulting in an increase of 40 per

cent in raw material cost in 2005-6,

we re-engineered our portfolio with

speed; we graduated towards the

manufacture of value-added varieties

of industrial paper and cultural

paper, which enhanced our

realisations.

And as our power and fuel costs

rose 23 per cent during the year

under review, we commissioned a

multi-fuel boiler to provide flexibility.

What was the status of theCompany’s Rs. 85 crmodernisation and expansionprogramme that was supposedto go on stream during 2005-6? We expect the programme to be

completed in 2006-7, which will

reflect in our performance in the

coming years.

The rebuild of PM 2, our largest, was

completed in July 2005. It would be

relevant to note that this rebuild was

ordered in 1994, the principal

vendor had ceased to be in business

after supplying part of the items but

we completed the rebuild and

enhanced our installed capacity

independently without support from

the principal vendor. Going ahead,

this rebuild will not only increase our

production but also enrich it; since it

will provide us with the ability to

produce writing and printing grades

that enjoy attractive value-addition.

The oxygen de-lignification system

that will be commissioned in August

2006 will help modernise the

Company’s bleaching process. This

two-stage process is being supplied

by Metso, Finland, the world leader

in pulp and paper technology.

Following its commissioning, we will

be able to improve pulp quality and

strengthen our compliance with the

emerging environmental standards.

For our power generation unit, the

original vendor on which the order

for the turbine had been placed was

unable to manufacture on schedule

or as per the ordered specifications.

As a result, the Company was

compelled to identify another vendor

and after the delay, the turbine is

likely to be commissioned by the end

of 2006-7. We have already installed

a new multi-fuel boiler and

upgraded the recovery boiler to

match the new turbine.

What initiatives has theCompany taken to ensure low-cost raw material availability?Apart from accelerating the

distribution of normal seedlings as a

part of our social forestry

programme, we are investing to

increase our clonal capacities, which

will result in a higher wood

availability from the same plantation

area. It will comfort shareholders to

know that clones released by the

Company received a favourable

response from the farmer

community, which will result in the

accelerated use of the seedlings and

enhance wood availability.

In addition, the Company established

a number of direct purchase points.

This will translate into two

advantages: it will reduce the

intermediaries in the supply chain

and it will enable the Company to

strengthen its presence at the grass-

roots level.

Stockholders will be keen toknow the larger trendstranspiring in the Indian paperindustry and how Star is placedto capitalise on them.The demand for paper is

continuously increasing, more so in a

rapidly expanding economy with

rising literacy levels. Star, with its

ability in the manufacture multiple

products, is ideally placed to exploit

this growth.

Going forward, how does theCompany expect to enhanceshareholder wealth? Despite a challenging 2005-6, we

have maintained the dividend at

Rs.1.75 per equity share. In addition

we expect to complete the

modernisation programme without

any equity dilution. As the benefits

of modernisation kick-in, share

owners can look forward to a better

financial performance by the

Company.

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Strengtheningour industry presence

Corporate renewal – 1

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Overview Even as India is home to the second

largest population in the world, its

per capita paper consumption is one

of the lowest in the world at around

6 kgs. India’s growing economy and

initiatives in the area of education

and literacy are expected to drive the

demand for paper significantly.

Business Standard estimates that an

increase in consumption of paper by

one kg per capita will lead to an

increase in demand of one million

tonnes.

Star Paper’s presence Star enjoys a strong presence in the

industrial and cultural paper

segments (2:1 product mix),

segments that experience buoyant

demand. The Company has

capitalised on every upturn in the

demand in these segments through

the provision of a wide range (28 –

230 GSM in industrial and 58 – 130

GSM in the writing and printing

varieties) and adequate availability.

Industrial: The Company’s strong

presence in industrial paper is

desirable for the following reasons:

In an expanding economy, the

demand for industrial paper rides

growing consumerism, increasing

disposable incomes, modern retail

formats and robust exports.

The Company’s location in North

India is advantageous as it is the

sole manufacturer of industrial

grade virgin paper in this region.

Its locational advantage results in

quick delivery, prompt service,

dependability and repeat orders.

Nearly 60 per cent of the

Company’s output is sold within a

radius of 300 kms of its factory.

Result: Star is among the three

leading paper mills in India to

manufacture industrial paper.

Cultural: Star strengthened its

presence in the cultural paper

segment following the rebuild and

commissioning of its PM 2, resulting

in an increased output of writing

and printing paper. This volume-

value strategy will enhance

profitability as the demand for

cultural paper is expected to remain

robust on account of the following

factors:

Increasing allocation by the

Central Government towards

education and literacy. For

instance, the Union Government

has enhanced the allocation for

education by 31.5 per cent to Rs.

24,115 cr in 2006-7.

India is cost competitive in

publishing and there is a trend

towards outsourcing from India.

This will further enhance demand.

Result: Star is among the 16 leading

virgin paper mills in India

manufacturing cultural paper.

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Renewingour assets


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OverviewStar was engaged in a major Rs. 85

cr asset rejuvenation programme in

2005-6. Once complete – all the

phases of the programme are

expected to be implemented by the

end of 2006-7 – the Company will

produce better quality of pulp on

the one hand and gain the capability

to manufacture high value-added

paper varieties on the other. In

addition, an increase in co-

generation capacity will reduce

energy cost.

Highlights, 2005-6The rebuild of PM 2 – possessing

the highest capacity among all

machines at Star – was completed

in July 2005. This will result in not

only higher production but the

ability to produce cultural grades.

The shutting of PM 2 for rebuild

caused a reduction in the output

by 4.5 per cent to 67,875 MT

over the previous year.

The commissioning of a multi-fuel

boiler and retrofit of turbine in

October 2005 helped reduce the

cost of turbine generated power.

The pulping process

improvements enabled the

Company to reduce the

consumption cost of chemicals

and dyes by 8.5 per cent to Rs.

21.21 cr in 2005-6.

Results, 2005-6Decline in capital cost per tonof production (Rs)

Decline incoal consumption (MT)

Outlook, 2006-7The Company installed the DCS

system to automate its washing

line and digesters in March

2006.This initiative will benefit

the Company in a number of

ways: generate pulp of consistent

quality leading to enhanced paper

brightness, productivity

improvement and lower chemical

consumption.

The commissioning of the oxygen

de-lignification line (ODL) by

August 2006 will enable the

Company to reduce chlorine

consumption, enhancing quality,

and strengthening Environmental

compliance with future standards.

The commissioning of a second 5

MW steam turbine in December

2006 will enable the Company to

utilise the process steam

efficiently and reduce energy cost.

The installation of modern stock

screening system in the pulp mill

by March 2007 will improve

quality and reduce power

consumption.

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Streamliningour fiber procurement


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Overview At Star, fiber costs jumped 40.11 per

cent to Rs. 46.73 cr in 2005-6, one

of the sharpest increases in recent

years. This increase in raw material

costs was the result of a number of

external developments:

Since paper mills located in other

parts of the country initiated

wood procurement from the

north, driving up costs.

A sharp jump in fuel prices led to

the increasing use of wood as

fuel.

Acute power shortages resulted in

State Governments offering

attractive purchase rates for the

supply of electricity by

independent power producers to

the grid, resulting in the increased

installation of steam turbines and

consequent reduced availability of

agri-residues.

With a view to mitigate the impact

of this scenario, Star has undertaken

a number of initiatives.

Highlights, 2005-6 The Company established new

purchase depots across Uttar

Pradesh to broadbase its raw

material procurement.

Bamboo was added to the farm

forestry programme.

As a part of the farm forestry

programme, the Company

increased distribution to 273 lacs

seedlings.

The Company stocked raw

material inventory to cover at

least 4.5 months of production,

as a result of which not a single

day of production was lost.

Results, 2005-6 Enhancing farm forestry (lac

seedlings)

Raw material costs as aproportion of turnover (gross)

Outlook, 2006-7The Company expects raw

material costs to stay firm in

2006-7.

The Company intends to enhance

the distribution of seedlings to

311 lac (eucalyptus, bamboo and

other varieties).

It also intends to establish a

nursery to nurture poplar plants.

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Capitalisingon our marketplace visibility


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Overview At Star, our market-centric initiatives

involved a strong element of service

to reach the right quantity at the

right time to the customer. An

outward-looking approach and

application-driven product

customisation enabled the Company

to report the highest net sales

realisations.

Highlights, 2005-6The Company reduced its finished

goods inventory by 603 MT

during 2005-6 partially offsetting

its production loss.

Average realisations increased

7.47 per cent to Rs. 27,583 per

MT on account of price increases

and product mix improvement.

Web-enabled customer service

enabled the Company to shrink

customer response time.

The Company enjoys a robust

distribution infrastructure of 50

pan-Indian dealers and three

depots with over half the dealers

located in the fast-growing

markets of Punjab, Delhi, Uttar

Pradesh and Haryana. This

locational advantage enabled the

Company to market nearly 60 per

cent of its total output within a

radius of 300 kms from its

manufacturing facility in West

Uttar Pradesh.

Strong debtor management

practices enabled the Company to

maintain its debtor days at an

unchanged 11 days of turnover

equivalent.

Results, 2005-6 Stronger net sales realisations (Rs. per tonne)

Declining debtor days

Outlook, 2006-7Following the rebuilding of PM 2,

the Company intends to enhance

volumes of high value-added

cultural grades.

It intends to fortify customer

delivery standards through its

technical services team.

It expects net sales realisations to

improve further.

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The global paper industryThe health of the global paper

industry is influenced by economic

growth, global trade, industrial

activity, corporate prosperity,

advertising, population growth,

literacy and demand-supply

dynamics.

While demand growth for writing

and printing paper remained modest

in the mature markets of Western

Europe and North America, the

markets of Asia, primarily driven by

China and India, reported a demand

surge. Demand for the packaging

grades also grew faster in the

developing economies compared to

the mature markets of North

America. As a result, the total global

demand for paper and paper

products is estimated to have grown

1 per cent to around 344 million

tonnes in 2005. The global paper

industry is expected to grow at a

compounded annual growth rate

(CAGR) of two per cent with a

consumption volume of 402 million

tonnes by 2010.

According to Jaakko Poyry, the

global trade of paper and board

amounts to 112 million tonnes,

accounting for 31 per cent of global

consumption. The principal exporting

regions comprised Central Europe,

Nordic countries and North America,

largely on account of the availability

of abundant wood fiber in these

regions and corresponding

production of paper and allied

products. Interestingly, demand for

paper is slowing in these mature

markets leading to increased export.

Europe, North America and Asia

represent the key paper markets of

the world. A brief description on the

performance of these markets in

2005 is highlighted below.

Europe: Production of writing and

printing paper in Europe is estimated

to have aggregated to 39.20 million

tonnes in 2005, while demand is

expected to have aggregated to

around 35 million tonnes. Europe

emerged as a net exporter of writing

and printing paper to the extent of

3.80 million tonnes in 2005,

signifying faster growth in

production over slower growth in

demand. Furthermore, the

production and demand for carton

boards in Western Europe was also

estimated to have de-grown by two

per cent apiece to six million tonnes

and 4.50 million tonnes respectively

in 2005.

North America: Production of

writing and printing paper totalled

28.20 million tonnes in North

America in 2005, unchanged from

2004. Total demand reached around

30.20 million tonnes, representing a

two per cent drop compared to

2004. This is a strong reflection on

Managementdiscussion andanalysis

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the fact that while production

remained the same in 2005, demand

dipped during the year under review.

Asia: The capacity for writing and

printing paper grew in Asia to the

extent of five per cent, primarily

driven by China and India. Total

demand in the region aggregated to

around 38 million tonnes, driven by

a four per cent rise over 2004.

Growth in demand was the fastest in

China, which surged by

approximately six per cent. Asia

emerged as the only continent

among the large paper producing

nations to have reported a growth in

both production and demand.

Global consumer packagingmarket by material

Source: Pira International

Global consumer packagingmarket by end-use

The Indian paper industry Estimated at Rs. 15,000 cr, the

Indian paper industry comprises the

writing, printing, industrial and

newsprint segments. Though India is

the fifteenth largest paper market in

the world (1.40 per cent of the

world’s paper and board

consumption and 4.70 per cent of

the Asian consumption), the

interesting point to note is that

demand for paper and allied

products in India is growing faster at

around six per cent compared to a

demand growth of about three per

cent the world over. The Indian

paper industry provides employment

to around 13 cr people and

contributes about Rs. 2,500 cr to the

exchequer.

A number of interesting trends are

driving the Indian paper industry,

briefly described below.

Slow capacity growth: The Indian

Wrap it up…

According to a recentstudy undertaken by PiraInternational, paper andboard emerged as the

globally-preferredpackaging material over

other varieties, indicatingrobust and sustainabledemand for paper andpaper-based products.

The Indian paperindustry providesemployment to around13 cr people andcontributes about Rs.2,500 cr to theexchequer

Source: Pira International

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installed paper manufacturing

capacity is expected to grow at a

compounded annual growth rate of

a mere 3.70 per cent to 8.75 million

tonnes per annum in 2008-09. This

growth in paper production is largely

expected to be a mix of de-

bottlenecking undertaken by

companies and brownfield

expansions. However, long gestation

period will result in slow pace of

capacity addition.

Demand rising: According to Jaako

Poyry, the demand for paper in India

is projected to grow at a

compounded annual growth rate of

6.10 per cent to an estimated 7.40

million tonnes in 2008-9. In terms of

various segments of paper, the

demand for:

Industrial paper (which enjoys the

largest chunk of the total paper

demand at around 60 per cent) is

estimated to grow at a

compounded annual growth rate

of 6.70 per cent.

Writing and printing paper

(accounting for 40 per cent of the

total paper demand) is expected

to grow at a compounded annual

growth rate of 5.50 per cent.

According to Jaakko Poyry, this

demand-supply mismatch is expected

to result in a supply shortage of

around 0.7 million tonnes in 2010.

Cost push and increase in

realizations: Paper prices in India

increased in tranches in 2005. This

was primarily driven by increasing

input cost. The cost of coal rose in

2005 (thereby inflating power and

fuel costs) and so did key chemicals.

Price increases were reflected in

other paper varieties as well

(newsprint, industrial paper and

coated paper among others).

Demand drivers The Budget 2005-6 increased the

total outlay under Sarva Siksha

Abhiyan from Rs. 1004 cr in

2005-6 to Rs. 7,156 cr in 2006-7

while Rs. 8,750 cr will be

transferred to Prarambhik Siksha

Kosh from the education cess. The

increased outlay for education will

drive demand and volumes for

writing paper. Besides, a cut in

excise duty on printing, writing

and packaging papers from 16

per cent to 12 per cent will

enhance affordability.

Growth in the domestic paper

industry mirrors the growth of the

Indian economy. While India’s

GDP grew 8.4 per cent in 2005-6,

domestic demand for paper and

paper products grew to nearly

6.30 million tonnes during the

same period. As per the Central

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According to JaakoPoyry, the demand forpaper in India isprojected to grow at acompounded annualgrowth rate of 6.10 percent to an estimated7.40 million tonnes in2008-9

Government estimates, the Indian

GDP is likely to grow by 8.10 per

cent in 2006-7, even as it aims to

achieve and economic growth of

10 per cent over the future. This

scenario is expected to accelerate

the production and consumption

of paper and paperboard.

The presence of a large number

of modern retail formats,

convenience stores and exclusive

outlets is prompting FMCG

players and consumer durables

and non-durables manufacturers

to provide innovative packaging

solutions. The growing popularity

of ready-to-eat products and

perishable foods is expected to

grow the demand of packaging

paper.

Variety-wise forecast of demand in India (‘000 tonnes)

Product portfolio analysis

*Change in ratio in 2005-6 is on account of shut of PM 2 for part of the year

Source: CRIS INFAC

Variety 2005-6 2006-7 2007-8 2008-9

Writing and printing paper 2292 2419 2555 2701

Uncoated paper 1975 2075 2182 2296

Coated paper 317 344 373 405

Industrial paper 3600 3841 4100 4379

Kraft 1968 2110 2263 2427

MG poster 305 310 315 320

Paper segment Percentage share Percentage share Percentage share

in 2003-4 in 2004-5 in 2005-6*

Industrial paper 66 66 55

Cultural paper 34 34 45

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Product portfolio analysisStar manufactures cultural and

industrial paper, the portfolio

highlighted in the table below:

Cultural paper: Cultural paper

comprises writing and printing

paper and business communication

paper. This variety is used for a

number of diverse applications in

diaries, calendars, books, maps,

computer stationery, book/

notebook covers, wedding and

invitation cards, photo-copying

paper, ledger paper and account

book paper among others.

Industrial paper: Industrial paper

constitutes absorbent kraft, padding

paper, base paper, kraft paper,

poster paper, poster ARSR and

ribbed kraft paper. The various

applications of industrial paper

comprises laminates, clay/ colour

coating, corrugated box paper, foil

lamination, wrapper/ pouches, files,

identity card , soap wrapper, fire

crackers, water-proofing, tobacco

packing and metallization among

others.

Risks and concerns Risk is inseparable from business.

Nonetheless, the Company has

undertaken a number of initiatives

to mitigate risk impact through

continuous risk identification and

management. The Indian paper

industry might face a slowdown,

resulting in sluggish demand and

slow offtake. This could impact the

profitability of companies operating

within the industry. Moreover, non-

availability of key raw material

resources may inflate procurement

costs, impact production and affect

profitability. Star enjoys robust asset

flexibility and a diversified product

mix, which enables it to

manufacture a range of products to

speedily cater to emerging

demands. This flexibility also enables

the Company to switch its raw

material mix in favour of those

which are available cost-effectively.

Internal control systemsStar has an adequate system of

internal control procedures

commensurate with its size of

operations, which enables

information dissemination and

facilitates speedy decision-making. A

compliance with functions,

processes and policies is periodically

appraised through internal audit.

Internal control systems are devised

to ensure the reliability,

transparency and accuracy of all

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financial records and statements.

Findings of the internal audit are

also forwarded to the Audit

Committee of the Board.

Human resourcesStar is strengthening its human

resource management practices,

which aim at the all-round

individual development. For

achieving this purpose, the

Company organises a number of

training sessions conducted by

trainers. It consistently seeks to

recruit, train and employ qualified,

capable and experienced

professionals with needed

competencies.

OutlookDespite being the second-most

populous country in the world

(population of over one billion),

India’s per capita paper

consumption is among the lowest in

the world at 6 kgs (as indicated in

the table). This represents

tremendous latent potential for the

growth in paper demand and

consumption in India.

Country/region Paper

consumption

(kg per capita)

USA 334

Japan 302

South East Asia 40

China 30

World average 53

India 6

Moreover within Asia, India is

expected to report the sharpest

demand growth on account of

increasing literacy levels, rising

corporate profitability, growing

population and increasing spending.

Estimates made by ICRA and IPMA

highlight the fact that by 2012 India

could be consuming more than 10

million tonnes of paper and paper

board.

Despite being thesecond-most populouscountry in the world,India’s per capita paperconsumption is amongthe lowest in the worldat 6 kgs

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Directors’ reportThe Directors present their report and audited accounts of the

Company for the financial year ended 31st March, 2006

Financial results(Rs. in crores)

Particulars Year ended 31st March, 2006 Year ended 31st March, 2005

Profit before interest and depreciation 30.01 44.90

Interest and finance charges (5.55) (6.30)

Depreciation (8.94) (7.36)

Profit before exceptional and non-recurring items 15.52 31.24

– Irrecoverable balances and pre-operative expenses written off – –

– Amount written off in respect of interest accrued (0.92) (0.98)

Profit before tax 14.60 30.26

Provision for Income Tax

– Current (2.06) (4.94)

– Deferred (3.26) (5.14)

Profit after taxation 9.28 20.18

Transfer to Debenture Redemption Reserve (1.50) (1.50)

Balance brought forward 27.65 13.61

Available for appropriation 35.43 32.29

Transfer to General Reserve (1.00) (1.55)

Proposed dividend (2.73) (2.73)

Tax on proposed dividend (0.38) (0.36)

Tax on dividend for earlier year (0.03) –

Balance carried to the Balance Sheet 31.29 27.65

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DividendThe Directors recommend payment

of a dividend of Rs. 1.75 per equity

share of a face value of Rs 10 each

for the year under review subject to

the necessary approvals.

The year in retrospectDuring the year your Company

completed modernization of Paper

Machine # 2, installation of Multi-

fuel Boiler and retrofit of Turbine.

While there was lower production

during the year due to plant shuts

required for completing these jobs,

your company will reap the benefits

in the form of increased production

and lower costs in the coming years.

As mentioned in the last Annual

Report, there were sharp increases in

prices of wood and fuel oil. Your

company made strenuous efforts to

control costs in all other areas and

was partially able to mitigate the

impact. These measures coupled

with improvement in realization

enabled the company to post a

profit of Rs. 928 lacs.

Prospects for 2006-07Upward trend in costs of raw

material and fuel continues. Your

company will strive to meet the

challenges by focusing on improved

efficiencies.

Implementation of other parts of

modernization project initiated last

year is progressing well and will be

completed during the current year.

Environment, pollutioncontrol and safetyYour company is accredited with ISO

14001: 2004 and ISO 9001:2000.

Its efforts in this field were once

again recognized in the form of a

Gold Award for Environmental

Excellence and also for Safety in

paper Industries from the Greentech

Foundation .

Social farm forestryIn order to increase the yield and

improve economics for the farmers,

your company started Clonal

technology programme in the year

1996. Two high yielding clones of

Eucalyptus have been developed and

based on encouraging field

performance, are being

commercialized. Your company has

created necessary infrastructure for

clonal multiplication and plans to

expand this in a phased manner.

This will help in enhancing rural

incomes and facilitate sustained

availability of raw material to the

Company.

In the face of rising wood prices,

your company has further enhanced

the tree plantation programme

under social forestry scheme.

Human resource andwelfare Industrial relations remained cordial.

Your Company continues to

emphasise enhancement in

employee skills. The Directors wish to

place on record their deep

appreciation for dedication of

employees.

Fixed depositsNo fixed deposits remained unpaid

as on 31st March, 2006.

DirectorsDr. S.P. Vohra has resigned from the

Directorship of the Company and

ceased to be a director of the

Company with effect from

November 29, 2005. The Board

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expresses its appreciation for the

services rendered by Dr. Vohra

during his tenure.

Mr. S. Sharma and Dr. B.L. Bihani

retire by rotation at the forthcoming

Annual General Meeting and being

eligible, offer themselves for re-

appointment.

Mr. Supriya Gupta was appointed

Additional Director of the Company

on February 27, 2006 and will hold

office till the forthcoming Annual

General Meeting. The company has

received notice from a member, as

required under section 257 of the

Companies Act, 1956, expressing his

intention to propose the

appointment of Mr. Supriya Gupta

as Director of the Company.

Particulars of conservationof energy, technologyabsorption and foreignexchange earnings andoutgoParticulars regarding energy

conservation, technology absorption

and foreign exchange earnings/outgo

pursuant to Section 217 (1)(e) of the

Companies Act, 1956, read with the

Companies (Disclosure of Particulars

in the Report of Board of Directors)

Rules, 1988, are furnished as

Annexure-I to this Report.

Particulars of employeesDetails of remuneration paid to

employees, as required by Section

217(2A) of the Companies Act, 1956

are furnished as Annexure-II to this

Report.

Directors’ responsibilitystatementAs required under the provisions of

Section 217(2AA) Directors

Responsibility Statement on the

preparation and presentation of

these accounts appears as Annexure-

III to this Report.

Corporate governanceA separate report on corporate

governance, together with a

certificate from the statutory auditors

confirming compliance with

corporate governance requirements

has been annexed as Annexure-IV of

this annual report.

AuditorsM/s Lodha & Co. Chartered

Accountants, retire at the ensuing

Annual General Meeting. They have

expressed their willingness to

continue in office, if re-appointed

and have furnished the requisite

certificate of their eligibility pursuant

to Section 224(1B) of the Companies

Act, 1956.

Auditors’ reportThe observations of the Auditors in

their report read with relevant notes

are self-explanatory and do not call

for any further comments.

Listing on stockexchangesThe Company’s equity shares are

currently listed with The Stock

Exchange, Mumbai (BSE) and

National Stock Exchange of India Ltd.

(NSE). The Company has paid the

requisite listing fees to the stock

exchanges for the financial year

2005-6.

AcknowledgementsThe Directors wish to place on record

their gratitude to the Company's

customers, dealers, suppliers, various

departments of the Government,

financial institutions and banks for

their continued support to the

Company.

For and on behalf of the Board

Place : Kolkata G. P. Goenka

Date : 29th May, 2006 Chairman

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Annexure-I Information pursuant to section 217

(1)(e) of the Companies Act-1956

,read with the Companies (

Disclosure of particulars in the

Report of Board of Directors )

Rules,1988.

A. Particulars with respectto conservation of energy.a) The Company has taken the

following measures for conservation

of energy:

Installation of 40 TPH steam

generation capacity and 42

kg/cm2 pressure Multi Fuel Boiler

and stopping 2 nos 21 TPH

existing 20 kg/cm2 pressure

boilers.

Retrofitting of existing 20 kg/cm2

pressure 5 MW BHEL turbine to

operate at 42 Kg/cm2 pressure

and increase co-generation of

power.

Installation of fan less cooling

tower in D.G.Sets.

Installation of energy efficient

Transformer.

Installation of steam and

condensate system for PM-2.


refiner for Paper Machines.

Installation of DCS in Pulp Mill.

b) Additional investments and

proposals, if any, being implemented

for reduction in consumption of

energy :

Installation of 5 MW turbine

further increase co-generation.

To Install Hot Stock Screening

system in Pulp Mill.

Installation of energy efficient FD

fan in Recovery Boiler


motors and VFDs.

c) Impact of measures (a) and (b)

above for reduction of energy

consumption and consequent impact

on the cost of production of goods.

Reduction in power generation

cost.

Reduction in power and steam

consumption.

Increased captive power

generation.

d) Total energy consumption and

energy consumption per unit of

production ( as per ‘Form-A’ of the

annexure to the rules)-annexed

B. Technology absorptionInformation as per Form ‘B’ of the

annexure to the rules – annexed.

C. Foreign exchangeearnings and outgoMembers are requested to refer to

note no. 20 (d), (e) and (f) of

schedule 16 forming part of balance

sheet and profit and loss account for

the year ended March 31, 2006.

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Form - AParticulars Current year ended Previous year ended

31st March, 2006 31st March, 2005

A. Power & fuel consumption

1. Electricity

a) Purchased

Units (Kwh in lakhs) 201.76 66.73

Total Amount (Rs. in lakhs) 860.02 350.02

Tariff Rate/Unit (Rs.) 4.26 5.24

b) Own Generation Through

i) Steam Turbine

Units (Gross) (Kwh in lakhs) 308.43 266.57

Units (Net) (Kwh in lakhs) 299.52 257.43

Units per MT of Coal (Kwh) 2188 1780

Cost/Unit (Rs.) 2.41 2.57

ii) Power Generating Sets

Units (Gross) (Kwh in lakhs) 413.98 521.05

Units (Net) (Kwh in lakhs) 392.57 496.81

Units per MT of Fuel Oil (Kwh) 4524 4524

Cost/Unit (Rs.) 4.61 3.44

2. Coal : Grade-A, B & C

Quantity (MT) 28852 28990

Total Cost (Rs. in lakhs) 1009.33 936.72

Average Cost (Rs./MT) 3498 3231

3. Agro Residue




4. Fuel Oil




B. Consumption per unit of production

Product - Paper (MT) 67875 71105

Electricity (Kwh) 1362 1202

Fuel Oils (MT) 0.211 0.211

Coal (MT) 0.43 0.41

Agro Residue (MT) 0.49 0.52

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Form - B

A. Research and development(R&D)The In-house R&D unit of the

Company is recognized by Govt. of

India, Ministry of Science and

Technology, Department of Science

and Industrial Research (DSIR). The

details of the In-house R&D activities

are given below:-

1.Specific areas in which in-house

R&D projects were carried out by

the Company.

(i) Studies on separate cooking of

Eucalyptus & Poplar wood.

(ii) Studied for Development of SS

Maplitho Ultra White.

(iii) Studies on manufacturing of

Special Kraft Paper.

(iv) Studies on

reduction/optimization of

Sizing Chemical consumption.

(v) Studies on NCG

2.Benefits derived as a result of

above R&D projects

(i) Commercial production of SS

Maplitho Ultra White.

(ii) Consumption of sizing

chemical optimized.

(iii) Studies on NCG completed.

3. Future Plan of Action

(i) Establishing AKD sizing on

PM-1.

(ii) Studies on development of

suitable surfactant based

cooking aid and its use for

further reduction of cooking

chemicals.

4. Expenditure on R&D

a)Capital Nil

b)Revenue Rs.21.26 lakhs

c) Total Rs21.26 lakhs

d)R&D expenditure 0.10%

as a percentage

of total turnover

B. Technology absorption,adaptation & innovation1. Efforts made, in brief, towards

Technology Absorption, Adaptation

and Innovation :

a) Up gradation Chemical Recovery

Boiler by increasing its operating

pressure from 20 Kg/Cm2 (g) to 42

kg/cm(g) to increase cogeneration

power from Steam Turbine also

increasing its firing capacity from

300 to 350 Black liquor solids .

b)Up gradation of Evaporator Plant

by increasing its product

concentration from 52% to 65%

and removal of cascade

Evaporators from Recovery Boiler

and installing economiser there for

increasing steam generation from

Recovery Boiler.

c) Installation of Bi-nip press in PM-2.

d) Retrofitting of steam and

condensate system for PM-2 by

installing rotary siphoning,

cascading and thermo

compression system.




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Ann

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Annexure-III Directors’ Responsibility Statement

As required under the provisions of Section 217(2AA) of the Companies Act, 1956 the Board wishes to confirm that:

1. in preparation of accounts applicable accounting standards have been followed.

2. such accounting policies as were reasonable and prudent were selected in preparing the accounts and these were

applied consistently. Further judgments and estimates that were reasonable and prudent were also made in the course of

preparing the accounts so as to give a true and fair view of the Company’s state of the affairs as at the end of the financial

year and its profit for the year ended 31st March, 2006.

3. proper and sufficient care was taken for the maintenance of proper accounting records in accordance with the

provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting

frauds and other irregularities;

4. the accounts have been prepared on going concern basis.




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Annexure-IV

Report on Corporate Governance(Pursuant to Clause 49 of the Listing Agreement)

The following is the composition of the Board of Directors as on 31st March, 2006

* Excludes Directorships in Indian Private Limited Companies, Foreign Companies, Companies under Section 25 of the Companies Act,

1956, memberships of Managing Committees of various Chambers/Bodies and Alternate Directorships.

** Represents Memberships / Chairmanships of Audit Committee, Shareholders / Investors Grievance Committee, Remuneration

Committee of Indian Companies.

*** Dr. S.P. Vohra ceased to be director of the Company w.e.f. 29th November, 2005.

**** Mr. Supriya Gupta joined as an additional director w.e.f. 27th February, 2006.

The Directors present the Company’s

Report on Corporate Governance for

the year ended 31st March, 2006.

I. Company’s philosophyon Corporate GovernanceThe Company places strong

emphasis on transparency,

empowerment, accountability and

integrity so as to continuously

enhance the stakeholders’ value.

II. Board of DirectorsIn terms of the Company’s Corporate

Governance Policy, all statutory and

other significant and material

information are placed before the

Board to enable it to discharge its

responsibilities of supervision, control

and direction setting for the

organisation.

(a) CompositionThe composition of the Board of

Directors consists of Executive and

Non-Executive Directors.

The total number of directors of the

Company is Ten during the year

under review, including the Whole-

Time Director and Managing

Director.

Director Category of Director Total No. of Total No. of Memberships/

Directorships (*) Chairmanships of

Committees (**)

Executive Director

Mr. G.P. Goenka Chairman cum 11 0

Whole-Time Director

Mr. Madhukar Mishra Managing Director 2 1

Non – Executive Directors

Dr. B.L. Bihani Independent Director 1 2

Mr. P.N. Ghatalia Independent Director 8 11

Dr. S.P. Vohra *** Independent Director 4 2

Mr. Shiromani Sharma Independent Director 4 5

Mr. S.V. Goenka Promoter Director 9 2

Mr. N.J. Jhaveri Independent Director 10 9

Mr. Supriya Gupta **** Independent Director 11 10

Mr. M.P. Pinto Independent Director 3 3

– Nominee of IDBI

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(b) Meetings and AttendanceDuring the year ended 31st March, 2006, four meetings of Board of Directors were held on 30th May, 2005, 29th

August, 2005, 30th November, 2005 and 27th February, 2006.

Attendance of Directors at Board Meetings and at Last Annual General Meeting

Director (Name) No. of Board Meetings Attendance at last

attended Annual General Meeting

Yes or No

Mr. G.P. Goenka 4 Yes

Dr. S.P. Vohra 0 No

Mr. Shiromani Sharma 4 Yes

Dr. B.L. Bihani 4 Yes

Mr. P.N. Ghatalia 4 Yes

Mr. M.P. Pinto 3 Yes

Mr. S.V. Goenka 4 Yes

Mr. N.J. Jhaveri 2 No

Mr. Supriya Gupta – N.A.

Mr. M. Mishra 4 Yes

(III) Code of ConductA Code of Conduct for all its Board

Members and Senior Management

personnel for avoidance of conflict of

interest has been laid down and is

available on the Company's website.

Necessary declarations affirming

compliance has been received with it

during the period since it became

effective. There were no material

personal interest/ personal benefits

received by the Board Members/

Senior Management personnel,

which could lead to potential conflict

of interest with the Company as a

result of their position.

(IV) Committees of theBoard The Board of Directors has

constituted two Committees – the

Audit Committee and the

Shareholders/ Investors Grievance

Committee.

(i) Audit Committee The Company set up the Audit

Committee in accordance with the

requirements of section 292A of the

Companies Act, 1956 and the terms

of reference are in conformity with

clause 49 of the listing agreement

entered into with the stock

exchanges. Statutory Auditors,

Internal Auditors and Cost Auditors

are invitees to the Committee

meetings. The Company Secretary

acts as the Secretary to the

Committee. However, the Company

Secretary has resigned with effect

from 10th December, 2005 and till

the time a new Company Secretary is

appointed, Chief Financial Officer of

the Company is acting as Secretary

to the Committee.

Composition

The composition of the Audit

Committee as on 31st March, 2006

is on the following page:

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# Salary also includes allowances, Performance Pay and Commission on net profits.

## Perquisites and other benefits include contribution to Provident and other funds but exclude company’s contribution to

Gratuity Fund.

The non-executive directors are not holding any shares in the company except 500 Equity shares held by

Mr. S.V. Goenka .

Apart from the above, none of the Non-Executive Directors had any pecuniary relationship or transactions with the

Company.

In Rupees

Director Salary # Perquisites and Sitting Fees Total

other benefits##

Mr. G.P. Goenka 6760000 476676 – 7236676

Dr. S.P. Vohra – – – –

Mr. Shiromani Sharma – – 50000 50000

Dr. B.L. Bihani – – 55000 55000

Mr. P.N. Ghatalia – – 20000 20000

Mr. M.P. Pinto – – 20000 20000

Mr. S.V. Goenka – – 25000 25000

Mr. N.J. Jhaveri – – 10000 10000

Mr. M. Mishra 2695000 1643754 – 4338754

Total 9455000 2120430 180000 11755430

(ii) Shareholders/InvestorsGrievance Committee The Committee oversees redressal of

shareholder and investor grievances,

like transfer of shares, non-receipt of

Annual Report, dividends and

approves of sub-division,

transmission, issue of duplicate

shares etc.

Composition

In 2005-6, the composition of the

Committee was as under :

Name of Category

the Director

Mr. Shiromani Non- Executive

Sharma, Chairman

Dr. B.L. Bihani Non-Executive

Mr. Madhukar Executive

Mishra

(V) Remuneration ofDirectors Remuneration of Managing Director

and Whole-Time Director were

determined by the Board of

Directors. Remuneration of Non-

Executive Directors was restricted

to only sitting fees for attending

meetings of the Board, Audit

Committee and Shareholders/Investor

Grievance Committee meetings.

The details of remuneration of the

directors for the financial year ended

31st March, 2006 were:

The Audit Committee meetings were held on 30th May, 2005, 29th July, 2005, 28th October, 2005 and 30th January,

2006.

Sl. No. Name of the Director Designation No. of Meetings attended

1. Mr. Shiromani Sharma Chairman 4

2. Dr. B.L. Bihani Member 4

3. Mr. M. P. Pinto Member 1

4. Mr. Shrivardhan Goenka Member 1

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Service contracts, severancefees and notice periodThe appointment of the Executive

Directors is governed by resolutions

passed by the Board of Directors and

the shareholders of the Company,

which covers the terms and

conditions of such appointment.

There is no separate provision for

payment of severance fee under the

resolutions governing the

appointment of Executive Director.

Statutory provisions however will

apply in case of severance of service.

The appointment is terminable by six

months’ notice from either side.

(VI) DisclosuresThere were no materially significant

related party transactions which may

have potential conflict with the

interest of the company at large.

Confirmations has been placed

before the Audit Committee and the

Board that all related party

transactions during the year under

reference were in the ordinary course

of business and on arm's length

basis. There was no non-compliance

during the last three years by the

company on any matter relating to

the Capital Markets. There were no

penalties, strictures passed on the

Company by stock exchanges/SEBI or

any Statutory Authority. There were

no pecuniary relationships or

transactions with Non-Executive

Directors. The Company does not

have any material non-listed

Subsidiary Companies as defined in

Clause 49 of the Listing Agreement

with Stock Exchanges.

(VII) Means ofcommunicationThe quarterly results of the Company

were announced within a month of

the end of each quarter and the

audited results were announced

within three months of the close of

the financial year; such results were

published normally in the ‘The

Financial Express’, ‘Business

Standard’, ‘The Economic Times’,

and ‘Aajkal’. The Management

Discussion and Analysis Report forms

part of the Annual Report. The

financial results of the Company is

provided to the web site

www.starpapers.com.

Compliance certificate of theAuditorsThe Company has obtained

certificate from the statutory auditors

certifying compliance of conditions

of corporate governance as

stipulated in Clause 49 of the listing

agreement and the same is annexed.

The certificate will also be sent to the

stock exchanges along with the

Annual Return that will be filed by

the Company.

(VIII) Shareholder Information68th AGM Details

Date Venue Book Closure Time Dividend Payment

dates dates

6th September, 2006 ‘KalaKunj’ 24.08.2006 to 06.09.2006 10.30 A.M. After 06.09.2006

(Kalamandir basement),

48, Shakespeare Sarani,

Kolkatta 700 017

36

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Registrar & Share TransferAgentsThe Company’s Registrar and Share

Transfer Agent is Karvy

Computershare Pvt. Ltd.

Address for correspondence Karvy House,

46, Avenue 4, Street No. 1,

Banjara Hills, Hyderabad 500 034

Telephone : 0091-040-23312454 /

23320751 / 23320752 / 23320251

Fax : 0091-040-23311968/23323049

e-mail : [email protected]

The Shareholders holding shares in

the electronic form should address

their correspondence, except those

relating to dividend, to their

respective Depository Participants.

Compliance OfficerMr A. Ghosh, Chief Financial Officer

is the Compliance Officer under

Clause 47 of the listing agreement.

Transfer System The Registrars and Share Transfer

Agents process every fortnight

requests for approving share

transfers. The processing activities

with respect to requests received for

share transfer are completed within

7-10 days from the date of receipt of

request.

There were no shares pending

transfer as on 31st March, 2006.

Dematerialisation of Shares andLiquidityThe shares of the Company can be

traded in dematerialised form with

both NSDL (National Securities

Depository Ltd.) and CDSL (Central

Depository Services (India) Ltd.)

As on 31st March, 2006, a total of

1,43,74,307 shares of the company,

which form 92.09% of the share

capital, stand dematerialised. The

processing activities with respect to

the requests received for

dematerialisation are completed

within 3-5 days from the date of

receipt of request.

Under the depository system, the

International Securities Identification

Number (ISIN) allotted to the

company is INE 733A01018.

Shareholders ComplaintsThere was no complaints pending at

the begining of the year. 9 (nine)

complaints were received during the

year 2005-06 and settled. No

complaint is pending at close of the

year.

Distribution of shareholding as on March 31, 2006

No. of shareholders No. of ordinary shares

Slab Total % of shareholders Total % of share capital

1-500 10960 90.09 1446727 9.27

501-1000 626 5.15 522854 3.35

1001-2000 299 2.46 465555 2.98

2001-3000 86 0.71 221946 1.42

3001-4000 41 0.34 145759 0.94

4001-5000 33 0.27 154133 0.99

5001-10000 49 0.40 365530 2.34

10001 and above 71 0.58 12285846 78.71

Total 12165 100.00 15608350 100.00

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Monthly high and low quotations of shares traded on the listed stock exchanges

Category of shareholders as on 31st March, 2006

Category No. of Shares %

Foreign Holding 35000 0.23

Overseas Body Corporate 500 0.00

Non resident Indians 62901 0.40

Financial Institutions 1990177 12.76

Banks and Mutual Funds 5191 0.03

Promoter Group 8381993 53.70

Clearing Member (NSDL & CDSL) 84808 0.54

Public 5047780 32.34

Total 15608350 100.00

Month NSE BSE

High Low High Low

2005

April 63.70 57.15 63.85 51.10

May 74.90 61.00 75.00 61.00

June 72.95 64.75 71.90 64.50

July 69.90 62.00 69.75 63.05

August 87.40 61.50 87.00 61.35

September 123.70 85.00 118.70 85.20

October 102.80 72.20 102.90 69.00

November 86.90 61.15 90.00 69.95

December 88.80 72.00 87.50 73.15

2006

January 91.90 73.25 91.90 73.40

February 76.80 64.05 74.85 64.20

March 70.00 54.25 70.00 56.50

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Listing on stock exchangesThe Company’s Equity Shares are

currently listed with the Stock

Exchange, Mumbai (BSE) and the

National Stock Exchange of India Ltd.

(NSE) under Stock Codes ‘516022’

and ‘STARPAPER’ respectively. The

Company has paid the requisite

listing fees to the stock exchanges

for the financial year 2006-2007.

Registered office27, Biplabi Trailokya Maharaj Sarani,

(Formerly Brabourne Road),

Kolkata 700 001

Plant locationSeth Baldeodas Bajoria Road,

Saharanpur 247 001, Uttar Pradesh

Branches ati) IInd Floor, Express Building,

9-10 Bahadur Shah Zafar Marg,

New Delhi 110 008

ii) 23, Mauji Colony, Malviya Nagar

Jaipur 302 017

Financial Calendar 2006-2007 The next financial year of the

Company is 1st April, 2006 to 31st

March, 2007

Apr’05 May’05 Jun’05 Jul’05 Aug’05 Sep’05 Oct’05 Nov’05 Dec’05 Jan’06 Feb’06 Mar’06

Star

Pap

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crip

(Rs.

)

Star Paper Scrip

BSE Sensex

BSE Sensex

0

3000

6000

9000

12000

15000

18000

21000

24000

0

20

40

60

80

100

120

140

The Schedule of approving the Financial Results of the Company is given below:

Postal BallotNo special resolution requiring a postal ballot was placed before the last Annual General Meeting. Similarly, no special

resolution requiring a postal ballot is being proposed at the forthcoming Annual General Meeting.

Particulars of Past three AGM’s

S. No. Financial Results Month for approving the Results ( Tentative)

1. First quarter results July

2. Second quarter and half yearly results October

3. Third quarter results January

4. Annual results June

Year Venue Date Time

2004-2005 ‘Kala Kunj’, 48, Shakespeare Sarani, 29.08.2005 10.30 A.M.

Kolkata 700 017

2003-2004 ‘Kala Mandir’(Main Auditorium), 31.08.2004 10.00 A.M.

48, Shakespeare Sarani, Kolkata 700 017

2002-2003 ‘Kala Kunj’, 48, Shakespeare Sarani, 08.09.2003 10.30 A.M.

Kolkata 700 017

Comparison of Star Paper scrip with Mumbai Stock Exchange (BSE) Sensex

2005-6

39

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Auditors’ Certificate on Corporate Governance

To the Members of,

Star Paper Mills Limited

We have examined the compliance of conditions of Corporate Governance by Star Paper Mills Limited, for the year ended

on 31st March, 2006, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in

India.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was

limited to procedures and implementations thereof, adopted by the Company for ensuring the compliance of the

conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the

Company.

In our opinion and to the best of our information and according to the explanation given to us, we certify that the

Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing

Agreement.

We further state that no investor grievance is pending for a period exceeding one month against the Company as per

records maintained by the shareholder/ Investor Grievance Committee.

We further state that such compliances is neither an assurance as to the future viability of the Company nor the efficiency

or effectiveness with which the management has conducted the affairs of the Company.

For Lodha & Co

Chartered Accountants

HK Verma

Place: Kolkata Partner

Date: 29th day of May, 2006 Membership No. 55104

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Financial section

41

We have audited the attached Balance Sheet of Star Paper MillsLimited as at 31st March 2006 and also the Profit and Lossaccount and the cash flow statement for the year ended onthat date annexed thereto. These financial statements are theresponsibility of the Company's management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing theaccounting principles used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order,2003 ('the order') issued by the Central Government ofIndia in terms of sub-section (4A) of section 227 of theCompanies Act, 1956 and in terms of the information andexplanations given to us and also on the basis of suchchecks as we considered appropriate, we state that:

I. Fixed Assetsa. The Company has maintained proper records showing

full particulars including quantitative details andsituation of fixed assets.

b. All the assets have not been physically verified by themanagement during the year but there is regularprogramme of verification, which, in our opinion, isreasonable having regard to the size of the Companyand the nature of its assets. There were no materialdiscrepancies with regard to book records in respectof the assets verified during the year.

c. During the year, the Company has not disposed off asubstantial part of its fixed assets.

II. Inventorya. The inventory has been physically verified by the

management at regular intervals during the year. Inour opinion and according to the information andexplanations given to us, the frequency of verificationis reasonable.

b. In our opinion, the procedure for the physicalverification of the inventory followed by the

management is reasonable and adequate in relationto the size of the Company and the nature of itsbusiness.

c. The Company is maintaining proper records ofinventory. As explained to us, discrepancies noticedon physical verification of inventory were not material.

III. Loans, secured or unsecured, granted or taken by theCompany to/from companies, firms or other partiescovered in the register maintained under Section 301 ofthe Companies Act, 1956:

a. The Company has granted unsecured loans to threecompanies. The maximum amount and year-endbalance of such loans were Rs 1564.26 lacs andRs.1343.85 lacs respectively.

b. In respect of loan referred to in Note 7(b) of Schedule16, the principal and interest thereon are repayableafter repayments to Financial Institutions. Other thanthis, in respect of loans given by the company, therate of interest and other terms and conditionsthereof are not prima facie prejudicial to the interestof the Company.

c. There is no overdue amount of loans taken by orgranted to the Company except in case of loansgranted by the company as stated in note 7(b) ofschedule 16 and Rs. 22 lakhs from one of the bodycorporates.

d. Steps for recovery except in cases of loans of Rs.1200lacs and interest there on, where reference has beenmade to BIFR and recovery will be dependent uponrevival scheme to be formulated /sanctioned by BIFR,has been taken.

e. The Company has taken unsecured loan from oneCompany. The maximum amount during the year ofsuch loan was Rs.51.65 lacs and the amountremaining unpaid at the year- end was Rs.1.65 lacs.

f. The loan taken by the Company is free of interest andis not due for repayment at the year-end.

g. There is no overdue amount of the principal repayableat the year end.

IV. In our opinion there are adequate internal controlprocedures commensurate with the size of the Companyand the nature of its business with regard to purchases ofinventory, fixed assets and with regard to the sale of goodsand services. During the course of our audit, no major

To The Members of Star Paper Mills Limited

Auditors’ Report

42

STAR PAPER MILLS LIMITED

weakness has been noticed in the internal controls.

V. Transaction covered under Section 301 of the CompaniesAct, 1956a. According to the information and explanations given

to us there are no transactions during the year, whichare required to be entered into the registermaintained under Section 301 of the Companies Act,1956.

b. Accordingly, the provisions of clause v (b) of the Orderare not applicable to the Company.

VI. In our opinion and according to the information andexplanations given to us, the Company has complied withthe provisions of Section 58A and 58AA or any otherrelevant provision of the Companies Act, 1956 and theCompanies (Acceptance of Deposits) Rules, 1975 withregard to deposits accepted from the public.

VII. In our opinion and according to the information andexplanations given to us, the Company has an internalaudit system commensurate with the size of the Companyand nature of its business.

VIII.We have broadly reviewed the books of accountmaintained by the Company pursuant to the Rules madeby the Central Government for the maintenance of costrecords under Section 209 (1) (d) of the Companies Act,1956 in respect of the Company's product to which thesaid rules are applicable and are of the opinion that primafacie the prescribed records have been made andmaintained. We have not, however, made a detailedexamination of the said records.

IX. Statutory Duesa. According to the records of the Company, the

Company is generally regular in depositing withappropriate authorities undisputed statutory duesincluding Provident Fund, Investor Education andProtection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom Duty,Excise Duty, Cess and other statutory dues applicableto it. According to the information and explanationsgiven to us, no undisputed amounts payable inrespect of aforesaid dues were outstanding, as at 31stMarch 2006 for a period of more than six monthsfrom the date they became payable.

X. The Company does not have any accumulated losses. TheCompany has not incurred any cash losses during thefinancial year covered by our audit and the immediatelypreceding financial year.

XI. Based on our audit procedures and on the informationand explanations given by the management, we are ofthe opinion that during the year the Company has notdefaulted in repayment of dues to financial institutions,bank or debenture holders.

XII. Based on our examination of documents and records andaccording to information and explanations given to us,we are of the opinion that the Company has not grantedloans and advances on the basis of security by way ofpledge of shares, debentures and other securities.

XIII. In our opinion, the Company is not a chit fund or a nidhimutual benefit fund / society. Accordingly, theprovisions of clause 3 (xiii) a to d of the Order are notapplicable to the Company.

b. According to the records of the Company and according to the information and explanation given to us by themanagement, the details of disputed statutory dues are as below:

Name of the Statute Nature of Forum where dispute Period to which Amount

the Dues is pending the amounts relate (Rs. in Lacs)

(Financial Year)

The Central Excise Duty Supreme Court 2002-03, 2003-04 4.68

Excise Act, 1944 High Court, Kolkata 1982 5.68

CESTAT 1989-99 3.21

The Uttar Pradesh Sales Tax High Court at Allahabad 1980-81, 1986-1989 75.83

Trade Tax Act, 1948 Trade Tax Tribunal 2000-01 1.68

The Central Sales Tax High Court at Allahabad 1995-1996 18.80

Sales Tax Act, 1956 Trade Tax Tribunal 1996-97 8.59

The Delhi sales Tax Act. Sales Tax Assistant Commissioner 2002-03 2.09

43

XIV. In our opinion, the Company is not dealing in or tradingin shares, securities, debentures and other investments.Accordingly, the provisions of clause 3 (xiv) of the Orderare not applicable to the Company.

XV. The Company has not given guarantees for loans takenby others from bank or financial institutions.

XVI. The Company has utilized the term loan for the purposefor which they were raised.

XVII. On an overall examination of the balance sheet of theCompany, we are of the opinion that no funds raised onshort- term basis have been used for long-terminvestment.

XVIII.The Company has not made any preferential allotment ofshares to parties and companies covered in the registermaintained under Section 301 of the Companies Act,1956.

XIX. The Company has created security in respect ofdebentures issued.

XX. The Company has not raised money by public issuesduring the year.

XXI. Based upon the audit procedures performed andinformation and explanations given by themanagement, we report that no fraud on or by theCompany has been noticed or reported during thecourse of our audit.

2. Attention is invited to notes (i) 7(b) of schedule 16,regarding certain overdue loans including interestthereon, in respect of which revenue recognitionshortfall and their impact, being currently notascertained have not been recognised in theseaccounts and as such cannot be commented uponby us; (ii) Non provision of dimunition in value ofinvestments as given in Note 9 of Schedule 16, theimpact whereof though likely to be material, inabsence of an independent valuation as such ispresently not ascertainable.

3. Further to above, we report that:

(i) We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit;

(ii) In our opinion, proper books of account asrequired by law have been kept by the

Company so far as appears from ourexamination of those books;

(iii) The balance sheet, profit and loss account andcash flow statement dealt with by this reportare in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit andloss account and cash flow statement dealtwith by this report comply with the accountingstandards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956;

(v) On the basis of information available with theCompany and written representations receivedfrom the directors, and taken on record by theBoard of Directors, we report that none of thedirectors is disqualified as on 31st March 2006from being appointed as directors in terms ofsection 274(1) (g) of the Companies Act 1956;

(vi) In our opinion and to the best of ourinformation and according to the explanationsgiven to us, the said accounts subject toparagraph 2 above the impact of which couldnot be ascertained and read together withnotes thereon give the information required bythe Companies Act, 1956, in the manner sorequired and give a true and fair view inconformity with the accounting principlesgenerally accepted in India:

a) in the case of the balance sheet, of thestate of affairs of the Company as at 31stMarch 2006;

b) in the case of the profit and loss account,of the profit for the year ended on thatdate; and

c) in the case of the cash flow statement, ofthe cash flows for the year ended on thatdate.

For Lodha & Co.,Chartered Accountants

H. K. VermaPlace: Kolkata Partner

Date: 29th day of May 2006 Membership Number: 55104

44


Balance SheetAs at March 31, 2006

(Rs. in Lakhs)Schedule 31.3.2006 31.3.2005

I. SOURCES OF FUNDS

Shareholders' Funds

Share Capital 1 1560.83 1560.83

Reserves and Surplus 2 9111.91 8497.73

10672.74 10058.56

Loan Funds

Secured Loans 3 6441.30 4397.27

Unsecured Loans 4 9.81 70.18

6451.11 4467.45

Deferred tax Liabilities(Net) 2267.89 1941.80

19391.74 16467.81

II. APPLICATION OF FUNDS

Fixed Assets 5

Gross Block 20566.10 17229.58

Less: Depreciation 7639.95 6747.37

Net Block 12926.15 10482.21

Capital Expenditure in Progress 1342.35 1369.15

14268.50 11851.36

Investments 6 2107.21 1935.21

Current Assets, Loans and Advances

Inventories 7 3578.63 3199.00

Sundry Debtors 8 663.99 638.01

Cash and Bank Balances 9 133.91 114.08

Loans and Advances 10 2866.48 3115.27

7243.01 7066.36

Less: Current Liabilities and Provisions 11 4226.98 4385.12

Net Current Assets 3016.03 2681.24

19391.74 16467.81

Accounting Policies and Notes to the Accounts 16

The Schedules referred to above form part of the Balance Sheet

For Lodha & Co. On behalf of the BoardChartered accountants

H. K. Verma G P Goenka M P PintoPartner Chairman and Shiromani SharmaMembership No. 55104 Whole-Time Director P N Ghatalia

Shrivardhan GoenkaPlace: Kolkata Madhukar Misra Supriya GuptaDated: 29th May, 2006 Managing Director Directors

45

Profit and Loss AccountFor the year ended March 31, 2006

(Rs. in Lakhs)Schedule 31.3.2006 31.3.2005

INCOMESales (Gross) 21836.11 21195.78Less: Excise Duty 3044.69 3037.49Sales (Net) 18791.42 18158.29 Other Income 12 397.59 437.20

19189.01 18595.49 EXPENDITUREDecrease/(Increase) in Stocks 13 127.71 (141.46)Raw Materials Consumed 4672.72 3334.83 Manufacturing, Administrative and Selling Expenses 14 11387.16 10911.78 Interest and Finance Charges(Net) 15 555.43 630.31

16743.02 14735.46Profit before Depreciation 2445.99 3860.03Depreciation 893.95 736.36 Profit before Exceptional and Non-recurring Items 1552.04 3123.67– Amount written off in respect of loan and Interest accrued (91.68) (98.03)Profit before tax 1460.36 3025.64Provision for Income Tax– Fringe Benefit Tax 16.00– Current 190.00 493.74 – Deferred 326.09 514.26

532.09 1008.00Profit after Tax 928.27 2017.64Profit brought forward 2765.15 1361.36 Profit available for Appropriation 3693.42 3379.00AppropriationsProposed Dividend 273.15 273.15 Tax on Proposed Dividend 38.32 35.70 Tax on Dividend for earlier years 2.62 –Transfer to Debenture Redemption Reserve 150.00 150.00 Transfer to General Reserve 100.00 155.00 Balance Carried To The Balance Sheet 3,129.33 2,765.15

3693.42 3379.00 Basic & Diluted earning per Share (Rs.) 5.95 12.93 (Equity Shares of Face Value of Rs. 10 each)Number of shares used in computing earning per Share

Basic & Diluted 15608350 15608350Accounting Policies and Notes to the Accounts 16

This is the Profit & Loss Account referred to in our Report of even date




46


Cash Flow StatementFor the year ended March 31, 2006

(Rs. in Lakhs)31.3.2006 31.3.2005

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit/(Loss) before Tax 1,460.36 3,025.64

Adjustments for:

Depreciation 893.95 736.36

Loss/(Profit) on sale of Fixed Assets (9.65) (52.28)

Dividend Income (4.41) (10.16)

Interest and Finance Charges (Net) 555.43 630.31

Loss/(Profit) on sale of current investments – (0.27)

Cash Flow Before Extra-Ordinary Items 2,895.68 4,329.60 Irrecoverable advance/interest written off 91.68 98.03

Operating Profit before Working Capital Changes 2,987.36 4,427.63Adjustments for:

Trade and Other Receivables 113.44 (50.59)

Inventories (379.62) (333.93)

Trade and Other Payables (75.02) 786.45

Cash generated from Operations 2,646.16 4,829.56

Income Tax Paid (232.30) (574.26)

Net Cash from Operating Activities 2,413.86 4,255.30B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (3,482.17) (2,736.34)

Purchase of Investment (172.00) –

Sale of Fixed Assets 9.71 69.18

Profit on sale of Investments 0.00 0.27

Dividend 4.41 10.16

Interest Income 92.85 156.44

Net Cash from Investing Activities (3,547.20) (2,500.29)C. CASH FLOW FROM FINANCING ACTIVITIES

Long Term Borrowings 884.02 (1,064.48)

Short Term Borrowings 1,185.06 (234.71)

Dividend Paid (307.57) (260.50)

Interest paid (608.34) (775.47)

Net Cash from Financing Activities 1,153.17 (2,335.16)Net Increase/(Decrease) in Cash and Cash Equivalents 19.83 (580.15)Cash and Cash Equivalents at the begining of the year 114.08 694.23 Cash and Cash Equivalents at the end of the year 133.91 114.08




47

Schedules to the AccountsAs at March 31, 2006 (Rs. in Lakhs)

31.3.2006 31.3.2005

1 SHARE CAPITAL

Authorized 10,000 5% Cumulative Tax Free Redeemable Preference Shares of Rs.100 each 10.00 10.003,98,00,000 Equity Shares of Rs.10 each 3980.00 3980.001,00,000 À' Equity Shares of Rs.10 each 10.00 10.00

4000.00 4000.00Issued

1,55,11,250 Equity Shares of Rs.10 each 1551.12 1551.121,00,000 À' Equity Shares of Rs.10 each 10.00 10.00

1561.12 1561.12Subscribed & Paid-up

1,55,08,350 Equity Shares of Rs.10 each fully paid-up (including 8,96,875 EquityShares allotted as fully paid-up Bonus Shares by capitalization of Reserves) 1550.83 1550.831,00,000 À' Equity Shares of Rs.10 each fully paid-up 10.00 10.00

1560.83 1560.83

2 RESERVES AND SURPLUS

Capital ReserveRevaluation Reserve (as per last account) – 5747.38Less: Adjustment in respect of fixed assets sold/discarded (Net) – –

– 5747.38Less: Transfer to Profit and Loss Account – 0.00

– 5747.38Less: Revaluation Reserve reversed – 5747.38

– 0.00Other Reserve (As per last account) 3.20 3.20

3.20 3.20Capital Redemption ReserveAs per last account 50.00 50.00Debenture Redemption ReserveAs per last account 300.00 150.00Add:-Transfer from Profit and Loss Account 150.00 150.00

450.00 300.00Share Premium AccountAs per last account 4459.50 4459.50General ReserveAs per last account 919.88 764.88 Add:-Transfer from Profit and Loss Account 100.00 155.00

1019.88 919.88 Profit and Loss Account 3129.33 2765.15

9111.91 8497.73

48


(Rs. in Lakhs)31.3.2006 31.3.2005

3 SECURED LOANS

Rupee Term Loan from Financial Institutions (including funded interest term loan) 2547.87 3312.36Punjab National Bank(PNB) 1771.02 –Bank of Baroda(BOB) – 122.52

Debentures (privately placed) 600.00 600.00Working Capital Demand Loan and Cash Credit from Banks (including FCNR(B) facility) 1522.41 362.39

6441.30 4397.27

Notes:

1 (i) Rupee Term Loans from Financial Institutions are secured by way of first mortgage and charge on the immoveable

properties (except property at Kalol Distt: Mehsana in Gujarat, specfic assets acquired / to be acquired under term loan

from PNB and certain other properties at Saharanpur) and hypothecation of all the moveables, present and future, in

favour of the lenders (Financial Institutions) save and except book-debts, subject to prior charges created and/or to be

created in favour of the bankers on the stocks of raw materials, semi-finished and finished goods, consumable stores

including in transit and book debts for securing the working capital requirements, ranking pari-passu with the

charges created/to be created in favour of the Financial Institutions. The term loan from IDBI to the extent of Rs701.65

lakhs(Previous year Rs.1002.15)and from ICICI to the extent of Rs 650.00lakhs(Previous year Rs.750.00 lakhs) are further

secured by the personal guarantee of a Director and a corporate guarantee, respectively. These will be further secured by

way of second charge on assets acquired/ to be acquired under the term loan from PNB

ii) Rupee Term Loan from Punjab National Bank is secured by Exclusive First Charge by way of hypothication of specific plant

and machinery and moveable fixed assets acquired / to be acquired under the modernisation project being implemented

by the company, extension of charges on current assets,ranking pari-passu interse with charges created / to be created

in favour of consortium of bankers (BOB and PNB) providing working capital facilities to the Company. The loan is to be

further secured by way of second charge on other fixed assets of the Company subject to and subservient to the subsisting

first charge in favour of existing charge holders.

iii) Debentures represents 600,000 14% Non Convertible Secured Redeemable Debentures (NCD's) of Rs.100/- each. These

are secured by way of English mortgage of plot at Kalol, Distt: Mehsana in Gujarat, extension of first mortgage and

charge on the immoveable properties (except specific assets acquired / to be acquired under term loan from PNB) for

rupee term loan and hypothecation of all the moveables, present and future, in favour of the Debentures Trustees

save and except assets purchased under the bills re-discounting scheme and book-debts, subject to prior charges

created and/or to be created in favour of the bankers on the stocks of raw materials, semi-finished and finished goods,

consumable stores including in transit and book debts for securing the working capital requirements, ranking

pari-passu with the charges created/to be created in favour of the Financial Institutions and the personal guarantee of

a Director. These will be further secured by way of second charge on assets acquired/ to be acquired under the term loan

from PNB. These (NCD's) are redeemable at par in four equal installments commencing from March, 2007.

2 Working Capital Demand Loan, Cash Credit, FCNR(B) and other Working Capital facilities from Banks are secured by way of

hypothecation of stocks of finished goods, raw materials, chemicals, stores, other materials including those in transit,

book-debts both present and future and second charge on the fixed assets of the company, ranking pari-passu in favour of

the banks.

3 In respect of Rupee Term Loans of Rs.2547.87 lakhs (Previous year Rs.3212.36 lakhs) from the Financial Institutions, under

certain circumstances of default by the company, the Financial Institutions have an option to convert either the whole of the

outstanding amount of the loans or a part thereof not exceeding 20% of the loans, whichever is lower, into fully paid

up Equity Shares of the company at par.

Schedules to the AccountsAs at March 31, 2006

49


31.3.2006 31.3.2005

4 UNSECURED LOANS

Fixed Deposits 8.16 18.53Short Term Loans from Bodies Corporate 1.65 51.65

9.81 70.18

31.3.2006 31.3.2005

6 INVESTMENTS (Long Term other than Trade)No. of

Shares/ UnitsQuotedFully Paid Equity Shares of Rs.10 each:

Gujarat Carbon & Industries Ltd. 50000 5.00 5.00Duncans Industries Ltd. 3815000 1182.65 1182.65NRC Ltd. 313922 10.36 10.36Andhra Cements Ltd. 8000000 720.00 720.00Bank of Baroda 20000 9.20 9.20

1927.21 1927.21UnquotedGujarat Carbon & Industries Ltd. 1720000 172.00 – (10% Cumulative Redeemable Preference shares of Rs 10 Each)E.Hill & Co. Ltd. 80000 8.00 8.00

2107.21 1935.21Aggregate amount of:

Quoted Investments 1927.21 1927.21(Market value - Rs.3908.67 lakhs Previous year - Rs.2755.57 lakhs)Unquoted Investments 180.00 8.00

2107.21 1935.21

5 FIXED ASSETS

GROSS BLOCK DEPRECIATION NET BLOCKParticulars As on Reval- Additions Adjust- As on Upto Reval- For the Adjust- Upto As on As on

1.4.2005 -uation during the ments 31.3.2006 31.3.2005 -uation year ments 31.3.2006 31.3.2006 31.3.2005Reserve Period during Reserve during

reversed the Period reversed the year

Land 20.99 – – – 20.99 – – – – – 20.99 20.99

Buildings 660.43 – 161.82 – 822.25 375.62 – 29.51 – 405.13 417.12 284.81

Machinery 16,239.22 – 3,158.02 1.44 19,395.80 6,184.94 – 834.17 1.37 7,017.74 12,378.06 10,054.28

Railway Siding 6.83 – – – 6.83 6.66 – 0.02 – 6.68 0.15 0.17

Furniture and 177.44 – 12.40 – 189.84 137.17 – 8.44 – 145.61 44.23 40.27 Fittings

Vehicles 124.67 – 5.72 – 130.39 42.98 – 21.81 – 64.79 65.60 81.69

Total 17,229.58 – 3,337.96 1.44 20,566.10 6,747.37 – 893.95 1.37 7,639.95 12,926.15 10,482.21 Previous Year 22,761.77 7,432.87 2,095.39 194.71 17,229.58 7,874.10 1,685.49 736.36 177.60 6,747.37 10,482.21

Note:

1) Gross block and Net block of Buildings include flat acquired under joint ownership with others at New Delhi amounting Rs.55.30 Lakhs and Rs49.91 Lakhs. (Previous Year Rs. 55.30

Lakhs and Rs 52.54 Lakhs) respectively

2) Gross block and net block of machinery includes amounting Rs.21.27 Lakhs and Rs.18.65 Lakhs taken on lease respectively

50



31.3.2006 31.3.2005

6 INVESTMENTS (Long Term other than Trade) (Contd.)

Notes1. Out of 3815000 equity shares 3769900 equity shares of Duncan

Industries Ltd.have been pledged on behalf of an associate company enabling them to avail certain relief from a financial Institution.

2. Subsequent to the date of Balance sheet,equity shares of Andhra Cements Limited have been pledged on behalf of an associate company enabling them to avail financial assistance from a financial institution

3. Details of current Investments purchased and sold during the year are as under.

No. of Units No. of UnitsFranklin Templeton Investment (Face Value Rs 10 Each) – 1507047HDFC Mutual Fund Income Fund (Face Value Rs.10 Each) – 997042Standard Chartered Mutual Fund (Face Value Rs 10 Each) – 990615LIC Mutual Fund (Face Value Rs 10 Each) – 6050515ILFS Mutual fund Dividend Plan – 1007480SBI Futual Fund (Face Value Rs 10 Each) – 1521996

7 INVENTORIES (As certified by the Management)

Spare Parts, Components, other Consumable Stores etc.(Includes Rs.1.34 lakhs Previous year Rs 1.34 lakhs of discarded assets) 597.53 513.75Raw Materials 2451.63 2023.95Chemicals and Dyes 119.21 123.01Loose Tools 0.53 0.85Finished Paper 190.66 300.93Stock in Process 219.07 234.56Wrapper – 1.95

3578.63 3199.00

8 SUNDRY DEBTORS (Considered good unless otherwise stated)

Debts due for a period exceeding six monthsSecured 23.35 33.49Unsecured 19.10 14.95

42.45 48.44Other Debts

Secured 345.20 281.02Unsecured 276.34 308.55

621.54 589.57663.99 638.01

51


31.3.2006 31.3.2005

9 CASH AND BANK BALANCESCash and stamps on hand 12.44 10.18Cheques/Drafts on hand and/or in transit 2.48 28.67Balances with Scheduled Banks– In Current Accounts 72.67 30.85– In Unpaid Dividend Accounts 16.84 12.94– In Deposit/Margin Money Accounts (Receipts of Rs.Nil lakhs, 27.31 29.36

previous year Rs.0.17 lakhs, lying with Government Authorities)In Fixed Deposit/Saving Accounts (Employees Security Deposits) 2.17 2.08

133.91 114.08

(Rs. in Lakhs)

10 LOANS AND ADVANCES (Unsecured considered good unless otherwise stated)

Loans 1310.46 1575.00Advances recoverable in cash or in kind or for value to be received 406.62 430.30Advance payment of Income-Tax including Tax deducted at source 2663.42 2431.12Less: Provision for Taxation 2177.43 1987.43

485.99 443.69Balances with Customs and Excise 435.82 432.99Deposits with Government Authorities and Others 227.59 233.29

2866.48 3115.27

11 CURRENT LIABILITIES AND PROVISIONS

Current LiabilitiesAcceptances 31.39 –Sundry Creditors

Dues to small scale industrial undertakings 80.10 37.18Dues to others (including project creditors Rs.162.31 Lakhs 2615.69 2966.45Previous year Rs.283.48 Lakhs)VAT payable 24.30 –

Unclaimed liabilities in respect ofRedeemed Preference Shares 1.76 1.76Unclaimed Dividend * 16.82 12.94Deposits from whole sellers 605.34 519.92Interest accrued but not due on Loans 79.35 79.84

3454.75 3618.09ProvisionsProposed Dividend 273.15 273.15 Tax on Proposed Dividend 38.32 35.70 Provision for leave encashment and pension 460.76 458.18

772.23 767.03 4226.98 4385.12

Note:

*This is not due for payment to 'Investor Education and Protection Fund'.

The names of SSI undertakings to the extent such creditors have been identified from the information available with the company and

outstanding more than 30 days as per agreed terms are: Cardinal Chemicals Pvt. Limited, D. B. Engineering Pvt. Ltd., Indo Dynamics Pvt. Ltd.,

Khyati Chemicals Pvt. Ltd., M F Resins Manufacturing Company, Nainital Woven Sacks Pvt. Ltd., K D Traders, Orient Packing Ltd., Pal Minerals

Industries Pvt. Ltd., Rishab Metals & Chemicals Pvt. Ltd., Sonar Airotech Pvt. Ltd.,

52



31.3.2006 31.3.2005

12 OTHER INCOMESale of Scrap, etc. 179.24 183.72

Income on Investments-Other than trade:

– Dividend on long term Investments 4.41 2.62

– Dividend on current Investments – 7.54

– Profit on Sale of current Investments – 0.27

4.41

Profit on Sale/Discard of Fixed Assets(Net) 9.65 52.28

Liabilities and balances no longer required 115.17 58.18

Provision for doubtful debts written back – 0.50

Miscellaneous 89.12 132.09

397.59 437.20

(Rs. in Lakhs)

13 DECREASE/ (INCREASE) IN STOCKS

Opening Stock

Stock in Process 234.56 120.19

Finished Paper 300.93 275.79

Wrapper 1.95 –

537.44 395.98

Closing Stock

Stock in Process 219.07 234.56

Finished Paper 190.66 300.93

Wrapper – 1.95

409.73 537.44

127.71 (141.46)

53

Schedules to the AccountsFor the year ended March 31, 2006

31.3.2006 31.3.2005

14 MANUFACTURING, SELLING AND ADMINISTGRATIVE EXPENSESSalaries, Wages, Bonus, Gratuity etc. 1876.89 1761.78

Contribution to:

Provident and Other Funds 208.07 233.60

Employees State Insurance 56.83 47.11

Workmen and Staff Welfare Expenses 130.67 117.23

Chemicals and Dyes consumed 2120.96 2317.19

Stores and Components consumed 886.93 940.08

Power and Fuel 4639.36 3765.04

Repairs to:

Buildings 141.53 236.83

Machinery 360.76 525.68

Others 5.74 7.86

Rent 53.32 49.18

Rates and Taxes 73.10 77.97

Excise Duty on Stocks (Net) (28.77) 6.16

Insurance 60.70 71.11

Freight, Transportation etc. 184.60 167.01

Charity and Donations 3.16 8.24

Directors' Fees 1.80 1.90

Research and Development Expenses 21.26 24.47

Irrecoverable Balance/debts written off 10.08 235.09

Provision for doubtful debts – (235.09)

Miscellaneous Expenses 580.17 553.34

11387.16 10911.78

(Rs. in Lakhs)

15 INTEREST AND FINANCE CHARGES

On Debentures and Fixed Loans 458.20 621.29On Other Accounts 132.85 70.39

591.05 691.68Less: Interest Income(Gross) (Tax deducted at source Rs.10.23 lakhs, previous year Rs 28.08 lakhs) 48.85 125.02

542.20 566.66Finance Charges 13.23 63.65

555.43 630.31

54


Schedules to the Accounts

16 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS

1. Accounting Policiesi) General

a) These accounts have been prepared on historical cost assets and on the accounting principles of going concern.

b) Accounting policies are consistent and are in consonance with generally accepted accounting principles.

ii) Use of EstimatesThe preparation of financial Statements require management to make estimates and assumptions that affect the

reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance

Sheet date and the reported amounts of income and expenses during the year. Difference between the actual results

and the estimates are recognised in the year in which the results become known/ materialise.

iii) Fixed AssetsFixed assets are stated at cost of acquisition/construction. Cost includes interest and pre-operative expenses as allocated

to the fixed assets.

iv) InvestmentsLong-term investments are stated at cost less diminution in the values thereof, other than temporary.

v) Inventoriesa) Inventories are valued at cost or estimated net realisable value whichever is lower. The value of inventories other

than raw materials is determined on weighted average basis. The value of raw materials is determined by first in

first out method. Cost of raw materials includes expenses incurred for procuring the same. Cost in respect of

finished goods, stock in process and wrapper represents manufacturing cost and does not include interest, selling

and distribution and certain administrative overheads.

b) Customs duty on materials in bond and excise duty on finished goods lying in the factory as at the year-end is

considered as cost for valuation of stocks.

vi) Impairment Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any

impairment, recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying

amounts of assets exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its

value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their

present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount

and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value

of the respective assets.

vii) Foreign Exchange TransactionsTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction.

Foreign currency monetary assets and liabilities at the year end are translated using closing exchange rates. The loss or

gain thereon and also on the exchange differences on settlement of foreign currency transactions during the year are

recognised as income or expenses and are adjusted to the profit and loss account under respective heads of accounts,

except in cases (a) where such liabilities and/or transactions relate to fixed assets/ projects and these were entered into

before 1-4-2004; (b) fixed assets acquired from a country outside India, in which case, these are adjusted to the cost of

respective fixed assets.

viii) Revenue Recognitiona) Revenue is being recognised on accrual basis.

b) All expenses, claims, interest on overdue debts/demands and other incomes to the extent ascertainable and

considered payable or receivable as the case may be, have been accounted for.

55


16 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS (Contd.)

ix) SalesSales are recognised on passing of the property in the goods as per the terms of the sales, irrespective of actual delivery.

Sales include excise duty and incidental charges but rebates, discounts and Sales Tax/Value Addred Tax(VAT) are

excluded therefrom.

x) Retirement Benefitsa) Liability for gratuity is provided on the basis of actuarial valuation and the amount thereof is funded to the extent

required in terms of scheme with the Life Insurance Corporation of India.

b) Liability for Leave Encashment is provided on the basis of actuarial valuation.

c) Contribution towards Provident Fund are accounted for according to the rules of the Funds.

d) Provision for pension to employees under non-funded Pension Scheme has been made on actuarial valuation.

xi) Borrowing CostsBorrowing costs that are attributable to the acquisition/construction of fixed assets are capitalised as part of the assets.

Other borrowing costs are recognised as expenses in the year in which they are incurred.

xii) DepreciationDepreciation has been provided for as per Schedule XIV of the Companies Act, 1956, on written down value method

and in respect of plant and machinery acquired on or after 1.4.76, on straight-line method. Certain plants have been

considered as continuous process plants on technical evaluation.

xiii) Income TaxProvision for Tax is made for both current and deferred taxes. Current Tax is provided on the taxable income using the

applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences, which are

capable of reversal in subsequent periods are recognized using tax rates and tax laws, which have been enacted or

substantively enacted. Deferred Tax Asset is recognized and carried forward only to the extent there is virtual certainty

that asset will be realised in future.

xiv) Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation

as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither

recognized nor disclosed in the financial statements.

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 1313.21 lakhs (Previous

year Rs.1038.92 lakhs).

3. Contingent Liabilities

(Rs. in Lakhs)Sl. No. Particulars 31.3.2006 31.3.2005

A In respect of various demands raised, Which in the opinion of the management are not tenable and are under appeal at various stages:

i. Sales Tax 3.08 2.09ii Excise Duty 4.68 1.76iii Electricity Duty 2.70 2.70iv Employees State Insurance Corporation (On Good work bonus) 4.90 4.90

B Workmen Claims 50.11 37.72C Interest on Mandi Fee, if any, is disputed by the Company and is sub

judice(amount un-ascertainable).D Gurantees given by bank on behalf of the company 105.81 110.81

56



4. Capital Expenditure in Progress of Rs.1342.35 lakhs includes machinery in stock, construction/erection materials, advances forconstruction/erection works and machinery etc. and the following pre-operative expenses.

5. The Company has been legally advised that notwithstanding the capitalisation of interest and replacement cost of worn outspare parts of certain plant and machinery in earlier years, these are to be considered as allowable for determination of Taxliability in view of various court decisions.

6. Pursuant to the order of the Board for Industrial and Financial Reconstruction (BIFR) and the Scheme of Rehabilitationsanctioned by it in June 1994, Duncans Industries Ltd. (DIL) had acquired the control of Andhra Cements Ltd. (ACL). In termsof the agreement with DIL to participate in the said Scheme, the Company as an associate of DIL had subscribed for 80 lakhsequity shares of ACL at par.

7. a. Pursuant to a settlement arrived at with Bakelite Hylam Ltd., an erstwhile associate company Rs.91.63 lakhs out of theloan and interest accrued thereon, being no longer receivable has been written off and shown under exceptional andnon recurring items in these accounts

b. In terms of the restructuring scheme sanctioned by the Financial Institutions to an associate company, the loan ofRs.1200 lakhs given to that company and the interest thereon at the rates specified in the said scheme are not repayableby the said company during the currency of the Institutional loans to that company. A reference has been made to BIFRfor revival of the said company. Pending finalisation of the scheme by BIFR, the said amount has been considered goodand recoverable. Accordingly, no interest is being provided in these Accounts.

8. During the year, assumption with regard to future increase in salary considered for acturial valuation of Gratuity at the yearend has been revised taking into account the latest increase in salaries & wages. Consequent upon, this change in estimates,gratuity provision to the extent of Rs.25.44 lakhs being no longer required has been written back and charge for the year onaccount of this is lower to the extent of Rs.95.11 lakhs.

9. Revenue recognition in respect of diminution of Rs.495.95 lakhs in the value of investments in Duncans Industries Limitedhas not been made in these accounts since these are long term strategic investments.

10. In terms of modifications to the restructuring of loans and NCD's, in earlier years the Financial Institutions have requested foran option to convert outstanding Funded Interest Term Loan during its currency (outstanding balance as on 31 March, 2006Rs.218.69 lakhs, Previous year Rs.277.01 lakhs) at par into equity. The company had sought modification and/or waiver tothe said condition together with certain other terms and conditions.

11. The break-up of Deferred Tax Assets and Liabilities is follows:


(Rs. in Lakhs)31.3.2006 31.3.2005

Interest, other financial charges 113.47 39.78Add : Expenditure upto previous year pending Allocation 11.26 –

124.73 39.78Less : Allocation to Fixed Assets 96.18 28.52

28.55 11.26

(Rs. in Lakhs)

Deferred Tax AssetsExpenses Allowable on Payment Basis and Others 471.68 37.41 509.09Sub Total 471.68 37.41 509.09Deferred Tax LiabilitiesDepreciation and Other Items 2413.48 363.50 2776.98Deferred Tax Liabilities (Net) 1941.80 326.09 2267.89

Opening as on Charge/(Credit) Closing as on1st April, 2005 during the year 31st March, 2006

57


12. Rs.12.20 lakhs(Previous year Rs. 17.09 lakhs, net gain) being net loss due to exchange rate variation with regard to foreigncurrency transactions have been adjusted against the respective heads of accounts and Rs. 0.93 lakhs (Previous year Rs1.14lakhs, net loss) being net loss have been added to the cost of fixed assets.

13. Future obligations toward lease rentals under finance lease agreements are as follows:

14. Related Party disclosures as identified by the management in accordance with the Accounting Standard 18 issued by theInstitute of Chartered Accountants of India:

(a) Key Management Personnel and their relativeMr. G. P. Goenka (Chairman and Whole Time Director)Mr. S . V . Goenka (Director and son of Whole Time Director)Mr. M. Mishra (Managing Director) Mrs. M. Mishra (Wife of Managing Director)

(b) Associates/Group Companiesi) With whom the Company had transactions

Duncans Industries Limited, Duncans Tea Limited, Consolidated Fibres and Chemicals Limited, Gujarat Carbon andIndustries Limited, NRC Limited, Andhra Cements Limited, Silent Valley Investment Company Limited, KavitaMarketing Private Limited, ISG Traders Limited, Shubh Shanti Services Limited, Sewand Investments Private Limited.Stone India Limited, Unimers India Limited

ii) OthersAlbert Trading Company Private Limited, Bargate Communications Private Limited, Boydell Media Private Limited,Continuous Forms (Calcutta) Limited, Dail Consultants Limited, Duncans Agro Chemicals Limited, Duncans BiotechLimited, Duncans Tea House Pvt. Limited, Halcyon properties Limited, Infratech software services Private Limited,Julex Commercial Company Limited, Leyden Leasing and Financial Services Limited, Maharastra PolybutenesLimited, Marleybone Travels and Resorts Private Limited, Napier Softech Private Limited, National Standard IndiaLimited, Octave Technologies Private Limited, Odyssey Travels Limited, Orchard Holdings Private Limited, Oxidesand Specialities Limited, Portland Holding Private Limited, Pallmall Adu Systems and Medicare Services PrivateLimited, Pentonville Software Limited, Santipara Tea Company Limited, Skylight Trading Company Limited, SprintTrading Company Limited.

The parties listed in (ii) above, though are not required to be disclosed as per the requirement of AS-18, have been includedhereinabove in view of the requirement of Clause 32 of the Listing Agreement.

The aggregate amount of transactions with the related parties as mentioned in (a) above is as below:


(Rs. in Lakhs)

Not Later than one year 6.12 6.73 5.44 5.99Later than one year but not later than five years 5.51 11.62 3.44 8.71

Period Lease payment Present Value2005-06 2004-05 2005-06 2004-05

(Rs. in Lakhs)Particulars 2005-06 2004-05Managerial Remuneration– Mr. G. P. Goenka 72.37 71.59– Mr. M.Mishra 43.39 41.28Expenditure– RentMrs. M. Mishra 12.00 12.00Outstanding – Security Deposit GivenMrs. M. Mishra 6.00 6.00

58



The aggregate amount of transactions with the related parties as mentioned in (b - i) above is as below:


(Rs. in Lakhs)Particulars 2005-06 2004-05IncomeSalesISG Traders Limited 73.46 75.12Interest

ISG Traders Limited 11.77 8.19Shubh Shanti Services Limited 11.90 11.90Silent Valley Investment Company Limited 4.05 4.05Services RenderedDuncans Industries Limited 0.62 0.76Andhra Cements Limited 0.82 0.60Stone India Limited 1.08 –Consolidated Fibres and Chemicals Limited 0.49 –Duncans Tea Limited – 0.89Others 0.09 0.55Expenditure Services ReceivedShubh Shanti Services Limited 0.10 –Odyssey Travels Ltd. 15.29 –Duncans Industries Ltd. 0.13 –RentKavita Marketing Private Limited 1.80 1.80Interest ISG Traders Limited 2.20 1.88Finance And InvestmentLoans RepaidDuncans Industries Limited 50.00 123.85Advance GivenISG Traders Limited 100.00 –Advance RealisedGujarat Carbon and Industries Limited 172.00 –ISG Traders Limited 100.00 –Bakelite Hylam Limited 7.15 –Security Deposit TakenISG Traders Limited – 10.00Investment Gujarat Carbon and Industries Limited 172.00 –Outstanding Loan takenDuncans Industries Limited 1.15 51.15Loan GivenConsolidated Fibres and Chemicals Limited 1200.00 1,200.00Bakelite Hylam Limited – 65.00Gujarat Carbon and Industries Limited – 172.00Silent Valley Investment Company Limited 22.50 22.50ISG Traders Limited 45.50 45.50Shubh Shanti Services Limited 42.46 70.00

59



(Rs. in Lakhs)Particulars 2005-06 2004-05Interest ReceivableBakelite Hylam Limited – 33.83Gujarat Carbon and Industries Limited 63.00 100.00Silent Valley Investment Company Limited 2.35 2.35ISG Traders Limited 4.76 3.07Shubh Shanti Services Limited 38.39 10.35Security Deposit receivedISG Traders Limited 20.00 20.00Security Deposit GivenKavita Marketing Private Limited * 35.00 35.00Sewand Investments Private Limited. 5.00 5.00Debtor/Debit BalanceDuncans Industries Limited 0.94 0.42Duncans Tea Limited 3.57 4.04ISG Traders Limited 2.20 10.91Others 0.70 0.83Creditor/ Credit BalancesUnimer India Limited 0.02 –Odyssey Travels Ltd. 0.90 –Investment In SharesDuncans Industries Limited 1,182.65 1,182.65Gujarat Carbon and Industries Limited 177.00 5.00NRC Limited 10.36 10.36Andhra Cements Limited 720.00 720.00OthersFixed Assets PurchasedShubh Shanti Services Limited – 27.54Amount Written OffGujarat Carbon and Industries Limited 98.03Bakelite Hylam Limited 91.68 –

* a company in which one of the director is a director.

The Company has provided security to a Financial Institution for certain relief availed by an associate company (Refer Note No. 1 & 2 in Schedule 6).

15. Disclosure required vide Clause 32 of the listing Agreement.

a) Amount of loans/advances in the nature of loans outstanding from Associates/Group Companies during 2005-06 :

(Rs. in Lakhs)

Consolidated Fibres and Chemicals Limited 1200.00 1200.00Bakelite Hylam Limited - 98.83Gujarat Carbon and Industries Limited 63.00 272.00Silent Valley Investment Company Limited 24.85 24.85Shubh Shanti Services Limited 80.85 92.26ISG Traders Limited 50.26 50.26

Name of the Company At the maximum

year end during the year

60




(Rs. in Lakhs)

(Rs. in Lakhs)

b) Investment by loanee companies in the shares of the company:

Name of the Company At the year end Maximum during the year No. of Shares Rs. lakhs No. of Shares Rs. Lakhs

Silent Valley Investment Company Limited 771000 475.32 771000 475.32ISG Traders Ltd. 1195135 736.80 5622019 3465.97

16. i) Remuneration paid or payable to Whole Time Director and Managing Director:

17. The company operates mainly in one business segment viz Paper and all other activities are incidental thereto.

18. Salary/wages Rs.92.73 lakhs, Provident Fund and Employee State Insurance Rs.2.91 lakhs,office expenses Rs.11.58Lakhs,Stores & components and repairs Rs.320.40 Lakhs,Rent Rs.6.58 Lakhs and insurance Rs.5.41 lakhs have been classifiedfunctionally under other heads of accounts.

19. Miscellaneous Expenses include

31.03.2006 31.03.2005 Whole Time Managing Whole Time Managing

Director Director Director DirectorSalary and Performance Pay 24.00 21.40 24.00 20.35Other Allowances 12.60 5.55 9.00 3.63Contribution to Provident and other Funds* 2.88 1.37 6.48 2.79Commission payable 31.00 – 31.00 –Other Benefits (Actual) 1.89 15.07 1.11 14.51

72.37 43.39 71.59 41.28

*Excluding Company's contribution to Gratuity Fund.

ii) Computation of Net Profit in accordance with Section 349 and 198 of the Companies Act, 1956

Profit Before Taxation 1460.36Add: Remuneration, Perquisite and other benefits payable to Managing Director

and Whole Time Director 115.76Director Fees 1.80Provision for wealth Tax 3.00Profit as per Section 349 of the Companies Act, 1956 1580.92

Less: Profit on sale of Fixed assets (9.65)Income from Investments (4.41)Profit as per Section 198 of the Companies Act, 1956 1566.86

(Rs. in Lakhs)31.3.2006 31.3.2005

Auditors Remunerationi) Statutory Auditors

a) Audit Fee 3.75 3.75b) In other capacities

– Fees for Tax Audit 0.75 0.75– Fees for Certificates and Review 1.46 2.14

ii) Cost Audit Fees 0.30 0.22

61


20. Additional information pursuant to the provisions of paragraphs 3, 4 (c) and 4 (d) of Part-II of Schedule-VI of the CompaniesAct, 1956:-

a) Particulars in respect of Capacity, Production, Turnover and Stocks

Notes:i) Pulp Plant is an integrated part of the paper plant and therefore, the capacity and actual production of pulp are

not separately ascertained.

ii) Production and Stocks excludes Wrapper produced for the packing of finished goods.

iii) Production includes wastage of 69 MT (Previous year 79 MT) on conversion of reels into sheets on job work basisoutside the plant and 134 MT (Previous year 32 MT) re-pulped during the year.

iv) Turnover excludes 146 MT (Previous year 117 MT) of self consumed paper.


b) Raw Materials Consumed

31.03.2006 31.03.2005 Quantity Value Quantity Value

Tonnes Rs. lakhs Tonnes Rs. lakhsi) Wood, bamboo and wood waste 227857 4564.87 250660 3320.95ii) Waste paper and wood pulp 582 107.84 104 13.88

4672.72 3334.83

c) Value of Raw Materials and Spare Parts and Components consumed

d) C.I.F. Value of Imports

31.03.2006 31.03.2005 Rs. lakhs % Rs. lakhs %

i) Raw Materials– Indigenous 4628.5 99 3321.53 99– Imported 44.22 1 13.30 1

4672.72 100 3334.83 100ii) Spare Parts and Components

– Indigenous 188.28 78 180.36 90– Imported 53.80 22 23.00 10

242.08 100 203.36 100

(Rs. in Lakhs)31.3.2006 31.3.2005

– Raw Materials 20.82 7.38– Components and Spare Parts 382.31 190.80

31.03.2006 31.03.2005Licenced Capacity Not Applicable Not ApplicableInstalled Capacity (TPA)(As certified by the management) Paper and PaperBoard of different varieties 75000 71350

Tonnes Rs.lakhs Tonnes Rs.lakhsProduction 67875 71106Turnover 68129 21836.11 70755 21195.78Opening Stock 1269 300.93 1146 275.79Closing Stock 666 190.66 1269 300.93

62




e) Expenditure incurred in Foreign Currency(Rs. in Lakhs)

31.3.2006 31.3.2005– Travelling 13.99 13.44– Professional Fee and Technical Services 5.00 5.78– Others 0.98 –

f) Earning in Foreign exchange

21. Figures have been given in Rupees lakhs and have been rounded off to the nearest

thousand.

22. Previous year figures have been regrouped/rearranged wherever necessary.

Signatures to schedule 1 to 16 forming part of Balance Sheet and Profit & Loss Account.

(Rs. in Lakhs)31.3.2006 31.3.2005

F O B Value of Exports 75.86 53.84

As per our report of even date.For Lodha & Co. On behalf of the BoardChartered accountants



63

Balance Sheet Abstract and Company’s General busines profile(Information Persuant to Part IV of Schedule VI of the Companies Act, 1956)

Public Issue

Bonus Issue

3 1 0 3

Registration No.

Balance Sheet Date

I. Registration Details

II. Capital Raised during the year (Amount in Rs. thousands)

Total Liabilities

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. thousands)

2 0 0 6

Date Month Year

Private Placement

Paid-up Capital

Sources of Funds

Total Assets

Reserves & Surplus

IV. Performance of the Company (Amount in Rs. thousands)

Product Description ITC Code No.

V. Generic Names of Two Principal Products / Services of Company (as per monetary terms)

Net Fixed Assets Investments

Turnover & Other Income

Profit Before Tax

Total Expenditure

Profit After Tax

Application of Funds

2 3 6 1 8 7 2

2 1 - 8 7 2 6

1 5 6 0 8 3

1 9 1 8 9 0 1

1 4 6 0 3 6

1 7 7 2 8 6 5

9 2 8 2 7

Earning per share (in Rs.)

-Basic & Diluted)Dividend Rate (%)

1. Paper

5 . 9 5

4 8 0 2 4 0 0

N A

1 7 . 5

2. N. A.

1 4 2 6 8 5 0 2 1 0 7 2 1

Net Current Assets Misc. Expenditure3 0 1 6 0 3 N I L

Accumulated Losses N I L

N I L

Rights Issue N I L

State Code 2 1

N I L

N I L

2 3 6 1 8 7 2

9 1 1 1 9 1

Secured Loans Unsecured Loans6 4 4 1 3 0

Net Deferred Tax Liabilities 2 2 6 7 8 9

9 8 1

On behalf of the Board

G P Goenka M P PintoChairman and Shiromani SharmaWhole-Time Director P N Ghatalia


corporate information · 2014. 3. 13. · itc, pearson education (singapore) pte limited, shree...

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