Directors Report of Seshasayee Paper & Boards Ltd.

Mar 31, 2025

The Company has adopted the Indian
Accounting Standards (IndAS) from Financial
Year 2017-18 as mandated. Accordingly, the
financial statements for current year, including
comparative figures of previous year are based
on IndAS and in accordance with the recognition
and measurement principles stated therein, as
well as other accounting principles generally
accepted in India. While this has no major
impact for the Statement of Profit and Loss,
there is and would be periodical impact for
“Other Comprehensive Income” in measuring
and restating investments at fair value.

WORKING RESULTS

	2024-25 (in tonnes)	2023-24 (in tonnes)
Production	2,46,431	2,40,383
Sales	2,39,073	2,23,254
	('' crores)	('' crores)
Revenue from Operations	1754.11	1801.56
Other Income	70.15	51.48
Total Income	1824.26	1853.04
Profit before interest, depreciation, exceptional item and tax	181.49	391.35
Finance Cost	8.43	2.14
Depreciation	45.24	43.81
Profit before tax	127.82	345.40
Provision for current tax	24.38	86.30
Transfer to / (from) Deferred Tax	(-) 1.12	(-) 0.27
Net Profit	104.56	259.37

DIVIDEND

The Board of Directors recommend payment
of Dividend at '' 2.50 (Two Rupees and Fifty
Paise) per Equity Share of '' 2 each, absorbing a
sum of '' 15.77 crores.

As per the provisions of the Income tax Act,
1961, as amended by the Finance Act, 2020,
Dividend Distribution Tax is not applicable in
respect of Dividends declared, distributed or paid
by the Company after March 31,2020. The same
will be taxed in the hands of the shareholders.

As per Ind AS 10, Events after the reporting
period, Proposed Dividend on Equity Shares,
being a non-adjusting event at the Balance
Sheet date, is not recognised as a liability in the
accounts for the year ended March 31,2025. The
same will be recognised in the year of payment,
viz., year ending March 31,2026.

APPROPRIATIONS

The Board has proposed to transfer
'' 50 crores to General Reserve.

2024-25 ('' crores)
Net profit for the year	104.56
Add: Income from SPB Equity Shares Trust	1.42
Add: Surplus brought forward from the previous year	559.35
Add: Re-measurement of defined benefit Plans (net of tax)	1.39
	666.72
Less:
Dividend paid during the year (For Financial Year 2023-24)	31.53
Transfer to General Reserve	50.00
Balance carried forward	585.19

OPERATIONS

The Company had registered the following
landmarks during the FY 2024-25, in-spite of
challenging market conditions.

? Highest ever annual production at 2,46,431
tonnes.

? Highest ever annual Production in Unit
: Erode - 1,70,426 tonnes (Erode unit
operating at 103% of the installed capacity).

? 2^nd highest annual sales at 2,39,073 tonnes
(Highest annual sales - 2,40,649 tonnes in
FY 2022-23).

PRODUCTION

(Tonnage)

Unit	FY	FY	Growth
	2024-25	2023-24	(%)
Erode	1,70,426	1,65,116	3.2 %
Tirunelveli	76,005	75,267	1.0 %
Total	2,46,431	240,383	2.5 %

? During FY25, the production at Unit : Erode
was 1,70,426 tonnes of paper, as compared
to 1,65,116 tonnes, produced in the previous
year, thanks to overall improved operations.
(Capacity Utilisation at 103% in FY25).

? The Company had completed project
Mill Development Plan - III (MDP-III) in
Unit : Erode in phases during FY 2020-21
and FY 2021-22. With the completion of
Project MDP-III, the annual installed capacity
of Paper for Unit : Erode is augmented to
1,65,000 tonnes.

? The annual capacity of Unit : Tirunelveli
remains at 90,000 tonnes. Accordingly,
the total installed capacity of the company
currently stands at 2,55,000 tonnes per
annum.

? Unit : Erode also produced 26,275 tonnes
of Wet Lap Pulp during FY25. (Previous
Year 28,562 tonnes) of which 20,815
tonnes (previous year 25,665 tonne) were

transferred to Unit-II, Tirunelveli to meet the
pulp requirement therein.

? Unit : Tirunelveli produced 76,005 tonnes
of Paper during the FY25, as compared to
75,267 tonnes, produced in the previous
year. (Capacity Utilisation at 84.5% in FY25).

? Overall Production during the current period
was higher in Erode in-spite of

(i) Outages in Recovery and Power Boilers
and availability issues in wood affecting
pulp and paper production and

(ii) adverse product mix / basis weight mix
due to poor market conditions.

SALES

(Tonnage)

Unit	FY	FY	Growth
	2024-25	2023-24	(%)
Erode	1,68,345	1,47,987	13.8 %
Tirunelveli	70,728	75,267	(-) 6.0 %
Total	2,39,073	2,23,254	7.1 %

? During FY25, company registered an overall
sales of 2,39,073 tonnes of Paper (Previous
year : 2,23,254 tonnes).

? In addition, as part of its trading activity,
the Company sold during FY25, petroleum
products valued at '' 27.80 crores (Previous
Year : '' 26.47 crores) and Note Books
valued at '' 3.06 crores (Previous Year :
'' 0.84 crores) and other traded items valued
at '' 1.25 crores (Previous Year : Nil).

(Tonnage)

? Stock of Finished Goods :

	As on 31.03.2025	As on 31.03.2024	Growth (%)
Erode	16,545	15,315	8.0 %
Tirunelveli	5,277	--	--
Total	21,822	15,315	42.5 %

PROFITABILITY

Revenue from Operations of the Company
for FY25 was '' 1754.11 crores, as against
'' 1801.56 crores, in the previous year.

Profit before interest, depreciation,
exceptional item and tax (EBIDTA) was '' 181.49
crores, for the Company as a whole in FY25,
compared to '' 391.35 crores, in the previous
year.

After absorbing finance costs and
depreciation of '' 8.43 crores and '' 45.24 crores
respectively, the Profit before tax (PBT) was
'' 127.82 crores in FY25, as compared to
'' 345.40 crores, in the previous year.

The fall in net profit during FY25 compared to
the previous year is mainly due to:

? Lower average realisations per tonne of

paper in the Domestic Market.

? Significant increase in the cost of wood, key

input material for the company.

Impacts from the above were partially
negated by higher volumes of Production and
sales, reduction in prices coal, pulp and waste
paper.

For the year ended 31^st March 2025, current
tax liability works out to '' 24.38 crores (which
is net of reversal of '' 10.16 crores provisions
made for earlier years but no longer required),
as against a liability of '' 86.30 crores in the
previous year.

The Deferred Tax liability amounted to
'' (-) 1.12 crores for the year ended 31^st March
2025, as against '' (-) 0.27 crores in the previous
year.

As a result, profit after tax for the year ended
March 31,2025 was '' 104.56 crores, as compared
to '' 259.37 crores, in the previous year.

FINANCE

The Company did not have any Project Term
Loan (Long Term Borrowing) outstanding as on
31.03.2025. The Company did not have any
instalments of Long Term Loans and interest
thereon, due for payment during the year.

Fund Based Working Capital limits availed in
the form of “PCFC Loans” and outstanding as on
31.03.2025 - '' 81.86 crores. ['' 21.0 crores as on
31.03.2024].

MARKET CONDITIONS

? The adverse market conditions seen in
FY24 for most varieties / grades of Writing
& Printing (W&P) continued in FY25 and
further worsened more particularly in
2^nd half of FY25, amidst global uncertainties,
weak demand and sustained higher inflow of
cheaper imported paper into India.

? The Domestic Paper market continues to
remain weak amidst.

(i) Disrupted supply chains globally due to
the tariffs announced by US.

(ii) Increased availability of Imported Paper
from China, Indonesia and other Asian
countries, at Cheaper Prices in the
Indian market.

(iii) The overall unfavourable global demand
situation resulting in increased supply
situation to the Indian Market, thereby
resulting in Demand -Supply mismatch.

? The above factors contributed to significant
reduction in the prices of Paper during the
year. Though the company / most paper mills
could announce price increase in Jan’25 and
Feb’25, the said could not be implemented
in the market due to aggressive dilution of
accumulated paper inventory by few paper
mills at disruptive prices.

? The International market for Paper, which
remained extremely buoyant until FY23,
had seen severe pricing pressures over
last 8-10 quarters. The International market
has not shown any signs of recovery and
the drop in price mainly from Indonesia
and China continue. Demand remains flat
although some short-term bumps are seen.
The company’s supplies in to US Market
remained strong during FY25; however, this
has been affected in Q-1 of FY26 with steep
tariff announcements by US.

OUTLOOK

Domestic market conditions are expected
to remain challenging at-least until the first
2 quarters of the FY26 for W&P grades, as per
the present market trends.

The demand for paper and more particularly,
the market operating prices will depend on the
Global macro-economic trends and swift closure
of trade agreements between India and US in
resolving the tariff situation.

As sweeping tariffs have been imposed on
India''s competitors including China, Thailand,
Vietnam and Malaysia, their goods become
expensive in the US market and this would lead
to diversion of goods into countries like India
after some months. The clear signals for these
rises in imports are likely to manifest from June
to July.

With fear of possible recession / lower
than expected growth levels in some of the
key economies and distressing global political
situations, prices of Paper is expected to see
continued pressures in the short-medium term.
Considering the uncertainties that continue to
prevail in global macroeconomic situation and
subsequent slowdown in developing countries,
the market is expected to be very cautious and
seek for replenishment of inventory only when
necessary without room for any speculation.

The Export market for Uncoated Wood Free
grades has been under pressure both in terms

of demand and prices over the last 8-10 quarters
and this trend is expected to continue.

(Tonnage)

EXPORT PERFORMANCE

Unit	FY 2024-25	FY 2023-24	Growth (%)
Erode	12,242	13,076	(-) 6.4 %
Tirunelveli	16,501	16,170	2.0 %
Total	28,743	29,246	(-) 1.7 %

? The export volumes represented 11.6% of
the production during FY25 (This stood at
12.2 % during FY24).

? The overall export sales stood at '' 243.51
Crs for FY25 vs '' 216.8 Crs in FY24, thereby
registering a growth of 12% in value terms.

? The total export proceeds in US $ stood at
US $ 28.81 Mn for FY25, compared to US $
27.29 Mn in previous year. Export Sales in
currencies other than US$ during FY25 - NIL
(Sales in Previous year : NIL).

TREE FARMING ACTIVITY

The Company continues to provide quality
Clonal Seedlings of Eucalyptus, as well as
bare-rooted Casuarina Seedlings, at subsidised
rates, to interested farmers and assist them with
technical help to achieve higher yields.

In addition, the Company had provided
clones of Melia-Dubia, a high yielding fast
growing species, suitable for Pulp production.

Technical Support to the farmers for this
initiative is being provided in association with the
Department of Tree Breeding of Forest College
and Research Institute, attached to Tamil Nadu
Agricultural University, Coimbatore, under a
Collaborative Research Project.

In accordance with the Company''s vision to
augment tree farming activities, over fourteen

crore Seedlings (Clonal Eucalyptus Seedlings,
bare-rooted Casuarina Seedlings and Melia
Dubia Clones) were made available during the
year, to farmers at subsidised rates for planting
in about 20,772 acres of land. (Previous Year :
24,764 acres).

ISO 9001 / ISO 14001 ACCREDITATION

The Company''s Quality Management
Systems and Environment Management
Systems continue to be covered under ISO 9001
and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standard
have undergone revision to 2015 Standards
which lays emphasis on role of top management,
adoption of risk management and change
management. All these changes are to facilitate
sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification
under Occupational Health and Safety
Assessment Series 18001 (OHSAS) which
is an international standard that facilitates
management of Occupational Health and
Safety risks associated with the business of the
organisation.

ISO 50001 CERTIFICATION

During FY24, the company secured
certificate for the Energy Management System
under Standard ISO 50001 : 2018. The company
continues to enjoy this certification.

FOREST STEWARDSHIP COUNCIL® (FSC®)
(FSC- C084458) CERTIFICATION

The Company continues to be certified under
four Standards of FSC, viz. FSC-STD-40-004
(Chain of Custody (COC) Certification),
FSC-STD-40-005 (Requirements for Sourcing
FSC Controlled Wood), FSC-STD-40-003
(COC certification of multiple sites) and
FSC-STD-50-001 (Certificate Holder Trademark
Requirements). By this, the Company assures
its stakeholders that the wood and wood

fibre (pulp) purchased by it are traceable to
responsibly managed plantations and that
adequate document controls are in place to
ensure identification and traceability throughout
the Chain of Custody. This also means that
the Company is capable of manufacturing
and selling ‘FSC Mix’ Claim Products in the
domestic and international markets. Being FSC
certified implies adherence to sustainable and
responsible forestry practices, providing market
access, brand reputation, compliance, supply
chain integrity, and partnership opportunities.

ESCerts

Both the units of the Company have achieved
the targets under the PAT Cycle, as prescribed
by the Government of India and accordingly
are eligible for ESCerts (Energy Saving
Certificates).

The Company has to its credit 13,946 ESCerts
as on March 31,2025.

ESCerts sold during the FY25 - 1,664 Nos.
(Previous Year - 4,946 Nos.).

AWARDS

The Company received the following Awards
and recognitions during the year :

- CII SR EHS Excellence - Silver Award for
the year 2023.

- CII EHS Excellence - Special award in
Energy / Carbon footprint for the year 2023.

- National Excellence in Energy Management
by CII for the 7^th Consecutive Year.

- National Energy Leader Award by CII - 5^th
consecutive year.

EXPORT HOUSE STATUS

The Company continues to be accredited with
"Star Export House" Status by the Government
of India, Ministry of Commerce, Directorate
General of Foreign Trade, in recognition of its
export performance.

DEPOSITORY SYSTEM

As on March 31,2025, 23,012 Shareholders
are holding Shares in Demat form and
5,34,37,418 shares have been dematerialised,
representing 84.73 % of the total Equity Share
Capital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters)
Limited (Esvin) is a wholly owned subsidiary of
the Company. Currently, Esvin holds properties
and derives property income. The Company
does not have any material subsidiary as per
SEBI (LODR) Regulations. A policy on material
subsidiary has been formulated by the Company
and is available on our website www.spbltd.
com. Neither Managing Director nor Chairman
of the Company receives any remuneration or
commission from the Subsidiary Company.

ACQUISITION OF ASSETS OF
M/s. SERVALAKSHMI PAPER LIMITED (IN
LIQUIDATION) (CORPORATE DEBTOR), ON
A GOING CONCERN BASIS

The Company participated and emerged
as the sole successful bidder in the e-auction
held on 19.09.2022, for the sale of assets of
M/s.Servalakshmi Paper Limited (In Liquidation)
(Corporate Debtor), on a Going Concern basis.

The company had remitted the entire bid
value in the month of October 2022, post the
confirmation received from the Official Liquidator
of the Corporate Debtor.

The e-auction was for sale of assets on
“As is where is basis”, “As is what is basis”,
“Whatever there is basis” and “Without any
recourse basis”, of M/s.Servalakshmi Paper
Limited (In Liquidation) (Corporate debtor) on
a Going Concern basis” under the provisions
of Insolvency and Bankruptcy Code, 2016
read with Regulation 32(e) of Insolvency and
Bankruptcy Board of India (Liquidation Process)

Regulations, 2016 and pursuant to the directions
contained in Order of Hon’ble National Company
Law Tribunal, Chennai Bench (“NCLT”).

The Hon’ble NCLT, Chennai Bench vide its
Order dated May 12, 2023 had approved the
application filed by the Liquidator for confirmation
of sale of assets of M/s.Servalakshmi Paper
Limited (Corporate Debtor) (In Liquidation) as
a Going Concern, in favour of M/s. Seshasayee
Paper and Boards Limited (SPB) and dismissed
/ disposed of other appeals against the auction.

Consequent to the order of the Hon’ble
NCLT dated 12.05.2023, the official liquidator
of the Corporate Debtor had Issued Sale
Certificate dated 24.05.2023 in favour of M/s.
Seshasayee Paper and Boards Limited and he
had completed the physical handing over of the
possession of land and factory premises located
at Kodaganallur Village, Vaduganpatti Post,
I.C.Pettai, Tirunelveli - 627 010 of Servalakshmi
Paper Limited (In Liquidation) on 24.05.2023
to SPB, as per direction in the Order dated
12/05/2023 of Hon''ble NCLT, Chennai Bench.

Company is taking steps for revival,
refurbishment and recommencement of
operations.

Few appeals challenging Hon’ble NCLT’s
order have been filed in Hon’ble NCLAT, which
are pending. Appeals have been heard by
the Hon’ble NCLAT, in different dates in Feb /
Mar’25 and the orders have been reserved in the
hearing held on March 04, 2025

MILL DEvELOPMENT PLAN - Iv - PHASE - I

The Board of Directors, in their meeting
held on 13.09.2024, has approved undertaking
the Project MDP-IV-Phase-1 at Unit : Erode, for
enhancement in pulp and paper capacities, at a
total project cost of Rs.405 crores, subject to the
approval of MoEF&CC for increase in pulp and
paper capacities in Unit : Erode by 20%.

In the latest EAC (Expert Advisory Committee)
of MoEF & CC, the company has been advised
to resubmit the application with few additional
information and the company has done the
same. EAC, in its meeting held on 9-May-2025,
had considered the application favourably and
forwarded our company’s application to the
MoEF & CC for its favourable consideration and
approval.

CURRENT YEAR (2025-26)

Company had faced one of the most difficult
times in H-II of FY25 mainly due to :

A. Continued availability of imported copier and
other printing and writing grades at cheaper
prices.

B. Few paper mills aggressively disposing
of stocks at cheaper prices - resulting in
challenges in implementing price increases.

C. Continued scarcity in wood availability and
price hikes.

D. Weaker Global markets.

The above key factors are expected to
continue to influence FY26 also, thereby
affecting the profitability margins.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost
attention to the conservation and improvement
of the environment. In Unit : Erode, the Power
Boilers, Lime kiln and Recovery Boilers are
equipped with Electro Static Precipitators, to
arrest dust emissions. The Company operates
an Anaerobic Lagoon, for high BOD liquid
effluents and a Secondary Treatment System,
for total Mill effluent. These facilities are
operating efficiently, enabling the Company
to comply with the Pollution Control norms, on
a sustained basis. The treated effluent water
continues to be utilised for irrigating nearby
sugar cane fields. The Company is also setting
up a Wet ESP in its Erode unit, first of its kind in
Indian Paper Industry, for further improvement in
Environmental compliances.

Additional treatment facilities have been
proposed for waste water under the Mill
Development Plan.

Unit : Tirunelveli is well equipped with
efficient Electro Static Precipitator for the Power
Boiler and has an extensive green cover. Its
treated waste water, after recycling, is used to
irrigate the Company owned lands. As part of the
Mill Expansion Plan, the Waste Water Treatment
Plant has been augmented with a Dissolved Air
Floatation Cell and Anaerobic Digester.

MANAGEMENT''S DISCUSSIONS AND
ANALYSIS REPORT

The Report on Management’s Discussion
and Analysis, as required under clause 2(e)
of Regulation 34 read with Schedule V of
SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 covering
industry structure and developments,
opportunities and threats, outlook, discussion
on financial performance, etc., is contained in
“Management Discussion and Analysis Report”
that forms an integral part of this Report and
annexed as Annexure - I.

CORPORATE GOvERNANCE

Pursuant to Regulation 34 and Schedule V
to the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, Corporate
Governance Report, together with the Certificate
from the Company’s Auditors confirming
the compliance of conditions on Corporate
Governance is given in Annexure - II.

BUSINESS SUSTAINABILITY REPORT

Securities Exchange Board of India (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 [SEBI (LODR) Regulations],
with amendments to Regulation 34 (2) (f) of
LODR Regulations vide Gazette Notification
no. SEBI/LAD-NRO/GN/2021/22 dated May 05,
2021 introduced reporting requirements on ESG
parameters called the Business Responsibility
and Sustainability Report (BRSR). Top 1000

companies, measured based on average Market
Capitalization during the period from 1^st July to
31^st December, are required to have “Business
Responsibility & Sustainability Report” (BRSR)
as part of their Directors’ Report.

This regulation is not mandatorily applicable
for the company for FY25, since the company is
placed at 1087^th and 1113^rd position as per NSE’s
data and BSE’s date respectively on average
market capitalization during 01.07.2024¬
31.12.2024. However, the company has opted to
comply with this regulation on voluntary basis for
FY25 and the Company has accordingly drafted
the Business Sustainability Report for FY25,
which is given in Annexure - III to the Directors’
Report.

DISCLOSURE REQUIREMENTS UNDER
SECTION 134(3) OF THE COMPANIES ACT,
2013

Section 134(3) of the Companies Act, 2013
requires the Board’s Report to include several
additional contents and disclosures compared to
the earlier law. Most of them have accordingly
been made in the Corporate Governance Report
at appropriate places that forms an integral part
of this Report. There are no proceedings pending
against the company under the Insolvency and
Bankruptcy Code, 2016. There was no instance
of one time settlement with any Bank or Financial
Institution

THE ANNUAL RETURN

A copy of the annual return for FY 2024-25
will be placed on the website of the Company
(www.spbltd.com) after conclusion of the 65^th
Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

While preparing the annual accounts, the
Company has adhered to the following:

Applicable Accounting Standards, referred

to in Section 129(1) of the Companies Act,

2013, have been followed.

The Directors have selected such accounting
policies and applied them consistently and
made judgements and estimates that are
reasonable and prudent so as to give a true
and fair view of the state of affairs of the
Company as at March 31, 2025 and of the
profit of the Company for the said period.

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

The Directors have prepared the annual
accounts on a “going concern” basis.

The Directors have laid down internal
financial controls to be followed by the
Company and that such internal financial
controls are adequate and were operating
effectively.

The Directors have devised proper systems
to ensure compliance with the provisions of
all applicable laws and that such systems
were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR

investments

During the year, the Company did not extend
any Loan or Guarantee or provided any security
covered under Section 186 of the Companies
Act, 2013.

During the year, the company had purchased
1,45,718 equity shares of M/s High Energy
Batteries (India) Limited at a total cost of '' 7.63
crores, from Open Market.

During the year, the company has also
purchased 4,21,102 equity shares of M/s Ponni
Sugars (Erode) Limited at a total cost of '' 17.76
crores, from Open Market.

PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains
relevant details on the nature of Related Party
Transactions (RPTs) and the policy formulated
by the Board on Material RPTs. Particulars of
Contracts or Arrangements with Related Parties
referred to in Section 188(1) of the Companies
Act, 2013 is furnished in accordance with
Rule 8(2) of the Companies (Accounts) Rules,
2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of
business of the Company during the year. There
are no other material changes and commitments
in the business operations of the Company since
the close of the financial year on 31^st March 2025
to the date of this Report.

conservation of energy, technology

ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO

The information relating to Conservation of
Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo, as required
under Section 134(3)(m) of the Companies
Act, 2013, read with Rule 8 of the Companies
(Accounts) Rules, 2014 is given in Annexure - v.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013
mandates every company having minimum
threshold limit of net worth, turnover or net
profit as prescribed to constitute a Corporate
Social Responsibility Committee of the Board,
formulation of a Corporate Social Responsibility
Policy that shall indicate the activities to be
undertaken by the Company as specified in
Schedule VII to the Companies Act, 2013 and
duly approved by the Board, fix the amount of
expenditure to be incurred on the activities and
monitor the CSR Policy from time to time.

Since your Company falls within the minimum
threshold limits, constituted a CSR Committee

of the Board and formulated a CSR Policy.
The CSR Report, forming part of this Report, is
furnished in Annexure - vI.

PARTICULARS OF EMPLOYEES

The information required pursuant to
Section 197, read with Rule 5 of the Companies
(Appointment and Remuneration of Management
Personnel) Rules, 2014, is furnished in
Annexure - vII.

CASH FLOW STATEMENT

As required under Regulation 53 of the
SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a Cash Flow
Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and
Employees were cordial throughout the year
under review. The five year wage / salary
agreement with labour unions / staff association
expired on March 31,2024 and the labour unions
have submitted their charter of demands for the
renewal of the agreement.

DIRECTORS

We are deeply saddened to announce
the sudden demise of our beloved Managing
Director, Sri.K.S.Kasi Viswanathan in the early
hours of March 08, 2025. His end was peaceful
and in his sleep.

Sri Kasi Viswanathan was associated with
the organisation for nearly 5 decades. He was
inducted into the Board of Directors of the
Company in the year 2005 and was instrumental
in providing strategic direction and leadership.
His contributions significantly impacted the
governance and operations of the Company,
driving key areas of expansion, modernization,
and operational excellence.

He played a pivotal role in overseeing the
efficient operations of the mill and successfully
executing numerous growth and development
initiatives for the company. He was largely
responsible for acquisition and successful

turnaround of Unit-II (Paper mill acquired from
M/s.Subburaj Papers Ltd) and the acquisition
of Unit-III (containing assets acquired under
e-auction from M/s.Servalakshmi Paper Limited,
Corporate Debtor in liquidation).

Under his guidance, the Company
experienced substantial growth in both capacity
and production efficiency. He had contributed
significantly to the growth and sustainability
of the Indian Pulp and Paper Industry, thro’
his leadership roles Indian Pulp and Paper
Technical Association (IPPTA) and Indian
Paper Manufacturers Association (IPMA). His
leadership and vision were vital to the Company’s
success, and his sudden passing represents an
irreplaceable loss to the Company and the Pulp
and Paper industry as a whole.

Sri.Kasi Viswanathan was a role model
for the entire employee group of SPB and its
associates. His sudden and silent passing
away has come as a deep shock to all his
friends and admirers, in addition to his family
members. Board of Directors joins Sri.Kasi
Viswanathan’s friends, the employees of SPB
and the associate companies in conveying the
heartfelt condolences to the bereaved family
members.

During the year under review, the Board
appointed:

1. Mr.T.C.A Ranganathan and

Dr. C. Chandramouli, as Independent
Directors on the Board at its meeting held
on 20^th July, 2024, on the recommendation
of the Nomination and Remuneration
Committee, for a term of five consecutive
years effective 20^th July, 2024.

The shareholders have approved their
appointment by way of special resolutions
through postal ballot on 29^th August, 2024.

2. Dr. M. Sai Kumar, IAS, Chairman and
Managing Director, The Tamilnadu Industrial
Investment Corporation Limited(TIIC),

Chennai, as Additional Director on the Board
at its meeting held on 20^th July, 2024.

The shareholders have approved his
appointmentas Nominee Director byway of an
Ordinary resolution, through postal ballot on
29^th August, 2024.

During the year, the second term of
Independent Directorship of Sri A L Somayaji and
Dr. Nandhitha Krishna ended on 28^th September,
2024. Your Directors place on record the
valuable services rendered by Sri A L Somayaji
and Dr. Nandhitha Krishna during their tenure as
Independent Directors of the Company and their
contribution to the governance and growth of the
company.

During the year, TIIC withdrew its nomination
of Sri Hans Raj Verma, IAS as the Nominee
Director in our Board, on 20^th July, 2024 and
he accordingly vacated the office of Nominee
Director. Your Director place on record the
valuable services rendered by Sri Hans Raj
Verma, IAS during his tenure as a Director of the
Company.

All the Independent Directors have given
the declaration that they meet the criteria on
independence, as laid down under Section 149(6)
of the Companies Act, 2013. The performance
evaluation of Independent Directors has been
done by the entire Board of Directors, excluding
the Director being evaluated at the Board
Meeting held on March 21, 2024. The Board,
on the basis of such performance evaluation
determined to continue the term of appointment
of all Independent Directors.

The Board of Directors, in their meeting
held on 10.05.2025, after due considerations
to the recommendations of the Nomination and
Remuneration Committee, had approved

(i) the re-appointment of Sri.Ganesh
Balakrishna Bhadti as wholetime director,
designated as Executive Director

(Operations & Projects) for a period of 3
years from 23.07.2025.

(ii) the appointment of Sri.S.Srinivas as
Additional Director, designated as “Director
(Finance) & Secretary” and his appointment
as a wholetime director for a period of 3
years from 14.06.2025.

The above appointments / re-appointments
as wholetime directors are subject to the
approval of the shareholders of the company in
the ensuing 65th AGM.

OTHER KEY MANAGERIAL PERSONNAL

Mr. K Narayanan, Company Secretary,
had resigned on 28.11.2024 citing personal
reasons and accordingly vacated the position of
Company Secretary and Compliance Officer on
December 31,2024.

Subsequently, Mr. S Srinivas has been
appointed as the Company Secretary and
Compliance Officer of the Company, effective
from March 22, 2025.

AUDITORS

M/s Suri & Co, Chartered Accountants
were appointed as the statutory auditors of
the Company for a period of 5 years from the
conclusion of the 63^rd AGM until the conclusion of
the 68^th AGM of the Company and they continue
to be the Statutory Auditors of the Company.

Particulars of Statutory Auditors, Cost
Auditors, Internal Auditors and the Secretarial
Auditors have been given in the Corporate
Governance Report that forms an integral part of
this report. Secretarial Audit Report, as required
by Section 204(1) of the Companies Act, 2013,
is attached in Annexure - VIII.

For the year under review, the reports issued
by Statutory and Secretarial Auditors do not
have any qualifications.

ACKNOWLEDGEMENT

The Directors place on record their great
appreciation of the tireless efforts of all the
Executives and Employees of the Company for
their commendable performance in achieving
excellent financial results, in a year of great
challenges. The Directors also express their
sincere thanks to the Government of India,
Government of Tamilnadu and Commercial
Banks, for their understanding, guidance and
assistance and Indentors, Customers, Farmers,
Suppliers and Shareholders, for their excellent
support, at all times.

(On behalf of the Board)
N GOPALARATNAM
Chennai Chairman

May 10, 2025 DIN:00001945

---

Mar 31, 2024

The Board of Directors hereby present their 64^th Annual Report and the Audited Accounts for the year ended March 31,2024.

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18 as mandated. Accordingly, the financial statements for current year, including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein, as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit and Loss, there is and would be periodical impact for “Other Comprehensive Income” in measuring and restating investments at fair value.

WORKING RESULTS:
	2023-24	2022-23
	(in tonnes)	(in tonnes)
Production	2,40,383	2,41,145
Sales	2,23,254	2,40,649
	('' crores)	('' crores)
Revenue from Operations	1801.56	2082.53
Other Income	51.48	30.52
Total Income	1853.04	2113.05
Profit before	391.34	564.58
interest, depreciation, exceptional item and tax
Finance Cost	2.14	3.19
Depreciation	43.81	45.25
Profit before tax	345.40	516.14
Provision for current tax	86.30	129.94
Transfer to / (from) Deferred Tax	(-) 0.27	(-) 0.34
Net Profit	259.37	386.54

DIVIDEND

The Board of Directors recommend payment of Dividend at '' 5.00 (Rupees Five only) per Equity Share of '' 2 each, absorbing a sum of '' 31.53 crores.

As per the provisions of the Income tax Act, 1961, as amended by the Finance Act, 2020, Dividend Distribution Tax is not applicable in respect of Dividends declared, distributed or paid by the Company after March 31,2020. The same will be taxed in the hands of the shareholders.

As perInd AS10,Events after the reporting period, Proposed Dividend on Equity Shares,being a non-adjusting event at the Balance Sheet date, is not recognised as a liability in the accounts for the year ended March 31, 2024. The same will be recognised in the year of payment, viz., year ending March 31, 2024.

APPROPRIATIONS

The Board has proposed to transfer '' 100 crores to General Reserve.

2023-24 ('' crores)
Net profit for the year	259.37
Add: Income from SPB Equity Shares Trust	1.70
Add: Surplus brought forward from the previous year	428.87
Add: Re-measurement of defined benefit Plans (net of tax)	7.25
	697.19
Less:
Dividend paid during the year (For Financial Year 2022-23)	37.84
Transfer to General Reserve	100.00
Balance carried forward	559.35

OPERATIONS

The Company had registered the following landmarks during the FY 2023-24, in-spite of challenging market conditions.

? 2^nd highest annual production at 2,40,383 tonnes. (Highest production - 2,41,145 in FY 2022-23).

? Highest ever Annual Production in Unit : Erode - 1,65,116 tonnes.

? 2^nd highest annual sales at 2,23,254 tonnes (Highest sales - 2,40,649 tonnes in FY 2022-23).

? 2^nd Highest Total Income - '' 1853.04 crores (Highest Total Income at '' 2113.05 crores in FY 2022-23).

? 2^nd Highest PAT at '' 259.37 crores (Highest PAT at '' 386.54 crores in FY 2022-23).

PRODUCTION

(Tonnage)
Unit	FY	FY	Growth
	2023-24	2022-23	(%)
Erode	1,65,116	1,63,909	0.7 %
Tirunelveli	75,267	77,236	(-) 2.5 %
Total	240,383	2,41,145	(-) 0.3 %

? During the FY 2023-24, the production at Unit : Erode was 1,65,116 tonnes of paper, as compared to 1,63,909 tonnes, produced in the previous year.

? The Company had completed project Mill Development Plan - III (MDP-III) in Unit : Erode in phases during FY 2020-21 and FY 2021-22.With the completion of most of the critical parts of the Project MDP-III, the annual installed capacity of Paper for Unit : Erode for FY 2022-23 stood augmented to 1,65,000 tonnes.

? During FY 2023-24, the company’s production in Unit : Erode could achieve the annual capacity of 1,65,000 MT.

? The annual capacity of Unit : Tirunelveli remains at 90,000 tonnes. Accordingly, the total installed capacity of the company currently stands at 2,55,000 tonnes per annum.

? Capacity Utilisation in Unit : Erode stood at 100 % in FY 2023-24 and the same was 83.6 % in Unit : Tirunelveli in FY 2023-24.

? Unit : Erode also produced 28,562 tonnes of Wet Lap Pulp during FY 2023-24, (Previous Year 35,577 tonnes) to augment the Pulp requirements of Unit : Tirunelveli.

? Unit : Tirunelveli produced 75,267 tonnes of Paper during the FY 2023-24, as compared to 77,236 tonnes, produced in the previous year.

? Overall Production during the current period was lower on account of

(i) planned maintenance activities, mostly in first half of the current year.

(ii) outages in Recovery and Power Boilers in the first half of the year, affecting pulp and paper production and

(iii) adverse product mix / basis weight mix due to poor market conditions.

SALES			(Tonnage)
Unit	FY	FY	Growth
	2023-24	2022-23	(%)
Erode	1,47,987	1,63,414	(-) 9.4 %
Tirunelveli	75,267	77,235	(-) 2.5 %
Total	2,23,254	2,40,649	(-) 7.2 %

? During the FY 2023-24, company registered an overall sales of 2,23,254 tonnes of Paper (Previous year : 2,40,649 tonnes).

? In addition, as part of its trading activity, the Company sold during FY 2023-24, petroleum products valued at '' 26.47 crores (Previous

Year : '' 24.96 crores) and Note Books valued at '' 0.84 crores (Previous Year : '' 3.82 crores).

? The Company could achieve ZERO Stock of Finished Goods in Unit :Tirunelveli as on March 31,2024 (Stock of Finished Goods in Unit : Tirunelveli as on 31.03.2023 - NIL).

? The Company had a finished goods inventory of 15,315 tonnes as on 31.03.2024 in Unit : Erode (Stock of Finished Goods in Unit : Erode as on 31.03.2023 - NIL).

PROFITABILITY

Revenue from Operations of the Company for the year was '' 1801.56 crores, as against '' 2082.53 crores, in the previous year.

Profit before interest, depreciation, exceptional item and tax (EBIDTA) was '' 391.35 crores, for the Company as a whole in FY 2023-24, compared to '' 564.58 crores, in the previous year.

After absorbing finance costs and depreciation of '' 2.14 crores and '' 43.81 crores respectively, the Profit before tax (PBT) was '' 345.40 crores in FY 2023-24, as compared to '' 516.14 crores, in the previous year.

The fall in net profit during FY 2023-24 compared to corresponding period of previous year is mainly due to:

? Significant increase in the cost of wood, a key input material for the company. Wood procurement prices almost doubled during the year.

? Reduction in the average realisations in the export market.

? Reduction in average realisation in Domestic Market due to intense competition from Imported Paper, available at Cheaper prices.

? Lower production and sales volumes, particularly in the first 2 quarters

Impacts from the above were partially negated by reduction in prices of imported Coal, imported pulp, waste paper and chemicals.

For the year ended 31^st March 2024, current tax liability works out to '' 86.30 crores, as against a liability of '' 129.94 crores in the previous year.

The Deferred Tax liability amounted to '' (-) 0.27 crores for the year ended 31^st March 2024, as against '' (-) 0.34 crores in the previous year.

As a result, profit after tax for the year ended March 31, 2024 was '' 259.37 crores, as compared to '' 386.54 crores, in the previous year.

FINANCE

The Company doesn’t have any Term Loan outstanding as on 31.03.2024. (Debt Position as on March 31,2023 was NIL). The Company did not have any installments of Term Loans and interest (on Working Capital borrowings), due for payment during the year.

Fund Based Working Capital limits availed in the form of “Export Packing Credit” and outstanding as on 31.03.2024 - '' 21.0 crores. [NIL as on 31.03.2023].

MARKET CONDITIONS

? The market conditions were favourable and buoyant for most varieties / grades of Writing & Printing (W&P) during the entire FY 2022-23. However, effective May 2023, the Domestic Paper market had turned adversely due to :

(i) Increased availability of Imported Paper from China, Indonesia and other Asian countries, at Cheaper Prices in the Indian market.

(ii) The overall unfavourable global demand situation resulting in increased supply situation to the Indian Market, thereby resulting in Demand-Supply mismatch.

? Both these factors contributed to significant reduction in the prices of Paper during the year. Price reduction were seen almost every month from May 2023. Domestic Paper mills had to drop prices to liquidate their production and inventory. Though the overall consumption levels of Paper in Domestic Market remained stable, prices have dropped significantly during the year, thereby affecting the margins of the Indian Paper Mills in the FY 2023-24 compared to an extremely favourable and buoyant FY 2022-23.

? The Domestic market condition was unusually poor even during the peak season (i.e. Dec-Mar) in this FY 2023-24. This kind of extremely challenging market conditions during peak seasons, attributable largely to cheaper imports, is normally not noticed.

? The International market for Paper, which remained extremely buoyant by end of calendar year 2022, had seen severe pricing pressures by the end of Q4 of previous year, with the reduction in International Pulp Prices and Ocean Freight Charges. This had continued in to FY 2023-24 as well. The International market has not shown any signs of recovery and the drop in price mainly from Indonesia and China continue. Demand remains flat although some shortterm bumps are seen.

OUTLOOK

? Domestic market conditions are expected to remain challenging at-least untill the first 2 quarters of the FY 2024-25 for W&P grades, as per the present market trends.

? The demand for paper and more particularly, the market operating prices will depend on the Global macro-economic trends. With fear of possible recession in some of the key developed economies and distressing

global political situations, prices of Paper is expected to see continued pressures in the short-medium term. Considering the uncertainties that continue to prevail in global macroeconomic situation and subsequent slowdown in developing countries, the market is expected to be very cautious and seek for replenishment of inventory only when necessary without room for any speculation.

? The Export market for Uncoated Wood Free grades has been under pressure both in terms of demand and prices over the last 18 months and this trend is expected to continue.

EXPORT PERFORMANCE

(Tonnage)
Unit	FY 2023-24	FY 2022-23	Growth (%)
Erode	13,076	16,851	(-) 22 %
Tirunelveli	16,170	22,106	(-) 27 %
Total	29,246	38,957	(-) 25 %

? The export volumes represented 12.2% of the production during FY 2023-24 (This stood at 16.2 % during the FY 2022-23).

? Due to pressure on realisations in FY 2023-24 and reduction in export volumes, the overall export sales in value terms stood at '' 216.8 Crs for FY 2023-24 vs '' 379.84 Crs in FY 2022-23, thereby registering a de-growth of 43.0% in value terms.

? The total export proceeds in US $ stood at US $ 27.29 Mnfor the year 2023-24, compared to US $ 46.65 Mn in previous year).Export Sales in currencies other than US$ during FY 2023-24 - NIL (Sales in Previous year : EURO Mn 0.11& AED 1.82 Mn).

TREE FARMING ACTIVITY:

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as bare-rooted Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had provided clones of Melia-Dubia, a high yielding fast growing species, suitable for Pulp production.

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, under a Collaborative Research Project.

In accordance with the Company’s vision to augment tree farming activities, over twenty crore Seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available during the year, to farmers at subsidised rates for planting in about 24,764 acres of land. (Previous Year : 22,502 acres)

ISO 9001 / ISO 14001 ACCREDITATION

The Company’s Quality Management Systems and Environment Management Systems continue to be covered under ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standard have undergone revision to 2015 Standards which lays emphasis on role of top management, adoption of risk management and change management.All these changes are to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

ISO 50001 CERTIFICATION

During the year, the company secured certificate for the Energy Management System under Standard ISO 50001 : 2018.

FOREST STEWARDSHIP COUNCIL® (FSC®) (FSC- C084458) CERTIFICATION

The Company continues to be certified under four Standards of FSC, viz. FSC-STD-40-004 (Chain of Custody (COC) Certification), FSC-STD-40-005 (Requirements for Sourcing FSC Controlled Wood), FSC-STD-40-003 (COC certification of multiple sites) and FSC-STD-50-001 (Certificate Holder Trademark Requirements). By this, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling ‘FSC Mix’ Claim Products in the domestic and international markets. Being FSC certified implies adherence to sustainable and responsible forestry practices, providing market access, brand reputation, compliance, supply chain integrity, and partnership opportunities..

ESCerts

Both the units of the Company have achieved the targets under the PAT Cycle, as prescribed by the Government of India and accordingly is eligible for ESCerts (Energy Saving Certificates). The Company has to its credit 16,111 ESCerts as on March 31,2024.

ESCerts sold during the FY 2023-24 - 4,946 Nos. (Previous Year -501 Nos.)

AWARDS

The Company received the following Awards and recognitions during the year :

- Excellent Energy Efficient Unit for FY 2022-23 by CII - 6^th consecutive year.

- National Energy Leader Award for FY 2022-23 by CII - 4^th consecutive year.

- CAPEXIL Export Excellence Award for 4 years from 2018-2022.

EXPORT HOUSE STATUS

The Company continues to be accredited with “Star Export House” Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance. The Company''s status was upgraded to "3-Star Export House" in Oct-2023.

DEPOSITORY SYSTEM

As on March 31,2024, 24,359 Shareholders are holding Shares in Demat form and 5,32,52,048 shares have been dematerialised, representing 84.44% of the total Equity Share Capital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income. The Company does not have any material subsidiary as per SEBI (LODR) Regulations. A policy on material subsidiary has been formulated by the Company and is available on our website www.spbltd.com. Neither Managing Director nor Chairman of the Company receives any remuneration or commission from the Subsidiary Company.

ACQUISITION OF ASSETS OF M/s. SERVALAKSHMI PAPER LIMITED (IN LIQUIDATION) (CORPORATE DEBTOR), ON A GOING CONCERN BASIS

The Company participated and emerged as the sole successful bidder in the e-auction held on 19.09.2022, for the sale of assets of M/s.Servalakshmi Paper Limited (In Liquidation) (Corporate Debtor), on a Going Concern basis and the company had remitted the entire bid value of '' 105.0 crores in the month of October 2022.

The e-auction was for sale of assets of M/s.Servalakshmi Paper Limited (In Liquidation) (Corporate debtor) on a Going Concern basis, without liabilities, on “As is where is basis”, “As is what is basis”, “Whatever there is basis” and “Without any recourse basis”, under the provisions of Insolvency and Bankruptcy Code, 2016 read with Regulation 32(e) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and pursuant to the directions contained in Order of Hon’ble National Company Law Tribunal, Chennai Bench (“NCLT”).

The Hon’ble NCLT, Chennai Bench vide its Order dated May 12, 2023 had approved the application filed by the Liquidator for confirmation of sale of assets of M/s.Servalakshmi Paper Limited (Corporate Debtor) (In Liquidation) as a Going Concern, in favour of M/s. Seshasayee Paper and Boards Limited (SPB) and dismissed / disposed of other appeals against the auction.

Consequent to the order of the Hon’ble NCLT dated 12.05.2023, the official liquidator of the Corporate Debtor has Issued Sale Certificate dated 24.05.2023 and has completed the physical handing over of the possession of land and factory premises located at Kodaganallur Village, Vaduganpatti Post, I.C.Pettai, Tirunelveli - 627 010 of Servalakshmi Paper Limited (In Liquidation) on 24.05.2023 to SPB, as per direction in the Order dated 12/05/2023 of Hon’ble NCLT, Chennai Bench and the company remitting additional '' 2.0 crores as per the directions in the said NCLT order.

Appeals challenging the aforesaid Hon’ble NCLT’s Order have been filed in Hon’ble NCLAT, which are pending.

MILL DEvELOPMENT PLAN - Iv

The company had originally submitted application with Ministry of Environment, Forests and Climate Change (MoEF & CC) seeking Environmental Clearances (EC) for project Mill Development Plan - IV (MDP - IV) in Company’s

manufacturing facility in Erode, for increasing the pulp and paper capacities by 40%.

In accordance with the feedback received from Expert Appraisal Committee (EAC) of MoEF & CC, the company now proposes to make a fresh application for EC for expansion up to 20% as Phase-I. Further expansion upto 40% as Phase-II will be done on successful completion of phase-I since the company had sought exemption from fresh public consultations.

The final approval for the revised scope, timelines and cost for various phases of Project Mill Development Plan - IV (MDP-IV) at Unit : Erode, shall be granted by the Board of Directors, after detailed review of the techno-economic feasibility report for the project, subject to the Company obtaining the requisite approvals from concerned authorities for the revised Phase-I expansion by 20%.

CURRENT YEAR (2024-25)

The Company continues to face pricing pressure from increased availability of Imported Paper at Cheaper Prices and this trend is expected to continue in FY 2024-25.

Further, the wood prices continue to remain high and the coal prices have started to increase, thereby affecting the profitability margins.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit: Erode, the Power Boilers, Lime kiln and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the Pollution Control norms, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Additional treatment facilities have been proposed for waste water under the Mill Development Plan.

Unit : Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. As part of the Mill Expansion Plan, the Waste Water Treatment Plant has been augmented with a Dissolved Air Floatation Cell and Anaerobic Digester.

MANAGEMENT’S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management’s Discussion and Analysis, as required under clause 2(e) of Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in “Management Discussion and Analysis Report” that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOvERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company’s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR) Regulations], with amendments to Regulation 34 (2) (f) of LODR Regulations vide Gazette Notification No. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021 introduced new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). Top 1000 companies based on Market Capitalisation as per NSE / BSE as on March 31 of every Financial Year, are required to have “Business Responsibility & Sustainability Report” (BRSR) as part of their Boards’ Report.

This Regulation is mandatorily applicable to our Company.

The Company has drafted the Business Responsibility and Sustainability Report for FY 2023-24, in line with the format prescribed by SEBI, which is given in Annexure - III to the Directors’ Report.

DISCLOSURE REQUIREMENTS UNDER SECTION 134(3) OF THE COMPANIES ACT, 2013

Section 134(3) of the Companies Act, 2013 requires the Board’s Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at appropriate places that forms an integral part of this Report. There are no proceedings pending against the company under the Insolvency and Bankruptcy Code, 2016. There was no instance of one time settlement with any Bank or Financial Institution.

THE ANNUAL RETURN

A copy of the annual return for FY 2023-24 will be placed on the website of the Company (www.spbltd.com) after conclusion of the 64^th Annual General Meeting.

DIRECTORS’ RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

◊ Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed. The Directors have selected such accounting policies and applied them consistently and

made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the said period.

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

◊ The Directors have prepared the annual accounts on a “going concern” basis.

◊ The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

◊ The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the year, the Company did not extend any Loan or Guarantee or provided any security covered under Section 186 of the Companies Act, 2013.

During the year, the Company had purchased 35,095 equity shares of M/s High Energy Batteries (India) Limited at a total cost of '' 1.96 crores, from Open Market.

The only other investment made by the Company pertains to '' 107.0 crores paid by the Company (''105.0 crores in 2022-23 and '' 2.0 crores in FY 2023-24) for acquisition of assets of M/s. Servalakshmi Papers Limited (Corporate Debtor under Liquidation), as a going concern, which is treated as “Other Non Current Assets” in the audited balance sheet of the company as at 31.03.2024, since appeals challenging the

Hon’ble NCLT’s Order (approving the e-auction sale in favour of the Company) have been filed in Hon’ble NCLAT, which are pending.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year. There are no other material changes and commitments in the business operations of the Company since the close of the financial year on 31^st March 2024 to the date of this Report.

conservation of energy, technology

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - V.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, the Board has constituted a CSR Committee and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review. The five year wage / salary agreement with labour unions / staff association expired on March 31,2024 and the labour unions have submitted their charter of demands for the renewal of the agreement.

DIRECTORS

During the FY 2023-24, the Board appointed:

1. Mr S. Durgasankar, as an Independent Director on the Board at its meeting held on 04^th November 2023, on the recommendation of the Nomination and Remuneration Committee, for a term of five consecutive years effective 04^th November 2023.

The shareholders have approved his appointment by way of special resolution through postal ballot on 13^th December, 2023

2. Mrs S. Sheela Balakrishnan, IAS (Retd) as an Independent Director on the Board at its meeting held on 20^th January, 2024, on the recommendation of the Nomination and Remuneration Committee, for a term of five consecutive years effective 20^th January, 2024.

The shareholders have approved her appointment by way of special resolution through postal ballot on 6^th March, 2024

During the FY 2023-24, the Board also reappointed:

Mr Mohan Verghese Chunkath, IAS (Retd), as an Independent Director on the Board at its meeting held on 20^th January, 2024, on the recommendation of the Nomination and Remuneration Committee, for the second consecutive term of five years effective 01^st April, 2024. The shareholders have approved his re-appointment by way of special resolution through postal ballot on 06^th March, 2024.

The second term of Independent Directorship of Mr. S. Narayan, IAS (Retd) and Mr. V. Sridar ended on 31^st March, 2024. Your Directors place on record the valuable services rendered by Mr. S. Narayan and Mr. V. Sridar during their tenure as Independent Directors of the Company.

All the Independent Directors have given the declaration that they meet the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board Meeting held on March 21, 2024. The Board, on the basis of such performance evaluation determined to continue the term of appointment of all Independent Directors.

OTHER KEY MANAGERIAL PERSONNAL

Mr. B.S. Raj Kiran, Company Secretary, resigned and vacated the position of Company Secretary on May 18, 2023. During the interim period from May 18, 2023 to August 14, 2023, Mr. S. Srinivas, CFO, held the role of Compliance Officer of the Company.

Subsequently, Mr. K. Narayanan has been appointed as the Company Secretary and Compliance Officer of the Company, effective from August 14, 2023.

AUDITORS

M/s Suri & Co, Chartered Accountants were appointed as the statutory auditors of the Company for a period of 5 years from the conclusion of the 63^rd AGM until the conclusion of the 68^th AGM of the Company and they continue to be the Statutory Auditors of the Company.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

For the year under review, the reports issued by Statutory and Secretarial Auditors do not have any qualifications.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results, in a year of great challenges. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Indentors, Customers, Farmers, Suppliers and Shareholders, for their excellent support, at all times.

---

Mar 31, 2023

The Board of Directors hereby present their 63^rd Annual Report and the Audited Accounts for the financial year ended March 31,2023.

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18 as mandated. Accordingly, the financial statements for current year, including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein, as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit and Loss, there is and would be periodical impact for “Other Comprehensive Income” in measuring and restating investments at fair value.

WORKING RESULTS
	2022-23 (in tonnes)	2021-22 (in tonnes)
Production	2,41,145	2,12,086
Sales	2,40,649	2,20,344
	('' crores)	('' crores)
Revenue from Operations	2082.53	1354.93
Other Income	30.52	16.65
Total Income	2113.05	1371.58
Profit before interest, depreciation, exceptional item and tax	564.58	182.24
Finance Cost	3.19	2.87
Depreciation	45.25	40.83
Profit before tax	516.14	138.54
Provision for current tax	129.94	34.55
Transfer to / (from) Deferred Tax	(-) 0.34	0.89
Net Profit	386.54	103.10

DIVIDEND

The Board of Directors recommend payment of Dividend at '' 6.00 (Rupees six only) per Equity Share of '' 2 each, absorbing a sum of '' 37.84 crores.

As per the provisions of the Income tax Act, 1961, as amended by the Finance Act, 2020, Dividend Distribution Tax is not applicable in respect of Dividends declared, distributed or paid by the Company after March 31,2020. The same will be taxed in the hands of the shareholders.

As per Ind AS 10, Events after the reporting period, Proposed Dividend on Equity Shares, being a non-adjusting event at the Balance Sheet date, is not recognised as a liability in the accounts for the year ended March 31,2023. The same will be recognised in the year of payment, viz., year ending March 31,2023.

appropriations
2022-23 ( '' crores)
Net profit for the year	386.54
Add:
Income from SPB
Equity Shares Trust	0.71
Add:
Surplus brought forward
from the previous year	166.14
Add:
Re-measurement of defined
benefit Plans (net of tax)	(-) 8.75
	544.64
Less:
Dividend paid during the year
(For Financial Year 2021-22)	15.77
Transfer to General Reserve	100.00
Balance carried forward	428.87

OPERATIONS

Thanks to the favourable market conditions and the realisation of benefits from project MDP-III in Unit : Erode in the first full year post project completion, the Company had registered the following key landmarks during the FY 2022-23, which are the highest in the annals of the Company’s history.

? Annual production at 2,41,145 tonnes.

? Annual sales at 2,40,649 tonnes.

? Total Income at '' 2113.05 crores.

? PAT at '' 386.54 crores.

PRODUCTION		(Tonnage)
Unit	FY	FY	Growth
	2022-23	2021-22	(%)
Erode	1,63,909	1,41,707	15.7 %
Tirunelveli	77,236	70,379	9.7 %
Total	2,41,145	2,12,086	13.7 %

? During the FY 2022-23, the production at Unit: Erode was 1,63,909 tonnes, as compared to 1,41,707 tonnes, produced in the previous year. The production during the previous year included 11,025 tonnes of Pulp Board produced (for in-house use) during the year, whereas the pulp board production was NIL during the FY 2022-23.

? Accordingly paper production at Unit : Erode was higher by 33,227 tonnes, compared to the previous year.

? The Company had completed project Mill Development Plan - III (MDP-III) in Unit : Erode in phases with critical areas of upgradation works on Paper Machine 2, Paper Machine 4, Pulp Mill and Recovery Boiler getting completed during the Financial Year 2021-22.

? With the completion of most of the critical parts of the Project MDP-III, the annual installed capacity of Paper for Unit : Erode for FY 2022-23 stood augmented to 1,65,000 tonnes. The annual capacity of Unit : Tirunelveli remains at 90,000 tonnes. Accordingly, the total installed capacity of the company currently stands at 2,55,000 tonnes per annum.

? Capacity Utilisation in Unit : Erode stood at 99.4 % in FY 2022-23 and the same was 85.8 % in Unit : Tirunelveli in FY 2022-23.

? Unit : Erode also produced 35,577 tonnes of Wet Lap Pulp during FY 2022-23, (Previous Year 29,551 tonnes) to augment the Pulp requirements of Unit : Tirunelveli.

? Unit : Tirunelveli produced 77,236 tonnes of Paper during the FY 2022-23, as compared to 70,379 tonnes, produced in the previous year. The production of 77,236 tonnes is the highest ever annual production in the history of the Unit : Tirunelveli.

? Overall Production for the Company was 2,41,145 tonnes of Paper and Boards for the year, as compared to 2,12,086 tonnes produced, in the previous year.

sales			(Tonnage)
Unit	FY 2022-23	FY 2021-22	Growth (%)
Erode	1,63,414	1,42,500	14.7 %
Tirunelveli	77,235	77,844	(-) 0.8 %
Total	2,40,649	2,20,344	9.2 %

? During the FY 2022-23, company registered an overall sales of 2,40,649 tonnes of Paper (Previous year : 2,20,344 tonnes).

? In addition, as part of its trading activity, the Company sold during FY 2022-23, petroleum products valued at '' 24.96 crores (Previous Year : '' 26.34 crores) and Note Books valued at '' 3.82 crores (Previous Year : '' 0.80 crores).

? Both Units Erode & Tirunelveli achieved Zero

Stock of Finished Goods as on March 31,

2023.

PROFITABILITY

Revenue from Operations of the Company for the year was '' 2082.53 crores, as against '' 1354.93 crores, in the previous year.

Profit before interest, depreciation,

exceptional item and tax (EBIDTA) was '' 564.58 crores, for the Company as a whole in FY 2022-23, compared to '' 182.24 crores, in the previous year.

After absorbing finance costs and depreciation of '' 3.19 crores and '' 45.25 crores respectively, the Profit before tax (PBT) was '' 516.14 crores in FY 2022-23, as compared to '' 138.54 crores, in the previous year.

The improved profitability during the FY 2022-23, as compared to the previous year, is mainly on account of :

? Improved Net Sales Realisations both from

the Domestic and Export markets.

? Higher volumes of production and sales.

? Improved performance of Pulp Mill and

Recovery operations.

The benefits arising from above factors were partially neutralised by exorbitant increase in the cost of most input materials viz. Wood, Chemicals, Waste Paper, Imported Pulp, Coal, etc.

For the year ended 31^st March 2023, current tax liability works out to '' 129.94 crores, as against a liability of '' 34.55 crores in the previous year.

The Deferred Tax liability amounted to (-) '' 0.34 crores for the year ended 31^st March 2022, as against '' 0.89 crores in the previous year.

As a result, profit after tax for the year ended March 31, 2023 was '' 386.54 crores, as compared to '' 103.10 crores, in the previous year.

FINANCE

The Company reports NIL debt position as on March 31,2023 (Debt Position as on March 31, 2022 was also NIL).

The Company did not have any instalments of Term Loans or interest due for payment during the year. Availment of Fund Based Working Capital limits remained NIL throughout the FY 2022-23.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid '' 4.37 crores during the year and with this the balance outstanding had become ZERO. The Company has no outstanding liability on this account as on 31.03.2023.

MARKET CONDITIONS

? The market conditions were favourable for most varieties / grades of Writing & Printing (W&P) during the entire FY 2022-23. The buoyancy in Paper Market which commenced in Q4 of FY 2021-22 remained so during greater part of financial year under review.

? The continued buoyancy helped almost all the major players in the Indian Paper Industry to effect Price Increases during the FY 2022-23.

? The key triggers for the Price Increases implemented during the year were

n Exorbitant increase in the prices of imported pulp and recovered paper in the International markets.

n Continuous increase in the cost of wood

n Significant increase in the cost of chemicals

n Continued high levels of cost of imported coal

? The International market for Paper, which remained extremely buoyant by end of calendar year 2022, had seen severe pricing

EXPORT PERFORMANCE
			(Tonnage)
Unit	FY 2022-23	FY 2021-22	Growth (%)
Erode	16,851	28,129	(-) 40 %
Tirunelveli	22,106	28,881	(-) 23 %
Total	38,957	57,010	(-) 32 %

pressures by the end of Q4, with the reduction in International Pulp Prices and Ocean Freight Charges.

? OUTLOOK : The market for Writing & Printing (W&P) Paper grades is expected to be stable in the first quarter of FY 2023-24. Despite increased availability of imported W&P products including Copiers at attractive prices, the higher requirements of papers for the ongoing notebook segment and major Government Tenders in various states is expected to sustain the order inflow in this segment in Q1 of FY 2023-24. Both Board segments and Kraft Paper are likely to face sluggish market conditions.

The sustainability of the higher levels of demand will however depend on the Global macro-economic trends. With fear of possible recession in some of the key developed economies, prices of Paper is expected to see pressures in the medium term.

The Export market for Uncoated Wood Free grades has been under pressure both in terms of demand and prices over the last 6 months and this trend is expected to continue.

? The export volumes represented 16.2 % of the production during FY 2022-23 (This stood at 26.9 % during the FY 2021-22).

? Thanks to higher realisations in FY 2022-23 over FY 2021-22, the overall export sales in value terms stood at '' 379.8 Crs for FY 2022-23 vs '' 358.2 Crs in FY 2021-22, thereby registering a growth of 6.0% in value terms.

? The total export proceeds in US $ stood at US $ 46.65 Mn for the year 2022-23, compared to US $ 47.96 Mn in previous year. In addition, the company had sales of EURO 0.11 Mn and AED Mn 1.82 during the FY 2022-23 (Previous year : EURO Mn 0.08 & AED NIL).

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as bare-rooted Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had provided clones of Melia-Dubia, a high yielding fast growing species, suitable for Pulp production.

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, under a Collaborative Research Project.

In accordance with the Company’s vision to achieve wood positive status, over twenty crore Seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available during the year, to farmers at subsidised rates for planting in about 22,502 acres of land. (Previous Year : 20,042 acres).

ISO 9001 / ISO 14001 ACCREDITATION

The Company’s Quality Management

Systems and Environment Management

Systems continue to be covered under ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standard have undergone revision to 2015 Standards which lays emphasis on role of top management, adoption of risk management and change management. All these changes are to facilitate sustainability in business performance.

ESCerts

Both the units of the Company have achieved the targets under the PAT Cycle, as prescribed by the Government of India and accordingly is eligible for ESCerts (Energy Saving Certificates). The Company has to its credit 21057 ESCerts as on March 31,2023.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL® (FSC®) (FSC- C084458) Certification

The Company continues to be certified under four Standards of FSC, viz. FSC-STD-40-004 (Chain of Custody (COC) Certification), FSC-STD-40-005 (Requirements for Sourcing FSC Controlled Wood), FSC-STD-40-003 (COC certification of multiple sites) and FSC-STD-50-001 (Certificate Holder Trademark Requirements). By this, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling ‘FSC Mix’ Claim Products in the domestic and international markets. Being FSC certified implies adherence to sustainable and responsible forestry practices, providing market access, brand reputation, compliance, supply chain integrity, and partnership opportunities.

AWARDS

The Company received the following Awards and recognitions during the year :

- IPMA (Indian Paper Mills Association) Paper

Mill of the Year award for FY 2019-20.

V___

- IPMA Energy Conservation Award for FY 2021-22.

- Excellent Energy Efficient Unit for FY 2021-22 by CII.

- National Energy Leader Award for FY 2021-22 by CII.

- CII - SR EHS Excellence Bronze Award for the year 2022.

EXPORT HOUSE STATUS

The Company continues to be accredited with “Star Export House” Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2023, 18529 Shareholders are holding Shares in Demat form and 5,31,41,863 shares have been dematerialised, representing 84.26 % of the total Equity Share Capital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

ACQUISITION OF M/s. SERvALAKSHMI PAPER LIMITED (IN LIQUIDATION) (CORPORATE DEBTOR), ON A GOING CONCERN BASIS

The Company participated and emerged as the successful bidder in the e-auction held on 19.09.2022, for the sale of M/s.Servalakshmi Paper Limited (In Liquidation) (Corporate Debtor), on a Going Concern basis. Applications, filed challenging the e-auction and confirmation of sale, were heard by NCLT, Chennai bench and the Hon’ble Tribunal had reserved the matters for Orders.

The company had remitted the entire bid value of '' 105.0 crores in the month of October 2022, _>

post the confirmation of the company being the sole successful bidder received from the Official Liquidator of the Corporate Debtor.

MILL DEVELOPMENT PLAN - IV

? The Project Mill Development Plan-III (MDP- III), commissioned in phases during the last 3 years, helped the company

a) In Upgradation and Modernisation of the Paper Machines in Erode, to increase the Capacity from 1,32,000 tonnes per annum to 1,65,000 tonnes per annum.

b) In Upgradation and Modernisation of the RDH Pulp Mill to increase the Capacity to 1,54,000 tonnes per annum.

c) Upgradation of the Recovery Island and

d) Further Diversification and enhancement of Product offerings with entry in to Premium Boards segments / multi-layer products.

? The entire project cost of MDP-III (Project Cost incurred as on 31.03.2023 - '' 244.3 Crs) was met out of internal accruals.

? With the successful completion of project MDP-III and with the prospect of company’s paper manufacturing capacity getting expanded with the acquisition of M/s. Servalakshmi Paper Limited (Corporate Debtor under Liquidation), the company has commenced its work on identifying the next round of strategic growth projects for the company.

? The Board of Directors of the Company, in their meeting held on April 29, 2023, has accorded in-principle approval for the company to secure Environmental Clearances for project Mill Development Plan-IV (MDP-IV) in Company’s manufacturing facility in Erode, to augment Paper Capacity from 1,65,000 tonnes p.a. to 2,31,000 tonnes p.a. and Pulp Capacity (Wood and Bagasse) from 1,80,000 tonnes p.a. to 2,52,000 tonnes p.a.

? Phase-I of MDP-IV will consist of activities for enhancing the pulp capacity to 2.52 lakh tonnes p.a. in Unit : Erode with a marginal increase in paper capacity. The enhanced pulping capacity will help the company in replacing costlier purchased pulp (imported pulp / deinked pulp) and reduce the overall cost of manufacturing per tonne of Paper in Unit : Tirunelveli.

? The company plans to file shortly, the necessary applications with the Ministry of Environment and Forests for Climate Change for Environment Clearance and further approvals concerning the project will be sought from concerned regulatory authorities including local, state and central authorities, as may be necessary for the project.

? Project MDP-IV-Phase-I is expected to be completed in 30 months after final approval of the Project by the Board of Directors and on securing necessary Environmental Clearances.

? The project cost for Phase-I is estimated at ''.700 crores and the company expects to fund the entire project out of its internal accruals only.

? The final approval for the project shall be granted by the Board, after detailed review of the techno-economic feasibility report for the project, subject to the Company obtaining the requisite approvals from concerned authorities.

CURRENT YEAR (2023-24)

FY 2023-24 has begun with good order inflow, both for printing and writing grades and packaging grades.

environmental protection

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers, Lime kiln and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for

total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the Pollution Control norms, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Additional treatment facilities have been proposed for waste water under the Mill Development Plan.

Unit : Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. As part of the Mill Expansion Plan, the Waste Water Treatment Plant has been augmented with a Dissolved Air Floatation Cell and Anaerobic Digester.

MANAGEMENT’S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management’s Discussion and Analysis, as required under Clause 49(VI 11 )(D) of the Listing Agreement with Stock Exchanges covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in “Management Discussion and Analysis Report” that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOvERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company’s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR) Regulations], with amendments to Regulation 34 (2) (f) of

LODR Regulations vide Gazette notification

V._

no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021 introduced new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). Top 1000 companies based on Market Capitalisation as per NSE / BSE as on March 31 of every Financial Year, are required to have “Business Responsibility & Sustainability Report” (BRSR) as part of their Directors’ Report.

This Regulation is mandatorily applicable to our Company, with effect from Financial Year 2022-23.

The Company has drafted the Business Responsibility and Sustainability Report for FY 2022-23, in line with the format prescribed by SEBI, which is given in Annexure - III to the Directors’ Report.

DISCLOSURE REQUIREMENTS UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Section 134(3) of the Companies Act, 2013 requires the Board’s Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at appropriate places that forms an integral part of this Report.

THE ANNUAL RETURN

A copy of the annual return for FY 2022-23 will be placed on the website of the Company (www.spbltd.com) after conclusion of the 63^rd Annual General Meeting.

DIRECTORS’ RESPONSIBIUTY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

? Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

? The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the

Company as at March 31, 2023 and of the profit of the Company for the said period.

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

? The Directors have prepared the annual accounts on a “going concern” basis.

? The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

? The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the year, the Company did not extend any Loan or Guarantee or provided any security covered under Section 186 of the Companies Act, 2013.

The only investment made by the company pertains to '' 105.0 crores of bid amount paid by the company for acquisition of M/s. Servalakshmi Papers Limited (Corporate Debtor under Liquidation), which is treated in the nature of advance and disclosed as “Non Current Financial Assets” in the audited balance sheet of the company as at 31.03.2023, since the sale is pending for approval in NCLT, Chennai bench.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies

Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - Iv.

material changes and commitments

There was no change in the nature of business of the Company during the year. There are no other material changes and commitments in the business operations of the Company since the close of the financial year on 31^st March 2023 to the date of this Report.

conservation of energy, technology

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - v.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - vi.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management

Personnel) Rules, 2014, is furnished in Annexure- VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review. The five year wage / salary agreement with labour unions / staff association expired on March 31, 2019. After prolonged discussions, a new agreement, valid until March 31, 2024, has been entered into by the Company during FY 2022-23.

DIRECTORS

During the year, Tamilnadu Government withdrew the nomination of Sri K.Rajkumar, IFS and in his place nominated, Sri Ritto Cyriac, IFS, the Special Secretary to Government, Environment and Forests Department, as its Nominee Director on the Board of our Company. Sri Ritto Cyriac, IFS, was appointed as an Additional Director on the Board of the Company on March 24, 2023. His appointment as a Nominee Director, liable to retire by rotation, has been approved and recommended by the Board of Directors and the same has been included as Special Business in the Notice for 63^rd AGM, for consideration and approval by the shareholders of the Company.

Your Directors place on record the valuable services rendered by Sri K Rajkumar, IFS during his tenure as Directors of the Company.

Sri.N.Gopalaratnam, Chairman and Sri.K.S.Kasi Viswanathan, Managing Director were due for retirement by March 31, 2023. The Board of Directors, in their meeting held on 28.01.2023, after due considerations to the recommendations of the Nomination and ^_

Remuneration Committee, had approved the re-appointment of Sri.N.Gopalaratnam as wholetime director designated as Chairman and Sri.K.S.Kasi Viswanathan as Managing Director for another term of 3 years.

The shareholders of the company, vide the Postal Ballot e-voting which concluded on March 13, 2023, had approved the appointment of Sri.N.Gopalaratnam as wholetime director designated as Chairman and Sri.K.S.Kasi Viswanathan as Managing Director for a further period of 3 years from 01.04.2023, with overwhelming majority.

All the Independent Directors have given the declaration that they meet the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board Meeting held on March 24, 2023. The Board, on the basis of such performance evaluation determined to continue the term of appointment of all Independent Directors.

other key managerial personnal

Sri S Srinivas, Senior Vice President, had demitted the office of the Company Secretary on 28.01.2023. He continues to hold the office of the “Chief Financial Officer (CFO)” of the Company. Sri B.S.Raj Kiran has been appointed as Company Secretary w.e.f 28.01.2023.

AUDITORS

M/s Maharaj N R Suresh & Co LLP, Chartered Accountants are the Statutory Auditors of the Company for FY 2022-23. However, the 2^nd five year tenure of M/s Maharaj N R Suresh & Co LLP gets over with the conclusion of this annual general meeting and the Board of Directors have approved and recommended appointment of M/s Suri & Co., as the statutory auditors of the Company for a period of 5 years from the conclusion of the 63^rd AGM until the conclusion of the 68^th AGM of the Company.

j

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving

excellent financial results, in a year of great challenges. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Indentors, Customers, Farmers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board

Chennai N GOPALARATNAM

April 29, 2023 Chairman

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Mar 31, 2022

The Board of Directors hereby present their 62^nd Annual Report and the Audited Accounts, for the financial year ended March 31, 2022.

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18, as mandated. Accordingly, the financial statements for current year, including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein, as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit and Loss, there is and would be periodical impact for “Other Comprehensive Income” in measuring and restating investments at fair value.

WORKING RESULTS

	2021-22 (in tonnes)	2020-21 (in tonnes)
Production	2 12 086	1 70 138
Sales	2 20 344	1 39 005
	('' crores)	('' crores)
Revenue from Operations	1354.93	781.79
Other Income	16.65	19.32
Total Income	1371.58	801.11
Profit before interest, depreciation, exceptional item and tax	182.24	126.87
Finance Cost	2.87	2.91
Depreciation	40.83	37.60
Profit before tax	138.54	86.36
Provision for current tax	34.55	18.44
Transfer to / (from) Deferred Tax	0.89	(-) 32.35
Net Profit	103.10	100.27

DIVIDEND

The Board of Directors recommend payment of Dividend at '' 2.50 (Rupees Two and fifty paise only) per Equity Share of '' 2 each, absorbing a sum of '' 15.76 crores.

As per the provisions of the Income tax Act, 1961, as amended by the Finance Act, 2020, Dividend Distribution Tax is not applicable in respect of Dividends declared, distributed or paid by the Company after March 31, 2020. The same will be taxed in the hands of the shareholders.

As per Ind AS 10, Events after the reporting period, Proposed Dividend on Equity Shares, being a non-adjusting event at the Balance Sheet date, is not recognised as a liability in the accounts for the financial year ended March 31,

2022. The same will be recognised in the year of payment, viz., financial year ending March 31,

2023.

APPROPRIATIONS

2021-22 ( '' crores)
Net profit for the year	103.10
Add: Income from SPB Equity Shares Trust	1.11
Add: Surplus brought forward from the previous year	176.89
Add: Re-measurement of defined benefit Plans (net of tax)	0.80
	281.90
Less: Dividend paid during the year (For Financial Year 2020-21)	15.76
Tax on Dividend distribution	---
Transfer to General Reserve	100.00
Balance carried forward	166.14

OPERATIONS

Gradually coming out of Covid-19 lockdown

and restrictions, the Company had registered the

following key landmarks during the FY 2021-22.

? Highest ever annual production at 2.12 lakh tonnes.

? Highest ever annual sales at 2.20 lakh tonnes.

? Highest ever Total Income at '' 1371.58 crores.

? Highest ever annual Exports at 57010 tonnes (representing over 25% of FY 2021-22 volumes).

The Company could achieve these landmarks in

the current financial year, in-spite of the following:

? Weak demand situation amidst Closure of Schools and educational institutions for most part of the 1^st half of FY 2021-22.

? Shuts availed in Paper Machines, Pulp Mill and Recovery Operations during the FY 2021-22 for upgradation works under the Project Mill Development Plan - III.

? Global political and economic situations resulting in highly vulnerable and uncertain logistics situation, non-availability and high cost of containers for sourcing imported input materials and in exporting finished products.

PRODUCTION

(Tonnage)
Unit	FY 2021-22	FY 2020-21	Growth (%)
Erode	1,41,707	1,12,489	26 %
Tirunelveli	70,379	57,649	22 %
Total	2,12,086	1,70,138	25 %

? During the FY 2021-22, the production at Unit : Erode was 1,41,707 tonnes of paper, as compared to 1,12,489 tonnes, produced in the previous year. The production during the year included 11,025 tonnes of Pulp Board production. (Previous Year - 16,226 tonnes).

? Accordingly paper production at Unit : Erode was higher by 34,419 tonnes, compared to the previous year.

? The Company completed upgradation works on Paper Machine - 1 and Paper Machine - 5 in FY 2020-21 as part of project Mill Development Plan - III (MDP-III).

? As part of the second phase of the project, the Company completed the upgradation works in Paper Machine - 2, Paper Machine - 4, Pulp Mill and Recovery Boiler during the Financial Year 2021-22.

? Completion of these projects helped the Company to ramp up production during FY 2021-22 and helped the Erode unit to achieve its highest ever annual production & sales, despite tough demand situation and shuts availed in machines for upgradation works under the project.

? With the completion of most critical parts of the Project MDP-III, the annual installed capacity of Paper for Unit : Erode reached 1,65,000 tonnes. The annual capacity of Unit : Tirunelveli remains at 90,000 tonnes. Accordingly, the total installed capacity of the Company currently stands at 2,55,000 tonnes per annum.

? Unit : Erode also produced 29,552 tonnes of Wet Lap Pulp during FY 2021- 22, (Previous Year 32,569 tonnes) to augment the Pulp requirements of Unit : Tirunelveli.

? Unit : Tirunelveli produced 70,379 tonnes of Paper during the FY 2021-22, as compared to 57,649 tonnes, produced in the previous year. Production recorded was higher mainly due to significant increase in the volume of export orders during the FY 2021-22.

? Overall Production for the Company was 2,12,086 tonnes of Paper and Boards for the year, as compared to 1,70,138 tonnes produced in the previous year.

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SALES (Tonnage)
Unit	FY 2021-22	FY 2020-21	Growth (%)
Erode	1,42,500	86,309	65%
Tirunelveli	77,844	52,696	48%
Total	2,20,344	1,39,005	59%

? During the FY 2021-22, Company registered an overall sales of 2,20,344 tonnes of Paper (Previous year : 1,39,005 tonnes).

? In addition, as part of its trading activity, the Company sold during FY 2021-22, petroleum products valued at '' 26.34 crores (Previous Year : '' 21.75 crores) and Note Books valued at '' 0.80 crores (Previous Year : '' 3.61 crores).

? Unit : Tirunelveli achieved Zero Stock of Finished Goods as on March 31, 2022 (Stock as on March 31, 2021 - 7490 tonnes).

? Unit : Erode had a Finished Goods Inventory of only 2337 tonnes as on March 31, 2022 (Stock as on March 31,2021 - 27735 tonnes).

PROFITABILITY

The Revenue from Operations of the Company for the year was '' 1354.93 crores, as against '' 781.79 crores, in the previous year.

Profit before interest, depreciation, exceptional item and tax was '' 182.24 crores, for the Company as a whole, compared to '' 126.87 crores, in the previous year.

After absorbing interest and depreciation of '' 2.87 crores and '' 40.83 crores respectively, the Profit before tax (PBT) was '' 138.54 crores in FY 2021-22, as compared to '' 86.36 crores, in the previous year.

The higher PBT is mainly on account of higher volumes, manufactured and sold during the FY 2021-22 compared to the previous year.

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It is to be highlighted that the healthy profitability of the Company in FY 2021-22 is despite the significant impact of use of costlier pulp and power during the 45 days shut of pulp mill & recovery operations, for upgradation works under MDP-III.

The Company''s strategy of using the Covid-19 related downtimes, during the last 2 years, to manufacture and stock pulp board paid rich dividends during FY 2021-22 and effectively contained the impact, of above mentioned 45 days planned shut of pulp mill & recovery operations, to manageable levels.

For the financial year ended March 31, 2022, current tax liability works out to '' 34.55 crores, as against a liability of '' 18.44 crores in the previous year.

The Deferred Tax liability amounted to '' 0.89 crores for the financial year ended March 31, 2022, as against '' (-) 32.35 crores in the previous year. The Company had migrated to effective income-tax rate of 25.17% w.e.f FY 2021-22 and accordingly the Company had restated the deferred tax assets & liabilities at the effective income tax rate of 25.17% as on March 31, 2021. The restatement involved a deferred tax provision reversal of '' 43.67 crores and MAT credit entitlement adjustment of '' 7.28 crores, net adjustment amounting to '' 36.39 crores during the previous financial year ended March 31, 2021.

As a result, profit after tax for the financial year ended March 31,2022 was '' 103.10 crores, as compared to '' 100.27 crores in the previous financial year.

FINANCE

The Company reports NIL debt position as on March 31, 2022 (Debt Position as on March 31, 2021 was also NIL).

The Company did not have any instalments of Term Loans and interest (on Working Capital borrowings), due for payment during the year.

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Availment of Fund Based Working Capital limits remained NIL throughout the FY 2021-22.

As against '' 82.5 crores of Term Loan sanctioned by the Bankers (State Bank of India and HDFC Bank) for the project MDP-III, the Company had availed a Term Loan of '' 11.16 crores only during the year and the same had been prepaid, along with accrued interest, during the year. The Company had also surrendered the un-availed portion of the Term Loan. Accordingly, the Term Loan outstanding as of March 31, 2022 stands NIL.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid '' 4.03 crores during the year and the balance outstanding as on March 31, 2022 was '' 4.37 crores.

MARKET CONDITIONS

? Q-I 2021-22 : FY 2021-22 started with a positive note, as the market sentiments and demand at the beginning of this year was good. Good market conditions and demand helped the Paper Mills to announce price increases in April''21. However this did not last long, due to the onset of Covid 2^nd wave from May''21. With more Government restriction from May''21 and closure of schools and colleges, the demand and market conditions started deteriorating. In May''21, Paper Mills withdrew the price increases announced in April''21.

? Q-II 2021-22 : The market conditions showed signs of improvement from August''21 as the schools and colleges were reopened. This improved the sentiments in the market and the Paper mills announced Price increases, amidst extraordinary levels of cost push. Though the market was not buoyant, the fear of price increase in the subsequent months forced the customers to buy the material in advance. Our Company also started marketing various new products, particularly in the Boards Segment, aggressively. The order flow for the new products was good and

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unaffected by the poor market conditions that prevailed for writing and printing segments. These new products complemented the existing products and contributed to improved sale in this quarter for the Company.

? Q-III 2021-22 : Cost of all key input materials (Coal, Wood, Chemicals) continued to see significant increase during the quarter and the Paper Mills announced series of price increases during the quarter. End of the quarter witnessed sluggishness in demand, particularly for Printing and Writing Paper, owing to various uncertainties in the market and fear of Omicron.

? Q-IV 2021-22 : Towards the end of January ''22, the market sentiments improved as the fear of Omicron started fading. The demand for printing and writing grades started improving significantly especially from the educational sector, as the schools and colleges were reopened for conducting physical classes. The sudden surge in demand helped most Paper Mills announce further Price Increases, as the industry witnessed unseen levels of cost push. The mills particularly dependent on Imported Coal, had seen severe contraction in their margins. High demand and good market conditions prevailed from second half of January ''22 and this helped the Paper Mills to announce further round of Price Increases to pass on the cost push on account of continued rise in cost of most key input materials.

? OUTLOOK : Outlook for the 1^st quarter of FY 2022-23 is expected to be positive with continued higher pent-up demand for printing and writing grade papers. Demand for Boards is expected to remain strong throughout the financial year. Paper Mills have already announced next round of Price Increases and the Company has followed suit. However, the global political situations, macro-economic indicators & global supply chain constraints will have a strong bearing on the healthy order inflow, both from Domestic and Global markets.

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EXPORT PERFORMANCE			(Tonnage)
Unit	FY 2021-22	FY 2020-21	Growth (%)
Erode	28,129	11,802	138 %
Tirunelveli	28,881	16,181	78 %
Total	57,010	27,983	104 %

? The Company exported 57,010 tonnes of paper during the FY 2021-22, as compared to 27,983 tonnes exported during FY 2020-21.

? The export volumes during the FY 2021-22 represented 25% of the volumes sold by the Company during the year.

? The export proceeds in Foreign Currency for the year 2021-22 amounted to US $ 47.96 Mn (Previous Year Exports - US $ 19.0 Mn).

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as bare-rooted Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had provided clones of Melia-Dubia to interested farmers, a high yielding fast growing species, suitable for Pulp production.

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, through a Collaborative Research Project.

In accordance with the Company''s vision to achieve wood positive status, over fourteen crore Seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available during the year, to farmers at subsidised rates for planting in about 20,042 acres of land. (Previous Year : 19,105 acres).

ISO 9001 / ISO 14001 ACCREDITATION

The Company''s Quality Management

Systems and Environment Management

Systems continue to be covered under ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 standards have undergone revision to 2015 standards which lays emphasis on role of top management, adoption of risk management and change management. All these changes are to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL® (FSC®) CERTIFICATION

The Company continue to be certified under four Standards of FSC, viz. FSC-STD-40-004, FSC-STD-40-005, FSC-STD-40-003 and

FSC-STD-50-001. By this, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC 100% and FSC Mix Products in the domestic and international markets.

AWARDS

The Company received the following Awards and recognitions during the year :

? CII - National Award for Excellence in Energy

Management, in the year 2021.

a) Excellence in Energy Management - for the past 4 consecutive years.

b) National Energy Leader - 2^nd time in row.

c) Innovation award- For Digester modification to enhance pulp production and green energy.

? Paper Mill of the year award for FY 2019-20, awarded by Indian Paper Manufacturers Association.

? AEE award - Regional Corporate Energy award 2021 by Association of Energy Engineers, US.

EXPORT HOUSE STATUS

The Company continues to be accredited with “Star Export House” Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2022, 16,347 Shareholders are holding Shares in Demat form and 5,00,68,026 shares have been dematerialised, representing 79.39% of the total Equity Share Capital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT PLAN

In the FY 2020-21, the Company had embarked on a Mill Development Plan - III (MDP - III) at Unit : Erode at a Cost of '' 315 crores.

The MDP - III at Unit : Erode consist of :

? Upgradation and Modernisation of the Paper Machines to increase the Capacity from 1 32 000 tonnes per annum to 1 65 000 tonnes per annum.

? Upgradation and Modernisation of the RDH Pulp Mill to increase the Capacity to 1 54 000 tonnes per annum.

? Upgradation of the Recovery Island and

? Augmentation of Waste Water Treatment

Plant.

However, in March 2020, while we were taking steps for placing orders for major equipment, Covid-19 pandemic broke out resulting in nationwide / global lockdowns. During the Covid-19 pandemic period, most of the schools / colleges / offices, courts etc were shut, resulting in huge dent in the consumption of printing and writing paper, which is a major grade manufactured by our Company.

This situation had resulted in huge build-up of unsold stocks. Manufacturing of “Stocks without Orders” resulted in huge pressure on Sales and poor collection of money from market. With a view to ensure that the normal operations are not affected by adverse funds situation, it was considered prudent to trim the project to focus on essential equipment and to defer items of equipment that can be conveniently installed after return of normalcy.

The shareholders may also recall that during this pandemic period, there was a serious stand-off between India and China. As retaliatory measures, the Indian Customs had resorted to delayed clearance of Chinese shipments, etc. Also the Chinese suppliers were not able to depute their engineers for installation jobs in India, since Indian embassy was not issuing visas to Chinese nationals. Fearing undue delay in receipt of equipment and lack of installation support, if orders were to be placed on Chinese suppliers, it was thought prudent to shift the sourcing of some of the equipment to India / non-china sources.

Also, during this time, Packaging Industry witnessed unprecedented growth opportunities and as part of de-risking strategy, our Company decided to get equipped with facilities to manufacture multi-layer products like Kraft Liner Boards, Cup Stock, Carton Boards, etc.

All these had resulted in altered scope of equipment than originally envisaged in the

Project documents. The above exercise however was undertaken with utmost care to ensure that the critical objectives of the project were not diluted. Accordingly, the Project Cost has been revised and the revised Cost of implementation of Project MDP-III is now estimated at '' 288.0 crores.

The project is nearing completion with major upgradation works in Chemical Recovery Plant, Wood Pulp Mill, Paper Machine - 5, Paper Machine - 2 and Paper Machine - 4 having been successfully completed.

The Company has achieved the following objectives successfully and has started realising the benefits from the project, in the Erode unit.

a) Paper Capacity has been increased to 1,65,000 tonnes p.a.

b) Pulp Capacity has been increased to 1,54,000 tonnes p.a.

c) Recovery Island has been upgraded

d) Successful foray in to multi-layer boards Segment, by altering 2 machines to manufacture Boards.

The Company has spent '' 220 crores as on March 31, 2022 for the project MDP-III and the balance '' 68 crores is expected to be spent on a staggered basis over the next 12 - 15 months.

Considering the global uncertainties & extraordinary cost push, it was considered prudent to spend only on those projects which will add immediate value to the business. Other items will be taken up for installation only on requirement basis and after normalcy returns in Indian and Global markets.

In this background, the Company had also prepaid the Term Loan of '' 11.16 availed for the project and have also surrendered the balance unavailed portion of the Term Loan, sanctioned for the project by the Company''s bankers. Effectively, the entire project cost is met out of internal accruals only.

COST PUSH

The Company is facing unprecedented increase in costs amidst the current global scenarios. The global supply chain, which was first hampered by Covid-19 pandemic, is now suffering from the consequences of the Russia-Ukraine war. The Oil prices have reached unprecedented levels.

Coal prices are now at 3 times the pre-covid levels. Cost of most chemicals / other input materials have increased significantly.

All these have resulted in significant pressure on margins, with Price increases in Paper not meeting the impact of cost push in full.

CURRENT YEAR (2022-23)

FY 2022-23 has begun with strong demand resulting in good order inflow, both for printing and writing grades and boards segments. Margins continue to be an area of concern, amidst unprecedented increase in the cost of all input materials.

In Unit : Erode, the Production during April 2022 was 13,051 tonnes, as compared to 10,683 tonnes, produced during April 2021. In Unit : Tirunelveli, the Production was 6,003 tonnes in April 2022, as against 6,003 tonnes in April 2021. The overall Production for the Company, for the month of April 2022, was 19,054 tonnes. Total Value of Production, during April 2022 amounted to '' 110.93 crores, compared to '' 77.75 crores during April 2021.

During April 2022, 1072 tonnes of paper, valued at '' 8.84 crores were exported.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers, Lime kiln and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company operates an Anaerobic Lagoon, for high BOD liquid

effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the Pollution Control norms, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Additional treatment facilities have been proposed for waste water under the Mill Development Plan - III.

Unit : Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. As part of the Mill Expansion Plan, the Waste Water Treatment Plant has been augmented with a Dissolved Air Flotation Cell and Anaerobic Digester.

MANAGEMENT’S DISCUSSIONS AND ANALYSIS REPORT

The Report covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in “Management Discussion and Analysis Report” in terms of Regulation 34 of the Listing Regulations, that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company''s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II. The Corporate Governance Report also includes contents and disclosures required under Section 134(3) of the Companies Act, 2013 at relevant places that forms an integral part of this report.

BUSINESS RESPONSIBILITY REPORT

Consequent to mandatory reporting of its responsibility initiatives under the Listing

Regulations, the Company had formulated a consolidated policy on Business Responsibility which lays down the broad principles guiding the Company in delivering its various responsibilities to its stakeholders. The policy is intended to ensure that the Company adopts responsible business practices in the interest of the social set-up and the environment so that it contributes beyond financial and operational performance. A copy of the policy is available at https://www.spbltd.com/investor-info/policy/ index.html and the Business Responsibility Report for the year ended March 31, 2022 in terms of Regulation 34(2) of the SEBI (LODR) Regulations is annexed to this report as Annexure - III.

DISCLOSURE REQUIREMENTS UNDER SECTION 134 OF THE COMPANIES ACT, 2013

In deference to Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, disclosures / confirmations are made as below :

(i) THE ANNUAL RETURN

A copy of the annual return for FY 2021-22 will be placed on the website of the Company (https://www.spbltd.com/investor-info/annual-return/index.html) after conclusion of the 62^nd Annual General Meeting.

(ii) DIRECTORS’ RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

? Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

? The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the said period.

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

? The Directors have prepared the annual accounts on a “going concern” basis.

? The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

? The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(iii) PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the financial year ended March 31, 2022, the Company did not extend any Loan or Guarantee or provided any security or make investment covered under Section 186 of the Companies Act, 2013.

(iv) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

(v) MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year. There are no other material changes and commitments in the business operations of the Company since the close of the financial year on 31^st March 2022 to the date of this Report.

(vi) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - V.

(vii) CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every Company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, it has constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

(viii) PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year

under review. The five year wage / salary agreement with labour unions / staff association, which expired on March 31, 2019, has been finalised and a formal agreement, valid until March 31, 2024 had been entered into by the Company, during April / May 2022.

DIRECTORS

During the FY 2021-22, Tamilnadu Industrial Investment Corporation (TIIC) withdrew the nomination of Tmt. Sigy Thomas Vaidhyan, IAS and in her place nominated Sri Hans Raj Verma, IAS (Chairman and Managing Director, TIIC) as its Nominee Director on the Board of our Company. Sri Hans Raj Verma, IAS, was appointed as an Additional Director on the Board of the Company on June 15, 2021 by a Circular Resolution. He was later appointed by the Shareholders of the Company, in the Annual General Meeting held on July 24, 2021, as a Nominee Director not liable to retire by rotation.

Also, during the year, Tamilnadu Government withdrew the nomination of Dr. Shekhar Kumar Niraj, IFS and in his place nominated Sri K Rajkumar, IFS, the Special Secretary to Government, Environment, Climate change and Forests Department, as its Nominee Director on the Board of our Company. Sri K Rajkumar, IFS, was appointed as an Additional Director on the Board of the Company on October 23, 2021. He was later appointed by the Shareholders of the Company, vide Postal Ballot on December 7, 2021, as Nominee Director liable to retire by rotation. Your Directors place on record the valuable services rendered by Tmt. Sigy Thomas Vaidhyan, IAS and Dr. Shekhar Kumar Niraj, IFS, during their tenure as Directors of the Company.

All the Independent Directors have given the declaration that they meet the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board

Meeting held on March 26, 2021. The Board, on the basis of such performance evaluation determined to continue the term of appointment of all Independent Directors.

AUDITORS

M/s Maharaj N R Suresh & Co LLP and M/s R Subramanian and Company LLP Chartered Accountants were the Statutory Auditors of the Company for FY 2021-22. However, the 5 year tenure of M/s R Subramanian and Company LLP gets over with the conclusion of this annual general meeting and the Board of Directors have approved and recommended continuation of M/s Maharaj N R Suresh & Co LLP as the sole statutory auditor of the Company for FY 2022-23.

Your Directors place on record the valuable services rendered by M/s R Subramanian and Company LLP during their tenure as Joint Statutory Auditors of the Company.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results, in a year of great challenges. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Indentors, Customers, Farmers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board

Chennai N GOPALARATNAM

May 7, 2022 Chairman

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Mar 31, 2019

DIRECTORS'' REPORT

The Directors hereby present their Fifty Ninth Annual Report and the Audited Accounts for the year ended 31st March 2019:

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18 as mandated. Accordingly, the financial statements for current year, including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein, as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit and Loss, there is and would be periodical impact for "Other Comprehensive Income" in measuring and restating investments at fair value.

WORKING RESULTS	2018-19 (in tonnes)	2017-18 (in tonnes)
Production	209015	1 88 203
Sales	2 07 971	1 86 595
Revenue from Operations	(Rs crores)	(Rs crores)
Sales and Other Operating Income	1325.24	1117.79
Less: Excise Duty and Excise Cess	..	13.14
	1325.24	1104.65
Other Income	23.06	9.40
Total Revenue	1348.30	1114.05
Profit before interest, depreciation, exceptional item and tax	318.90	216.59
Finance Cost	13.81	14.30
Depreciation	33.78	31.94
Exceptional Item	-	4.84
Profit before tax	271.31	175.19
Provision for current
tax	58.20	36.02
Transfer to / (from)
Deferred Tax	23.11	16.28
Net Profit	190.00	122.89

DIVIDEND

The Board of Directors recommend payment of Dividend at Rs 20 (twenty) per Equity Share, absorbing a sum of Rs 25.23 crores.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs 5.18 crores.

As per Ind As 10 Events after the reporting period, Proposed Dividend on Equity Shares and Corporate Tax on dividend being a non adjusting event at the Balance Sheet date, is not recognised as a liability in the accounts for the year ended March 31, 2019. The same will be recognised in the year of payment, viz., year ending March 31, 2020.

APPROPRIATIONS	2018-19 (Rs crores)
Net profit for the year	190.00
Add: Surplus brought forward from the previous year	89.21
	279.21
Less:
Re-measurement of Defined Benefit Plans	0.02
Dividend paid during the year (For Financial Year 2017-18)	18.92
Tax on Dividend distribution	3.89
Transfer to General Reserve	100.00
Balance carried forward	156.38

OPERATIONS PRODUCTION

During the year, the production at Unit : Erode was 1 32 379 tonnes, as compared to 1 21 594 tonnes, produced in the previous year. The production was higher by 10 785 tonnes, compared to the previous year due to improved performance of Paper Machines.

Unit: Erode also produced 32138 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit: Tirunelveli.

Unit : Tirunelveli produced 76 636 tonnes of Paper during the year, as compared to 66 609 tonnes, produced in the previous year. The production was higher by 10 027 tonnes, compared to the previous year mainly due to increased machine speed and basis weight optimisation.

Overall Production for the Company was 209015 tonnes of Paper and Boards for the year, as compared to 1 88 203 tonnes produced, in the previous year.

SALES

After taking into account 1040 tonnes towards in-house consumption, Unit: Erode sold 1 31 339 tonnes, against the production of 1 32 379 tonnes and achieved zero stock at the end of the financial year.

In addition, Unit: Erode, as part of its trading activity, had sold petroleum products valued at Rs 26.88 crores and 61 tonnes of Note Books.

Closing Stock of Traded Goods was 11 tonnes, as on March 31, 2019.

Unit : Tirunelveli sold 76 632 tonnes after taking into account 4 tonnes towards in-house consumption and achieved zero stock of finished goods at the end of the financial year.

In addition, Unit : Tirunelveli as part of its trading activities had sold 644 tonnes of Note Books. Closing stock of traded goods was 205 tonnes as on March 31, 2019.

The overall sale of Paper and Paper Boards effected by the Company during the year, was 2 07 971 tonnes, compared to 1 86 595 tonnes, sold during the previous year.

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs 1325.24 crores, as against Rs 1117.79 crores, in the previous year.

Profit before interest, depreciation, exceptional item and tax was Rs 318.90 crores, for the Company as a whole, compared to Rs 216.59 crores, in the previous year.

After absorbing interest and depreciation of Rs 13.81 crores, Rs 33.78 crores respectively, the Profit before tax was Rs 271.31 crores, as compared to Rs 175.19 crores, in the previous year.

The Company registered commendable financial results contributed by all round operational improvements both in Unit: Erode and Unit: Tirunelveli. Major factors that had contributed to improved financial performance during the year were:

0 Higher De-inked Pulp production enabled replacement of costly imported pulp.

0 Optimisation in Raw Material Mix and Chemicals.

0 Higher sales realisation due to better Product mix.

0 Improved paper market conditions and favourable exchange rate.

0 Higher Other income.

0 Lower Interest and Financing Charges due to repayment of Term Loans and non-utilisation of working capital limits.

For the year ended 31st March 2019, the tax liability under the normal method works out to Rs 79.49 crores after deduction under Section 80-IA of the Income tax Act, 1961. The tax liability under MAT works out to Rs 58.20 crores. Consequently, the Company became liable for the net current tax

liability of Rs 79.49 crores. The Company is eligible to utilise Rs 21.29 crores as MAT Credit Entitlement and consequently the net payment of tax will be Rs 58.20 crores.

The net Deferred Tax liability for the year ended March 31, 2019 was Rs 23.11 crores.

In the result, profit after tax for the year ended March 31, 2019 was Rs 190.00 crores, as compared to Rs 122.89 crores, in the previous year.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capital borrowings were paid on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs 3.89 crores during the year and the balance outstanding as on March 31, 2019 was Rs 14.85 crores.

MARKET CONDITIONS

The year under review commenced with a strong demand for Copier grades, as supplies from the domestic mills together with the limited imports could not meet the total demand, resulting in a gap in supplies.

Demand for other white grades, like Creamwove and Maplitho, exhibited a better demand than the last year permitting opportunities for price revisions.

Flow of imported Copier grades and Maplitho grades gradually moderated when the Customs Department imposed an Anti-dumping Duty on imported Copier, if the landed price was less than USD 855, on 4th December 2018. The Anti-dumping Duty payable is equal to the difference between the bench mark price and the actual price of import, in case it was lower than the bench mark price.

With the prices of imported coated paper and boards being lower than the domestic prices, demand for MG Boards and certain Yankee grades was poor throughout the year.

Demand picked up for the white grades in Q-4 more gradually when compared to earlier years.

Zero stock in Q-4 this year was achieved with relative ease, at the end of the financial year, for the 21st time in the last 25 years.

EXPORT PERFORMANCE

Unit : Erode exported 16 993 tonnes during the year, as compared to 14446 tonnes, exported during 2017-18. The export proceeds in Foreign Currency for the year 2018-19 amounted to US$ 15 211 167 and Euro 160 056. In Rupee terms the value of exports amounted to Rs 107.03 crores. Export constituted around 12.84% of the Production.

Unit : Erode also sold 62 tonnes during the year, under deemed exports whose proceeds amounted to Rs 0.40 crores.

Unit: Tirunelveli exported 17825 tonnes of Paper during the year, as against 14484 tonnes exported during 2017-18. The export proceeds in Foreign Currency amounted to US $ 15541015. In Rupee terms the value of exports amounted to Rs 111.01 crores. Export constituted around 23.26% of the Production.

Unit: Tirunelveli also sold 641 tonnes during the year, under deemed exports whose proceeds amounted to Rs 3.91 crores.

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had identified Melia-Dubia, a high yielding fast growing species, suitable for Pulp production. The Company has been providing Melia- Dubia Clones to interested farmers.

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, through a Collaborative Research Project.

In accordance with the Company''s vision to achieve wood positive status, over thirteen crore Seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available during the year, to farmers at subsidised rates, for planting in about 16000 acres of land.

ISO 9001 /ISO 14001 ACCREDITATION

The Company''s Quality Management Systems and Environment Management Systems continue to be covered under ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standard have undergone revision to 2015 Standards which lays emphasis on role of top management, adoption of risk management and change management. All these changes are to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been certified under three Standards of FSC, viz. FSC-STD-40-004, FSC-STD-40-005 v2-1 and FSC-SSTD-40-003 v1-0. By this, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the

Company is capable of manufacturing and selling FSC Pure and FSE Mixed Products in the domestic and international markets.

AWARDS

The Company won the following Awards and recognitions during the year

0 "Tamil Nadu Pollution Control Board Green Award" for the year 2017 for the excellent contribution to the Environmental protection.

0 "CII Excellent Energy Efficiency Unit Award" for the year 2018.

0 "Best maintained outlet during 2017-18 Award" for Namakkal Region given by Indian Oil Corporation Limited to the petroleum products Retail outlet operated by the Company.

EXPORT HOUSE STATUS

The Company continues to be accredited with "Star Export House" Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2019, 9 001 Shareholders were holding Shares in Demat form and 99 30518 shares have been dematerialised, representing 78.73% of the total Equity Share Capital of the Company.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT / EXPANSION PLAN

As advised last year, the Company had embarked on the implementation of two Projects viz. Mill Development Plan II at Unit : Erode and Mill Expansion Plan at Unit: Tirunelveli.

Unit: Erode

The Company has completed Phase - I of the Mill Development Plan II (MDP - II) in the year 2017-18, at a cost of Rs 75 crores. Phase - II of MDP - II, with an estimated project cost of Rs 50 crores, is nearing completion.

The successful implementation of MDP - II has helped the Company to increase the Production of Paper to 132 000 tpa and the production of Unbleached Wood Pulp to 1 45 000 tonnes per annum, in Unit: Erode.

In order to further increase production of Paper and Pulp in its Unit : Erode, the Company has drawn up Mill Development Plan -III (MDP-III) at an estimated cost of Rs 315 crores. The implementation period of this project is estimated at 9 months to 21 months and is expected to be completed in phases.

The Techno Feasibility Study of the project has been completed and the Board of Directors of the Company, after detailed appraisal and review of the Project report, have approved the Project. The work on the Project has since commenced in the Financial Year 2019-20.

The MDP-III at Unit: Erode will consist of:

0 Upgradation and Modernisation of the Paper Machines to increase the Capacity from 1 32 000 tonnes per annum to 1 65 000 tonnes per annum.

0 Upgradation and Modernisation of the RDH Pulp Mill to increase the Capacity to 1 54 000 tonnes per annum.

0 Upgradation of the Recovery Island and

0 Augmentation of Waste Water Treatment Plant.

Unit: Tirunelveli

Mill Expansion Plan in Unit : Tirunelveli, undertaken at a cost of Rs 75 Crores, is nearing completion.

Film Press and Top Wire Former were installed in the Paper Machine to help in improving the quality of paper as well as stepping up production. Re-commissioned De-Inking Plant helps us to step up pulp production and reduce use of expensive imported pulp. Re-build of Power Boiler has also been completed to generate additional power. Waste Water Treatment Plant has been augmented to handle higher Wetlap Pulp Product.

Considering that the Paper Industry is expected to grow at a CAGR of 5 - 6 % over the next few years and considering the demand supply gap, that is currently prevailing in India for high quality paper, to continue, Company is actively pursuing both Organic and Inorganic Growth opportunities.

CURRENT YEAR (2019-20)

In Unit : Erode, the Production during April 2019 was 10611 tonnes, as compared to 9 712 tonnes, produced during April 2018. In Unit: Tirunelveli, the Production was 5 355 tonnes in April 2019, as against 5 058 tonnes in April 2018. The overall Production for the Company, for the month of April 2019, was 15 966 tonnes. Total Value of Production, during April 2019, amounted to Rs 88.67 crores, compared to Rs 77.60 crores, during April 2018.

During April 2019, 782 tonnes of paper, valued at Rs 6.14 crores were exported.

Both Mettur Dam (for Unit : Erode) and Papanasam Dam (for Unit: Tirunelveli) have poor storage level. The Barrage across River Cauvery downstream of Unit: Erode and scattered rains in southern parts of Tamilnadu have helped the two units to maintain uninterrupted production.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit: Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions.

The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the Pollution Control norms prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Installation of a new Electro Static Precipitator in the Chemical Recovery Boiler, under Mill Development Plan, has helped the Company in controlling emission.

A Twin Roll Press has been added in the Wood Pulp Line to control and reduce COD in waste water.

Alkaline Scrubbing has been provided for the non-condensable gasses for elimination of emission of mal-odorous gases.

The Company has implemented several projects under Mill Development Plan to reduce consumption of water as well as energy. Waste water generation in the Mill has been brought down significantly.

In accordance with the directives of CPCB, adequate monitoring facility has been provided for air emissions and liquid effluent discharge. Online connectivity has been provided for monitoring of emissions and discharges, real-time by both CPCB and TNPCB.

In addition, further treatment facility has been proposed for waste water under the Mill Development Plan.

Unit: Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. As part of the Mill Expansion Plan, the Waste Water Treatment Plant has been augmented with a Dissolved Air Floatation Cell and Anaerobic Digester.

MANAGEMENT''S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management''s Discussion and Analysis, as required under Clause 49(VIII)(D) of the Listing Agreement with Stock Exchanges covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in "Management Discussion and Analysis Report" that forms an integral part of this Report and annexed as Annexure -1.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company''s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

DISCLOSURE REQUIREMENTS UNDER SECTION 134(3) OF THE COMPANIES ACT, 2013

Section 134(3) of the Companies Act, 2013 requires the Board''s Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at appropriate places that forms an integral part of this Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT - 9, is given in Annexure - III.

DIRECTORS'' RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

0 Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

0 The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the said period.

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

0 The Directors have prepared the annual accounts on a "going concern" basis.

0 The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

0 The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the year, the Company provided a short term Inter Corporate Loan of Rs 0.60 crore to SPB Projects and Consultancy Limited for a period of twelve months.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year.

There are no material changes and commitments in the business operations of the Company since the close of the financial year on 31st March 2019 to the date of this Report.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - V.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every Company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review.

DIRECTORS

During the year, Tamilnadu Government withdrew the nomination of Mr Md Nasimuddin, IAS and in his place nominated Sri Shambhu Kallolikar, IAS, the Principal Secretary to Government, Environment and Forests Department, as its Nominee Director on the Board of our Company.

Sri R V Gupta stepped down from the Board of our Company at the close of business hours on March 31, 2019 after a long tenure of nearly 16 years as a Director on the Board of our Company.

Your Directors place on record the valuable services rendered by Sri R V Gupta and Mr Md Nasimuddin, IAS, during their tenure as Directors of the Company.

Sri Mohan Verghese Chunkath, IAS (Retd.) was appointed as an Independent Director on the Board of our Company for a period of five years with effect from April 01, 2019.

All the Independent Directors have given the declaration that they meet the criteria on independence, as laid down under

Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated, at the Board Meeting held on 27th March 2019. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the Independent Directors who have been appointed by the Company for a fixed tenure till 31st March 2019 for three Directors and 28th September 2019 for two Directors.

AUDITORS

M/s Maharaj N R Suresh & Co., and M/s R Subramanian and Company LLP Chartered Accountants continue to be the Statutory Auditors of the Company.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman

Chennai

May 25, 2019

---

Mar 31, 2018

DIRECTORS’ REPORT

The Directors hereby present their Fifty T Eighth Annual Report and the Audited Accounts for the year ended 31^st March 2018 :

The Company hitherto was following the Companies (Accounting Standards) Rules, 2006 and Indian GAAP. It has now adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18 as mandated and reworked the financial statements for Financial Year 2016-17 for presenting comparative information. Accordingly, the financial statements for current year including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit & Loss, there is and would be periodical impact on “Other Comprehensive Income” in measuring and restating investments at fair value.

WORKING RESULTS

	2017-18	2016-17
Production	(in tonnes) 1 88 203	(in tonnes) 1 95 413
Sales	1 86 595	1 93 977
Revenue from Operations	('' crores)	('' crores)
Sales and Other Operating Income	1117.79	1166.67
Less: Excise Duty and Excise Cess	13.14	59.08
	1104.65	1107.59
Other Income	9.40	8.14
Total Revenue	1114.05	1115.73
Profit before interest, depreciation, exceptional item and tax	216.59	221.80
Finance Cost	14.30	23.20
Depreciation	31.94	30.62

	2017-18	2016-17
	(rS, crores)	(Rs, crores)
Exceptional Item	4.84	-
Profit before tax	175.19	167.98
Provision for current	36.02	35.90
tax
Transfer to / (from) Deferred Tax	16.28	4.04
Net Profit	122.89	128.04

DIVIDEND

The Board of Directors recommend payment of Dividend at Rs, 15 ('' Fifteen) per Equity Share, absorbing a sum of Rs, 18.92 crores.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs, 3.89 crores.

Pursuant to the Accounting Standard 4 revised by Ministry of Corporate Affairs Notification dated 30^th March 2016, proposed dividend on Equity Shares and Corporate Tax on dividend being a non adjusting event at the Balance Sheet date, are not recognized as a liability in the accounts for the year ended March 31, 2018. The same will be recognized in the year of payment, viz., year ending March 31, 2019.

APPROPRIATIONS
	2017-18
	(Rs, crores)
Net profit for the year	122.89
Add:
Surplus brought forward from the	84.28
previous year
	207.17
Less:
Re-measurement of Defined Benefit
Plans	2.78
Dividend paid during the year	12.61
(For FY 2016-17)
Tax on Dividend distribution	2.57
Transfer to General Reserve	100.00
Balance carried forward	89.21

OPERATIONS PRODUCTION

During the year, production at Unit : Erode was 1 21 594 tonnes, as compared to 1 25 662 tonnes, in the previous year.

Unit : Tirunelveli produced 66 609 tonnes of Paper during the year, as compared to 69 751 tonnes, produced in the previous year.

Production was affected in both the Units due to severe shortage of water faced during the summer season due to continuous failure of monsoon and planned shuts availed for installing key equipment under Mill Development / Expansion Plans.

Unit : Erode also produced 24 631 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit : Tirunelveli.

The overall production for the Company was 1 88 203 tonnes of Paper and Paper Boards for the year, as compared to 1 95 413 tonnes produced, in the previous year.

SALES

After taking into account 1 608 tonnes towards in-house consumption, Unit : Erode sold 1 19 986 tonnes, against the production of 1 21 594 tonnes and achieved zero stock at the end of the financial year.

In addition, Unit : Erode, as part of its trading activity, had sold petroleum products valued at Rs, 23.92 crores and 510 tonnes of Note Books. Closing Stock of Traded Goods was 16 tonnes, as on March 31, 2018.

Unit : Tirunelveli sold 66 609 tonnes of all the quantity produced and achieved zero stock at the end of the financial year.

Unit : Tirunelveli had also sold 415 tonnes of Note Books. Closing stock of traded goods was 411 tonnes as on March 31, 2018.

The overall sale of Paper and Paper Boards effected by the Company during the year, was 1 86 595 tonnes, compared to 1 93 977 tonnes, sold during the previous year.

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs, 1117.79 crores, as against Rs, 1166.67 crores, in the previous year.

Profit before interest, depreciation, exceptional item and tax was Rs, 216.59 crores, for the Company as a whole, compared to Rs, 221.80 crores, in the previous year.

After absorbing interest and depreciation of Rs, 14.30 crores, Rs, 31.94 crores respectively and after taking into consideration exceptional income of Rs, 4.84 crores, the Profit before tax was Rs, 175.19 crores, as compared to Rs, 167.98 crores, in the previous year.

The Company achieved good financial results, despite loss of production, both in Unit : Erode and Unit : Tirunelveli. Major factors that had contributed to improved financial performance during the year were :

0 Higher De-inked Pulp production enabling replacement of costly imported pulp.

0 Moderation in Wood Prices.

0 Optimisation in Raw Material mix, Product mix.

0 Improved paper market conditions witnessed from the end of third quarter of the financial year.

0 Higher Operating Income due to monetisation of REC inventory.

0 Lower Interest and Financing Charges due to repayment of Term Loans, marginal reduction in interest rates and non-utilisation of working capital limits.

The Company could not pass on fully the cost increase arising out of steep increase in the prices of Coal, Furnace Oil and other input chemicals during the year.

For the year ended 31^st March 2018, the tax liability under the normal method works out to Rs, 39.30 crores after deduction under Section 80-IA of the Income tax Act, 1961. The tax liability under

MAT works out to Rs, 36.02 crores. Consequently, the Company became liable for the net current tax liability of Rs, 39.30 crores. The Company is eligible to utilize Rs, 3.28 crores as MAT Credit Entitlement and consequently the net payment of tax will be Rs, 36.02 crores.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capital borrowings were paid on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs, 3.61 crores during the year and the balance outstanding as on March 31, 2018 was Rs, 18.74 crores.

MARKET CONDITIONS

The year under review commenced with stable market conditions, aided by a growing economy and reduction in the supply of paper products in the domestic market on account of closure of some units, coupled with restricted production of Maplitho and other grades due to shortage of water in the River Cauvery.

However, month June 2017 witnessed huge drop in orders on account of the upcoming introduction of GST from July 01, 2017. Lack of clarity on overall GST provisions and rules as well reluctance on the part of small traders to migrate to GST regime, resulted in poor order flow and accumulation of unsold stock with Mills.

Simultaneously, the market was flooded with imports of Copier and Maplitho grades from ASEAN countries taking advantage of the Zero Import Duty concession, at highly competitive prices, forcing domestic manufacturers to effect price reduction in these grades.

Q-2 and Q-3 saw failure of Indentors / Dealers to lift their assigned quota. Consequently unsold stock with Mills swelled.

Welcome breakthrough came in the form of huge hike in international pulp prices, forcing overseas manufacturers to put up paper prices and cut-down their export volume to Indian

market. Softening trend of Indian Rupees vis-a-vis US$, further raised the cost of imported paper; customers came back to domestic mills to meet their demand. Market became thus stable in Q-4. This enabled SPB to liquidate accumulated stocks.

Meantime, few Indian manufacturers had moved an application with appropriate authority seeking imposition of Anti Dumping Duty on Copier imports from ASEAN countries. Investigation is currently on by the Director General of Anti-Dumping and Allied Duties.

With these developments, paper market became stable during Q-4 and enabled the Company to achieve the customary Zero Stock at the end of the Financial Year for the 20^th time in the last 24 years.

EXPORT PERFORMANCE

Unit : Erode exported 14 446 tonnes during the year, as compared to 12 737 tonnes, exported during 2016-17. The export proceeds amounted to Rs, 81.17 crores. Export constituted around 11.88% of the Production.

Unit : Erode also sold 34 tonnes, under deemed exports whose proceeds amounted to Rs, 0.21 crore.

Unit : Tirunelveli exported 14 484 tonnes of Paper during the year, as against 13 130 tonnes, exported during the previous year. The export proceeds amounted to Rs, 77.12 crores. Export constituted around 21.74% of the Production.

Unit : Tirunelveli also sold 156 tonnes, under deemed exports whose proceeds amounted to Rs, 0.94 crore.

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had identified Melia-Dubia, a high yielding fast growing species, as suitable for Pulp production and provided Melia- Dubia Clones also to interested farmers. __/

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, through a Collaborative Research Project.

In accordance with the Company’s vision to achieve wood positive status, over twelve crore seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available to farmers at subsidised rates for planting in about 15 000 acres of land.

ISO 9001 / ISO 14001 ACCREDITATION

The Company’s Quality Management Systems and Environment Management Systems continue to be covered by ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standards have undergone revision to 2015 Standards which lays emphasis on the role of top management, adoption of risk management and change management to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organization.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been certified under three Standards of FSC, viz. FSC-STD-40-004, FSC-STD-40-005 v2-1 and FSC-SSTD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed Products in the domestic and international markets.

AWARDS

During the year under review, the Company won the following Awards and recognitions:

- “GreenCo Gold” rating under the GreenCo Rating System by the Confederation of Indian Industry (CII).

- CII’s 18^th National Award for Excellence in Energy Management - 2017 - “Excellent Energy Efficient Unit”.

- Certificate of Merit (under National Energy Conservation Award) by Ministry of Power for the efforts in Energy Conservation in the Pulp & Paper Sector.

- Certificate of Recognition by Bureau of Energy Efficiency for promoting energy efficient and cleaner production for sustainable industrial growth.

EXPORT HOUSE STATUS

The Company continues to be accredited with “Star Export House” Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2018, 7 461 Members were holding their Shares in Demat form and 98 44 488 Equirty shares, representing 78.05% of the total Paid-up Equity Share Capital of the Company, have been dematerialized.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT / EXPANSION PLAN

As advised last year, the Company had embarked on implementation of two Projects viz. Mill Development Plan II at Unit : Erode and Mill Expansion Plan at Unit : Tirunelveli.

Unit : Erode

The Mill Development Plan II - Phase I has since been completed at a cost of Rs, 75 crores.

Under Phase-I, Wood Pulp Line was upgraded to produce 1 45 000 tonnes per annum of wood pulp. Second Stage Oxygen Delignification System and a Twin Roll Barrier Press were installed in the Wood Pulp Mill. A new Electro Static Precipitator was added in Chemical Recovery Complex.

In addition, a new Winder was added to Paper Machine 1-4. Distributed Control System in the Stock Preparation Section of Paper Machines 1-4 and Energy Efficient Drive System were added in Paper Machine # 3.

Further, major retrofit was carried out in Power Boiler to generate additional steam and power. This has helped us to wheel 3 MW of power from Unit : Erode to Unit : Tirunelveli.

Work commenced under Phase-II at an estimated cost of Rs, 50 crores to enhance paper production and upgrading Bagasse Pulping facility and Waste Water Treatment Plant. Works are currently in progress.

Unit : Tirunelveli

Mill Expansion Plan in Unit : Tirunelveli has been undertaken at a cost of Rs, 75 crores.

Film Press and Top Wire Former were installed in the Paper Machine to help in improving the quality of paper as well as step up production. Re-commissioned De-Inking Plant helps us to step up pulp production and reduce use of expensive imported pulp. Re-build of Power Boiler has also been completed to generate additional power. Augmenting Waste Water Treatment facility and installation of Wetlap Machine for De-inked Pulp are in progress.

CURRENT YEAR (2018-19)

In Unit : Erode, the Production during April 2018 was 9 712 tonnes, as compared to 9 073 tonnes, produced during April 2017. In Unit : Tirunelveli, the Production was 5 058 tonnes in April 2018, as against 5 454 tonnes in April 2017. The overall

Production for the Company, for the month of April 2018, was 14 770 tonnes. Total Revenue, during April 2018, amounted to Rs, 74.58 crores, compared to Rs, 68.97 crores, during April 2017.

During April 2018, 815 tonnes of paper, valued at US$ 7 47 229 (equivalent to Rs, 4.96 crores) were exported.

Both Mettur Dam (for Unit : Erode) and Papanasam Dam (for Unit : Tirunelveli) have poor storage level. However, scattered summer showers have kept the Rivers running with water, which has helped the two units to maintain production.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with Pollution Control norms prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Installation of a new Electro Static Precipitator in the Chemical Recovery Boiler, under Mill Development Plan, has helped the Company in controlling emission.

A Twin Roll Press has been added in the Wood Pulp Line to control and reduce COD in waste water.

Alkaline Scrubbing has been provided for the non-condensable gasses for elimination of emission of mal-odorous gases.

The Company has implemented several projects under Mill Development Plan to reduce consumption of water as well as energy. Waste water generation in the Mill has been brought down significantly.

_J

In accordance with the directives of CPCB, adequate monitoring facility has been provided for air emissions and liquid effluent discharge. Online connectivity has been provided for monitoring of emissions and discharges, real-time by both CPCB and TNPCB.

In addition, further treatment facility has been proposed for waste water under the Mill Development Plan.

Unit : Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. Extensive augmentation of waste water treatment facility is under implementation.

MANAGEMENT’S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management’s Discussion and Analysis, as required under Clause 49(VI 11 )(D) of the Listing Agreement with Stock Exchanges covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in “Management Discussion and Analysis Report” that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company’s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

DISCLOSURE REQUIREMENTS UNDER SECTION 134(3) OF THE COMPANIES ACT,

2013

Section 134(3) of the Companies Act, 2013 requires the Board’s Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at appropriate places that forms an integral part of this Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT - 9, is given in Annexure - III.

DIRECTORS’ RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

- Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

- The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the said period.

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

- The Directors have prepared the annual accounts on a “going concern” basis.

- The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the year, the Company invested Rs, 2.00 crores in the Equity Capital of its fully owned Subsidiary, viz., Esvi International (Engineers & Exporters) Limited by subscribing to 100 000 Equity Shares of Rs, 100 each at a premium of Rs, 100 per share.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 are furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year.

There are no material changes and commitments in the business operations of the Company since the close of the financial year on 31^st March 2018 to the date of this Report.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - V.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by

the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review.

DIRECTORS

During the year, Tamilnadu Industrial Investment Corporation Limited (TIIC) withdrew the nomination of Sri Satyabrata Sahoo, IAS and in his place nominated its Managing Director Dr (Mrs) M Aarthi, IAS, as its Nominee Director on the Board of our Company.

Your Directors place on record the valuable services rendered by Sri Satyabrata Sahoo, IAS, during his tenure as Directors of the Company.

All the Independent Directors have given the declaration that they met the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board Meeting held on 23^rd March 2018. _y

The Board on the basis of such performance evaluation decided to continue the term of appointment of all the Independent Directors who have been appointed by the Company for a fixed tenure till 31^st March 2019 for three Directors and 28^th September 2019 for two Directors.

AUDITORS

The term of appointment of M/s Maharaj N R Suresh & Co., (Firm Regn. No. 001931S) as Statutory Auditor of the Company expires at the conclusion of the 58^th Annual General Meeting. They are eligible for re-appointment for a further term of five years from the conclusion of the 58^th Annual General Meeting as provided under Section 139(2) of the Companies Act, 2013. Taking into consideration the excellent services rendered by M/s Maharaj N R Suresh & Co., the Board of Directors, on the recommendations of the Audit Committee of the Board, appointed them as one of the Statutory Auditors of the Company to hold office for a term of five years from the conclusion of the 58^th Annual General Meeting and till the conclusion of 63^rd Annual General Meeting.

M/s R Subramanian and Company LLP (Firm Regn. No. 004137S) continue to be the other Statutory Auditor of the Company.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman

Chennai May 26, 2018

---

Mar 31, 2017

The Directors hereby present their Fifty Seventh Annual Report and the Audited Accounts for the year ended 31^st March 2017 :

WORKING RESULTS

	2016-17	2015-16
	(in tonnes)	(in tonnes)
Production	195413	1 82634
Sales	193977	1 82230
	(Rs.lakhs)	(Rs.lakhs)
Revenue from Operations Sales and Other Operating Income	119387	1 0831 2
Less: Excise Duty and Excise Cess	5908	51 62
	113479	103150
Other Income	705	428
Total Revenue	114184	103578
Profit before interest, depreciation, exceptional item and tax	22174	11133
Finance Cost	2156	3229
Depreciation	3062	2876
Exceptional Item	0	0
Profit before tax	16956	5028
Provision for current tax	2164	0
Transfer to / (from) Deferred Tax	1907	1470
Net Profit	12885	3558

DIVIDEND

The Directors recommend payment of Dividend at Rs.10 (‘ Ten) per Equity Share, absorbing a sum of Rs.1261.36 lakhs.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs.256.78 lakhs.

Pursuant to the Accounting Standard 4 revised by Ministry of Corporate Affairs Notification dated 30^th March 2016, Proposed Dividend on Equity Shares and Corporate Tax on dividend being a non adjusting event at the Balance Sheet date, are not recognised as liabilities in the accounts for the year ended March 31, 2017. The same will be recognised in the year of payment, viz., year ending March 31, 2018.

APPROPRIATIONS

Your Directors propose the following appropriations:

	2016-17 (Rs. lakhs)
Net profit for the year	12885
Add : Surplus brought forward from the previous year
	3260
	16145
Less :
Transfer to General Reserve	6500
Balance carried forward	9645

OPERATIONS

PRODUCTION

During the year, the production at Unit : Erode was 1 25 662 tonnes, as compared to 1 23 630 tonnes, produced in the previous year. The production was higher by 2 032 tonnes, compared to the previous year. The production would have beenhigher but for the planned shut of equipment to undertake Mill Development Plan - Phase - I.

Unit : Erode also produced 31 826 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit : Tirunelveli.

Unit : Tirunelveli produced 69 751 tonnes of Paper during the year, as compared to 59 004 tonnes, produced in the previous year. Production would have been higher but for the planned shut of critical equipment for undertaking Mill Expansion Project.

The overall Production for the Company was 1 95 413 tonnes of Paper and Boards for the year, as compared to 1 82 634 tonnes produced, in the previous year.

SALES

After taking into account 1432 tonnes towards in-house consumption, Unit : Erode sold 1 24 230 tonnes, against the production of 1 25 662 tonnes and achieved zero stock at the end of the financial year.

In addition, Unit : Erode, as part of its trading activity, had sold petroleum products valued at Rs.2 535 lakhs and 1 070 tonnes of Note Books. Closing Stock of Traded Goods was 268 tonnes, as on March 31, 2017.

After taking into account 4 tonnes for own use Unit : Tirunelveli sold 69 747 tonnes against the production of 69 751 tonnes and achieved zero stock at the end of the financial year.

In addition, Unit : Tirunelveli, as part of its trading activities had sold 143 tonnes of Note Books. Closing stock of traded goods was 312 tonnes as on March 31, 2017.

The overall sale of Paper and Paper Boards effected by the Company during the year, was 1 93 977 tonnes, compared to 1 82 230 tonnes, sold during the previous year.

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs.1 14 184 lakhs, as against Rs.1 03 578 lakhs, in the previous year.

Profit before interest, depreciation, exceptional item and tax was Rs.22 174 lakhs, for the Company as a whole, compared to Rs.11 133 lakhs, in the previous year.

After absorbing interest and depreciation of Rs.2 156 lakhs and Rs.3 062 lakhs, respectively, the Profit before tax was Rs.16 956 lakhs, as compared to Rs.5 028 lakhs, in the previous year.

The Company achieved excellent financial results, both in Unit : Erode and Unit : Tirunelveli. Major factors that had contributed to improved financial performance during the year were :

- Higher production at Unit : Tirunelveli

- Higher Wood Pulp production at Unit : Erode that enabled replacement of costly imported pulp at Unit : Tirunelveli

- Improved Green Power generation at Unit : Erode that enabled reduced drawal of Grid Power and nil purchase of costly Power from third parties.

- Optimisation in Raw Material consumption.

- Moderation in prices of key inputs, viz., Wood, Coal and Furnace Oil.

- Mavourable market conditions that enabled upward price revisions for end products.

- Mower Interest and Financing Charges due to repayment of Term Loans and utilisation of lower amount of working capital limits.

For the year ended 31^st March 2017, the tax liability under MAT works out to Rs.3590.30 lakhs. The tax liability under the normal method works out to Rs.2164.22 lakhs after fully setting off the carry forward unabsorbed depreciation and deduction under Section 80-IA of the Income tax Act, 1961. The excess of MAT tax liability over the tax liability under regular method, amounting to Rs.1426.08 lakhs is recognised as MAT Credit Entitlement. Consequently, the Company became liable for the net current tax liability of Rs.2164.22 lakhs. Provision for taxation has been made in the books accordingly. The Company is entitled to carry forward Rs.1426.08 lakhs as MAT Credit Entitlement and utilise the MAT tax paid in future when it becomes liable for tax under regular method.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum of Rs.1 907 lakhs has been transferred to Deferred Tax to the debit ofthe Profit and Loss Account, as against transfer of Rs.1 470 lakhs in the previous year.

In the result, Profit after tax for the year was Rs.12 885 lakhs, as compared to Rs.3 558 lakhs, in the previous year.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capital borrowings werepaid on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs.628 lakhs during the year and the balance outstanding as on March 31, 2017 was Rs.2 235 lakhs.

MARKET CONDITIONS

Market conditions during the year 2016-17 were stable aided by a growing economy and restricted availability of paper in the domestic market on account of closure of some units.

Increased demand from educational sector supported the market in the early part of the year. The subsequent off-season did not see much fall in demand unlike in previous years.

While sale of certain grades like colour paper and copier were affected by the Demonetisation Scheme announced by the Government in November 2016, the main challenges came from influx of imported copier, coated grades and even Maplitho grades from ASEAN countries at extremely competitive prices taking advantage of the Zero Import Duty window.

Order flow of colour grades and copier improved in the last quarter with better liquidity in the retail market. With improvement in Indian Economy, demand was stable during the fourth quarter as well and helped the Company to achieve the customary ‘Zero Stock’ both in Erode and Tirunelveli Units with relative ease.

EXPORT PERFORMANCE

Unit : Erode exported 12 737 tonnes during the year, as compared to 14 342 tonnes, exported during 2015-16. The export proceeds amounted to US $ 10 152 486. In Rupee terms, the value of exports amounted to Rs.6 894 lakhs. The export constituted around 10.14% of production.

The Unit : Erode also sold 364 tonnes, under deemed exports whose proceeds amounted to Rs.209 lakhs.

Unit : Tirunelveli exported 13 130 tonnes of Paper during the year, as against 15 006 tonnes, exported during the previous year. The export proceeds amounted to US $ 8 785 534. In Rupee terms, the value of exports amounted to Rs.6 561 lakhs. The exports constituted around 18.82% of the Production.

The Unit : Tirunelveli also sold 354 tonnes, under deemed exports whose proceeds amounted to Rs.195 lakhs.

During the year the Company succeeded in exporting paper from Unit : Tirunelveli and Unit : Erode to the USA market.

TREE FARMING ACTIVITY

The Company provides quality Clonal Seedlings of Eucalyptus, as well as Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

Technical Support for this initiative is provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, through a Collaborative Research Project.

In accordance with the Company’s vision to achieve wood positive status, over twelve crore seedlings (Clonal Eucalyptus Seedlings and bare-rooted Casuarina Seedlings) were made available to farmers at subsidised rates for planting in about 16 000 acres of land.

ISO 9001 / ISO 14001 ACCREDITATION

Company’s Quality Management Systems continue to be covered by the “ISO 9001” accreditation. Company’s Environmental Management System, continues to enjoy “ISO 14001”, accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been certified under three Standards of FSC, viz., FSC-STD-40-004, FSC-STD-40-005 v2-1 and FSC-STD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed Products in the domestic and international markets.

AWARDS

During the year under review, the Company won the following Awards:

- Special Export Award from CAPEXIL for the year 2014-15 for its excellent export performance.

- IPMA Environment Award for 2015-16 for best environmental practices.

- CII’s 17th National Award for excellence in energy management - 2016 - “Excellent Energy Efficient Unit”.

- CII’s 17th National Award for excellence in energy management - 2016 - “Innovative Project”.

EXPORT HOUSE STATUS

The Company is accredited with “Star Export House” Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2017, 6 346 Members were holding their shares in demat form and 96 68 273 Equity shares, representing 76.65% of the total Paid up Equity Share Capital of the Company, have been dematerialised.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT / EXPANSION PLAN

As informed last year, the Company embarked on implementation of two Projects, viz., Mill Development Plan II at Unit : Erode and Mill Expansion Plan at Unit : Tirunelveli.

The Mill Development Plan II at Unit : Erode is aimed at :

- Augmentation of Paper production capacity from 1 15 000 tonnes to 1 65 000 tonnes per annum.

- Augmentation of Wood Pulp production from 1 15 000 tonnes to 1 45 000 tonnes per annum.

- Augmentation of Captive Power Plant capacity by 15 MW.

- Up-gradation of Waste Water Treatment facilities to comply with all relevant regulations.

The Company has since received Consent To Operate (CTO) to produce 1 65 000 tonnes per annum of Paper and 1 80 000 tonnes per annum of Pulp. GO, for relaxing the 5 km restriction (for undertaking expansion of existing units situated within 5 km of River Cauvery) has since been issued by Government of Tamilnadu.

The Mill Development Plan II is estimated to cost Rs.300 crores and will be implemented in convenient phases.

Similarly, Mill Expansion Plan has been drawn up for Unit : Tirunelveli at an estimated cost of Rs.180 crores. The Project is aimed at :

- Augmentation of Paper production capacity from 72 000 tonnes to 1 10 000 tonnes per annum by various de-bottlenecking measures and up-gradation of quality.

- Installation of a Coal based 18 MW Captive Power Plant.

The Company has since secured necessary Environmental Clearance for undertaking this Project which is being implemented in convenient phases.

CURRENT YEAR (2017-18)

In Unit : Erode, the Production during April 2017 was 9 073 tonnes, as compared to 10 378 tonnes, produced during April 2016. In Unit : Tirunelveli, the Production was 5 454 tonnes in April 2017, as against 5 400 tonnes in April 2016. The overall Production for the Company, for the month of April 2017, was 14 527 tonnes. Total Revenue (net of Excise Duty and Cess), during April 2017, amounted to Rs.6 897 lakhs, compared to Rs.6 202 lakhs, during April 2016.

During April 2017, 609 tonnes of paper, valued at US $ 482 591 (equivalent to Rs.311 lakhs) were exported. In addition, 18 tonnes, valued at Rs.11 lakhs, were exported under deemed exports.

Due to severe drought conditions and drying of the perennial Rivers prevailing in the State of Tamilnadu, the Tamilnadu Government has advised the Company to restrict the drawal of water from the River Cauvery for drinking water purposes only. While the Company has appealed to the Government to permit minimum quantity of water, steps have been taken to step-up ground water resources. A similar direction has been given to Unit : Tirunelveli. Subsequently, Unit : Tirunelveli has been allowed to draw 50% of permitted quantity of water. This will enable the Unit to maintain full production.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields. The implementation of the Mill Development Plan has enabled the Mill to enhance its environmental performance and compliance, thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

Unit : Tirunelveli is well equipped with efficient Electrostatic Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands.

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

The Report on Management’s Discussion and Analysis, as required under Clause 49(VIII)(D) of the Listing Agreement with Stock Exchanges covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in “Management Discussion and Analysis Report” that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company’s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

DISCLOSURE REQUIREMENTS UNDER SECTION 143(3) OF THE COMPANIES ACT, 2013

Section 143(3) of the Companies Act, 2013 requires the Board’s Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at appropriate places that forms an integral part of this Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT - 9, is given in Annexure - III.

DIRECTORS’ RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

- Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

- The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the said period.

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

- The Directors have prepared the annual accounts on a “going concern” basis.

- The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year, the Company invested Rs.200 lakhs in the Equity Capital of its fully owned Subsidiary, viz., Esvi International (Engineers & Exporters) Limited by subscribing to 100 000 Equity Shares of Rs.100 each at a premium of Rs.100 per share.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 are furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year.

There are no material changes and commitments in the business operations of the Company since the close of the financial year on 31^st March 2017 to the date of this Report.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure - V.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Section 135 of the Companies Act, 2013 mandates every company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review. In Unit : Erode, a long term wage settlement for the period April 1, 2014 to March 31, 2019 was reached during the year with Staff Association with regard to payment of salary, bonus, production incentive and other benefits under Section 12(3) of the Industrial Disputes Act, 1947, before the Joint Commissioner of Labour, Coimbatore. Such an agreement was reached with Labour Unions in the previous year. In Unit : Tirunelveli, a long term agreement has already been reached with the Union covering the wages / salary and other benefits.

DIRECTORS

During the year, Tamilnadu Industrial Investment Corporation Limited (TIIC) withdrew the nomination of Mrs Supriya Sahu, IAS and in her place nominated its Principal Secretary / Managing Director Mr Md Nasimuddin, IAS, as its Nominee Director on the Board of our Company. The nomination of Mr Md Nasimuddin, IAS, was also withdrawn and in his place nominated its Chairman and Managing Director, Sri Satyabrata Sahoo, IAS, as its Nominee Director on the Board of our Company.

During the year, Government of Tamilnadu, nominated Sri Atulya Misra, IAS, Principal Secretary to Government, Environment and Forests Department, to represent the Government, as its Nominee Director on the Board of our Company, in the place of Sri Hans Raj Verma, IAS. The nomination of Sri Atulya Misra, IAS, was also withdrawn and in his place nominated Mr Md Nasimuddin, IAS, Principal Secretary to Government, Environment and Forests Department, as its Nominee Director on the Board of our Company.

Your Directors place on record the valuable services rendered by Mrs Supriya Sahu, IAS and Sri Atulya Misra, IAS, during their tenure as Directors of the Company.

All the Independent Directors have given the declaration that they met the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board Meeting held on 25^th March 2017. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the Independent Directors who have been appointed by the Company at its 54^th Annual General Meeting for a fixed tenure till 31^st March 2019.

AUDITORS

M/s Suri & Co., (Firm Regn. No. 004283S) and M/s S Viswanathan LLP, (Regn. No. 004770S / S200025), Chartered Accountants, Chennai shall cease to hold office at the conclusion of this 57^th Annual General Meeting having regard to the provisions of Section 139(2) of the Companies Act, 2013. Your Board wish to place on record the excellent professional services received from them all along.

The Board of Directors proposed continuance of M/s Maharaj N R Suresh & Co., as Statutory Auditor till the conclusion of the 58^th Annual General Meeting, subject to ratification by Members at every Annual General Meeting.

Further, the Board of Directors proposed appointment of M/s R Subramanian and Company LLP (Regn No. 004137S) as Joint Auditor to hold office for a term of five years from the conclusion of 57^th Annual General Meeting and till the conclusion of 62^nd Annual General Meeting.

Accordingly, requisite Resolution for ratifying the appointment of M/s Maharaj N R Suresh & Co., and approving the appointment of M/s R Subramanian and Company LLP is proposed in the manner stated in the Notice for the 57^th Annual General Meeting.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman

Chennai May 30, 2017

---

Mar 31, 2015

Dear Members,

The Directors hereby present their Fifty Fifth Annual Report and the Audited Accounts for the year ended 31st March 2015:

WORKING RESULTS

2014-15 2013-14 (in tonnes) (in tonnes)

Production 177904 178272

Sales 177150 1 77917

(Rs. lakhs) (Rs. lakhs) Revenue from Operations

Sales and Other Operating Income 106820 106422

Less: Excise Duty and Excise Cess 5408 5337

101412 101085

Other Income 584 528

Total Revenue 101996 101613

Profit before interest, depreciation, exceptional item and tax 9513 12892

Finance Cost 3721 3871

Depreciation 2929 4897

Exceptional Item 322 -

Profit/(loss) before tax 2541 4124

Provision for current tax 0 0

Transfer to / (from) Deferred Tax 806 1445

Net Profit 1735 2679

DIVIDEND

The Directors recommend payment of Dividend at Rs. 4 (Rs. four) per equity share, absorbing a sum of Rs. 505 lakhs.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs. 102 lakhs.

APPROPRIATIONS

Your Directors propose the following appropriations:

2014-15 (Rs. lakhs)

Net profit for the year 1735

Add :

Surplus brought forward from the previous year 3075

4810

Less :

Transfer to General Reserve 1000 MAT Credit of prior period availed 241

Proposed dividend and tax thereon 607

1848

Balance carried forward 2962

OPERATIONS PRODUCTION

During the year, the production at Unit : Erode was 1 18 378 tonnes, (1 18 197 tonnes in 2013-14). Production was constrained due to restrictions imposed on Grid Power drawal by the State Government especially when Annual Shuts were taken upon our Power Plants. Unit : Erode also produced 20 138 tonnes of Wet Lap Pulp during the year to meet, in part, the pulp requirements of Unit: Tirunelveli.

Unit: Tirunelveli produced 59 526 tonnes of paper (60 075 tonnes in 2013-14). Production was affected by frequent power outages in the Grid System as well as inadequate receipt of orders, following subdued market conditions.

Overall production of paper of the Company was 1 77904 tonnes (1 78 272 tonnes in 2013-14), marginally lower than the previous year.

SALES

Sales in Unit: Erode during the year was 1 17 806 tonnes. While the entire paper produced was sold and "Zero Stock" achieved at the end of the year, 406 tonnes of Notebook and 174 tonnes of paper procured for Trading remained in stock as on March 31,2015.

Unit: Tirunelveli sold 59 309 tonnes of paper, achieving "Zero Stock" at the end of the year. Only 211 tonnes of Notebook, produced during the year remained in stock as on March 31,2015.

Overall sale of paper (including sales under Trading activity) during the year was 1 77 150 tonnes, compared to 1 77 917 tonnes sold during the previous year.

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs. 1 01 996 lakhs, as against Rs. 1 01 613 lakhs, in the previous year,

The Profit before interest, depreciation, exceptional item and tax was Rs. 9 513 lakhs, for the Company as a whole, compared to Rs. 12 892 lakhs, in the previous year.

After absorbing interest and depreciation of Rs. 3 721 lakhs and Rs. 2 929 lakhs, respectively and charging of exceptional item of Rs. 322 lakhs, the Profit before tax was Rs. 2 541 lakhs, as compared to Rs. 4 124 lakhs, in the previous year.

Overall Profit before tax for the year registered a steep fall due to extremely unfavourable market conditions that prevailed throughout the year when cost increases could not be passed on to the customers and discounts had to be offered to push-up sales. Necessity to purchase expensive 'market power', to maintain production when the Captive Power Plant was taken 'off stream' for retrofit, also contributed to the erosion in profits.

The profitability could have suffered much more but for the new rates of depreciation that have come into force effective April 2014 under Schedule II to the Companies Act, 2013.

Consequently, the depreciation charge for the year was lower by Rs. 1 968 lakhs. Based on Schedule II to the Companies Act, 2013, useful life of assets have been revised with effect from April 01,2014. The carrying amounts of assets whose remaining useful life is zero as on April 01, 2014, have been charged to Statement of Profit and Loss under Exceptional Items which amounted to v 322 lakhs.

Due to substantial carried forward unabsorbed depreciation available on account of amalgamation of SPB Papers Limited, the Company was liable only to Minimum Alternate Tax (MAT). As the tax liability under the Regular Method is nil, the entire MAT is eligible to be carried forward as MAT Credit Entitlement for set off in future years. Consequently, the Current Tax liability for the year is Nil. Due to revision of income tax assessments of earlier years, there was a reversal of MAT Credit Entitlement of earlier years, amounting to Rs.241 lakhs which has been adjusted against the Surplus in Statement of Profit and Loss under Reserves and Surplus.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum of Rs. 806 lakhs has been transferred to Deferred Tax to the debit of the Statement of Profit and Loss, as against transfer of Rs. 1 445 lakhs in the previous year.

In the result, Profit after tax for the year was Rs. 1 735 lakhs, as compared to Rs. 2 679 lakhs, in the previous year.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capital borrowings were paid on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs. 680 lakhs during the year and the balance outstanding as on March 31,2015 was Rs. 3 563 lakhs.

MARKET CONDITIONS

Paper Market conditions were at the lowest ebb throughout the year under review. Lack of demand growth arising out of weak economic conditions that prevailed during the year, unabsorbed excess capacity present in the paper industry, weak demand in overseas markets restricting the export potential and undue competition from imported grades of paper taking advntage of the "zero" import duty concession available under the Regional Free Trade Agreements vitiated the sentiments, offtake and prices of domestic products. Consequently inventories piled up forcing the manufacturers to drop prices, resulting in huge pressure on margins. Sentiments have not changed in April and May 2015 and the market is likely to remain weak and subdued for most part of the year.

EXPORT PERFORMANCE

The Unit : Erode exported 12 329 tonnes during the year, as compared to 13 388 tonnes, exported during 2013-14.The export proceeds amounted to US $ 10 331 873. In Rupee terms, the value of exports amounted to Rs. 6 569 lakhs as compared to Rs. 7 046 lakhs, during the previous year.

Besides the above, the Unit : Erode also sold 609 tonnes, under deemed exports whose proceeds amounted to Rs. 343 lakhs.

The Unit :Tirunelveli exported 12 464 tonnes of Paper during the year, as against 10 404 tonnes, exported during the previous year. The export proceeds amounted to US$ 9 834 277. In Rupee terms, the value of exports amounted to Rs. 6 222 lakhs, as against Rs. 5 184 lakhs in the previous year.

Besides the above, the Unit : Tirunelveli also sold 215 tonnes, under deemed exports whose proceeds amounted to Rs. 113 lakhs.

The total exports, including Deemed Exports, accounted for 14.40% of total Production for the year.

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as Casuarina, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

Technical support for this initiative is provided by the Department of Tree Breeding of Forest College and Research Institute, Mettupalayam, attached to Tamilnadu Agricultural University, Coimbatore, through a Collaborative Research Project. Last year, farmers owning 19 098 acres were benefited by such support.

The Company's vision is to ensure that more trees are grown than what the Company needs for maintaining capacity pulp production, thus ensuring Greening of the State. Accordingly the company will continue to help farmers in planting at least 18000 - 20000 acres of land in the state, year after year. This massive tree farming initiative, is helping the Company to achieve 'Wood Positive' status.

ISO 9001 / ISO 14001 ACCREDITATION

Company's Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Company's Environmental Management System, continues to enjoy "ISO 14001", accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been certified under three Standards of FSC, viz., FSC-STD-40-004, FSC- STD-40-005 v2-1 and FSC-STD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly managed forests and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed Products in the domestic and international markets.

AWARDS

Energy Conservation :

During the year, the Company won the following prestigious Energy Conservation Awards :

* National Energy Conservation Award 2014 in Pulp and Paper Sector - II Prize from Government of India (Ministry of Power);

* IPMA Energy Conservation Award for the year 2013-14.

EXPORT HOUSE STATUS

The Company is accredited with "Star Export House" Status, by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2015, 4 892 Members were holding their shares in demat form and 96 26 887 Equity Shares, representing 76.32% of the total Paid up Equity Share Capital of the Company, have been dematerialised.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT / EXPANSION PLAN

The Company has since drawn up plans to undertake Mill Development Plan (II) for Unit: Erode comprising :

* Augmentation of paper production capacity from 1 15 000 tonnes to 1 65 000 tonnes per annum.

* Augmentation of wood pulp production from 1 15 000 tonnes to 1 45 000 tonnes per annum.

* Augmentation of Captive Power Plant capacity by 15 MW.

* Upgrading Waste Water Treatment facilities to comply with all relevant regulations.

The Company has since completed the preparation of Environmental Impact Assessment Report and the requisite Public Hearing was held. Company's application is now before the Expert Appraisal Committee of MOEF for award of Environment Clearance.

MDP II, estimated to cost Rs. 300 crores, will be undertaken in convenient phases.

Similarly, a Mill Expansion Plan has been drawn up for Unit: Tirunelveli at an estimated cost of Rs. 180 crores. The Product will consist of :

* Augmenting Paper production capacity from 72 000 tonnes to 1 10 000 tonnes per annum by various debottlenecking measures and upgradation of quality.

* Installation of a coal based 18 MW Captive Power Plant.

The Company has secured necessary Environment Clearance for undertaking this Project which is being implemented in convenient phases.

CURRENT YEAR (2015-16)

In Unit : Erode, the Production during April 2015, was 10 315 tonnes, as compared to 8 928 tonnes, produced during April 2014. In Unit : Tirunelveli, the Production was 5 004 tonnes in April 2015, as against 4 050 tonnes in April 2014. The overall Production for the Company, for the month of April 2015, was 15 319 tonnes. Total Revenue (net of Excise Duty and Cess), during April 2015, amounted to Rs. 6 054 lakhs, compared to Rs. 5 373 lakhs, during April 2014.

During April 2015, 943 tonnes of paper, valued at US$ 717 927 (equivalent to Rs. 452 lakhs) were exported.

In addition, 31 tonnes, valued at Rs. 18 lakhs and 100 tonnes, valued at Rs. 51 lakhs, were exported under deemed exports and merchant exports, respectively.

Paper market continues to witness depressed conditions.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis in both the units. The treated effluent water continues to be utilised for irrigating nearby sugarcane fields in Unit: Erode, while tree planting is undertaken at Unit: Tirunelveli. The implementation of the Mill Development Plan has enabled the Mill to enhance its environmental performance and compliance, thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

Unit : Tirunelveli is well equipped with efficient Electrostatic Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Report on Management's Discussion and Analysis, as required under Clause 49(VIII)(D) of the Listing Agreement with Stock Exchanges covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in "Management Discussion and Analysis Report" that forms an integral part of this Report and annexed as Annexure - I.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, Corporate Governance Report, together with the Certificate from the Company's Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

DISCLOSURE REQUIREMENTS UNDER SECTION 143(3) OF THE COMPANIES ACT, 2013

Section 143(3) of the Companies Act, 2013 requires the Board's Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at the appropriate places that forms an integral part of this Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT - 9, is given in Annexure - III.

DIRECTORS' RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

* Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

* The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the said period.

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

* The Directors have prepared the annual accounts on a "going concern" basis.

* The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

* The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year, the Company did not give any Loan or Guarantee or provided any security or make investment covered under Section 186 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year.

There are no material changes and commitments in the business operations of the Company since the close of the financial year on 31st March 2015 to the date of this Report.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure - V.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Section 135 of the Companies Act, 2013 mandates every company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Accordingly, your Company has constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review. Discussions with Labour Unions / Staff Association are in progress with regard to the long term agreement on wages / salary and other benefits in Unit: Erode. In Unit: Tirunelveli, a long term agreement has since been reached with the Union covering the wages / salary and other benefits.

DIRECTORS

During the year, the Government of Tamilnadu withdrew the nomination of Sri Mohan Verghese Chunkath, IAS, as its Nominee on the Board of our Company, who was earlier appointed in the casual vacancy caused by the withdrawal of nomination of Sri C V Sankar, IAS. As there was no casual vacancy, Sri Hans Raj Verma, IAS, was appointed as an Additional Director. He retires at the ensuing Annual General Meeting and being eligible offers himself for election at the said Meeting.

Sri S K Prabakar, IAS, was appointed as the Nominee Director of Tamilnadu Industrial Investment Corporation Limited on 2nd February 2013. He could not attend any Board Meetings in the last 12 months and hence Sri S K Prabakar, IAS automatically ceased to be a Director on our Board with effect from 1st April 2015, as provided under Section 167(1)(b) of the Companies Act, 2013.

All the Independent Directors have given the declaration that they had met the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated at the Board Meeting held on March 26, 2015. The Board, on the basis of such performance evaluation, determined to continue the term of appointment of all the Independent Directors who have been appointed by the Company at its 54th Annual General Meeting for a fixed tenure till March 31,2019.

AUDITORS

M/s Suri & Co., and M/s S Viswanathan, Chartered Accountants, Chennai have been appointed as Statutory Auditors of the Company till the conclusion of the 57th Annual General Meeting and M/s Maharaj N R Suresh and Co., till the conclusion of the 58th Annual General Meeting, subject to ratification by Members at every Annual General Meeting. Accordingly, requisite Resolution for ratifying their appointment is proposed in the manner stated in the Notice for the 55th Annual General Meeting.

Particulars of Statutory Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this Report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the cooperation extended by all Executives and Employees of the Company which helped to sustain the profitable operations of the Company in a difficult year. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers and Suppliers, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM Chairman

Chennai May 30, 2015

---

Mar 31, 2014

The Directors hereby present their Fifty Fourth Annual Report and the Audited Accounts for the year ended 31st March 2014:

WORKING RESULTS

2013-14 2012-13 (in tonnes) (in tonnes)

Production 178272 169438

Sales 177917 170079

(Rs. lakhs) (Rs. lakhs)

Revenue from Operations

Sales and Other Operating Income 106675 87807

Less: Excise Duty and Excise Cess 5337 4358

101338 83449

Other Income 275 417

Total Revenue 101613 83866

Profit before interest, depreciation and tax 12892 11007

Finance Cost 3871 4446

Depreciation 4897 4914

Profit/(loss) before tax 4124 1647

Provision for current tax 0 0

Transfer to / (from) Deferred Tax 1445 (-) 404

Net Profit 2679 2051

DIVIDEND

The Directors recommend payment of Dividend at Rs. 4 (Rs. four) per Equity Share, absorbing a sum of Rs. 505 lakhs.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs. 85 lakhs.

APPROPRIATIONS

Your Directors propose the following appropriations:

2013-14 (Rs. lakhs)

Net profit for the year 2679

Add :

Surplus brought forward from the previous year 3487

6166

Less :

Transfer to General Reserve 2500 Proposed dividend and tax thereon 590

3090

Balance carried forward 3076

OPERATIONS PRODUCTION

During the year, the production at Unit : Erode was 1 18 197 tonnes, as compared to 1 19 366 tonnes, produced in the previous year. The production was marginally lower by 1 169 tonnes, compared to the previous year, mainly on account of severe restrictions on power availability imposed by the State Government.

The Unit : Erode also produced 18 177 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit : Tirunelveli.

The Unit : Tirunelveli produced 60 075 tonnes Paper during the year, as compared to 50 072 tonnes, produced in the previous year, higher by 10 003 tonnes.

The overall Production for the Company was 1 78 272 tonnes of Paper and Boards for the year, as compared to 1 69 438 tonnes produced, in the previous year.

SALES

During the year, the Unit: Erode sold 1 17 138 tonnes, against its production of 1 18 197 tonnes, While the entire paper produced had been sold and zero stock was achieved at the end of the financial year, nearly 502 tonnes of converted Note Books remained in stock, for disposal during the ensuing school season.

The Unit : Tirunelveli sold 60 642 tonnes, during the year and achieved zero stock at the end of the financial year.

The overall sale of Paper and Paper Boards, (including sales under trading activity), effected by the Company during the year, was 1 77 917 tonnes, compared to 1 70 079 tonnes,sold during the previous year.

PROFITABILITY

The Gross Turnover, including Other Operating Income, had crossed Rs. 1000 crore mark this year and stood at Rs. 1067 crores, as against Rs. 878 crores, in the previous year.

The Revenue from Operations of the Company for the year was Rs. 1 01 613 lakhs, as against Rs. 83 866 lakhs, in the previous year.

The Profit before interest, depreciation and tax was Rs. 12 892 lakhs, for the Company compared to Rs. 11 007 lakhs, in the previous year.

After absorbing interest and depreciation of Rs. 3 871 lakhs and Rs. 4 897 lakhs, respectively, the Profit before tax was Rs. 4 124 lakhs, as compared to Rs. 1 647 lakhs, in the previous year.

The overall Profit before tax for the year registered an impressive growth, due to increased production and better price realisations for the end products. The Profit could have been much better, but for the steep increase in prices of wood by nearly 70% and severe restrictions imposed by the State Government on availability of power from State Grid.

Due to substantial carried forward unabsorbed depreciation available on account of amalgamation of SPB Papers Limited, the Company was liable only to Minimum Alternate Tax (MAT). As the tax liability under the Regular Method is nil, the entire MAT is eligible to be carried forward as MAT Credit Entitlement for set off in future years. Consequently, the Current Tax liability for the year is Nil.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum of Rs. 1 445 lakhs has been transferred to Deferred Tax to the debit of the Profit and Loss Account, as against transfer of Rs. 404 lakhs from Deferred Tax and credited to the Profit and Loss Account in the previous year.

In the result, Profit after tax for the year was Rs. 2 679 lakhs, as compared to Rs. 2 051 lakhs, in the previous year.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capital borrowings were paid on or before the respective due dates. The entire Term Loan borrowed by Unit : Erode, for its Mill Development Plan, was fully repaid during the year. Unit : Erode does not carry any Term Loans in its books, other than the Working Capital borrowings. The Term Loan outstanding for Unit : Tirunelveli was Rs. 15 839 lakhs, as on March 31, 2014.

INTEREST FREE SALES TAX DEFERRAL SCHEME

As the repayment of the loan has already commenced, the Company repaid Rs. 521 lakhs during the year and the balance outstanding as on March 31, 2014 was Rs. 4 243 lakhs.

MARKET CONDITIONS

The year commenced with favourable conditions of demand, resulting from the text books and exercise note books sectors. Modest price increases could be effected to offset the cost increases.

However, the slide in demand for paper commenced by end September 2013, when the Maplitho grades experienced a fall in demand. By this time, the market and the end users were fully aware of the cost of production having escalated beyond the control of manufacturers, leaving them with no choice but to accept the increased prices charged by the manufacturers.

This in turn continued to keep the demand at higher than the off-season levels, due to the end users purchasing and storing more than their requirements to save on future price revisions.

Despite multiple revisions in price, the manufacturers were still short of covering the escalation in cost of production, primarily due to increase in price of wood, coal and chemicals. With unabated increase in prices of wood, another price revision was effected in December 2013, to partially neutralise the increase in costs. This was the last price revision for the year, which was not fully absorbed by the market.

The fourth quarter was most unique in the paper industry. Till now, every year demand for paper for the educational sector would commence from January and peak around April and May. This year, there was no indication of this additional demand, since the major consumers / publishers had already stored sufficient stocks to counter the price revisions.

From the 1st January 2014, as per FTA agreement with the ASEAN countries, import of paper was at zero Customs Duty item and this weakened the sentiments of the market further. General elections, that would normally trigger additional consumption of paper, had no impact on the demand this time. The general sluggishness in the economy, contributed to the postponement of regular purchases, due to uncertainty in the industrial and commercial sectors of the economy.

All the above factors resulted in a very subdued demand where stocks started piling up with all the manufacturers. This continued during the first quarter of the current financial year.

By securing some bulk orders, the Company could cover the machines with orders and achieve zero stock at the end of the year.

The outlook for the current year appears ''weak'', though a stable market is projected by Analysts.

EXPORT PERFORMANCE

The Unit : Erode exported 13 388 tonnes during the year, as compared to 15 314 tonnes, exported during 2012-13.The export proceeds amounted to US $ 10 431 863. In Rupee terms, the value of exports amounted to Rs. 7 046 lakhs as compared to Rs. 7 204 lakhs, during the previous year.

Besides the above, the Unit : Erode also sold 243 tonnes, under deemed exports whose proceeds amounted to Rs. 135 lakhs.

The Unit : Tirunelveli exported 10 404 tonnes of Paper during the year, as against 9 812 tonnes, exported during the previous year. The export proceeds amounted to US$ 8 514 217. In Rupee terms, the value of exports amounted to Rs. 5 184 lakhs, as against Rs. 4 345 lakhs in the previous year.

Besides the above, the Unit : Tirunelveli also sold 406 tonnes, under deemed exports whose proceeds amounted to Rs. 213 lakhs.

The exports, including Deemed Exports, accounted for 13.71% of Production.

TREE FARMING ACTIVITY

The Company provides quality Clonal Seedlings of Eucalyptus, as well as Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

Technical support for this initiative is provided by the Department of Tree Breeding of Forest College and Research Institute, Mettupalayam (FC&RI), attached to Tamilnadu Agricultural University, Coimbatore, through a Collaborative Research Project. Last year, farmers owning 19 507 acres were benefited by such support.

ISO 9001 / ISO 14001 ACCREDITATION

Company''s Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Company''s Environmental Management System, continues to enjoy "ISO 14001", accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been re-certified under three Standards of FSC, viz., FSC-STD-40-004, FSC-STD-40-005 v2-1 and FSC-STD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly managed forests and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed Products in the domestic and international markets.

AWARDS

Safety

The Company won the following Safety Awards, instituted by the Government of Tamilnadu, for the year 2012, in respect of units which worked for more than 10 lakhs man hours in a year:

- For highest reduction in accident rate when compared to the previous year - First Prize;

- For Lowest Weighted Frequency Rate in accidents when compared to other industries coming under the same classification and group - First Prize and

- For longest accident free period in man hours - First Prize.

EXPORT HOUSE STATUS

The Company continues to enjoy "Two Star Export House" Status, awarded by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2014, 95 89 050 Equity shares, representing 76.02% of the total Paid up Equity Share Capital of the Company were held by 4 750 Shareholders under Demat form.

FURTHER ISSUE OF SHARES

During the year, the Company issued 13 63 628 Equity Shares to the Equity Shareholders of SPB Papers Limited (since amalgamated with our Company), pursuant to the Scheme of Amalgamation approved by the Hon''ble High Court of Madras.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

CURRENT YEAR (2014-15)

In Unit : Erode, the Production during April 2014, was 8 928 tonnes, as compared to 9 558 tonnes, produced during April 2013. In Unit : Tirunelveli, the Production was 4050 tonnes in April 2014, as against 3 654 tonnes in April 2013. The overall Production for the Company, for the month of April 2014, was 12 978 tonnes. Total Revenue (net of Excise Duty and Cess), during April 2014, amounted to Rs. 5 373 lakhs, compared to Rs. 5 079 lakhs, during April 2013.

During April 2014, 764 tonnes of paper, valued at US$ 665 918 (equivalent to Rs. 403 lakhs) were exported.

Market conditions for paper are ''soft'' and weak demand growth is forecast.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields. The implementation of the Mill Development Plan has enabled the Mill to enhance its environmental compliance, thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

Unit : Tirunelveli is well equipped with efficient Electrostatic Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands.

AUDIT COMMITTEE

The Audit Committee of the Board consists of four members and all of them are Non-Whole- time Directors, viz., Sri R V Gupta, Dr S Narayan, Sri Bimal Kumar Poddar andSri V Sridar.

Sri R V Gupta is the Chairman of the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

The Company has constituted a Corporate Social Responsibility Committee (CSR), consisting of Sri N Gopalaratnam, Sri V Sridar, Sri K S Kasi Viswanathan and Sri V Pichai as its members. The Committee will formulate CSR Policy, recommend CSR Initiatives and monitor CSR expenditure.

DIRECTORS'' RESPONSIBILITY STATEMENT

While preparing the annual financial statements, the Company has adhered to the following:

Applicable Accounting Standards, referred to in Section 211(3-C) of the Companies Act, 1956, have been followed.

The said Accounting Standards are being applied consistently. The Company has made judgements and estimates that are reasonable, prudent and are in the interest of the Company''s business so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the said period.

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

The Directors have prepared the financial statements on a "going concern" basis.

CORPORATE GOVERNANCE

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

As required by the Listing Agreement, an Auditors'' Report on Corporate Governance and a Declaration by the Managing Director / Chief Executive Officer with regard to Code of Conduct are attached to the said Report.

Further, as required by Clause 49 of the Listing Agreement, a Certificate, duly signed by the Managing Director and Deputy Managing Director & Secretary, was submitted to the Board of Directors on the financial statements and cash flow statement of the Company for the year ended March 31, 2014 at the meeting held on May 30, 2014.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under 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, is given in Annexure - I and forms part of this Report.

PARTICULARS OF EMPLOYEES

During the year 2013-14, none of the employees of the Company was in receipt of remuneration, in excess of the limit prescribed in Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement is attached to the Balance Sheet.

EMPLOYEES

Relations between the Management and Employees were cordial throughout the year under review.

DIRECTORS

At the Board Meeting held on March 22, 2014, the Board of Directors re-appointed:

- Sri N Gopalaratnam, as Chairman with executive powers,

- Sri K S Kasi Viswanathan, as Managing Director and

- Sri V Pichai, as Deputy Managing Director & Secretary,

for a further term of three years from April 01, 2014. The re-appointment / remuneration package for the above three Whole-time Directors require the approval of the Members in General Meeting and hence, forms part of the Agenda for the Fifty Fourth Annual General Meeting.

Sri Bimal Kumar Poddar retires by rotation, under Article 104 of the Articles of Association of the Company at the conclusion of the ensuing Fifty Fourth Annual General Meeting and being eligible offers himself for re-election at the said Meeting.

The Company has received notices under Section 160 of the Companies Act, 2013 from Members proposing the candidature of Sri R V Gupta, Sri V Sridar and Dr S Narayan together with requisite deposit of Rs. one lakh for each for appointment as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence, as prescribed both under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDITORS

M/s Suri & Co., Chennai, Messrs S Viswanathan, Chennai and M/s Maharaj N R Suresh & Co., Chennai, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. Necessary Resolution for their appointment is proposed at the ensuing Annual General Meeting.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956, the Central Government has ordered that the Company carries out an audit of cost accounts relating to paper every year. M/s S Mahadevan & Co., Cost Accountants, was appointed as Cost Auditor for the year 2013-14. The Cost Audit Report for the year 2013-14 will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all Executives and Employees of the Company for their fine performance in a difficult year. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers and Suppliers, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman

Chennai

May 30, 2014

---

Mar 31, 2013

The Directors hereby present their Fifty Third Annual Report and the Audited Accounts for the year ended 31st March 2013.

As informed in last year''s Directors'' Report, taking into consideration the advantages, the Board of Directors of both SPB Papers Limited (SPBPL) and our Company (SPB) formulated and approved a Scheme of Amalgamation for the transfer and vesting of the Undertaking of SPBPL with and into SPB, pursuant to the provisions of Section 391 to 394 and other relevant provisions of the Companies Act, 1956.

On the Company Petition filed by both the Companies, the Hon''ble High Court of Madras has since accorded approval for the said Scheme of Amalgamation with effect from April 01, 2012.

Both the Companies have accepted the order of the Hon''ble High Court and filed necessary returns with the Registrar of Companies.

Accordingly, the accounts for the year ended March 31, 2013 have been prepared taking into account the operations of SPB Papers Limited which has since been dissolved

WORKING RESULTS

2012-13 2012-13 2012-13 2011-12 Unit: Unit: Total Erode Tirunelveli (Actuals) (Actuals) (Actuals) (Actuals) (in tonnes) (in tonnes) (in tonnes) (in tonnes)

Production 119366 50072 169438 118282

Sales 120023 50056 170079 117522 (Rs. lakhs) (` lakhs) (Rs. lakhs) (Rs. lakhs)

Revenue from Operations

Sales and Other Operating Income 64533 23544 88077 63912

Less: Excise Duty and Excise Cess 3614 1108 4722 2770

60919 22436 83355 61142

Other Income 408 103 511 463

Total Revenue 61327 22539 83866 61605

Profit before interest, depreciation and tax 10717 290 11007 10354

Finance Cost 2067 2379 4446 2432

Depreciation 3468 1446 4914 3426

Profit before tax 5182 (-) 3535 1647 4496

Provision for current tax 0 1168

Transfer from Deferred Tax (-) 404 (-) 82

Net Profit 2051 3410



DIVIDEND

The Directors recommend payment of Dividend at Rs.4 per Equity Share, absorbing a sum of Rs.504.55 lakhs.

As per the Scheme of Amalgamation approved by the Hon''ble High Court of Madras, the shareholders of SPB Papers Limited who will be allotted Equity Shares in the Share Capital of our Company, are eligible for dividend for the full year of 2012-13.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs.85.75 lakhs.

APPROPRIATIONS

Your Directors propose the following appropriations:

2012-13 (Rs.lakhs)

Net profit for the year 2051

Add : Surplus brought forward from the previous year 3026

5077

Less : Transfer to General Reserve 1000

Proposed dividend and tax thereon 590

1590

Balance carried forward 3487

OPERATIONS PRODUCTION

During the year, the Unit : Erode''s production was 1 19 366 tonnes, as compared to 1 18 282 tonnes, produced in the previous year. The production was marginally higher by 1 084 tonnes compared to the previous year. This could be achieved despite severe restrictions on power availability imposed by the State Government.

The Unit : Erode also produced 21 851 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit : Tirunelveli.

The Unit : Tirunelveli produced 50 072 tonnes Paper during the year, as compared to 36 069 tonnes produced in the previous year.

The overall Production for the Company was 1 69 438 tonnes of Paper and Boards for the year.

SALES

During the year, the Unit : Erode sold 1 19 163 tonnes, against its production of 1 19 366 tonnes. While the entire paper produced had been sold and zero stock was achieved at the end of the financial year, nearly 404 tonnes of converted Note Books remained in stock for disposal during the ensuing school season.

In addition, the Unit : Erode, as part of its trading activity, had bought 287 tonnes of paper, board, etc., and sold 860 tonnes, including out of opening stock of 798 tonnes, whose turnover amounted to Rs.204 lakhs and sold petroleum products valued at Rs.2 665 lakhs. Closing Stock of Traded Goods was 225 tonnes as on March 31, 2013.

The Unit : Tirunelveli sold 50 056 tonnes during the year.

The overall sale of Paper and Paper Board effected by the Company during the year was 1 70 079 tonnes.

PROFITABILITY

The Revenue from Operations of Unit : Erode was Rs.64 533 lakhs, for the year 2012-13, compared to Rs.63 912 lakhs, during the previous year. The Revenue from Operations registered a marginal increase of Rs.621 lakhs, compared to the previous year. The increase in Revenue from Operations was mainly on account of higher production and increase in prices of paper effected during the second half of the financial year.

The Revenue from Operations of Unit : Tirunelveli was Rs.23 544 lakhs.

The overall Revenue from Operations of the Company, net of Excise Duty for the year was Rs.83 866 lakhs.

The Profit before interest, depreciation and tax was Rs.11 007 lakhs for the Company as a whole, compared to Rs.10 354 lakhs, in the previous year.

After absorbing interest and depreciation of Rs.4 446 lakhs and Rs.4 914 lakhs, respectively, the profit before tax was Rs.1 647 lakhs, as compared to Rs.4 496 lakhs, in the previous year.

The overall Profit before Tax for the year registered a steep fall due to steep increase in prices of wood by more than 30% and the effect of amalgamation of SPB Papers Limited with the Company with effect from April 01, 2012.

Due to substantial business loss and carried forward depreciation available on account of amalgamation of SPB Papers Limited, the Company was liable only to Minimum Alternate Tax (MAT). As the tax liability under the Regular Method is nil, the entire MAT is eligible to be carried forward as MAT Credit Entitlement for set off in future years. Consequently, the Current Tax Liability for the year is Nil.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum of Rs.404 lakhs has been transferred from Deferred Tax and credited to the Profit and Loss Account, as against transfer of Rs.82 lakhs, in the previous year.

In the result, profit after tax for the year was Rs.2 051 lakhs, as compared to Rs.3 410 lakhs, in the previous year

FINANCE

The Unit : Erode paid the instalments of the Term Loans and the interest dues on Term Loans and Working Capital Limits, on or before the respective due dates. Unit : Tirunelveli paid the interest dues on or before the due dates on Term Loans and Working Capital Limits. There were no instalments of Term Loan payable during the year for Unit : Tirunelveli.

INTEREST FREE SALES TAX DEFERRAL SCHEME

During the year 2012-13, the Company availed Rs.358 lakhs under the Scheme and the cumulative amount availed, upto March 31, 2013, was ` 4764 lakhs. .

MARKET CONDITIONS

The year commenced with a negative outlook for the paper industry. Demand in the notebook segment had come down, due to announcement of free notebook distribution scheme by the Government of Tamil Nadu for Government and Government aided schools. Most of the major notebook manufacturers found themselves saddled with huge stocks and the smaller converters cancelled pending orders. With the educational sector peak flattening out by the end of June 2012, the outlook for the balance period of the financial year was not positive.

On the export front, during the months of April and May 2012, buoyancy continued, but from mid June 2012 onwards, the market started sliding.

From the third quarter onwards, there was some improvement in paper market conditions. The continued power shortage in Tamil Nadu and Andhra Pradesh, coupled with the weak Rupee ensured a very limited flow of material from the recycled paper mills in South India to the market. Commencement of finalisation of Text Book tenders by various State Governments had its impact in North and West, limiting flows to the market. Thus, A grade Mills were not compelled to offer further discounts, other than what was offered in Maplitho Products in August 2012, which continued in September 2012.

From October 2012, the impact of cost push was severe. Prices of Wood and Chemicals had shown an increasing trend from the end of second quarter. This forced the Mils to effect price revisions to offset the cost escalations, which were accepted by the market without much resistance.

Power position, throughout the year, was bleak in the Southern States and is not likely to improve, till the onset of the monsoon. Hence, supplies from the smaller mills are likely to be restricted. Also Text Books and Student Exercise Notebooks segment is showing marked preference for A Grade Papers.

No new capacities are to be commissioned in the immediate future, except for a new machine (1 50 000 tpa) during the end of second quarter. This may help in sustaining the demand and prices in the market, during the current year.

EXPORT PERFORMANCE

The Unit : Erode exported 15 314 tonnes, including export of 1 015 tonnes of paper and paper boards to Nepal and Iran during the year, as compared to 10 533 tonnes, during 2011-12. The exports accounted for about 12.83% of total production.

The export proceeds amounted to US $ 12 410 486. In Rupee terms, the value of exports amounted to Rs.7 204 lakhs, including value of exports to Nepal and Iran amounting to Rs.452 lakhs, as compared to Rs.4 620 lakhs, during the previous year.

Besides the above, the Unit : Erode also sold 268 tonnes, under deemed exports whose proceeds amounted to Rs.133 lakhs.

The Unit : Tirunelveli exported 9 812 tonnes of Paper during the year, accounting for 19.60% of Production. The export proceeds amounted to US$ 7 124 963. In Rupee terms the value of exports amounted to Rs.4 345 lakhs, including value of exports to Iran amounting to Rs.453 lakhs.

TREE FARMING ACTIVITY

The Company provides quality Clonal Seedlings of Eucalyptus as well as Casuarina Seedlings at subsidised rates to interested farmers and assist them with technical help to achieve higher yields.

Technical support for this initiative is provided by the Department of Tree Breeding of Forest College and Research Institute, Mettupalayam, (FC&RI) attached to Tamilnadu Agricultural University, Coimbatore, through a Collaborative Research Project. Last year, farmers owning 11 263 acres were benefited by such support.

ISO 9001 / ISO 14001 ACCREDITATION

Company''s Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Company''s Environmental Management System, continues to enjoy "ISO 14001" accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard which facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

Scientific Certification Systems (SCS), who is accredited by the FSC, has awarded to the Company the Forest Stewardship Council (FSC) Certification, valid till May 2015. FSC is an international certification and labeling system that guarantees that paper and wood products carrying the FSC label come from environmentally and socially responsible sources.

AWARDS

Safety

Safety Awards, for the year 2008, in respect of units which worked for more than 10 lakhs man hours in a year:

0 For highest reduction in accident rate when compared to the previous year - Third Prize

0 For Lowest Weighted Frequency Rate in accidents when compared to other industries coming under the same classification and group - Third Prize

0 For longest accident free period in man hours - Second Prize.

EXPORT HOUSE STATUS

The Company continues to enjoy "Two Star Export House" Status, awarded by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2013, 4 910 Members were holding their shares in demat form and 87 72 550 Equity Shares, representing 77.98% of the total Paid up Equity Share Capital of the Company, have been dematerialised.

SUBSIDIARY

During the year, the Company acquired 100% of the Equity of Esvi International (Engineers & Exporters) Limited (Esvin) thereby making it a wholly owned subsidiary of the Company. Esvin was involved in execution of projects, both in India and outside of India, in the past. Currently, it holds properties and derives property income

CURRENT YEAR (2013-14)

In Unit : Erode, the production during April 2013, was 9 558 tonnes as compared to 10 345 tonnes, produced during April 2012. In Unit : Tirunelveli, the Production was 3 654 tonnes in April 2013. The overall Production for the month of April 2013, for the Company was 13 212 tonnes.

Total Revenue (net of Excise Duty and Cess), during April 2013 amounted to Rs.4 479 lakhs, for Unit: Erode, compared to Rs.3 896 lakhs, during April 2012. For Unit: Tirunelveli, the Total Revenue and (net of Excise Duty and Cess) amounted to Rs.1 364 lakhs for April 2013. The overall Total Revenue for the month of April 2013, for the Company was Rs.5 843 lakhs.

During April 2013, 270 tonnes of paper, valued at US $ 2 28 156 (equivalent to Rs.133 lakhs) were exported by both Erode and Tirunelveli units.

Market sentiments were favourable during April 2013.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit : Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields. The implementation of the Mill Development Plan had enabled the Mill to enhance its environmental performance and compliance thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

Unit : Tirunelveli is well equipped with efficient Electrostatic Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands

AUDIT COMMITTEE

The Audit Committee of the Board consists of four members and all of them are Non-Whole- time Directors, viz., Sri R V Gupta, Dr S Narayan, Sri Bimal Kumar Poddar and Sri V Sridar.

Sri R V Gupta is the Chairman of the Audit Committee.

DIRECTORS'' RESPONSIBILITY STATEMENT

While preparing the annual financial statements, the Company has adhered to the following:

Applicable Accounting Standards referred to in Section 211(3-C) of the Companies Act, 1956, have been followed.

The said Accounting Standards are being applied consistently. The Company has made judgements and estimates that are reasonable, prudent and are in the interest of the Company''s business so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the said period.

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

The Directors have prepared the financial statements on a "going concern" basis..

CORPORATE GOVERNANCE

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

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

Further, as required by Clause 49 of the Listing Agreement, a Certificate, duly signed by the Chairman and Managing Director and Director (Finance) & Secretary, was submitted to the Board of Directors on the financial statements and cash flow statement of the Company for the year ended March 31, 2013 at the meeting held on May 30, 2013.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under 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, is given in Annexure - I and forms part of this Report.

PARTICULARS OF EMPLOYEES

During the year 2012-13, none of the employees of the Company was in receipt of remuneration, in excess of the limit prescribed in Sub-section (2A) of Section 217 of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement is attached to the Balance Sheet.

EMPLOYEES

Relations between the Management and Employees were cordial throughout the year under review.

DIRECTORS

Dr S Narayan, IAS (Retd.), Sri K S Kasi Viswanathan and Sri V Pichai retire by rotation, under Article 104 of the Articles of Association of the Company at the conclusion of the ensuing Fifty Third Annual General Meeting and being eligible offer themselves for re-election at the said Meeting.

During the year, The Tamilnadu Industrial Investment Corporation Limited (TIIC) withdrew the nomination of Sri Md. Nasimuddin, IAS and nominated its Chairman and Managing Director, Sri Swaran Singh, IAS, as its Nominee Director on the Board of the Company. Later, the nomination of Sri Swaran Singh, IAS was withdrawn and TIIC nominated its Chairman and Managing Director, Sri S K Prabakar, IAS, as its Nominee Director on the Board of the Company. Sri S K Prabakar, IAS is not liable to retire by rotation.

During the year, the Tamilnadu Government withdrew the nomination of Sri C V Sankar, IAS, and nominated Sri Mohan Verghese Chunkath, IAS, Additional Chief Secretary to Government,

Environment and Forests Department, as its Nominee on the Board of our Company. Sri Mohan Verghese Chunkath, IAS, was appointed as a Director in the casual vacancy caused by the withdrawal of nomination of Sri C V Sankar, IAS and is liable to retire by rotation.

Your Directors place on record the valuable services rendered by Sri Md. Nasimuddin, IAS, Sri Swaran Singh, IAS and Sri C V Sankar, IAS, during their tenure as Directors of the Company.

AUDITORS

M/s Suri & Co., Chennai and Messrs S Viswanathan, Chennai, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Your Directors also recommend appointment of M/s Maharaj N R Suresh & Co., Chartered Accountants, Chennai as Auditors of the Company. Necessary Resolution for their appointment is proposed at the ensuing Annual General Meeting.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956, the Central Government has ordered that the Company carries out an audit of cost accounts relating to paper every year. M/s S Mahadevan & Co., Cost Accountants, was appointed as Cost Auditor for the year 2012-13. The Cost Audit Report for the year 2012-13 will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all Executives and Employees of the Company for their fine performance in a difficult year. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers and Suppliers, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman and Managing Director

Chennai May 30, 2013

---

Mar 31, 2012

The Directors hereby present their Fifty Second Annual Report and the Audited Accounts for the year ended 31st March 2012 :

WORKING RESULTS

2011-12 2010-11 (Actuals) (Actuals) (in tonnes) (in tonnes) Production 118282 120558

Sales 117522 121010

(Rs lakhs) (Rs lakhs)

Revenue from Operations

Sales and Other Operating Income 63912 59515

Less: Excise Duty and Excise Cess 2770 2167

61142 57348

Other Income 463 638

Total Revenue 61605 57986

Profit before interest, depreciation and tax 10354 11680

Interest 2432 2203

Depreciation 3426 3400

Profit before tax 4496 6077

Provision for current tax 1168 -

Transfer (from) / to Deferred Tax (-) 82 (-) 423

Net Profit 3410 6500

DIVIDEND

The Directors recommend payment of Dividend at Rs 5 per Equity Share, absorbing a sum of Rs 562.50 lakhs. As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs 91.25 lakhs.

APPROPRIATIONS

Your Directors propose the following appropriations:

2011-12 (Rs lakhs)

Net profit for the year 3410

Add :

Surplus brought forward from the previous year 2195 Transfer from Investment Allowance Reserve 75

2270 5680

Less :

Transfer to General Reserve 2000 Proposed dividend and tax thereon 654

2654

Balance carried forward 3026

OPERATIONS

During the year, the Company's production was 1 18 282 tonnes, as compared to 1 20 558 tonnes, produced in the previous year. The production could have been higher but for the severe restrictions on power availability imposed by the State Government, which affected production whenever our Captive Power Plants were shut for annual inspection and during maintenance related outages.

The revenue was Rs 61 605 lakhs for the year under review, as compared to Rs 57 986 lakhs in the previous year. Total revenue was higher by 6.2%, on account of higher production and sale of Pulp.

The Profit before interest, depreciation and tax was Rs 10 354 lakhs, as compared to Rs 11 680 lakhs, in the previous year.

Major factors that impacted the profitability for the year under review were increases in prices of Wood, Bagasse, Coal and Chemicals.

After absorbing interest and financing charges and depreciation of Rs 2 432 lakhs and Rs 3 426 lakhs, respectively, the profit before tax was Rs 4 496 lakhs, as compared to Rs 6 077 lakhs, in the previous year.

There was no carried forward loss or depreciation available for set off against current year's profit. Consequently, the Company was liable for regular tax at normal rate. The said current tax liability worked out to Rs 1 168 lakhs. The unutilised MAT Credit Entitlement could be utilised to the extent Rs 287 lakhs to reduce the cash outgo.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum of Rs 82 lakhs has been transferred from Deferred Tax and credited to the Statement of Profit and Loss, as against Rs 423 lakhs, in the previous year.

In the result, profit after tax for the year was Rs 3 410 lakhs, as compared to Rs 6 500 lakhs, in the previous year.

FINANCE

The Company paid the instalments of the Term Loans and the interest dues on Term Loans and Working Capital borrowings, on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL SCHEME

During the year 2011-12, the Company availed Rs 401 lakhs under the Scheme and the cumulative amount availed, upto March 31, 2012, was Rs 4 406 lakhs.

MARKET CONDITIONS

The year 2011-12 began with buoyant paper market conditions as paper sourcing for notebooks was getting shifted to big integrated mills. As in earlier years, the Company started the year with Zero Stock of the finished goods inventory. Paper prices were up-revised in April

2011 and May 2011 to offset, in part, the continuous escalation in prices of coal, wood, chemicals, etc.

The buoyancy that had set-in, disappeared by June 2011 with the notebook season coming to an end. Paper Mills had to roll back the price revisions, made earlier, to garner orders to keep the units running. The Calendar /

Diary season could not provide any relief to the paper manufacturers due to weak demand for these products. While the poor off take for uncoated woodfree grades (Maplitho, Creamwove varieties) continued till year end, MG and Yankee products maintained normal demand and stable prices.

The Company had taken the initiative of stepping-up exports of the woodfree varieties and resorting to high volume 'Contract Orders' - albeit - at lower margins to combat the floundering domestic market.

During the year, Government of India replaced the DEPB Scheme (an incentive for exports) with a less attractive Duty Draw Back Scheme. The Company could not achieve Zero Stock at the end of the financial year, as the export goods, awaiting the arrival of ships, at the port, could not be shipped due to work stoppage by a section of the workmen at the Dock.

Outlook for the current year appears subdued. Market sentiments may remain weak, consistent with the falling economic conditions prevalent in the country. The excess capacity available in the woodfree grade is not likely to get fully absorbed till 2013-14. Till then, stepping- up exports may provide better margins and relief.

EXPORT PERFORMANCE

The Company exported 10 533 tonnes of paper and paper boards during the year, as compared to 8 773 tonnes, during 2010-11. The Exports accounted for about 8.9% of total production.

The export proceeds amounted to US $ 9 513 777, equivalent to Rs 4 620 lakhs, as compared to Rs 3 703 lakhs, during the previous year.

Besides the above, the Company also sold 409 tonnes, under deemed exports whose proceeds amounted to Rs 194 lakhs.

TREE FARMING ACTIVITY

Last year, the Contract Tree Farming Scheme was discontinued and a Modified Scheme was introduced whereby the Company provides quality Clonal Seedlings of Eucalyptus, as well as Casuarina Seedlings at Subsidized rates to interested farmers and assist them with technical help to achieve higher yields.

Technical support for this initiative is provided by the Department of Tree Breeding of Forest College and Research Institute, Mettupalayam, (FC&RI) attached to Tamilnadu Agricultural University, Coimbatore, through a Collaborative Research Project. Last year, farmers planted Eucalyptus and Casuarina to the extent of 8169 acres under this programme.

ISO 9001 / ISO 14001 ACCREDITATION

Company's Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Company's Environmental Management System, continues to enjoy "ISO 14001", accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard which facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

In May 2010, Scientific Certification Systems (SCS), who is accredited by the FSC, awarded to the Company the Forest Stewardship Council (FSC) Certification, valid till May 2015. FSC is an international certification and labeling system that guarantees that paper and wood products carrying the FSC label come from environmentally and socially responsible sources.

The Company has been certified under three Standards of FSC, viz., FSC-STD-40-004 v2-0, FSC-STD-40-005 v2-1 and FSC-STD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly

managed forests and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed products in the domestic and international markets.

AWARDS

The Company received the EHS Excellence Award 2011 instituted by Confederation of Indian Industry (CII) (Southern Region) in recognition of best practices of EHS (Environment, Health and Safety) in Plant / Manufacturing Sector for the year 2011.

EXPORT HOUSE STATUS

The Company continues to enjoy "Two Star Export House" Status, awarded by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2012, 5 106 Members were holding their shares in demat form and 87 33 435 Equity shares, representing 77.63% of the total Paid up Equity Share Capital of the Company, have been dematerialised.

SPB PAPERS LIMITED

As informed in last year's Directors' Report, Subburaj Papers Limited (SPL) set up a de-inked waste paper pulp based Paper Mill, with an annual capacity of 90 000 tonnes, in Tirunelveli District, Tamilnadu. The unit commenced operations in August 2009. The Project encountered huge cost and time overruns. Despite all financial support from the Banks to complete erection and commissioning, the unit could not be operated continuously.

As per the technical study conducted, at the request of the Promoters of SPL, the unit required further investment to add certain balancing equipments to reach the capacity of 90 000 tonnes per annum and make it viable.

As Promoters of SPL expressed inability to invest further funds and requested the Company to take over the unit as management buy out, the Company evaluated the option and found that the proposal offered advantages to the Company and will strengthen the existing operations, besides providing great opportunity for future growth.

SPL was acquired by ESVIN-SPB Group in February 2011 by taking over the assets and liabilities and also by purchase of the entire Equity Shares. In the process, our Company acquired 62 50 000 Equity Shares of Rs 10 each, constituting 41.67% of the total Equity Capital of SPL. Among others, the acquisition involved settlement of the dues of the existing Banks through a negotiated One Time Settlement (OTS). For this purpose, the Company availed a Short Term Loan of Rs 210 crores from Canara Bank and advanced to SPL a sum of Rs 180 crores to enable them to settle the Banks under OTS. On sanction of regular fund based limits, SPL has since repaid the said loan to the Company.

After take over, the name of SPL was altered as SPB Papers Limited (SPBPL). Balancing equipments for manufacture of fine papers from purchased pulp were installed and production operations commenced from April 2011 onwards.

Our Company, while finalising the acquisition of SPBPL in February 2011 had clear plans to merge the same with it at the appropriate time and had disclosed this intent to the Stock Exchanges in its filing on 01 02 2011. SPB, with its technical, financial and managerial inputs, has successfully de-bottlenecked the plant operations of SPBPL and has fairly stabilised production during the Financial Year 2011-12. Further, product quality of SPBPL is now well accepted by both the domestic and export markets.

SPBPL is located close to Tuticorin Port giving it logistical advantage for export of Paper and import of pulp, fuel and recovered fibre. It is also in close proximity to major consumer segment in Sivakasi and Kerala. The merged operations would help leverage these strengths for overall cost optimisation.

The amalgamation will enable appropriate consolidation of SPB and SPBPL, with pooling and more efficient utilisation of their combined resources, greater economy of scales, reduction in overheads and other expenses and improved operating performance. The benefit of such integrated operations could be derived from better resource management, reduction in overall working capital requirements and tie-up of resources on more competitive terms. The amalgamation will enable the business of the merged entity to be carried on more conveniently and advantageously. The amalgamation is, thus, intended to have beneficial results for the said companies, their shareholders and other stakeholders.

The product range of SPB and SPBPL are complementary and hence the combined operations would help cater to a wider market segment. With the help of De-inking Plant located in SPBPL and facility to handle recovered fibre, there would be diversified raw material source, including environment friendly source of raw material, for the combined operations of SPB post-amalgamation.

In these circumstances and in the business interest of the SPB and SPBPL and having regard to the synergistic linkages that exist between them, it was considered desirable and expedient to amalgamate SPBPL with SPB and give effect to the amalgamation from the beginning of Financial Year 2012-13, i.e., with effect from 01 04 2012.

Accordingly, the Board of Directors of both SPBPL and SPB have formulated and approved a Scheme for the transfer and vesting of the Undertaking of SPBPL with and into SPB, pursuant to the provisions of Sections 391 to 394 and other relevant provisions of the Companies Act, 1956.

Based on independent valuations, a Share Exchange Ratio was fixed at one (1) Equity Share of Rs 10 each of SPB for every Eleven (11) Equity Shares of Rs 10 each of SPBPL. The Equity

Shares of SPB will be allotted to the Shareholders of SPBPL whose names appear in the Register of Members of SPBPL on the Record Date to be fixed for this purpose. The fairness of the Share Exchange Ratio was certified by a SEBI recognised Category - I Merchant Banker.

The Scheme is to be approved by the Stock Exchanges, the Secured Creditors, Un-secured Creditors, Members of both the Companies and the Hon'ble High Court of Madras.

CURRENT YEAR (2012-13)

Production, during April 2012, was 10345 tonnes as compared to 9388 tonnes, produced during April 2011. Total Revenue (net of Excise Duty and Cess), during April 2012 amounted to Rs 3 896 lakhs, compared to Rs 3 146 lakhs, during April 2011.

During April 2012, 935 tonnes of paper, valued at US$ 786 778 (equivalent to Rs 406 lakhs) were exported.

Market conditions continue to exhibit weak sentiments during April 2012.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. The Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

With the commissioning of all the equipment under the Mill Development Plan, the Mill has enhanced its environmental performance and compliance thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

AUDIT COMMITTEE

The Audit Committee of the Board consists of four members and all of them are Non-Whole- time Directors, viz., Sri R V Gupta, Dr S Narayan, Sri Bimal Kumar Poddar and Sri V Sridar.

Sri R V Gupta is the Chairman of the Audit Committee.

DIRECTORS' RESPONSIBILITY STATEMENT

While preparing the annual financial statements, the Company has adhered to the following:

- Applicable Accounting Standards referred to in Section 211(3-C) of the Companies Act, 1956 have been followed.

- The said Accounting Standards are being applied consistently. The Company has made judgements and estimates that are reasonable, prudent and are in the interest of the Company's business so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the said period.

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

- The Directors have prepared the financial statements on a "going concern" basis.

CORPORATE GOVERNANCE

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

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

Further, as required by Clause 49 of the Listing Agreement, a Certificate, duly signed by the Chairman and Managing Director and Director (Finance) & Secretary, was submitted to the Board of Directors on the financial statements and cash flow statement of the Company for the year ended March 31, 2012 at the meeting held on May 29, 2012.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under 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, is given in Annexure - I and forms part of this Report.

PARTICULARS OF EMPLOYEES

During the year 2011-12, none of the employees of the Company was in receipt of remuneration, in excess of the limit prescribed in Sub-section (2A) of Section 217 of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement is attached to the Balance Sheet.

EMPLOYEES

Relations between the Management and Employees were cordial throughout the year under review.

DIRECTORS

Sri V Sridar and Sri Arun G Bijur retire by rotation, under Article 104 of the Articles of Association of the Company at the conclusion of the ensuing Fifty Second Annual General Meeting and being eligible offer themselves for re-election at the said Meeting.

During the year, The Tamilnadu Industrial Investment Corporation of India Limited (TIIC) withdrew the nomination of Mrs Sheela Rani Chunkath, IAS and nominated its Principal Secretary / Chairman and Managing Director, Sri T Prabhakara Rao, IAS, as its Nominee Director on the Board of the Company. Later, the nomination of Sri T Prabhakara Rao, IAS was withdrawn and TIIC nominated its Chairman and Managing Director, Sri Md. Nasimuddin, IAS, as its Nominee Director on the Board of the Company. Sri Md. Nasimuddin, IAS is not liable to retire by rotation.

During the year, the Tamilnadu Government withdrew the nomination of Dr V Irai Anbu, IAS, as its Nominee on the Board of our Company, who was earlier appointed in the casual vacancy caused by the withdrawal of nomination of Sri Debendranath Sarangi. As there was no casual vacancy, Sri C V Sankar, IAS was appointed as an Additional Director and is liable to retire by rotation under Article 97 of the Articles of Association of the Company. Accordingly, he retires at the ensuing Annual General Meeting and being eligible offers himself for election at the said meeting.

During the year, Life Insurance Corporation of India (LIC), nominated Mrs Philomina Thomas, Executive Director, (Principal, Zonal Training Centre, LIC of India, Gurgaon), as a Director on the Board of our Company, to represent LIC. Board of Directors, at the meeting held on November 04, 2011, appointed Mrs Philomina Thomas, as an Additional Director liable to retire by rotation under Article 97 of the Articles of Association of the Company. Accordingly, she retires at the ensuing Annual General Meeting and being eligible offers herself for election at the said meeting.

Your Directors place on record the valuable services rendered by Dr V Irai Anbu, IAS, Mrs Sheela Rani Chunkath, IAS and Sri T Prabhakara Rao, IAS, during their tenure as Directors of the Company.

AUDITORS

Messrs Suri & Co., Chennai and Messrs

S Viswanathan, Chennai, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Necessary Resolution for their appointment is proposed at the ensuing Annual General Meeting.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956, the Central Government has ordered that the Company carries out an audit of cost accounts relating to paper every year. M/s S Mahadevan & Co., Cost Accountants, was appointed as Cost Auditor for the year 2011-12. The Cost Audit Report for the year 2011-12 will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all Executives and Employees of the Company for their fine performance in a difficult year. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers and Suppliers, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman and Managing Director

Chennai

May 29, 2012

---

Mar 31, 2011

The Directors hereby present their Fifty First Annual Report and the Audited Accounts for the year ended 31st March 2011 :

WORKING RESULTS

2010-11 2009-10 (Actuals) (Actuals) (in tonnes) (in tonnes)

Production 120558 117989

Sales 121010 118287

(Rs. lakhs) (Rs. lakhs)

Gross Sales 58974 52897

Other Income 747 873

Less: Excise Duty and Excise Cess 2167 1971

Sales and Other Income 57554 51799 (net of Excise Duty)

Profit before interest, depreciation and tax 11642 12172

Interest 2165 2840

Depreciation 3400 3361

Profit before tax 6077 5971

Provision for Current Tax - -

Transfer (from) / to (-) 423 1978 Deferred Tax

Net Profit 6500 3993

DIVIDEND

The Directors recommend payment of Dividend at Rs. 5.00 per equity share, absorbing a sum of Rs. 562.50 lakhs. As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs. 91.25 lakhs.

APPROPRIATIONS

Your Directors propose the following appropriations :

2010-11 (Rs. lakhs)

Net profit for the year 6500

Add :

Surplus brought forward from the previous year 2349

8849

Less :

Transfer to General Reserve 6000

Proposed dividend and tax thereon 654

6654

Balance carried forward 2195

OPERATIONS

During the year, the Companys production was 1 20 558 tonnes, as compared to 1 17 989 tonnes, produced in the previous year. The production was marginally higher by 2.2% compared to the previous year.

The gross turnover was Rs. 58974 lakhs for the year under review, as compared to Rs. 52897 lakhs in the previous year. The gross turnover went up by 11.5%, due to increased production and sales and better market conditions that prevailed during the first half of the year, enabling the industry to effect price revision to partially neutralize the steep cost escalations.

The Profit before interest, depreciation and tax was Rs. 11642 lakhs, as compared to Rs. 12172 lakhs, in the previous year.

Major factors that impacted the profitability for the year under review, as compared to actuals for the previous year, were :

Favourable Factors :

- Increase in Sales Realisation, due to increase in prices of paper and withdrawal of discounts.

- Increase in contribution, due to increase in Production.

- Decrease in prices of Power and Fuel cost, due to favourable mix and usage of Power and Fuel.

- Lower Repairs and Maintenance expenditure.

- Lower Interest and Financing charges, due to repayment of Term Loan Instalments and closure of Working Capital borrowings.

- Increase in Trading Profit.

Un-favourable Factors :

- Increase in prices of Raw Materials, especially Wood and Bagasse.

- Increase in Raw Materials cost, due to adverse mix and usage of Raw materials.

- Increase in prices of Power and Fuel, especially Imported Coal.

- Increase in cost of Chemicals, due to increase in prices of Chemicals and usage of Chemicals.

- Higher Employee Cost, consequent to the long term wage settlement and on account of increased Dearness Allowance payment and normal increments.

- Increase in Other Expenses, mainly due to conversion charges for Note Books.

- Decrease in Other Income.

- Higher provision made for Depreciation.

The Company earned a profit before tax of Rs. 6077 lakhs, for the year ended March 2011, compared to Rs. 5971 lakhs for the year ended March 2010.

After absorbing interest and financing charges and depreciation of Rs. 2165 lakhs and Rs. 3400 lakhs, respectively, the profit before tax was Rs. 6077 lakhs, as compared to Rs. 5971 lakhs, in the previous year.

The Company was liable to only Minimum Alternate Tax (MAT) of Rs. 1193 lakhs, as against Rs. 1004 lakhs, in the previous year. In view of incentives available under Section 80-IA of the Income Tax Act, 1961, for the Captive Power Project and the Power Project under Mill Development Plan, the total income as per the regular method under the Income Tax Act, 1961, is Nil. Hence, the entire MAT liability is carried over as MAT Credit Entitlement. Together with the opening balance of Rs. 1353 lakhs, the total MAT Credit Entitlement of Rs. 2546 lakhs is being carried forward to be set-off in the financial year 2011-12 or thereafter.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum ofRs. 423 lakhs has been transferred from Deferred Tax and credited to the Profit and Loss Account, as against transfer of Rs. 1978 lakhs to Deferred Tax, in the previous year.

In the result, profit after tax for the year was Rs. 6500 lakhs, as compared to Rs. 3993 lakhs, in the previous year.

FINANCE

The Company paid the instalments of the Term Loans and the interest dues on Term Loans and Working Capital Loans, on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL SCHEME

During the year 2010-11, the Company availed Rs. 348 lakhs under the Scheme and the cumulative amount availed upto March 31, 2011 was Rs. 4005 lakhs.

MARKET CONDITIONS

Beginning of the year witnessed certain positive events indicating the beginning of recovery in the paper market.

- Most of the waste paper based mills could not supply large volumes to the market because of their commitment to supply to the local Governments against huge orders,

resulting in diversion of order to the larger Mills.

- The severe earthquake in Chile resulted in non availability of nearly 3 million tonnes of Pulp from 4 mills located in Chile that led to severe shortage of paper in European, Chinese and Japanese markets. This led to rise of Pulp prices and rise in demand for paper in the international markets.

- The commissioning of large new capacities in the domestic sector, though dampened the market sentiments, led to domestic mills venturing higher volumes into export markets.

- Restricted availability and soaring prices of recovered paper curtailed the output of paper from recycled paper mills.

- The census work, by Government of India, triggered demand for substantial volume of paper.

- The passage of the Fundamental Rights to Education Act in Parliament increased the demand for large volume of paper for text books and notebooks.

Consequent to the restricted availability of Pulp, international paper prices moved up to US$ 1100 during April 2010, resulting in increased volume of exports from India. This enabled the integrated large mills to go in for price revisions to compensate partially the cost increases.

The buoyancy witnessed in the market during the first quarter started to wane during the second quarter due to :

- Gradual increase of volumes from the newly commissioned capacities in the domestic market.

- In the international market the prices of Uncoated Wood Free Paper came down to US$ 850, which led to severe pressure on prices.

- The Diary and the Calendar season witnessed shrinkage of demand due to

corporates reducing their budget allocation for these products.

- Additional volumes of Copiers being released in new brands by the mills that had recently expanded their capacities.

This scenario forced A-Grade Mills to correct prices and offer discounts.

Market conditions worsened further from the beginning of the third quarter with additional supplies from the new capacities. Further discounts were offered by the Mills to push their production into the market and reduce the inventory. Faced with severe unviable prices of raw material, both domestic and International, recycled paper manufacturers were forced to reduce their production. The international prices continued to be low. The "strong Rupee" added to the lower realisation.

Fourth quarter commenced with a slight improvement in terms of enquiries and orders in the Creamwove and Maplitho varieties. This was the result of the commencement of the notebook season. While additional supply from the A-Grade Mills in these segments was sufficient enough to cover the additional seasonal demand, it was the non-availability of the recycled paper, due to various reasons which resulted in this spurt.

More critical in this period was the impact of excess availability of Copier Brands, especially from the new capacities that had come up recently.

All round increase in prices of Coal, Hard Wood, Chemicals, etc., necessitated up-revision of prices by Rs. 1000 per tonne in February 2011. Upward revision of Excise Duty from 4% to 5%, in the Central Government Budget for 2011-12, was passed on to the market with further increase in prices of all varieties by Rs. 500 per tonne effective March 01, 2011. In case of Exports, the prices were up-revised in February/ March 2011 by US$ 35 for Branded Copier and by US$ 20 for all other MF-III products.

The impact of severe earth quake and Tsunami in Japan on March 13, 2011 had its toll

in the Indian domestic paper market, as well as in the International markets. Prices of pulp, paper, as well as recovered paper moved up.

SPB could once again successfully achieve Zero Stock at the end of March 31, 2011, an achievement for the fourteenth time in the last seventeen years.

EXPORT PERFORMANCE

The Company exported 8773 tonnes of paper and paper boards during the year, as compared to 5935 tonnes, during 2009-10. The exports accounted for about 7.28% of total production.

The export proceeds amounted to US$ 8 144 589, equivalent to Rs. 3703 lakhs, as compared to Rs. 2370 lakhs, during the previous year.

Besides the above, the Company also sold 875 tonnes, under deemed exports whose proceeds amounted to Rs. 402 lakhs.

TREE FARMING ACTIVITY

To augment the availability of forest raw materials and to bring down their prices, the Company continues its initiative to develop its own source of plantations, following the footsteps of many of the Paper Mills in other States who have already taken pro-active steps during the last 5-8 years, by distributing large quantities of seedlings and saplings of Eucalyptus Hybrid, Subabul, etc.

In this direction, till last year, the Company entered into agreements with farmers who were evincing keen interest in tree plantations. It is now proposed to change the existing system of entering into individual agreements with the farmers for growing trees and agreeing to fell and remove when they mature, since the scheme is not working all that well as originally envisaged. Many farmers, unmindful of the agreement, fell the trees and sell in the open market. They also do not settle the Bank dues. Consequently, the agreement is only on paper and the Company is not in a position to enforce the agreement terms with the farmers.

We have now modified the Scheme and provide quality Clonal Seedlings of Eucalyptus as well as Casuarina Seedlings at subsidised rates to interested farmers and assist them with technical help to achieve higher yields.

Technical support for this initiative is provided by the Department of Tree Breeding of Forest College and Research Institute (FC&RI), Mettupalayam, attached to Tamilnadu Agricultural University, Coimbatore, through a Collaborative Research Project.

ISO 9001 / ISO 14001 ACCREDITATION

Companys Quality Management Systems continue to be covered by the "ISO 9001" accreditation. Companys Environmental Management System, continues to enjoy "ISO 14001" accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard which facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

Last year Scientific Certification Systems (SCS) who is accredited by the FSC awarded to the Company the Forest Stewardship Council (FSC) Certification, valid till May 2015. FSC is an international certification and labeling system that guarantees that paper and wood products carrying the FSC label come from environmentally and socially responsible sources.

The Company is the only Indian Paper Company that has been certified under three Standards of FSC, viz., FSC-STD-40-004, FSC-STD-40-005 v2-1 and FSC-STD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly

managed forests and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed products in the domestic and international markets.

EXPORT HOUSE STATUS

The Company continues to enjoy "Two Star Export House" Status, awarded by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2011, 5 025 Members were holding their shares in DEMAT form and 87 08 298 Equity shares, representing 77.41% of the total Paid up Equity Share Capital of the Company, have been dematerialised.

SUBBURAJ PAPERS LIMITED

Subburaj Papers Limited (SPL) set up a de-inked waste paper pulp based Paper Mill, with an annual capacity of 90 000 tonnes, in Tirunelveli District, Tamilnadu. The unit commenced operations in August 2009.

The Project encountered huge cost and time overruns. Despite all financial support from the Banks to complete erection and commissioning, the unit could not be operated continuously. At the request of the Promoters of SPL, a technical study was undertaken to evaluate means to revive the unit. The study highlighted that the unit could be made viable provided further investment is made to add certain balancing equipments to reach the capacity of 90 000 tonnes per annum.

The Promoters of SPL expressed inability to invest further funds and requested SPB to take over the unit as management buy out. SPB evaluated the option and found that the proposal offered advantages to SPB and will strengthen the existing operations

besides providing great opportunity for future growth.

The proposal involved settling the dues to SPLs Banks and also the creditors outstanding in the books. After detailed discussions, all the Banks of SPL agreed for a One Time Settlement (OTS). For the above purpose, Canara Bank, one of the Consortium Banks of SPB, provided a Short Term Loan of Rs. 210 crores, including start-up Working Capital Limit of Rs. 30 crores. With this funding support, SPB advanced Rs. 180 crores to SPL to enable them to settle their Banks under the OTS. The other creditors appearing in the books of accounts of SPL are being settled in stages.

During March 2011, SPB acquired 41.67% of the Equity Capital of SPL, held by the Promoters. The acquisition of the remaining shares of SPL is in progress.

SPB has already taken steps to restart the operations. Trials are under way and production is being built up gradually. It is expected that before end July 2011, operations in the unit will stabilise.

CURRENT YEAR (2011-12)

Production, during April 2011, was 9388 tonnes as compared to 9910 tonnes, produced during April 2010. Sales realisation (net of Excise Duty and Cess), during April 2011 amounted to Rs. 3146 lakhs (6713 tonnes), compared to Rs. 2586 lakhs (6186 tonnes), during April 2010.

During April 2011, 36 tonnes of paper, valued at US$ 32 997 (equivalent to Rs. 15 lakhs) were exported.

Market conditions witnessed improved sentiments during April 2011.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. The Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions.

The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

With the commissioning of all the equipment under the Mill Development Plan, the Mill has enhanced its environmental performance and compliance thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

AUDIT COMMITTEE

The Audit Committee of the Board consists of four members and all of them are Non Whole- time Directors, viz., Sri R V Gupta, Dr S Narayan, Sri Bimal Kumar Poddar and Sri V Sridar.

Sri R V Gupta is the Chairman of the Audit Committee.

DIRECTORS RESPONSIBILITY STATEMENT

While preparing the annual financial statements, the Company has adhered to the following :

- Applicable Accounting Standards referred to in Section 211(3-C) of the Companies Act, 1956 have been followed.

- The said Accounting Standards are being applied consistently. The Company has made judgements and estimates that are reasonable, prudent and are in the interest of the Companys business so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for the said period.

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,

1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The Directors have prepared the financial statements on a "going concern" basis.

CORPORATE GOVERNANCE

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

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

Further, as required by Clause 49 of the Listing Agreement, a Certificate, duly signed by the Chairman and Managing Director and Director (Finance) & Secretary, was submitted to the Board of Directors on the financial statements and Cash Flow Statement of the Company for the year ended March 31, 2011 at the meeting held on May 28, 2011.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under 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, is given in Annexure - I and forms part of this Report.

PARTICULARS OF EMPLOYEES

The statement of employees, referred to in sub-section (2A) of Section 217 of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 is given in Annexure - II and forms part of this Report. The employees shown therein are not relatives of any Director of the Company.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement is attached to the Balance Sheet.

EMPLOYEES

Relations between the Management and Employees were cordial throughout the year under review. During the year, the Company entered into long term settlements with the Trade Unions and Staff Association, covering payment of Salaries, Wages, Production Incentive, Bonus, etc. While the settlement relating to Salaries and Wages is for a period of five years from April 1, 2009, the agreement relating to Bonus and Production Incentive covers five financial years from 2008-09 to 2012-13.

DIRECTORS

Sri R V Gupta, IAS (Retd.) Sri Bimal Kumar Poddar and Dr S Narayan, IAS (Retd.), Directors, retire by rotation, under Article 104 of the Articles of Association of the Company at the conclusion of the ensuing Fifty First Annual General Meeting and being eligible offer themselves for re-election at the said Meeting.

At the meeting held on March 25, 2011, the Board of Directors re-appointed Sri K S Kasi Viswanathan, as Deputy Managing Director and Sri V Pichai, as Director (Finance) & Secretary for a further term of three years from April 01, 2011. The re-appointment / remuneration package of both Sri K S Kasi Viswanathan and Sri V Pichai require the approval of the members in General Meeting and hence forms part of the Agenda for the Fifty First Annual General Meeting.

During the year, the Tamilnadu Government withdrew the nomination of Sri Debendranath Sarangi, IAS and nominated Dr V Irai Anbu, IAS, as its Nominee on the Board of our Company. Dr V Irai Anbu, IAS was appointed as a Director in the casual vacancy caused by the withdrawal of nomination of Sri Debendranath Sarangi, IAS and is liable to retire by rotation.

Your Directors place on record the valuable services rendered by Sri Debendranath Sarangi, IAS, during his tenure as Director of the Company.

AUDITORS

Messrs Suri & Co., Chennai and Messrs S Viswanathan, Chennai, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Necessary Resolution for their appointment is proposed at the ensuing Annual General Meeting.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956, the Central Government has ordered that the Company carries out an audit of cost accounts relating to paper every year. M/s S Mahadevan & Co., Cost Accountants, was appointed as Cost Auditor for the year 2010-11. The Cost Audit Report for the year 2010-11 will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT

The Directors are pleased to place on record their great appreciation of the tireless efforts of all Executives and Employees that enabled the Company to achieve profitable financial results in a difficult year. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers and Suppliers, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM Chairman and Managing Director

Chennai May 28, 2011

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Mar 31, 2010

The Directors hereby present their Fiftieth Annual Report and the Audited Accounts for the year ended 31st March 2010 :

WORKING RESULTS

2009-10 2008-09 (Actuals) (Actuals) (tonnes) (tonnes) Production 117989 119779 Sales 118287 119396 (Rs lakhs) (Rs lakhs) Gross Sales 52897 56116 Other Income 873 992 Less: Excise Duty and Excise Cess 1971 3205 Sales and Other Income 51799 53903 (net of Excise Duty) Profit before interest, depreciation and tax 12172 7629 Interest 2840 2609 Depreciation 3361 2629 Profit before tax 5971 2391 Provision for Current Tax -- -- Transfer to Deferred Tax 1978 858 Provision for Fringe Benefit Tax -- 30 Net Profit 3993 1503

DIVIDEND

The Directors recommend payment of Dividend at Rs 3.50 per Equity Share, plus a Golden Jubilee Special Dividend of Rs 2.50 per Equity Share, totaling Rs 6 per Equity Share of Rs 10 each, absorbing a sum of Rs 675 lakhs. As per the provisions of the Income tax Act, 1961,

no tax will be deducted at source on dividend distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs 112 lakhs.

APPROPRIATIONS

Your Directors propose the following appropriations :

2009-10 (Rs lakhs) Net profit for the year 3993 Add : Surplus brought forward from the previous year 1643 5636 Less : Transfer to General Reserve 2500 Proposed dividend and tax thereon 787 3287 Balance carried forward 2349

OPERATIONS

During the year, the Companys production was 1 17 989 tonnes, as compared to 1 19 779 tonnes produced in the previous year. The lower production was mainly on account of higher downtime in Paper Machine - 5, disruptions in the operation of the Captive Power Plants and outages, due to restrictions in drawal of power from Tamilnadu Grid.

The gross turnover was Rs 52897 lakhs for the year under review, as compared to Rs 56116 lakhs, in the previous year. The gross turnover declined steeply on account of repeated price reductions effected during the year for the Companys products, due to unfavourable market conditions and reduction in rate of excise duty to 4% effected with effect from December 2008, as part of the relief package announced by the Central Government which formed part of the gross turnover, since the price structure for the Companys products is cum duty price.

The Profit before interest, depreciation and tax was Rs 12172 lakhs, as compared to Rs 7629 lakhs, in the previous year.

Major factors that contributed to higher profitability for the year under review, as compared to actuals for the previous year, were :

Favourable Factors :

0 Reduction in use of Imported Pulp, due to higher production and use of in-house Pulp.

0 Reduction in prices of Imported Coal.

0 Reduction in Other Expenses, mainly due to higher provision made towards exchange difference on Foreign Currency Loans, in the corresponding period of the previous year.

Un-favourable Factors :

0 Decrease in Sales Realisation, due to reduction in prices of paper and increase in incentives.

0 Increase in cost of Chemicals (due to increase in prices of chemicals and usage of new chemicals in ECF Bleaching of Wood Pulp and Bagasse Pulp).

0 Higher provision made for depreciation, due to capitalisation of remaining MDP assets during 2008-09.

0 Increase in Power and Fuel Cost, due to adverse mix and usage of power and fuel.

0 Higher interest and financing charges, due to capitalisation of remaining MDP assets during 2008-09.

0 Decrease in contribution, due to lower Production.

0 Higher Employee Cost, mainly due to capitalisation of in-house employee cost to MDP assets, in the corresponding period of the previous year and on account of normal increments, Dearness Allowance increase in the current year.

The Company earned a profit before tax of Rs 5971 lakhs, for the year ended March 2010,

compared to Rs 2391 lakhs for the year ended March 2009.

After absorbing interest and financing charges and depreciation of Rs 2840 lakhs and Rs 3361 lakhs, respectively, the profit before tax was Rs 5971 lakhs, as compared to Rs 2391 lakhs, in the previous year.

The Company was liable to only Minimum Alternate Tax (MAT) of Rs 1004 lakhs, as against Rs 265 lakhs, in the previous year. In view of higher quantum of depreciation available, due to addition of Plant and Machinery under Mill Development Plan, the total income as per the regular method under the Income Tax Act is a loss. Hence, the entire MAT liability is carried over as MAT Credit Entitlement. Together with the opening balance of Rs 349 lakhs, the total MAT Credit Entitlement of Rs 1353 lakhs is being carried forward to be set-off in the financial year 2010-11 or thereafter.

As per the Accounting Standard (AS) 22 of The Companies (Accounting Standards) Rules, 2006, a sum of Rs 1978 lakhs has been transferred to Deferred Tax by debit to the Profit and Loss Account, as against transfer of Rs 858 lakhs, in the previous year.

In the result, profit after tax for the year was Rs 3993 lakhs, as compared to Rs 1503 lakhs, in the previous year.

FINANCE

The Company paid the instalments of the Term Loans and the interest dues on Term Loans and Working Capital Loans, on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL SCHEME

During the year 2009-10, the Company availed Rs 313 lakhs under the Scheme and the cumulative amount availed upto March 31, 2010 was Rs 3657 lakhs.

MARKET CONDITIONS

The year under review, commenced with weak market conditions - both domestic and overseas. The printing and writing segment, especially - was under severe stress, since the domestic mills were also forced to cut-back on their exports, in view of un-remunerative prices prevailing in the overseas markets.

Level of unsold stocks was high with most of the Mills. SPB was better placed with all the machines being covered with orders, though additional incentives were to be extended to Maplitho varieties to prop-up the demand.

Market conditions further worsened during the second quarter. New capacities, commissioned during this quarter, further weakened the market sentiment. To combat, SPB introduced 70 GSM Copier and also upgraded the quality of the Maplitho paper with higher brightness. Further, incentives were also offered to ensure machine coverage.

Third quarter began on a weak note and worsened further, as the quarter progressed, warranting price reduction and additional discounts for Maplitho varieties as well as Creamwove, Color Printing Grades. SPB launched its Branded Notebooks “Success” in the Southern States which was well received.

Fourth quarter brought in some stability in demand and warranting no further reduction in prices. The ongoing notebook season and the huge orders won by non-integrated upcountry mills from Government Text Book Societies provided some impetus not only for holding the price-line but also withdrawing certain discounts in specified markets. With comfortable order position, the Company managed to do “Zero Stock” of Finished Goods as of March 31, 2010 - an achievement repeated for the 13th time in 16 years.

Current financial year has begun on a healthier note. Supply position in overseas market tightened due to non-availability of market pulp. Price of Recovered Paper shot up substantially with demand picking up from overseas mills, due to these mills stepping up their usage consequent on the “Pulp shortage”. Price of imported waste paper almost doubled in India and waste paper mills suffered

production-cuts. Market Pulp prices also witnessed steep climb. All these factors helped the domestic market to firm-up and effect some price increases. Year 2010-11, it is hoped, will witness better market condition than 2009-10, which incidentally was one of the worst, seen by the Paper Industry in recent times.

EXPORT PERFORMANCE

The Company exported 5935 tonnes of paper and paper boards during the year, as compared to 5741 tonnes, during 2008-09. The exports accounted for about 5% of total production.

The export proceeds amounted to US$ 5 066 540, equivalent to Rs 2370 lakhs, as compared to Rs 2673 lakhs, during the previous year.

Besides the above, the Company also sold 1582 tonnes, under deemed exports whose proceeds amounted to Rs 694 lakhs.

The Company scaled down its exports due to un-competitive prices prevailing in international markets.

CONTRACT TREE FARMING

To augment the availability of forest raw materials and to bring down their prices, the Company continues its initiative to develop its own source of plantations, following the footsteps of many of the Paper Mills in other States who have already taken pro-active steps during the last 5-8 years, by distributing large quantities of seedlings and saplings of Eucalyptus Hybrid, Subabul, etc.

In this direction, the Company continues to enter into agreements with farmers who are evincing keen interest in tree plantations. Currently, the Company is popularising two varieties of species, viz., Eucalyptus Hybrid and Casuarina. To increase the yield per acre, the Company is encouraging farmers to go in for clonal plantations in the place of traditional saplings route. As availability of clones for the above species is limited in the market, the Company has set up its own Clonal Multiplication

Centres to produce quality clones. The clones so produced are sold to the farmers who have entered into contract tree farming agreement with the Company. Since the requirement of clones is so large and the availability from the Companys captive source is limited, the requirement is partly supplemented by procurement from private parties.

The area covered under the Scheme is being increased progressively, year after year.

Technical support for this project is provided by the Department of Tree Breeding of Forest College and Research Institute, Mettupalayam, (FC&RI) attached to Tamilnadu Agricultural University, Coimbatore, through a Collaborative Research Project.

ISO 9001 / ISO 14001 ACCREDITATION

Company’s Quality Management Systems continue to be covered by the “ISO 9001” accreditation. Companys Environmental Management System, continues to enjoy “ISO 14001” accreditation.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard which facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has secured Forest Stewardship Council (FSC) Certification, granted by Scientific Certification Systems (SCS) who is accredited by the FSC. FSC is an international certification and labeling system that guarantees that paper and wood products carrying the FSC label come from environmentally and socially responsible sources. The Certificate provided by SCS is applicable to the Companys Erode Mill site and its 10 Depots.

The Company is the only Indian Paper Company that has been certified under three Standards of FSC viz., FSC-STD-40-004 v2-0, FSC-STD-40-005 v2-1 and FSC-STD-40-003 v1-0. By this, the Company assures its stakeholders that the wood, wood fibre and pulp purchased by it are traceable to responsibly managed forests and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the Company is capable of manufacturing and selling FSC Pure and FSC Mixed products in the domestic and international markets.

The Certificate is valid from May 03, 2010 to May 02, 2015.

AWARDS Exports :

Export House Status

0 The Company continues to enjoy “Two Star Export House” Status, awarded by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

During the year, the Company secured the following Awards, instituted by the Government of Tamilnadu :

(i) Good Industrial Relations :

Good Industrial Relations Award for the year 2005 - First Prize.

(ii) Safety :

Safety Awards, for the year 2006, in respect of units which worked for more than 10 lakhs man hours in a year :

0 For highest percentage reduction in weighted frequency rate in accidents - First Prize

0 For longest accident free period in man hours - First Prize.

DEPOSITORY SYSTEM

As on March 31, 2010, 5 535 Members were holding their shares in DEMAT form and 86 31 252 Equity Shares, representing 76.72% of the total Paid up Equity Share Capital of the Company, have been dematerialised.

CURRENT YEAR (2010-11)

Production, during April 2010, was 9910 tonnes as compared to 10009 tonnes, produced during April 2009. Sales realisation (net of Excise Duty and Cess), during April 2010 amounted to Rs 2586 lakhs (6186 tonnes), as compared to Rs 3283 lakhs (7770 tonnes) during April 2009.

During April 2010, 87 tonnes of paper and boards, valued at US$ 81 993 (equivalent to Rs 36 lakhs) were exported.

Market conditions witnessed improved sentiments during April 2010.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. The Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions. The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the pollution control norms, prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

With the commissioning of all the equipment under the Mill Development Plan, the Mill has enhanced its environmental performance and compliance thereby complying with the Charter on Corporate Responsibility for Environmental Protection (CREP) on a sustained basis.

AUDIT COMMITTEE

The Audit Committee of the Board consists of four members and all of them are Non Whole-

time Directors, viz., Sri R V Gupta, Dr S Narayan, Sri Bimal Kumar Poddar and Sri V Sridar.

Sri R V Gupta is the Chairman of the Audit Committee.

DIRECTORS’ RESPONSIBILITY STATEMENT

While preparing the annual financial statements, the Company has adhered to the following :

0 Applicable Accounting Standards referred to in Section 211(3-C) of the Companies Act, 1956 have been followed.

0 The said Accounting Standards are being applied consistently. The Company has made judgements and estimates that are reasonable, prudent and are in the interest of the Companys business so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit of the Company for the said period.

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

0 The Directors have prepared the financial statements on a “going concern” basis.

CORPORATE GOVERNANCE

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

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

Further, as required by Clause 49 of the Listing Agreement, a Certificate, duly signed by the Chairman and Managing Director and

Director (Finance) & Secretary, was submitted to the Board of Directors on the financial statements and cash flow statement of the Company for the year ended March 31, 2010 at the Meeting held on May 29, 2010.

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

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under 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, is given in Annexure - I and forms part of this Report.

PARTICULARS OF EMPLOYEES

The statement of employees, referred to in sub-section (2A) of Section 217 of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 is given in Annexure - II and forms part of this Report. The employees shown therein are not relatives of any Director of the Company.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, a Cash Flow Statement is attached to the Balance Sheet.

EMPLOYEES

Relations between the Management and Employees were cordial throughout the year under review. Negotiations are underway with Labour Unions for revision of salaries, wages and other benefits payable to employees.

DIRECTORS

Sri Arun G Bijur, Sri K S Kasi Viswanathan and Sri V Pichai, Directors, retire by rotation, under Article 104 of the Articles of Association of the Company at the conclusion of the ensuing

Fiftieth Annual General Meeting and being eligible offer themselves for re-election at the said Meeting.

AUDITORS

Messrs Suri & Co., Chennai and Messrs S Viswanathan, Chennai, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Necessary Resolution for their appointment is proposed at the ensuing Annual General Meeting.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956, the Central Government has ordered that the Company carries out an audit of cost accounts relating to paper every year. M/s S Mahadevan & Co., Cost Accountants, was appointed as Cost Auditor for the year 2009-10. The Cost Audit Report for the year 2009-10 will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the fine efforts of all Executives and Employees of the Company which was instrumental in achieving improved profitable financial results in a difficult year. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers and Suppliers, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM Chairman and Managing Director

Chennai May 29, 2010