Madhya Bharat Papers Limited

Board of Directors Sri Raju Bharat (upto 10.08.2013)Sri Rajeev GinodiaSri Jayant N GodboleSri Raghuvansh Lal Kapur (from 10.08.2013)Sri Abhas SenSri Jaydeep Chitlangia(Managing Director)

President & Sri Vinod Kumar KhannaCompany Secretary

Auditors Murari Agrawal & Co.

Principal Banker State Bank of India

Regd.Office and Mills Village BirgahniRly.& Post Champa-495 671Dist. Janjgir-ChampaChhattisgarhCIN : L21012CT1980PLC001682

Head Office 113, Park Street(4th Floor, North Block)Kolkata-700 016

2

Madhya Bharat Papers Limited

3

NOTICENOTICE is hereby given that the 34th Annual General Meeting of Members of MADHYA BHARAT PAPERSLIMITED will be held at the Registered Office of the Company at Village Birgahni, Rly & Post Champa-495 671,Dist. Janjgir-Champa (Chhattisgarh) on Friday, the 26th September, 2014 at 11.00 A.M. to transact the followingbusiness:

Ordinary Business

1. To consider and adopt the financial statements of the Company for the year ended 31st March, 2014,including the audited Balance Sheet as at 31st March, 2014, the Statement of Profit & Loss for the yearended on that date and the reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Sri R.L. Kapur (DIN: 00002483), who retires by rotation and, being eligible,seeks re-appointment.

3. To appoint Auditors and fix their remuneration and for the purpose to pass, with or without modification,the following resolution as Ordinary Resolution :

RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of theCompanies Act, 2013 and Rules made thereunder, and upon recommendations of the Audit Committee,M/s. Sawarmal Agrawal & Co., Chartered Accountants (Firm Registration No.318164E), be and are herebyappointed as Auditors of the Company to hold office from the conclusion of this Annual General Meetingtill conclusion of the next Annual General Meeting and that the Board of Directors be and are herebyauthorized to fix such remuneration, as may be determined by the Audit Committee in consultation withthe Auditors.

Special Business

4. To appoint Sri Abhas Sen (DIN: 01450642) as an Independent Director and in this regard to consider and,if though fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all otherapplicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification ofDirectors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time beingin force) and Clause 49 of the Listing Agreement, Sri Abhas Sen (DIN: 01450642), in respect of whom theCompany has received a notice in writing under Section 160 of the Companies Act, 2013 from a memberproposing his candidature for the office of Director, be and is hereby appointed as an IndependentDirector of the Company from the conclusion of this Annual General Meeting, not liable to retire byrotation, and to hold office for 5 (five) consecutive years for a term up to the conclusion of the 39th AnnualGeneral Meeting to be held in the calendar year 2019.

5. To consider and, if thought fit, to pass with or without modification the following resolution as a SpecialResolution:

RESOLVED THAT in supersession of the resolution passed by the members at the Extra Ordinary GeneralMeeting of the Company held on 15th December, 1994 and pursuant to Section 180(1)(c) and all otherapplicable provisions, if any, of the Companies Act, 2013, read with the relevant Rules thereof (includingany statutory modification(s) or re-enactment thereof for the time being in force), consent of the membersof the Company be and is hereby accorded to the Board of Directors (hereinafter referred to as “theBoard”, which term shall include any Committee constituted by the Board or any person(s) authorized bythe Board to exercise the powers conferred on the Board by this Resolution) to borrow from time to time

4

Madhya Bharat Papers Limitedin one or more branches, any sum or sums of money which, together with the moneys already borrowedby the Company (apart from temporary loans obtained / to be obtained from the Bankers of the Companyin the ordinary course of business) may exceed the aggregate of the paid up capital of the Company andits free reserves provided that the total amount so borrowed shall not at any time exceed `.200 crores(Rupees Two hundred crores).

RESOLVED FURTHER THAT the Board be and is hereby authorized to do or cause to be done all suchacts, matters, deeds and other things as it may in its absolute discretion deem fit, or considered necessaryor incidental thereto, for giving effect to the aforesaid resolution.

6. To consider and, if thought fit, to pass with or without modification the following resolution as a SpecialResolution:

RESOLVED THAT in supersession of the resolution passed by the members at the Extra Ordinary GeneralMeeting of the Company held on 15th December, 1994 and pursuant to Section 180(1)(a) and all otherapplicable provisions, if any, of the Companies Act, 2013, read with the relevant Rules thereof (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force), consent of themembers of the Company be and is hereby accorded to the Board of Directors including any Committeethereof (hereinafter referred to as “the Board”) to lease, mortgage or to create charge, mortgage and/orhypothecate the whole or substantially the whole of the undertaking(s) of the Company, where undertaking(both present and future) shall have the meaning as stated in explanation to Clause (a) of Sub-Section (1)of Section 180 of the Companies Act, 2013, at such time and on such terms and conditions as the Boardmay deem fit, in the best interest of the affairs of the Company, provided that the total amount for whichsuch charge / mortgage / hypothecation are being created to secure the borrowings shall not at any timeexceed `.200 crores over and above the paid up capital of the Company and its free reserves.

By Order of the Board

Regd.Office:Village Birgahni,Rly & Post Champa-495 671, V.K. KHANNADist. Janjgir-Champa President &Chhattisgarh. Company SecretaryCIN: L21012CT1980PLC001682Dated: 27th May, 2014

NOTES:

1. The Statement pursuant to Section 102(1) of the Companies Act, 2013 with respect to the Special Businessset out in the Notice is annexed.

2. A Member entitled to attend and vote at the AGM is entitled to appoint a proxy to attend and vote in themeeting instead of himself / herself and the proxy need not be a Member of the Company.

3. The instrument appointing the proxy, duly completed, must be deposited at the Company’s registeredoffice not less than 48 hours before the commencement of the meeting. A proxy form for the AGM isenclosed.

5

4. Pursuant to the provisions of Section 91 of the Companies Act, 2013, Register of Members and the ShareTransfer Books of the Company will remain closed from 18th September, 2014 to 26th September, 2014 (bothdays inclusive).

5. Members who have not registered their email addresses for receiving all communications includingAnnual Report, Notices, Circulars, etc, over email are requested to register their email address withtheir Depositary Participants, if the shares are held in dematerialized form and with the Registrar andTransfer Agents, if the shares are held in physical form.

6. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent AccountNumber (PAN) by every participant in securities market. Members holding shares in electronic form are,therefore, requested to submit their PAN to their Depository Participants with whom they are maintainingtheir demat accounts. Members holding shares in physical form can submit their PAN to the Registrar andShare Transfer Agents.

7. Copies of Annual Report 2014 and instruction for e-voting along with attendance slip and proxy form arebeing sent by electronic mode to all members whose email address is registered with the Company/Depository Participant(s) unless a member has requested for a hard copy of the same. For members whohave not registered their email address, physical copies are being sent by the permitted mode.

8. All documents referred to in the Notice and Statement are open for inspection by the Members at theCompany’s registered office during normal business hours on working days up to the date of AGM.

9. Members are requested to intimate change of addresses, if any, to the Registrar and Share TransferAgents in respect of equity shares held in physical mode and to the Depository Participant(s) in respectof shares held in dematerialized form.

10. Members/Proxies are requested to bring the attendance slips with them duly filled in and hand over thesame at the entrance of the meeting hall. Members/Proxies are also requested to carry photo identity cardand to produce the same on demand.

11. Re-appointment of Director.

A brief resume of the Director, proposed to be re-appointed:

Name of Director Sri Raghuvansh Lal Kapur

Date of Birth 02nd December, 1932

Date of appointment 10th August, 2013

Qualification M.A., LL.B., Post Graduation in HR & Labour Management

Experience 51 years

Nature of Expertise Corporate management and specialization in HR & IR

Other Directorships NIL

Committee membership in NILother Companies

Number of shares held in the NIL Company

6

Madhya Bharat Papers Limited12. Pursuant to Section 108 of the Companies Act, 2013, read with the relevant Rules of the Act, and Clause

35B of the Listing Agreement, the Company is providing the facility to Members to exercise their right tovote by electronic means. The Company has engaged the services of Central Depository Services (India)Limited (CDSL) for providing e-voting facilities. The e-voting rights of the Members / beneficial ownersshall be reckoned in proportion to originally shares held by them in the Company as on 14th August, 2014(Cut off date fixed for the purpose). The e-voting period will commence at 9.00 a.m. on Thursday, the 18th

September, 2014 and will end at 6.00 p.m. on Saturday, the 20th September, 2014. The Company has appointedCS A.K. Labh, Practicing Company Secretary, to act as the Scrutinizer, for conducting the scrutiny of thevotes cast. Detailed instructions for availing e-voting facility are being sent as a part of this Notice.

Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013

Item No.4

Sri Abhas Sen is Independent Director of the Company and have held the position as such for more than 5 (five)years.The Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement inter-aliastipulating the conditions for the appointment of Independent Directors by a listed company.It is proposed to appoint Sri Abhas Sen as Independent Director under Section 149 of the Act and Clause 49 ofthe Listing Agreement to hold office for 5 (five) consecutive years for a term up to the conclusion of the 39th

Annual General Meeting of the Company in the calendar year 2019.Sri Abhas Sen is not disqualified from being appointed as Director in terms of Section 164 of the Act and havegiven his consent to act as Director.The Company has received notice in writing from a member alongwith the deposit of requisite amount underSection 160 of the Act proposing the candidature of Sri Abhas Sen for the office as Director of the Company.The Company has also received declaration from Sri Abhas Sen that he meet with the criteria of independenceas prescribed both under sub-section (6) of Section 149 of the Act and under Clause 49 of the Listing Agreement.In the opinion of the board, Sri Abhas Sen fulfill the conditions for appointment as Independent Director asspecified in the Companies Act, 2013 and the Listing Agreement.

A brief resume of the Director, proposed to be appointed:

Name of Director Sri Abhas Sen

Date of Birth 29th October, 1936

Date of appointment 24th October, 2002

Qualification B.A.(Hons.), Chartered Secretary

Experience 57 years

Nature of Expertise Legal/Finance/Administration

Other Directorships (a) Inspectorate Griffith (India) Pvt.Ltd.(b) Powermax (India) Pvt.Ltd.(c) Spearhead Private Ltd.(d) Titagarh Wagons Ltd.(e) Flourish Securities & Finance Pvt. Ltd.

Committee membership in other Companies NIL

Number of shares held in the Company NIL

7

This statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the StockExchanges.

Sri Abhas Sen is interested in the resolution set out at item No. 4 of the Notice with regard to his appointment.No other Director, Key Managerial Personnel or their relatives of the Company is concerned or interested in theresolution.

The Board recommends the Resolution set out in item No. 4 of the Notice for approval by the shareholders.

Item No. 5

The members of the Company at the Extra Ordinary General Meeting held on 15th December, 1994 had approvedby way of Ordinary Resolution under Section 293(1)(d) of the Companies Act, 1956 borrowings over and abovethe aggregate of paid up share capital and free reserves of the Company provided that the total amount of suchborrowings together with the amount already borrowed and outstanding at any point of time shall not be inexcess of `.200 crores (Rupees Two hundred crores).

Section 180 of the Companies Act, 2013 effective from September 12, 2013, consent of the Members by way ofa special resolution is required to borrow money in excess of the Company’s paid up share capital and freereserves.

It is, therefore, necessary for the members to pass a Special Resolution under Section 180(1)(c) and otherapplicable provisions, if any, of the Companies Act, 2013, as set out at item No.5 of the Notice. The Boardrecommends the resolution for approval by the members of the Company.

None of the Directors and Key Management Personnel of the Company and their relatives is concerned orinterest, financially or otherwise, in the resolution set out at item No.5.

Item No. 6

The borrowings by a Company, in general, is required to be secured by mortgage or charge on all or any of themovable or immovable properties of the Company in such form, manner and ranking as may be determined bythe Board of Directors of the Company from time to time, in consultation with the lender(s).

The mortgage and/or charge on any of the movable and /or immovable properties and/or the whole or any partof the undertaking(s) of the Company, to secure borrowings of the Company, with a power to the charge holdersto take over the management of the business and concern of the Company in certain events of defaults, may beregarded as disposal of the Company’s undertaking(s) within the meaning of Section 180(1)(a) of the CompaniesAct, 2013

It is, therefore, necessary for the members to pass a Special Resolution under Section 180(1)(a) and otherapplicable provisions, if any, of the Companies Act, 2013, as set out at item No.6 of the Notice. The Boardrecommends the resolution for approval by the members of the Company.

None of the Directors and Key Management Personnel of the Company and their relatives is concerned orinterest, financially or otherwise, in the resolution set out at item No.6.

By Order of the Board

Regd. Office:Village Birgahni,Rly & Post Champa-495 671, V.K. KHANNADist. Janjgir-Champa President &Chhattisgarh. Company SecretaryCIN: L21012CT1980PLC001682Dated: 27th May, 2014

8

Madhya Bharat Papers LimitedDIRECTORS’ REPORTYour Directors have pleasure in presenting the 34th Annual Report together with the Audited Statement ofAccounts for the year ended 31st March 2014.OPERATIONS

(`. in lacs)2013-14 2012-13

Profit/(Loss) before Depreciation & Tax 58.85 (390.89)Less : Depreciation 201.83 202.42

Adjustment for earlier years 0.42 1.51Provision for taxation- Deferred Tax liability/assets (371.02) (168.77) (11.56) 192.37

Net Profit/(Loss) 227.62 (583.26)Add : Balance Brought Forward from

Previous year (453.45) 129.81Balance Carried Forward (225.83) (453.45)

The Company continues to face the economic recession in the paper industry, particularly, in the segment of itsoperation, which, coupled with sharp increase in cost of coal and other key raw materials has resulted into aloss of ̀ .143.40 lacs before tax adjustments (previous year loss of `.594.82 lacs).The production during the year was 16042 tonnes (16446 tonnes previous year).DirectorsSri Raju Bharat, who was associated with the Company as Director since 31.05.2004, has resigned from theBoard of the Company with effect from 10.08.2013. Your Company places on record its appreciation for thevaluable services rendered by him as a Director.Sri R.L. Kapur was appointed as Director of the Company with effect from 10.08.2013 and he retires by rotationand being eligible offer himself for re-appointment as Director.Sub-section (11) states no Independent Director shall be eligible for more than two consecutive terms of fiveyears. Sub-section (13) states that the provisions of retirement by rotation as defined in sub-section (6) and (7)of Section 152 of the Act shall not apply to such Independent Directors.Sri Abhas Sen, Director of the Company, is being appointed as Independent Director for five consecutive yearsupto the conclusion of the 39th Annual General Meeting to be held in the year 2019 as per provisions of Section149 and other applicable provisions, if any, of the Companies Act, 2013.Energy, Technology and Foreign ExchangeInformation in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation ofenergy, technology absorption and foreign exchange earning and outgo is given in the Annexure-1 forming partof this Report.PersonnelNo employee of the Company is covered under Section 217(2A) of the Companies Act, 1956.Corporate GovernanceManagement Discussions and Analysis Report and a Report on Corporate Governance along with the certificateof the Statutory Auditors as required under clause 49 of the Listing Agreement are included in the AnnualReport.Stock Exchange ListingsThe Equity Shares of the Company are listed on the Stock Exchanges at Indore and Kolkata. The Companyconfirms payment of respective listing fees due to the above Stock Exchanges for the year 2014-15.

9

ANNEXURE-1 TO DIRECTORS’ REPORTParticulars required under the Companies (Disclosure of particulars in the Report of Board of Directors)Rules, 1988:A. CONSERVATION OF ENERGY

(a) Energy Conservation measures taken:Change of various pumps and motors in Paper Machine and Pulp Mill have assisted in energyconservation. Further energy conservation measures are being identified to conserve and optimize theuse of energy through improved operational methods and other means.

(b) Impact of the above measures:The Company has been able to optimize electricity.

(c) Total energy consumption and energy consumption per unit of production: Form-A enclosed.B. TECHNOLOGY ABSORPTION:

Efforts made in technology absorption as per Form-B : Form-B enclosed.C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

(a) The Company has not exported any of its products during the year.(b) Total foreign exchange used and earned during the year (`. In lacs)

(i) CIF value of imports 235.11Expenditure in foreign currency 4.45

(ii) Foreign exchange earned -

AuditorsMessrs Murari Agrawal & Co., Chartered Accounts, Statutory Auditors of the Company will hold office tillconclusion of the ensuing Annual General Meeting. The Company has received consent from Messrs SawarmalAgrawal & Co., Chartered Accountants (Firm Registration No.318164E) for their appointment as StatutoryAuditors of Company and that their appointment, if made, would be within the prescribed limits under section141 of the Companies Act, 2013 and that they are not disqualified for appointment.Directors’ Responsibility StatementPursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’Responsibility Statement, it is hereby confirmed:[i] That in the preparation of the accounts for the financial year ended 31st March, 2014, the applicable

accounting standards have been followed;[ii] That the Directors have selected such accounting policies and applied them consistently and made

judgements and estimates that were reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit or loss of the Company for theyear under review;

[iii] That the Directors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

[iv] That the Directors have got the accounts prepared for the financial year ended 31st March, 2014 on a‘going concern’ basis.

AcknowledgementYour Directors gratefully acknowledge and express their appreciation for the continued support extended bythe banks, customers, suppliers, shareholders and for the services rendered by the employees and workers.

On behalf of the BoardRegd.Office:Village Birgahni,Rly & Post Champa-495 671, R.L. KAPUR JAYDEEP CHITLANGIADist. Janjgir-Champa Director Managing DirectorChhattisgarh.CIN: L21012CT1980PLC001682Dated: 27th May, 2014

10

Madhya Bharat Papers LimitedFORM - A

Form for disclosure of particulars with respect to conservation of energy Particulars 2013-14 2012-13

A. POWER AND FUEL CONSUMPTION1. Electricity

a) PurchasedUnits Kwh 2,29,500 3,47,700Total Amount `. 103,95,367 126,60,085Rate `. /Kwh 45.30 36.41

b) Own Generationi) Through Diesel Generator

Units Kwh - 980Units per Unit of Diesel Oil Kwh/Ltr. - 10.89Cost/Unit `. /Kwh - 4.21

ii) Through Turbine GeneratorUnits Kwh 159,91,311 161,58,748Units per Unit of Coal Kwh/MT 898 718Cost per Unit `. /Kwh 2.75 2.84

2. CoalFor steam generation & consumption in Paper Dvn.a) Grade B

Quantity M.T. 1,510 141Total Cost `. 74,55,379 6,37,648Average Cost `. /M.T. 4,937 4,509

b) Grade F&EQuantity M.T. 48,079 58,965Total Cost `. 11,48,53,452 12,05,27,559Average Cost `./M.T. 2,389 2,044

c) Kiln Waste/Ash CharQuantity M.T. - 607Total Cost `. - 6,24,546Average Cost `./M.T. - 1,028

d) CharcoalQuantity M.T. 4.4 9.9Total Cost `. 89,302 1,98,080Average Cost `./M.T. 20,158 20,110

e) Fire WoodQuantity M.T. - 1Total Cost `. - 2,910Average Cost `./M.T. - 2,910

3. Furnace Oil - -4. Diesel Oil

Quantity Ltr. - 90Total Cost `. - 4,130Average Cost `./Ltr. - 46

B. CONSUMPTION PER UNIT OF PRODUCTIONElectricity Kwh/M.T. 1,011 1,004Coal M.T/M.T. 3.09 3.63Diesel Oil Ltr./M.T. - 0.01

11

FORM-B

Form for disclosure of particulars with respect to Technology Absorption

RESEARCH AND DEVELOPMENT1. Specific areas in which R&D carried out by the Company. The R & D activities of the Company are aimed

at improvement of quality of its products, cost control and reduction of pollutants.2. Benefits Derived

The products of the Company were in reasonable demand.3. Future Plan of Action

Further improvement in quality, reduction in costs and reduction of pollutants.4. Expenditure on R & D : Nil

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION1. Efforts made

The Company is taking all necessary steps to improve the designing of various equipments for achievingoptimum results and is trying to absorb various technologies available in the industry.

2. BenefitsThe Company has been able to maintain the productivity.

3. Particulars of technologies imported during the last 5 years: NIL

12

Madhya Bharat Papers LimitedMANAGEMENT DISCUSSION AND ANALYSIS REPORT

Overall ReviewAccounting year 2013-14 was a difficult year for the paper industry. The Company continues to be affected byadverse factors of spiralling input cost of key raw materials. The Company has been able to pass on a partincrease in the cost, to its customers and the Company is hopeful that the realization will enhance atleast to theextent of cost increase which will enhance the performance level in the forthcoming year.

Business Segment – Papera) Industry Structure & Development

The paper industry is cyclical in nature and has strong linkages with the country’s general industrial, socialperformance and gross domestic product (“GDP”) due to its application in the print media, education,packaging, etc. The Indian paper industry is growing consistently but large capital investment need restrictsgrowth for the small paper mills.During the year, the division has achieved 97.22% capacity utilization.

b) Opportunities & ThreatsThe country is envisaging an inclusive growth and Government is taking steps to increase literacy levelswhich will give impetus to paper industry.Global slow down may affect the demand and growth of the paper industry. Unabated steep increase in theraw materials and fuel cost is likely to impact the performance. Paper demand is also sluggish due to tightliquidity in money market and is affecting the realization.

c) Segment PerformanceDuring the year 2013-14, segment revenue increased from ̀ .6548.22 lacs to ̀ .7300.42 lacs i.e. increase of11.5% and earned profit of `.94.97 lacs before interest and tax compared with previous year’s loss of`.371.12 lacs.The Government of India has removed the Paper Industry from the core sector for supply of coal which hasincreased the price of coal abnormally. The coal linkage grades have been changed resulting into highercost. Even Fuel Supply Agreement has been executed after much delay and the Company is still awaitingthe linkage quantity for the delayed period.

d) OutlookThe consumption of paper continues to grow in the developing economy of India and therefore, theCompany’s outlook for future growth is reasonably good despite economic slowdown.

e) Risks and Concerns:The Government has through Corporate Responsibility for Environment Protection (CREP) laid greateremphasis on environment protection. Non-compliance with Environment Protection Policies or relatedissues could dent operations and the plant may face closure.

Business Segment – Power

a) Industry Structure & DevelopmentThe Company is generating power for captive consumption and is working at its optimum capacity.

b) Opportunities & ThreatsThe uninterrupted quality power is available. The availability of coal and its price is a matter of concern asthe Company has to procure coal through e-auction market regularly which is very costly than the normalallocation.

13

c) Segment PerformanceDuring the year 2013-14, segment revenue increased from ̀ .657.10 lacs to ̀ .723.81 lacs but incurred a lossof ̀ .52.04 lacs before interest and tax against loss of ̀ .41.61 lacs in the previous year. The main reason is theincrease of electricity duty and steep rise in coal price and change of coal linkage grades by South EasternCoalfields Ltd.

d) OutlookThe outlook remains positive.

e) Risks and Concerns:Imposition of tighter and continuous change in Environmental laws is a concern to the Company. However,the company is continuously upgrading the same to mitigate the risk.

Internal Control systems and their adequacyThe Company has adequate internal control systems as per requirements of the Company. A qualified CharteredAccountants firm conducts internal audit, including systems audit, at regular intervals. The Audit Committee ofthe Company periodically reviews the existing internal control systems and take necessary steps for updation/modification of the same as and when considered necessary.

Financial Performance & Analysis highlights ` ` ` ` `. in lacs

Particulars 2013-14 2012-13

Gross Turnover (excluding inter divisional transfers) 7765.66 6954.08Net Sales 7300.42 6548.22PBIDT 214.52 (236.56)Interest 155.67 154.33Profit/(Loss) after Interest 58.85 (390.89)Depreciation 201.83 202.42Net adjustments in respect of earlier years 0.42 1.51Provision for Taxation- Deferred Tax (371.02) (11.56)Net Profit/(Loss) 227.62 (583.26)

Human Resource Development/Industrial RelationsThe Company firmly believes that Human Resources are invaluable assets for any Organization. The effectivedeployment of capital and furtherance of Company’s business are intimately dependent on the quality ofhuman resources. There is, therefore, a continuous review by the Management of the potentiality of the peopleemployed and enhancement of their contribution to the Company through training and development programmes.Industrial relations with the employees remain cordial throughout the year under review. The total manpowerstrength as on 31st March, 2014 was 301.

Cautionary Statement

Statement in the “Management’s Discussion and Analysis” section describing the Company’s objectives,projections, estimates, expectations or predictions may be “forward looking statements” within the meaningof applicable securities laws and regulations. Actual results could differ materially from those expressed orimplied. Important factors that could make a difference to the Company’s operations include global andIndian demand supply conditions, finished goods prices, raw material availability and prices, cyclicaldemand and pricing in the Company’s principal markets, changes in Government regulation, tax regimes,economic developments within India and other factors such as litigation and labour negotiations.

14

Madhya Bharat Papers LimitedREPORT ON CORPORATE GOVERNANCE1. Company’s Philosophy on Corporate Governance

The Company is committed to good corporate governance and aims at achieving increased levels oftransparency and accountability to its shareholders and other key stakeholders.

2. Board of Directorsa) Composition of the Board

The Board of the Company consists of 5 Directors, out of which 4 are Non-Executive IndependentDirectors while one is Managing Director. None of the Directors are related to each other.

b) Board meetings held during the yearDuring the year under review, four Board meetings were held on 30th May, 2013, 10th August, 2013, 11th

November, 2013 and 10th February, 2014.c) Attendance of each Director at the Board Meetings, last Annual General Meeting and Number of

other Directorship and Chairmanship/Membership of Committee of each Director in variouscompanies:

Sri J. Chitlangia (51) Promoter/(Managing Director) Executive 4 4 No 2 - -Sri Abhas Sen (78) } 4 4 No 1 - -Sri Raju Bharat (52)* }Non-Executive 2 - N.A. - - -Sri J.N. Godbole (68) } & 4 3 No 13 15 3Sri Rajeev Ginodia(49) }Independent 4 - No 1 - -Sri R.L. Kapur (81)** } 2 2 Yes - - - * upto 10.08.2013 ** from 10.08.2013

3. Audit CommitteeCompositionThe Audit Committee comprises of three Non-Executive Directors, all of them are Independent Directors.The names of the members of the Audit Committee are Sri Abhas Sen, Sri J.N. Godbole (upto 10.08.2013), SriRajeev Ginodia and Sri R.L. Kapur (with effect from 11.08.2013). The Managing Director is permanentinvitee in all meetings of the Committee. The Company Secretary acts as the Secretary of the Committee.Terms of Reference:The terms of reference of the Audit Committee are as per the guidelines set out in the Listing Agreementwith the Stock Exchanges read with Section 292A of the Companies Act, 1956. These broadly includeapproval of annual internal audit plan, review of financial reporting systems, internal control systems,ensuring compliance with regulatory guidelines, discussions on quarterly, half yearly and annual financialresults, interaction with statutory, internal and cost auditors, recommendation for appointment of statutory,internal and cost auditors’ and their remuneration.In addition to the above, the committee also reviews the following:a) Management’s Discussions and Analysis of Company’s operationsb) Periodical Internal Audit Reports

Name of the Category of Attendance particulars No. of Directorship in other PublicDirector/ Directorship Limited Companies (excluding Private

Age(in Yrs) Limited/Foreign Companies) andCommittee Membership/

Chairmanship

Board Last Other Committee CommitteeMeetings AGM Director- Member- Chairman-

Held Attended ships ships ships

15

c) Significant related party transactionsd) Financial statementse) Risk framework.The Company has framed the Audit Committee Charter for the purpose of effective compliance of Clause49 of the Listing Agreement.Meetings and AttendanceFour audit committee meetings were held during the year on 30th May, 2013, 10th August, 2013, 11th November,2013 and 10th February, 2014.

Name of Director No.of meetings held No.of meetings attendedSri Abhas Sen 4 4Sri J.N. Godbole 2 2Sri Rajeev Ginodia 4 -Sri R.L. Kapur 2 2

4. Remuneration CommitteeComposition:The Remuneration Committee comprises of two Non-Executive Directors, all of whom are IndependentDirectors. The names of the members of the Committee are Sri Abhas Sen and Sri Rajeev Ginodia.

Terms of Reference:The terms of reference of Remuneration Committee are to recommend/review the remuneration package of theManaging/Whole-time Directors, based on performance. The remuneration to the whole-time Directors aredecided on the basis of following broad criteria:a) Industry trendb) Remuneration package in other comparable corporates.c) Job contentsd) Company’s performance and individual’s key performance areas.Meetings and Attendance:There was no meeting during the year.Details of remuneration to Directors per annum:

Name Basic Salary Perquisites Sitting Fees Total(`) /Allowances (`) (`) (`)

Sri J. Chitlangia 3000000 939231 - 3939231Sri Abhas Sen - - 82500 82500Sri Raju Bharat - - - -Sri J.N. Godbole - - 45000 45000Sri Rajeev Ginodia - - - -Sri R.L. Kapur - - 35000 35000

Notes:(a) Appointment of Sri J. Chitlangia, Managing Director is on contractual basis till 31.03.2016.(b) The Company does not have any scheme for grant of stock options to its Directors or employees.(c) The company does not pay any commission or performance linked incentives to any of its Directors.

Shareholding of Non-Executive DirectorsNone of the Non-Executive Directors hold any shares in the Company.

16

Madhya Bharat Papers Limited5. Shareholders’/Investors’ Grievance Committee

CompositionThe Shareholders’/Investors’ Grievance Committee consists of Sri Abhas Sen, Non-Executive IndependentDirector (Chairman of the Committee), Sri Rajeev Ginodia, Non-Executive Independent Director and Sri J.Chitlangia, Managing Director.Compliance OfficerSri V.K. Khanna, President & Company Secretary is the Compliance Officer.Shareholders’ ComplaintsThere was no complaint from its shareholders during the year.

6. Annual General MeetingDetails of the last three Annual General Meetings are as under:

Year Location Date Time2010-11 Village Birgahni, Rly & Post Champa-495 671, 26.08.2011 11.00 a.m.

Dist. Janjgir-Champa, Chhattisgarh2011-12 Same as above 21.09.2012 11.00 a.m.2012-13 Same as above 20.09.2013 11.00 a.m.

In the last three Annual General Meetings, special resolutions were passed for the re-appointment of M/s.Murari Agrawal & Co., as Auditors of the Company and in the Annual General Meeting held on 20th

September, 2013, special resolution was passed for reappointment and payment of remuneration to ManagingDirector. During the year 2013-14, there was no resolution passed by the Company’s Members throughpostal ballot. At the ensuing Annual General Meeting also, there is no resolution proposed to be passedthrough postal ballot.

7. Disclosuresa) There are no materially significant transactions with the related parties which Promoters, Directors or

the Management, their subsidiaries or relatives conflicting with the company’s interests. Suitabledisclosures as required by the Accounting Standard (AS 18) have been made in the Annual Report.

b) There are no pecuniary relationships or transactions of Non-Executive Directors vis-à-vis the Companywhich has potential conflict with the interest of the Company at large.

c) Senior Management has made the disclosures to the Board and confirmed that they had no material,financial and commercial transactions that could have a potential conflict with the interest of thecompany at large.

d) No penalties or strictures have been imposed on the Company by any Stock Exchange or SEBI or anyother statutory authority on any matter relating to capital markets during the last three years.

e) The Company has not adopted any whistle blower policy. However, no personnel was denied accessto the audit committee.

f) Management Discussion & Analysis, which has been reviewed by the Audit Committee of the company,is a part of the Annual Report.

g) The Board has adopted a Code of Conduct for Directors and Senior Management. The declarationsigned by the Managing Director to the effect that all Board members and Senior Managementpersonnel have affirmed compliance with the code forms part of the Annual Report.

h) The Chief Executive Officer (Managing Director) and Chief Financial Officer (Company Secretary)have submitted a certificate to the Board of Directors of the Company in connection with the mattersspecified in sub-clause V of Clause 49 of the Listing Agreement and forms part of the Annual Report.

i) The Company has fulfilled the following non-mandatory requirements as prescribed in Annexure 1Dof Clause 49 of the Listing Agreement.

17

(i) The Company has set up a Remuneration Committee, details whereof have been given in para 4 of thisreport.

(ii) Financial statements of the Company are unqualified.8. Means of Communication

a) Quarterly results are normally published in Financial Express in English and Dainik Bhaskar in Hindi.b) Latest quarterly financial results are displayed on its website www.mbpl.inc) No presentations were made to institutional investors or analysts.

9. General Shareholder Information I. Annual General Meeting

Date and Time : 26th September, 2014 at 11.00 a.m.Venue : Village Birgahni, Rly & Post Champa-495 671,

Dist. Janjgir-Champa, Chhattisgarh.II. Financial Calendar for the year 2014-15 (tentative)

Results for first quarter : 1st week of AugustResults for second quarter : 1st week of NovemberResults for third quarter : 1st week of FebruaryAnnual Audited Results : Last week of May

III. Book Closure Date : 18th September to 26th September, 2014(both days inclusive).

IV. Dividend Payment Date : Not ApplicableV. Listing on Stock Exchanges : Madhya Pradesh Stock Exchange Ltd., Indore and

The Calcutta Stock Exchange Ltd., Kolkata.VI. Stock Code Details

Name of Stock Exchange Stock CodeMadhya Pradesh Stock Exchange Ltd. MBPAPE2141The Calcutta Stock Exchange Ltd. 10023013

VII. Market Price DataNo transactions were recorded at the aforesaid Stock Exchanges during the year.

VIII. Share Transfer SystemMaheshwari Datamatics Pvt.Ltd. are the Share Transfer Agents/Registrars (both for physical as wellas demat segments) of the Company. The Company follows a fortnightly cycle for processing andupdating share transfers and accordingly all valid transfers are effected within a fortnight.

IX. Distribution of Shareholding as on 31st March, 2014No. of shares No. of % of No. of shares Shareholdingof ̀ .10 each Shareholders shareholders Held %

1 – 500 217 80.3704 35043 1.0276501 – 1000 16 5.9259 13050 0.38271001 – 2000 6 2.2222 9614 0.28192001 – 4000 6 2.2222 16600 0.48684001 – 5000 2 0.7408 10000 0.29335001 – 10000 3 1.1111 26300 0.7713

10001 & above 20 7.4074 3299393 96.7564Total 270 100.00 3410000 100.00

18

Madhya Bharat Papers Limited

Auditors’ Certificate on Corporate Governanceto the members of Madhya Bharat Papers Ltd.

We have examined the compliance of conditions of Corporate Governance by Madhya Bharat Papers Limitedfor the year ended 31st March, 2014, as stipulated in Clause 49 of the Listing Agreement of the said Companywith the Stock Exchanges.The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance ofthe conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.In our opinion and to the best of our information and according to the explanations given to us and therepresentations made by the Directors and the Management, we certify that the Company has complied with theconditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to statethat as per the records maintained, there were no Investors’ Grievances remaining unattended/pending for morethan 30 days as at 31st March, 2014 except those under litigation, disputes or court orders.We further state that such compliance is neither an assurance as to future viability of the Company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For Murari Agrawal & Co. Chartered Accountants

F. R. No. 308095E

S.M. Agrawal Partner

Membership No. 53923

2A, Ganesh Chandra AvenueKolkata-700 013.Dated: 27th May, 2014

X. Categories of Shareholding as on 31st March, 2014Categories of Shareholders No.of shares Held Shareholding %

Indian Promoters 1948137 57.1301Banks/Financial Institutions 1255856 36.8286Private Corporate Bodies 79300 2.3255Indian Public 126707 3.7158

Total 3410000 100.00

XI. Dematerialisation of Equity SharesThe Company’s shares are available for dematerialization with NSDL and CDSL. The ISIN allotted tothe Company’s equity shares is INE697E01017. As on 31.03.2014, 97.27% of total equity share capitalis held in dematerialised form with NSDL and CDSL.

XII. Outstanding GDR/Warrants and Convertible Instruments: Not Applicable.XIII. Plant Location : Village Birgahni, Rly & Post Champa-495 671

Dist. Janjgir-Champa, Chhattisgarh.XIV. Address for Correspondence:

Registrar : Maheshwari Datamatics Pvt.Ltd.,6, Mangoe Lane, Kolkata-700 001.e-mail: mdpl@cal.vsnl.net.in

Company- Registered Office : Madhya Bharat Papers Ltd.,Village Birgahni, Rly & Post Champa-495 671Dist. Janjgir-Champa, Chhattisgarh.

E-mail id for investor grievances : mbplcal@vsnl.net

19

DECLARATION REGARDING CODE OF CONDUCT

I confirm that the Company has received from the Senior Management team of the Company and the Membersof the Board a declaration of compliance with the Code of Conduct, as applicable to them, during the financialyear ended 31st March, 2014.

JAYDEEP CHITLANGIAManaging Director

Kolkata,Dated: 27th May, 2014

CEO / CFO CERTIFICATION

We hereby certify that –

1. We have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2014and to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or containstatements that might be misleading.

(ii) these statements present a true and fair view of the Company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

2. To the best of our knowledge and belief, no transactions were entered into by the Company during the yearwhich are fraudulent, illegal or violative of the Company’s code of conduct.

3. (i) We accept responsibility for establishing and maintaining internal controls; and

(ii) We have evaluated the effectiveness of the internal control systems of the Company and there wereno major deficiencies in the design or operation of internal control.

4. We have indicated to the Auditors and Audit Committee :

(i) There were no significant changes in internal control systems during the year 2013-14;

(ii) Significant changes, if any, in accounting policies made during the year 2013-14 have been disclosedin the notes to the financial statements; and

(iii) We are not aware of any instance of significant fraud involving the management or an employeehaving a significant role in the Company’s internal control systems.

JAYDEEP CHITLANGIA V.K. KHANNAManaging Director Company Secretary

Kolkata,Dated: 27th May, 2014

20

Madhya Bharat Papers LimitedINDEPENDENT AUDITORS’ REPORT

ToThe Members ofMadhya Bharat Papers Limited

Report on the Financial StatementsWe have audited the attached Financial Statements of MADHYA BHARAT PAPERS LIMITED as at 31st March,2014, Comprising of the Balance Sheet, the Statement of Profit and Loss and the Cash flow statement for theyear ended on that date, annexed thereto, and a summary of significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of thefinancial position, financial performance and cash flows of the Company in accordance with the AccountingStandards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). Thisresponsibility includes the design, implementation and maintenance of internal control relevant to the preparationand presentation of the financial statements that give a true and fair view and are free from material misstatement,whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India.Those Standards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the Company’s preparation and fair presentationof the financial statements in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by management, as well as evaluating the overall presentation of the financialstatements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the financialstatements, together with the schedules annexed thereto and notes thereon subject to non provision ofDepreciation up to 31st March, 1999 on enhanced value of Fixed Assets in consequent upon revaluation of fixedassets on 30.4.1987. Had it been done, the net block and revaluation reserve account would have been lower by`.132.19 lacs as stated in note no. 11.1 of the notes on accounts give the information required by the Act in themanner so required and give a true and fair view in conformity with the accounting principles generally acceptedin India:

a) In case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2014;b) In the case of Statement of Profit and Loss, of the Profit of the company for the year ended on that date;

andc) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

21

‘COMMERCE HOUSE’2A Ganesh Chandra AvenueKolkata: 700 013.

Dated : 27th May, 2014

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2003 (the ‘Order’) as amended by the Companies

(Auditor’s Report) Order, 2004, issued by the Central Government of India in terms of section 227(4A) of‘The Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph4 & 5 of the said Order.

2. As required by section 227(3) of the Act, we report that :i) We have obtained all the information and explanations, which to the best of our knowledge and belief,

were necessary for the purpose of our audit.ii) In our opinion, proper books of account as required by law have been kept by the company so far as

appears from our examination of those books.iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report

are in agreement with the books of account.iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt

with by this report comply with the Accounting Standards referred to in section 211(3C) of theCompanies Act, 1956 to the extent applicable.

v) On the basis of our review of the written representations received from the Directors as on 31st March,2014 and taken on record by the Board of Directors, none of the directors of the company disqualifiedas on 31st March, 2014, from being appointed as director in terms of clause (g) of sub-section (1) ofsection 274 of the Companies Act, 1956.

vi) Since the Central Government has not issued any notification as to the rate at which the cess is to bepaid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the saidsection, prescribing the manner in which such cess is to be paid, no cess is due and payable by theCompany.

For MURARI AGRAWAL & CO.Chartered accountants

F.R.No-308095E

S.M. AGRAWALPartner

Membership No. - 053923

22

Madhya Bharat Papers LimitedANNEXUREReferred to in paragraph 3 of our report of even date,1. (a) In our opinion, the company has maintained proper records showing full particulars including

quantitative details and situation of its fixed assets.(b) As per the information and explanation given to us, the Fixed Assets have been physically verified by

the management during the year in a phased periodical manner, which, in our opinion is reasonablehaving regard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such verification.

(c) During the year, in our opinion, the Company has not disposed of substantial part of Fixed assets andthe going concern status of the company is not affected.

2. (a) According to the information and explanations given to us, the Inventory has been physically verified duringthe year by the management at regular interval. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures ofphysical verification of Inventories followed by the management are reasonable and adequate inrelation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of Inventory. The discrepancies noticed on verificationbetween the physical stocks and the book records were not material.

3. (a) The Company has not granted any unsecured loan to any company listed in the Register maintainedunder section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans of ` 38.78 lacs from one company listed in the Registercover under section 301 of the Companies Act, 1956 during the year. The maximum loan outstandingduring the year was ̀ 723.41 lacs and the year end balance was ` 686.92 lacs.

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been given to/ taken from Company as listed in the register maintained under section 301 of the Companies Act,1956 are not, prima facie, prejudicial to the interest of the Company.

4. In our opinion and according to the information given to us, there are adequate internal control procedurescommensurate with the size of the company and the nature of its business with regard to purchases ofinventory, fixed assets and with regard to the sale of goods and services. During the course of our audit,we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particularsof contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been enteredin the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions madein pursuance of contracts or arrangements entered in the register maintained under section 301 of theCompanies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during theyear have been made at prices which are reasonable having regard to prevailing market prices at therelevant time.

6. In our opinion and according to the information and explanations given to us, the company has notaccepted any deposit from the public during the year except trade deposit from its customers. Henceprovisions of section 58A and 58AA or any other relevant provisions of the Act and the Companies(Acceptance of Deposit) Rules, 1975 with regard to the deposit accepted from the public does not apply tothe company.According to the information and explanations given to us, no order has been passed by the CompanyLaw Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunalon the Company in respect of the aforesaid deposit.

7. In our opinion, the company has an internal audit system commensurate with its size and nature of its business.8. The Central Government has prescribed maintenance of cost records under clause (d) of sub-section (1) of

section 209 of the Act, we have broadly reviewed the books of accounts and records of the company in thisconnection and are of the opinion, that prima facie, the prescribed accounts and records have been madeand maintained. We have not, however, made a detailed examination of the same.

9. (a) According to the information and explanations given to us and the records of the company examinedby us, the Company is generally regular in depositing with appropriate authorities undisputed statutorydues including Provident Fund, Investor Education Protection Fund, Employees’ State Insurance,Income Tax, Sale Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other materialstatutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable inrespect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Cess were in arrears, asat 31st March, 2014 for a period of more than six months from the date they became payable.

23

(c) According to the information and explanation given to us and the records of the Company examinedby us, the particulars of dues of income-tax, sales tax, wealth tax, service tax, customs duty, exciseduty and cess as at 31st March, 2014 which have not been deposited on account of dispute, are asfollows :-

Name of the Statute Nature of Amount Forum wherethe dues `̀̀̀̀ dispute is pending

Central Excise Act,1944 F Y 2009-10 32,52,281/- CESTAT, New DelhiU P G S T Act (VAT) F Y 2007-08 2,68,980/- Asst. Commissioner,

F Y 2008-09 1,19,490/- Commercial TaxesF Y 2009-10 31,241/- Allahabad, U.P.F Y 2010-11 50,091/-

U P G S T Act F Y 2008-09 13,57,145/- Asst. Commissioner,(Entry Tax) F Y 2009-10 2,46,361/- Commercial Taxes

F Y 2010-11 1,68,324/- Allahabad, U.P.TOTAL 54,93,913/-

(Out of above ` 2,84,113/- has been deposited by the Company)10. The company has net worth of ` 1310.39 lacs as at 31st March, 2014 and has not eroded more than 50% of

its peak net worth in the current year. The Company has not incurred any cash losses during the periodcovered by the report but incurred cash Losses in the financial year immediately preceding the periodcovered by the report.

11. According to the records of the Company examined by us and the information and explanations given tous, the company has not defaulted in repayment of dues to any financial institution, or Bank or Debentureholders as at the Balance Sheet date.

12. As per the information and explanations given to us the company has not granted any loans and advanceson the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions ofany special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14. The company has maintained proper records of transactions and contracts in respect of trading in securities,debentures and other investments and timely entries have been made therein. All shares, debentures andother investments have been held by the company in its own name.

15. In our opinion, and as per the information and explanations given to us, the company has not given anyguarantee for loans taken by others from bank or financial institutions, the terms and conditions whereofare prejudicial to the interest of the company.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the termloans have been applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the BalanceSheet of the Company, we report that the no funds raised on short-term basis have been used for long terminvestment.

18. According to the information and explanation given to us, during the year, the Company has not made anypreferential allotment of shares to parties and companies covered in the register maintained under section301 of the Companies Act, 1956.

19. According to the information and explanations given to us, during the period covered by our audit report,the company has not issued any debenture.

20. According to the information and explanation given to us the company has not raised any money by wayof public issues during the year.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticedor reported during the course of our audit, that causes the financial statements to be materially misstated.

For MURARI AGRAWAL & CO.Chartered accountants

F.R.No-308095E

S. M. AGRAWALPartner

Membership No. - 053923

COMMERCE HOUSE’2A Ganesh Chandra AvenueKolkata: 700 013Dated : 27th May, 2014

24

Madhya Bharat Papers LimitedBalance Sheet as at 31st March, 2014

Sl. Note As at As atNo. Particulars No. 31.03.2014 31.03.2013

`.`.`.`.`. in lacs `.`.`.`.`. in lacsI EQUITY AND LIABILITIES

A Shareholders’ Funds(a) Share Capital 2 341.00 341.00(b) Reserves and Surplus 3 969.40 748.67

Total (A) 1310.40 1089.67B Non-Current Liabilities

(a) Long Term Borrowings 4 1095.67 1112.61(b) Other Long Term Liabilities 5 164.96 166.46(c) Long Term Provisions 6 1.60 1.60

Total (B) 1262.23 1280.67C Current Liabilities

(a) Short Term Borrowings 7 466.17 437.81(b) Trade Payables 8 776.01 590.76(c) Other Current Liabilities 9 263.90 250.57(d) Short Term Provisions 10 35.73 35.99

Total ( C) 1541.81 1315.13Total (A+B+C) 4114.44 3685.47

II ASSETSA Non-Current Assets

(a) Fixed Assets 11(i) Tangible Assets 2316.54 2517.64(ii) Capital Work-in-Progress 127.10 127.10

(b) Non Current Investments 12 24.65 24.65(c) Deferred Tax Assets (Net) 13 145.16 (225.86)

Total (A) 2613.45 2443.53

B Current Assets(a) Inventories 14 978.75 803.87(b) Trade Receivables 15 191.82 156.86(c) Cash and Cash Equivalents 16 20.14 18.76(d) Short Term Loans and Advances 17 275.29 219.59(e) Other Current Assets 18 34.99 42.86

Total (B) 1500.99 1241.94Total (A+B) 4114.44 3685.47

SIGNIFICANT ACCOUNTING POLICIES 1OTHER NOTES ON ACCOUNTS 2 to 34

The accompanying notes 1 to 34 are an integral part of the Financial Statements.As per our report of even date.For MURARI AGRAWAL & CO.Chartered Accountants

S. M. AGRAWALPartner(M.No. 53923)Kolkata : 27th May, 2014

V. K. KHANNAPresident &

Company Secretary

JAYDEEP CHITLANGIAManaging Director

R. L. KAPURDirector

25

Statement of Profit & Loss for the year ended 31st March, 2014

Sl. Particulars Note 2013-14 2012-13No. No. `.`.`.`.`. in lacs `.`.`.`.`. in lacs

INCOME :

I Revenue from Operations 19 7300.42 6548.22

II Other Income 20 12.07 20.99

III Total Revenue (I+II) 7312.49 6569.21

IV EXPENDITURE :(a) Cost of Material Consumed 21 2218.33 2212.16(b) Change in Inventories of Finished Goods,

Work-in-progress and Stock in Trade 22 (102.28) (34.29)(c) Employee Benefits Expenses 23 574.36 541.84(d) Finance Costs 24 155.67 154.33(e) Depreciation and Amortisation Expenses 25 201.83 202.42(f) Other Expenses 26 4407.98 4087.57

Total Expenses 7455.89 7164.03

V Profit Before Extraordinary Items and Tax (III-IV) (143.40) (594.82)

VI Extraordinary Items – –

VII Profit Before Tax (V-VI) (143.40) (594.82)

VIII Tax ExpensesDeferred Tax (371.02) (11.56)

IX Profit / (Loss) for the Period (VII-VIII) 227.62 (583.26)

X Earning per Equity Share 30(a) Basic 6.67 (17.10)(b) Diluted 6.67 (17.10)

SIGNIFICANT ACCOUNTING POLICIES 1OTHER NOTES ON ACCOUNTS 2 to 34

The accompanying notes 1 to 34 are an integral part of the Financial Statements.As per our report of even date.For MURARI AGRAWAL & CO.Chartered Accountants

S. M. AGRAWALPartner(M.No. 53923)Kolkata : 27th May, 2014

V. K. KHANNAPresident &

Company Secretary

JAYDEEP CHITLANGIAManaging Director

R. L. KAPURDirector

26

Madhya Bharat Papers Limited

Cash Flow Statement for the year ended 31st March, 20142013-14 2012-13

`.`.`.`.`. in lacs `̀̀̀̀. in lacsA. Cash flow from operating activities

Net Profit/Loss before interest, tax & extraordinary items 9.88 (443.19)Items adjusted forDepreciation 201.83 202.42Interest (11.90) (7.76)Dividend (0.02) (0.03)(Profit)/Loss on sale of fixed assets – 6.79

Operating profit before working capital changes 199.79 (241.77)Changes inTrade & other receivables (81.36) 12.41Inventories (174.89) (141.40)Trade payable 226.42 33.11

Cash generated from operation 169.96 (337.65)Direct taxes paid (0.61) (0.20)

Cash flow before extra-ordinary items 169.35 (337.85)

NET CASH FROM OPERATING ACTIVITIES 169.35 (337.85)

B. Cash flow from investing activitiesPurchase of fixed assets (incl. WIP) (7.62) (33.71)Sale of fixed assets (incl. WIP) – 3.51Investment in Deposit (0.67) 0.44Interest received 11.09 6.56Dividend received 0.02 0.03

NET CASH USED IN INVESTING ACTIVITIES 2.82 (23.17)

C. Cash flow from financing activitiesProceeds from long-term borrowings (14.19) 503.46Repayment of long term borrowings (2.48) (3.56)Proceeds from long-term liabilities (1.50) 7.47Proceeds from hire purchase loan – 8.00Interest paid (153.29) (151.63)

NET CASH USED IN FINANCING ACTIVITIES (171.46) 363.74

Net changes in cash & cash equivalents(A+B+C) 0.71 2.72

Cash & Cash Equivalents-Opening Balance 9.04 6.32Cash & Cash Equivalents-Closing Balance 9.75 9.04

0.71 2.72

27

Notes :-

(a) The above Cash Flow Statement has been prepared under the “IndirectMethod” as set out in the Accounting Standard 3 on Cash FlowStatement issued by the Companies (Accounting Standards) Rules 2006.

(b) Cash and Bank Balance (as per Note No.16 to Financial Statements) 20.14 18.76Less :Fixed Deposit (pledged with Sales Tax Authorities) 0.43 0.43Margin Money 9.96 9.29Cash & Cash Equialents-Closing Balance 9.75 9.04

(c) Cash Equivalents in the Form of Fixed Deposit Account for ̀ .0.43 lac(`.0.43 lac) pledged with Sales Tax Authorities, which are notavailable for use.

(d) Cash equivalent in the Form of Margin Money Account for `.9.96 lacs(`.9.29 lacs) which is not available for use.

(e) Figures in bracket represent cash out flows.

This is the Cash Flow Statement referred to in our report of even date.

2013-14 2012-13`.`.`.`.`. in lacs `̀̀̀̀. in lacs

For MURARI AGRAWAL & CO.Chartered Accountants

S. M. AGRAWALPartner(M.No. 53923)

Kolkata : 27th May, 2014

JAYDEEP CHITLANGIAManaging Director

V. K. KHANNAPresident &

Company SecretaryR. L. KAPUR

Director

28

Madhya Bharat Papers LimitedSIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

1. Significant Accounting Policies

1.1 (a) The accounts of the Company have been prepared on the concept of going concern and on accrualbasis except the Excise, and other claims / refunds which are being adjusted in the books as and whensettled.

(b) Sales value is inclusive of Excise Duty but exclusive of Sales Tax/VAT.

1.2 Fixed Assets have been stated at cost as increased by attributable direct and indirect expenses lessaccumulated depreciation. Wherever these assets have been revalued, the amounts stated are inclusive ofenhanced value on account of revaluation.

1.3 Impairment losses, if any, are recognised when carrying amount of asset exceeds its recoverable amount.Reversal of such loss is also accounted whenever situation so warrants, in accordance with the accountingStandard issued by The Institute of Chartered Accountants of India.

1.4 Capital work in Progress be assessed, reviewed and diminutioned adequately from time to time.

1.5 Pre-operative expenses relating to expansion / new projects are capitalised and allocated to building, plant& machinery, etc. on value basis.

1.6 (a) Depreciation on Fixed Assets have been provided for on straight line method as per the rates prescribedin Schedule XIV to the Companies Act, 1956 as amended.

(b) Depreciation on revaluation of Fixed Assets has been reduced from Revaluation Reserve account.

1.7 (a) Assets taken on lease other than leasehold land and building are not capitalised. Lease rentals arecharged to revenue.

(b) Right to use the Resorts is considered as Leasehold building and amount paid is amortised over thetenure of the right. Lease hold building are depreciated over the tenure of the lease hold right. Leasehold land are depreciated over the tenure of the lease hold right.

1.8 Investments have been stated at cost and provision for diminution in the value of long term Investmentsis made only if such a decline is other than temporary in the opinion of the management.

1.9 Inventories are valued as follows :

(a) Inventories are valued at lower of cost and net realisable value. For this purpose cost has beenarrived at on the basis of weighted average cost formula. The cost of finished goods, WIP compriseall costs of purchase, cost of conversion and other costs incurred in bringing the inventories to theirpresent location and condition.

(b) Provision for obsolescence is made wherever necessary.

1.10 Foreign currency transactions in respect of current assets and current/long term liabilities other than thoseincurred for acquisition of fixed assets, the overall net loss, if any, on conversion at the exchange rates

29

prevailing on the date of the Balance Sheet, is charged to revenue but the overall net gain, if any, is notaccounted for. In respect of liabilities incurred for acquisition of fixed assets, the net gain or loss on suchconversion, is adjusted in the carrying value of the related assets.

1.11 Revenue expenditure incurred on research and development is charged to the Profit & Loss Accountwhereas capital expenditure is treated as addition to fixed assets.

1.12 Employee Benefits

(a) Post retirement employee benefits:

Post retirement benefits like Provident Fund and Defined Contribution Superannuation schemes, inthe nature of defined contribution plans, are maintained by the Company. Contributions required arerecognised in the Profit & Loss Account on an accrual basis and funded with recognised funds setup for the purpose.

Defined Benefit plan like Gratuity is also maintained by the Company. Liabilities under the definedbenefit schemes are determined through independent year end actuarial valuation and charge isrecognised in the books. For schemes, where recognised funds have been set up, annual contributionsdetermined as payable in the actuarial valuation report are contributed. Actuarial gains and losses arerecognised in the Profit & Loss Account.

The Company recognises in the Profit & Loss Account, gains or losses on curtailment or settlementof a defined benefit plan as and when the curtailment or settlement occurs.

(b) Other Employee Benefits:

Other employee benefits are accounted for on accrual basis. Liabilities for compensated absence aredetermined based on independent year end actuarial valuation and charge is recognised in the Profit& Loss Account. Short term employee benefits are recognised on an undiscounted basis whereaslong term employee benefits are recognised on a discounted basis.

1.13 Borrowing Costs, attributable to the acquisition of qualifying assets upto the date it is ready to put to use,are capitalised. Other borrowing costs are charged to profit and loss account.

1.14 Government Grants of the nature of project subsidy are credited to Capital Reserves as it is not specifiedto particular item / asset. In the case where any grant received in relation to specified Item / asset, suchamount is adjusted with the specified item / asset, other government grants which are revenue nature,credited to Profit & Loss Account under the the head “Other Income”.

1.15 Intersegments transfer is being made at market value.

1.16 Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferredtax is recognised subject to the consideration of prudence in repect of deferred tax assets/liabilities ontiming differences, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods.

30

Madhya Bharat Papers Limited

Notes to the Financial StatementsAs at As at

Note No. Particulars 31.03.2014 31.03.2013`.`.`.`.`. in lacs `.`.`.`.`. in lacs

2. Share Capital1 Authorised

2,50,00,000 (Last Year 2,50,00,000) 2500.00 2500.00Equity Shares of ̀ . 10 each50,00,000 (Last Year 50,00,000) 500.00 500.00Preference Share of ̀ . 10 each

3000.00 3000.002 Issued, Subscribed and Paid-up

34,10,000 (Last Year 34,10,000) 341.00 341.00Equity Shares of ̀ . 10 each

341.00 341.002.1 Shares in the Company held by each Shareholder

holding more than 5 per cent Shares(Equity Shares in Nos of `. 10 each) Holding HoldingName of Shareholder % No.of Shares % No.of SharesSudeep Chitlangia 14.37 490000 14.37 490000Jaydeep Chitlangia 12.61 430000 12.61 430000Sheela Chitlangia 8.06 274737 7.57 258237Archana Chitlangia 7.33 250000 7.33 250000Nikhilesh Chitlangia 5.57 190000 5.57 190000IDBI Bank Limited 16.51 562937 16.51 562937IFCI Limited 8.14 277436 8.14 277436ICICI Bank Limited 6.66 227150 6.66 227150

2.2 Reconcilation of Number of Shares OutstandingEquity Shares at the Beginning of the Accounting Period 3410000 3410000Additions during the Year – –Shares at the end of the Accounting Year 3410000 3410000

2.3 All issued, subscribed and paidup capital of 3410000 equityshares having voting rights.

2.4 The company’s Shares are listed in Kolkata & M.P.StockExchanes and listing fees have been paid upto 2014-15.

3. Reserves & Surplus1 Revaluation Reserve

Balance as per Last Account 139.09 148.73Less: Depreciation Current Year 6.89 9.64(Refer Note No.11.1) 132.20 139.09

2 Capital ReserveAt the Beginning of the Accounting Period: Central Subsidy 15.00 15.00 Share Forefeiture Account 0.03 0.03Additions during the year – –At the end of the Accounting Year 15.03 15.03

31

2.1 Government grant of `.15 lacs received against CapitalInvestment Subsidy has been credited to Capital Reserve.

3 Capital Redemption ReserveAt the Beginning of the Accounting Period 450.00 450.00Additions during the year – –At the end of the Accounting Period 450.00 450.00

4 General ReserveAt the Beginning of the Accounting Period 598.00 598.00Additions during the year – –At the end of the Accounting Period 598.00 598.00

5 SurplusAt the Beginning of the Accounting Period (453.45) 129.81Additions/(Deletion) during the year 227.62 (583.26)(Balance in Statement of Profit & Loss A/c)At the end of the Accounting Period (225.83) (453.45)

Grand Total 969.40 748.67

4 Long Term Borrowings1 Secured

Term Loans from Banks 1.99 4.74(Hire Purchase Loan secured against Vehicles)

1.99 4.74

2 UnsecuredFrom Companies 818.68 777.87From Others 275.00 330.00

1093.68 1107.87Grand Total 1095.67 1112.61

5 Other Long Term LiabilitiesDeposits from -

Sales Representatives, consignment agents & dealers 164.96 166.46164.96 166.46

6 Long Term ProvisionsProvision for Dimunition in the value of Investment 1.60 1.60

1.60 1.60

As at As atNote No. Particulars 31.03.2014 31.03.2013

`.`.`.`.`. in lacs `.`.`.`.`. in lacs

32

Madhya Bharat Papers Limited

7 Short-Term BorrowingsSecuredWorking Capital Loan

From BankRupee Loan 466.17 437.81(Hypthecation of Company’s Present & Future Stocks ofRaw Materials, Consumable Stores, Finished & Semi-Finished Goods and Book Debts, Personal Guarantee ofManaging Director of the Company and also Second Chargeon the Fixed Assets of the Company.) 466.17 437.81

8 Trade PayablesMSME Unit 1.59 2.09Others 774.42 588.67

776.01 590.76

8.1 There are 2 Nos Micro, Small, Medium Enterprises, as definedin the Micro, Small, Medium Enterprise Development Act, 2006,to whom the Company owes dues on account of principal amounttogether with interest for `. 1.59 lacs (Previous year `. 2.09 lac).The above information regarding Micro, Small and MediumEnterprises has been determined to the extent such parties havebeen identified on the basis of information available with theCompany. This has been relied upon by the Auditors.

9 Other Current Liabilities1 Current Maturies of Long Term Debts 2.75 2.48

(Hire Purchase Loan secured against Vehicles)

2 TDS Payable 16.08 15.78

3 Other Current Liabilities 245.07 232.31(Consist of employees liabilities, retention moneyand security deposit, statutory liabilities andother expenses)

263.90 250.57

10 Short-Term ProvisionsProvision for Employee Benefits 35.73 35.99 (Refer Note No. 23.2)

35.73 35.99

As at As atNote No. Particulars 31.03.2014 31.03.2013

`.`.`.`.`. in lacs `.`.`.`.`. in lacs

33

11FI

XE

D A

SSE

TS

(`. i

n la

cs)

G

RO

SS B

LO

CK

DEP

REC

IATI

ON

N

ET

BL

OC

K

As

atA

s at

Upt

oU

pto

As

atA

s at

01.0

4.20

13A

dditi

onD

elet

ion

31.0

3.20

1401

.04.

2013

Add

ition

Del

etio

n31

.03.

2014

31.0

3.20

1431

.03.

2013

(i)TA

NG

IBL

E A

SSE

TS

1Fr

eeho

ld L

and

44.4

9 –

–44

.49

– –

––

44.4

944

.49

2Le

aseh

old

Land

4.39

– –

4.39

1.03

0.04

–1.

073.

323.

36

3Fa

ctor

y B

uild

ings

1053

.89

– –

1053

.89

477.

2823

.16

–50

0.44

553.

4557

6.61

4Pl

ant a

nd M

achi

nerie

s48

99.5

85.

02 –

4904

.60

3048

.55

179.

12–

3227

.67

1676

.93

1851

.03

5Fu

rnitu

re a

nd F

ixtu

re48

.28

– –

48.2

842

.73

0.46

–43

.19

5.09

5.56

6Ve

hicl

es46

.03

0.59

–46

.62

25.5

02.

55 –

28.0

518

.57

20.5

3

7O

ffic

e Eq

uipm

ents

30.1

5–

–30

.15

23.4

70.

72–

24.1

95.

966.

68

8C

ompu

ters

63.4

42.

01–

65.4

554

.06

2.66

–56

.72

8.73

9.38

Gra

nd T

otal

6190

.26

7.62

–61

97.8

836

72.6

220

8.71

–38

81.3

323

16.5

4

Tota

l of t

he P

revi

ous Y

ear

6141

.63

65.9

317

.30

6190

.26

3467

.57

212.

067.

0036

72.6

125

17.6

4

(ii)

CA

PITA

L W

OR

K IN

PR

OG

RES

SA

dvan

ce ag

ains

t Cap

ital E

xpen

ditu

re12

7.10

127.1

0&

Mac

hine

ries i

n St

ock/

Tran

sit

127.

1012

7.10

34

Madhya Bharat Papers Limited

11.1 Gross Block includes revaluation of Fixed assets (comprising ofBuilding, Plant & Machinery amounting to ̀ . 5441.18 lacs) madeon 30.04.1987 (Historical Cost for `. 4883.30 lacs) revalued byan external approved valuer and the replacement value methodadjusted with RBI index was used for such revaluation. 557.88 557.88

Cumulative Depreciation includes Depreciation onenhanced value of fixed assets. 425.68 418.79

Depreciation on enhanced value of fixed assets hasbeen deducted from revaluation reserve account. 6.89 9.64

The uncharged amount of accumulated depreciation relating torevaluation would be adjusted against the revaluation reserveon the retirement of asset. Had it been provided on the basis ofgenerally accepted accounting principles, the Net Block andReserves would have been lower by the same amount. 132.20 139.09

Assets revalued on 30.4.1987 have not been sold.

11.2 Depreciation on Leasehold Land has been depreciated @ 1% perannum straight line method

Net carrying amount of leasehold land is for ̀ . 3.31 lacs and forleasehold Building is for ̀ . 4.61 lacs as on 31.03.2014.

Factory Building includes Lease hold Building of ̀ . 5.55 lacs.

12 Non Current Investment:(Other than Trade)

(a) In Equity Shares of Associate CompanyQuoted, Fully Paid up55100 Shares in Sarda Plywood Industries Ltd. 23.39 23.39of ̀ .10 each

(b) In Equity Shares of Other CompanyQuoted, Fully Paid up1500 Shares in Simplex Infrastructures Ltd. 0.13 0.13of ̀ . 10 eachUnquoted, Fully Paid up100 Shares in Pro Sports Management Ltd. 1.00 1.00of ̀ . 1000 each

(c) Government Securities-Unquoted7 Years’ National Savings Certificate 0.13 0.13

24.65 24.65

As at As atNote No. Particulars 31.03.2014 31.03.2013

`.`.`.`.`. in lacs `.`.`.`.`. in lacs

35

12.1 Aggregate market value of quoted investments `. 9.29 lacs(Previous year `. 10.75 lacs)

12.2 Government Securities have been pledged with CentralExcise and Sales Tax Authorities.

12.3 Investments are valued at cost.

13 Deferred Tax (Liabilities)/Assets (Net)Deferred Tax

Provision for gratuity 13.70 (9.84)Provision for Loss carried forward 358.50 –

372.20 (9.84)Deferred Tax Liability

Related to Fixed Assets 215.51 227.63Provision for unencashed leave 11.04 (11.12)Provision for diminution in value of long term investment 0.49 (0.49)

227.04 216.02

Net Deferred Tax (Liability) / Assets 145.16 (225.86)

14 Inventories(As taken, valued and certified by the Management)(a) Raw Material

In Hand 248.33 204.21In Transit 41.54 12.12

(b) Work-in-Progress 65.24 91.40(c) Finished Goods 354.00 237.12

Add: Variation in Excise Duty on Opening &Closing Stock of Finished Goods 24.17 12.60

(d) Stores, Spares & Loose ToolsIn Hand 237.33 242.36In Transit 8.14 4.06

978.75 803.87

14.1 Work-in-Progress have been valued at lower of cost or netrealisable value.

14.2 Finished Goods are valued at lower of cost of net realisable value.14.3 Stores & Spares and Loose Tools have been valued at cost.14.4 Raw Materials are valued at cost.

15 Trade Receivables(Unsecured considered Good unless otherwise stated)(1) Debts Outstanding for a period exceeding

six months from the date they are due 2.31 1.28(2) Other Debts 189.51 155.58

191.82 156.86

As at As atNote No. Particulars 31.03.2014 31.03.2013

`.`.`.`.`. in lacs `.`.`.`.`. in lacs

36

Madhya Bharat Papers Limited

16 Cash & Cash Equivalenents(a) Balance with Banks

In Fixed Deposits 10.39 9.72In Current Accounts 4.16 4.77

(b) Cash in Hand 0.95 2.19(c) Cheque in Hand 4.64 2.08

20.14 18.7616.1 Fixed Deposit of `. 9.96 lacs held as Margin Money against

Bank Guarantee/Letter of Credit (Previous Year ̀ .9.29 lacs)16.2 Fixed Deposit of `. 0.43 lac pledged with Sales Tax Authorties

(Previous Year ̀ . 0.43 lac)

17 Short Term Loans & Advances(Unsecured considered good unless otherwise stated andrecoverable in cash or in kind for the value to be received)(a) Loans and Advances

To OthersAdvance to Parties 102.90 54.36Advance to Staff 1.07 0.97Advance to Others 139.98 128.06

(b) Receivable from Revenue AuthoritiesIncome Tax Deposit/Refund Receivable (Net) 9.46 8.84Sales Tax Deposit/Refund Receivable 0.26 0.29Balance with Central Excise Authorities 21.62 27.07

275.29 219.5918 Other Current Assets

Prepaid Expenses 8.48 7.54 Interest Accrued but not due on Deposits 6.79 5.97Trade and Other Deposits 19.72 29.35

34.99 42.8619 Revenue from Operations

(a) Sale of Products 8489.47 7611.18Less: Inter-Divisional Transfer 723.81 657.10

7765.66 6954.08(b) Less: Excise Duty 465.24 405.86

Net Revenue from Operations 7300.42 6548.22

20 Other Income(a) Interest Income 11.91 7.76(b) Dividend Income 0.02 0.03(c) Other Non-Operating Income 0.14 0.22(d) Liabilities no longer required written back – 12.98

12.07 20.99Other Non-operating income consists of commodity gain and others.

As at As atNote No. Particulars 31.03.2014 31.03.2013

`.`.`.`.`. in lacs `.`.`.`.`. in lacs

37

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

21 Cost of Materials ConsumedPurchases Raw Materials 2243.75 2291.42Add: Opening Balance of Stock 119.64 40.38

2363.39 2331.80Less: Closing Balance of Stock 145.06 119.64

Consumption of Raw Materials 2218.33 2212.16

21.1 Details of Raw Material consumed :

A. Raw Materials consumed : Qty. (MT) Amount Qty. (MT) Amount(i) Straw 34,607 755.83 33,115 665.65(ii) Hosiery Cuttings/Jute Caddies 116 4.80 737 38.71(iii) Waste Paper 6,409 1457.70 6,828 1507.80(iv) Coal 49,593 1223.98 59,724 1219.91

3442.31 3432.07Coal consumption has been shown underPower & Fuel expenses (other expenses)

B. Break-up of Raw Materials consumed: % %(i) Indigenious 90.36 3110.63 94.67 3249.20(ii) Imported 9.64 331.69 5.33 182.87

100 3442.32 100 3432.07C. C.I.F. Value of Imports :

(i) Raw Materials 231.23 179.28

22 Changes in InventoriesFinished Goods

At the Beginning of the Accounting Period 249.72 188.91At the End of the Accounting Period 378.16 249.73

(128.44) (60.82)Work-in-Progress

At the Beginning of the Accounting Period 91.40 117.93At the End of the Accounting Period 65.24 91.40

26.16 26.53

Grand Total (102.28) (34.29)

23 Employee Benefits ExpenseSalary and Wages 468.22 433.43Contribution to Provident Fund and Other Funds 76.80 77.36Workers and Staff Welfare 29.34 31.05

574.36 541.84

38

Madhya Bharat Papers Limited

23.1 (a) Payments to and provision for employees include thefollowing :Managerial Remuneration -Salary & Other Amenities 30.15 30.11Contribution to Provident Fund and other Funds 9.24 9.54

39.39 39.65(b) Computation of net profit for the purpose of Directors’

remuneration under section 349 of the Companies Act, 1956 neednot be enumerated since no commission has been paid to theDirectors. Fixed monthly remuneration has been paid to theDirectors as per Schedule XIII to the Companies Act,1956

23.2 The Company has adopted Accounting Standard 15 “EmployeeBenefits” of Companies (Accounting Standards) Rules, 2006, asamended by Companies (Accounting Standards) Amendment Rules,2008 dated 27th March, 2008 with effect from 1st April, 2007.

Defined Contribution Plan:Employee benefits in the form of Provident Fund, SuperannuationFund, Employee State Insurance Scheme, Pension Scheme and LabourWelfare Fund are considered as defined contribution plan and thecontributions are made in accordance with the relevant statute andare recognized as expense when employee have rendered serviceentitling them to the contributions. The contribution to definedcontribution plan, recoginized as expense for the year are as under:

Employers’ Contribution to Provident Fund & Pension Fund 38.42 38.43Employers’ Contribution to Superannuation Fund 12.24 14.23

Defined Benefit Plan:Post employment and other long-term employee benefits in the formof gratuity, sick leave and earned leave encashment are consideredas defined obligation. The present defined value of obligation isdetermined based on acturarial valuation using projected unit creditmethod as at the balance sheet date. The amount of defined benefitsrecognized in the balance sheet represent the present value of theobligation as adjusted for unrecognized past service, cost and asreduced by the fair value of plan assets.

Any asset resulting from this calculation is limited to the discountedvalue of any economic benefits available in the form of refunds fromthe plan or reductions in future contributions to the plan. The amountrecognized in the profit and loss account for the year ended 31stMarch, 2014 in respect of Employees Benefit Schemes based onactuarial reports as on 31st March, 2014 is as follows:

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

39

Amounts recognized in the Balance Sheet areas follows:

Gratuity Leave Gratuity Leave Present value of Defined Benefit obligation 201.30 35.73 192.55 35.98 Fair Value of Plan Assets 245.64 – 224.41 – Fund Status {Surplus/(deficit)} (44.34) 35.73 (31.86) 35.98 Unrecognized past service cost – – – – Net (Asset)/Liability recognized in Balance Sheet (44.34) 35.73 (31.86) 35.98

Amounts recognized in the Profit and Loss Accountand charges to Contribution to Funds, Staff Welfareand Insurance Expenditure are as follows:Current Service Cost 10.47 2.11 9.35 0.57Past Service Cost – – – –Interest on obligation 17.72 3.23 17.99 2.91Expected return on Plan Assets (21.15) – (20.91) –Curtailment Cost – – – –Settlement Cost – – – –Net Accrual Loss/(Gain) 1.89 3.88 3.69 3.90Total Expenses recognized in Profit & Loss 8.93 9.22 10.12 7.38

Reconciliation of opening and closing balancesof the present value of the obligations:Opening defined benefit obligation 192.55 35.98 207.23 36.81Acquisition Adjustment – – – –Current Service cost 10.47 2.11 9.35 0.57Past Service Cost – – – –Interest cost 17.72 3.23 17.99 2.91Curtailment Cost – – – –Settlement Cost – – – –Expected Return – – – –Accrual Loss/(Gain) 0.03 3.88 3.46 3.90Benefit Paid (19.46) (9.47) (45.49) (8.21)Closing Benefit obligation 201.31 35.73 192.54 35.98

Change in Fair Value of Plan AssetOpening Fair value of Plan Assets 224.41 – 240.18 – Acquisition Adjustment – – – – Settlement Cost – – – – Expected return on Plan Assets 21.15 – 20.91 – Actual company contribution 21.42 9.47 9.04 8.21 Benefits Paid (19.46) (9.47) (45.49) (8.21) Accrual Loss/(Gain) (1.87) – (0.23) – Planned Asset at the end of the year 245.65 – 224.41 –

Actul Return of Planned Assets (Amount) 21.15 20.91

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

40

Madhya Bharat Papers Limited

Actuarial AssumptionsDiscount Rate (per Annum) (%) 8.25 8.25 8.25 8.25Expected rate of return on Plan Assets (per Annum) 9.00 NA 9.00 NASalary Increases (%) 5.00 5.00 5.00 5.00Retirement / Superannuation Age 58 58Mortality LICI LICI

Major Categories of Plan Assets as a percentage of fairvalue of the total plan assets:Insurance managed Funds 100% 100%

Basis used to determine the Expected Rate of Return on Plan Assets :The expected rate of return on plan assets is determined consideringseveral applicable factors, mainly the composition of plan assets held,assesed risks, historical results of return on plan asseets and theCompany’s policy for plan assets management.

Basis of estimates of rate escalation in salaryThe estimates of rate escalation in salary considered in actuarialvaluation has taken into account inflation, seniority, promotion andother relevant factors including supply and demand in the employmentmarket. The above information is certified by the actuary. The GratuityExpenses have been recognized in “Contirbution to Provident & OtherFunds” and provision for Leave in “Salaries, Wages, Bonus and otheramenities” under Schedule 17.

24 Finance Costs(a) Interest Expense

Interest to Bank 44.13 53.79Interest to Parties/Distributors 14.82 14.79Interest to Depositors 93.72 82.66Interest to Bank on Vehicle Loan 0.62 0.39Interest to Others 0.43 0.75

(b) Other Finance Charges 1.95 1.95155.67 154.33

25 Depreciation and Amortization ExpenseDepreciation 208.72 212.06Less : Transferred to revaluation reserve 6.89 9.64(Refer Note 3.1)

201.83 202.4226 Other Expenses

(a) Manufacturing ExpenseStores and Spare Parts 76.98 62.12Power and Fuel 1327.94 1346.51Repair to Machinery 410.97 256.06Repair to Building 61.58 43.20Dyes and Chemicals 1576.85 1517.78

3454.32 3225.67

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

41

(b) Administrative ExpenseBank Charges 0.79 1.24Cash Discount 104.36 109.60Donation 0.12 0.12Subscription/Membership Fee 9.59 8.25General Expenses 11.58 9.98Interest on TDS and Other Taxes 0.05 0.14Insurance 12.79 10.39Legal and Professional Expenses 80.16 47.29Loss on Sale of Fixed Assets/Raw Material – 6.79Newspaper and Periodicals 0.28 0.18Prior Period Expenses 0.42 1.51Payment to the Auditors 2.00 2.00Printing and Stationery 3.30 2.66Rent 10.07 9.30Rates and Taxes 153.96 116.32Repair to Other 44.16 37.48Watch and Ward Expenses 6.81 19.67Postage, Courier and Telephone Expenses 9.19 7.73Travelling Expenses 19.98 22.24(Including Directors’ ̀ .9.02 lacs; Previous Year ̀ .13.00 lacs)Vehicle Running Expenses 31.84 29.26Miscellaneous Expenses 23.77 23.13

525.22 465.28

(c) Selling and Distribution ExpenseAdvertisement and Publicity Expenses 5.50 5.11Selling and Promotional Expenses 24.26 4.76Freight and Cartage (Outward) 122.90 126.50Packing Expenses 191.73 161.90Sales Commission and Incentives 75.10 79.69Sales Tax 8.95 18.66

428.44 396.62Grand Total 4407.98 4087.57

26.1 Break-up of Dyes, Chemicalsand Stores & Spares consumed : % %(i) Indigenious 99.67 1646.88 99.89 1576.66(ii) Imported 0.33 5.45 0.11 1.69

100 1652.33 100 1578.35

26.2 C.I.F. Value of Imports : Spare Parts 3.88 3.18

26.3 Expenditure in Foreign Currency : Travelling 2.64 7.76 Others 1.81 1.92

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

42

Madhya Bharat Papers Limited

26.4 Miscellaneous Expenses includes :(i) Auditors’ Remuneration :

As Audit Fees 0.75 0.75In Other Capacity-For Tax Audit 0.25 0.25

(ii) Cost Auditors’ Remuneration 0.40 0.40(iii) Internal Auditors’ Remuneration 0.60 0.60(iv) Directors’ Sitting Fees 1.63 1.70

27 Disclosure pursuant to AS-29 on Provisions, Contingent Liabilitiesand Contingent Assets:(a) No provision for Liabilities was made during the year and no provision

was outstanding at the beginning and at the end of the year.(b) The Contingent liabilities mentioned in Sl.No.27(c) are dependent

upon Court decision/out of court settlement/disposal of apeals etc.(c) Demand raised by Government Authorities in respect

of Taxes and Duties and contested by the Company. 54.94 246.97 (Out of ̀ . 54.94 lacs, Company has already deposited ̀ . 2.84 lacs)

(d) Guarantee issued by Company’s bankers on behalf 27.87 27.87 of the Company (Margin money of ̀ . 9.96 lacs (`. 9.29 lcs)

28 Estimated amount of contracts remaining to be executed on Capital Account (Net of Advances) and not provided for. – –

29 Segment information as per Accounting Standard - 17 on ‘Segment Reporting : The Company has identified two business segments viz. Paper and Power, taking into account the nature of the products, the differing risks and returns, the organisational structure & internal business reporting system.

(a) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis, have been disclosed as “Unallocable”.

(b) Segment Assets and Segment Liabilities represent assets and liabilities of respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis, have been disclosed as “Unallocable”.

(c) Information about Business Segment : i. Segment Revenue (Sales) (a) Paper 7300.42 6548.22 (b) Co-generation -Power Division 723.81 657.10 Total 8024.23 7205.32 Less: Inter Segment Revenue sales 723.81 657.10

7300.42 6548.22

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

43

ii. Segment Result (Profit before tax & Interestand Finance charges)

(a) Paper 94.97 (371.12) (b) Co-generation -Power Division (52.04) (41.61) Total 42.93 (412.73) Less: i) Interest & Finance charges 155.67 154.33

ii) Other un-allocated expenditure netof unallocated income 30.66 27.76

Total Profit before Tax (143.40) (594.82)

iii. Segment Assets(a) Paper 3105.23 2964.80

(b) Co-generation -Power Division 829.94 913.03 (c) Unallocated 34.10 33.49

Total 3969.27 3911.32

iv. Segment Liabilities (a) Paper 1182.79 972.02 (b) Co-generation -Power Division 55.06 69.27 (c) Unallocated 1421.03 1780.37 Total 2658.88 2821.66

v. Capital Expenditure 7.61 65.94

vi. Depreciation 201.83 202.42

(d) The geographical location of Segments is in India only.

30 Earning per Share (EPS)(a) Net profit available for equity shareholders 227.62 (583.26)

(Numerator used for calculation)(b) Number of equity shares used as denominator 3410000 3410000

for calculating EPS.(c) Weighted average number of equity shares

used as denominator for calculating EPS. 3410000 3410000(d) Nominal Value per share (`) 10 10(e) Basic Earning per share (`) 6.67 (17.10)(f) Diluted Earning per share (`) 6.67 (17.10)

31 (a) Income tax assessments have been completed uptoassessment year 2011-12 and refunds have beenshown as net provision of taxes, if any.

(b) The benefit of Income tax exemption under section 80 IAis available with respect to Co-generation power division.The company has opted to avail this benefit from thefinancial year 2005-06.

Note No. Particulars 2013-14 2012-13`.`.`.`.`. in lacs `.`.`.`.`. in lacs

32 Related party disclosure(a) List of related parties

(i) Associates : Pro Sports Management Ltd: Poushali Sales Pvt Ltd.: Sarda Plywood Industries Ltd

(ii) Key Management Personnel : Sri J Chitlangia (Managing Director)(b) Transaction

Income :Rent Received

Sarda Plywood Industries Ltd 0.12 0.12ExpenditurePurchase

Sarda Plywood Industries Ltd 0.08 –Rent Paid

Sarda Plywood Industries Ltd 0.06 0.06Interest Paid

Poushali Sales Pvt Ltd 80.47 65.40 Paid to Sri J Chitlangia

Salary & Other Amenities 30.15 30.11Contribution to Provident Fund and other Funds 9.24 9.54

39.39 39.65(c) Finance & Investment

Loan Paid (net)Poushali Sales Pvt Ltd (127.97) (61.41)

Loan Received (net) Poushali Sales Pvt Ltd 38.79 166.14

(d) Balance Outstanding at year end : Net Loan paid (+)/Received(-)Loan Payable

Poushali Sales Pvt Ltd 606.46 630.25Interest Payable(net)

Poushali Sales Pvt Ltd 80.47 65.40Investment in Shares Sarda Plywood Industries Ltd 23.39 23.39 Pro Sports Management Ltd 1.00 1.00

33 Disclosure under clause 32 of the Listing Agreement:There are no transactions (except related party transactions)which are required to be disclosed under clause 32 of the ListingAgreement with the stock exchange where the Equity Shares ofthe Company are listed.

34 Figures of the previous year have been re-grouped and/orre-arranged wherever necessary to make them comparablewith those of the current year.

44

Madhya Bharat Papers LimitedNote No. Particulars 2013-14 2012-13

`.`.`.`.`. in lacs `.`.`.`.`. in lacs

As per our report of even date.For MURARI AGRAWAL & CO.Chartered Accountants

S. M. AGRAWALPartner(M.No. 53923)Kolkata : 27th May, 2014

V. K. KHANNAPresident &

Company Secretary

JAYDEEP CHITLANGIAManaging Director

R. L. KAPURDirector

Notes:(1) This form of proxy in order to be effective should be duly completed and deposited at the Registered

Office of the Company not less than 48 hours before the commencement of the meeting;(2) A Proxy need not be a member of the Company.(3) A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not

more than 10% of the total share capital of the Company carrying voting rights. A member holding morethan 10% of the total share capital of the Company carrying voting rights may appoint a single personas proxy and such person shall not act as a proxy for any other person or shareholder.

**(4) This is only optional. Please put a ‘X’ in the appropriate column against the resolutions indicated in theBox. If you leave the ‘For’ or Against’ column blank against any or all the resolutions, your Proxy will beentitled to vote in the manner as he/she thinks appropriate.

(5) Appointing a proxy does not prevent a member from attending the meeting in person if he so wishes.(6) In the case of jointholders, the signature of any one holder will be sufficient, but names of all the

jointholders should be stated.

Regd.Office: Village Birgahni, Rly & Post Champa-495 671,Dist. Janjgir-Champa(Chhattisgarh), CIN: L21012CT1980PLC001682

PROXY FORM[Pursuant to section 105(6) of the Companies

Act, 2013 and rule 19(3) of the Companies(Management and Administration) Rules, 2014]

I/We, being the member(s) holding shares of Madhya Bharat Papers Limited, hereby appoint:1) of having e-mail id or failing him2) of having e-mail id or failing him3) of having e-mail id and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/ourbehalf at the 34th Annual General Meeting of the Company, to be held on Friday, 26th September, 2014 at 11 a.m. at theregistered office of the Company at Champa, Dist. Janjgir-Champa, Chhattisgarh and at any adjournment thereof inrespect of such resolutions as are indicated below:**I wish my above Proxy to vote in the manner as indicated in the box below:

Resolutions For Against

1. Consider and adopt Audited Financial Statement, Reports of the Board of Directors and Auditors2. Re-appointment of Sri R.L. Kapur who retires by roation3. Appointment of Auditors and fixing their remuneration4. Appointment of Sri Abhas Sen as an Independent Director5. Drawing Power under Section 180(1)( c) of the Companies Act, 20136. Creation of Charge under Section 180(1)(a) of the Companies Act, 2013

*Applicable for investors holding shares in eletronic form.

Signature of first proxy holder Signature of second proxy holder Signature of third proxy holder

Signature of shareholderSigned this day of 2014

MADHYA BHARAT PAPERS LIMITED

Name of the member(s) E-mail Id:Registered Address: Folio No./*Client Id:

*DP Id :

AffixRevenue

Stampof `.1/-

Regd.Office: Village Birgahni, Rly & Post Champa-495 671,Dist. Janjgir-Champa(Chhattisgarh), CIN: L21012CT1980PLC001682

MADHYA BHARAT PAPERS LIMITED

PROCEDURE FOR ELECTRONIC VOTINGThe procedure and instructions for e-voting are as follows:In case of members receiving e-mail:a. Log on to the e-voting website www.evotingindia.comb. Click on “Shareholders” tab.c. Now, select the “Madhya Bharat Papers Ltd” from the drop down menu and click on “SUBMIT”d. Now Enter your User ID (For CDSL: 16 digits beneficiary ID, For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

Members holding shares in Physical Form should enter Folio Number registered with the Company).e. Next enter the Image Verification as displayed and Click on Login.f. If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any

company, then your existing password is to be used.g. If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical FormPAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both

demat shareholders as well as physical shareholders)• Members who have not updated their PAN with the Company/Depository Participant are

requested to use the first two letters of their name and the 8 digits of the sequence number in thePAN field.

• In case the sequence number is less than 8 digits enter the applicable number of 0’s before thenumber after the first two characters of the name in CAPITAL letters. Eg. If your name isRamesh Kumar with sequence number 1 then enter RA00000001 in the PAN field. – Sequencenumber is communicated in the Attendance Slip/ Covering Letter.

DOB Enter the Date of Birth as recorded in your demat account or in the company records for the saiddemat account or folio in dd/mm/yyyy format.

Dividend Enter the Dividend Bank Details as recorded in your demat account or in the company records forBank Details the said demat account or folio.

• Please enter the DOB or Dividend Bank Details in order to login. If the details are not recordedwith the depository or company please enter the member id / folio number in the Dividend Bankdetails field.

h. After entering these details appropriately, click on “SUBMIT” tab.i. Members holding shares in physical form will then reach directly the Company selection screen. However, members

holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter theirlogin password in the new password field. Kindly note that this password is to be also used by the demat holders for votingfor resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting throughCDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keepyour password confidential.

j. For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in thisNotice.

k. Click on the EVSN for the relevant <Madhya Bharat Papers Ltd> on which you choose to vote.l. On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting.

Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO impliesthat you dissent to the Resolution.

m. Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution.n. After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you

wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.o. You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.p. If Demat account holder has forgotten the changed password then enter the User ID and the image verification code and

click on Forgot Password & enter the details as prompted by the system.• Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on to https://www.evotingindia.co.in

and register themselves as Corporates.• They should submit a scanned copy of the Registration Form bearing the stamp and sign of the entity to

helpdesk.evoting@cdslindia.com.• After receiving the login details they have to create a user who would be able to link the account(s) which they wish to vote on.• The list of accounts should be mailed to helpdesk.evoting@cdslindia.com and on approval of the accounts they would be

able to cast their vote.• They should upload a scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour

of the Custodian, if any, in PDF format in the system for the scrutinizer (Email id scrutinizeraklabh@gmail.com) to verifythe same.

In case of members receiving the physical copy:(A) Please follow all steps from sl. no. (a) to sl. no. (q) above to cast vote.(B) The voting period begins on 18.09.2014 at 9.00 am and ends on 20.09.2014 at 6.00 pm. During this period shareholders’

of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of14.08.2014, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-votingmanual available at www.evotingindia.co.in under help section or write an email to helpdesk.evoting@cdslindia.com.