1 1.1. CORPORATE INFORMATION:
 
 The company is engaged in manufacturing and marketing of paper. It uses
 various qualities of waste papers as its raw material for manufacturing
 finished paper. The company offers wide range of paper including
 Writing & printing paper, Newsprint paper, Duplex Board, Coated Paper,
 Colour Paper and Board, Crepe paper, Poster paper, Cast coated paper &
 fluorescent paper.
 
 During the year ended 31 March 2012 the company has acquired 100%
 equity shares in two companies viz. Rainbow Papers JLT(Dubai) and
 Rainbow Infrabuild Pvt Ltd.
 
 1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENT:
 
 The Financial Statements are prepared as per historical cost convention
 and in accordance with the Generally Accepted Accounting Principles
 (GAAP) in India, the provisions of the Companies Act 1956, and the
 applicable Accounting Standards notified under the Companies
 (Accounting Standards) Rules,2006. All Incomes and Expenditures having
 material bearing on the Financial Statements are recognized on accrual
 basis.
 
 (a) Terms/rights preferences and restrictions attached to securities:
 
 Equity Shares:
 
 The company has one class of equity shares having a par value of Rs. 2
 each. Each share holder is eligible for one vote per share held. The
 dividend proposed by the board of director is subject to the approval
 of share holders in the ensuing Annual General meeting, except in case
 of interim dividend.  In the event of liquidation, the equity share
 holders are eligible to receive the remaining assets of the
 company after distribution of all preferential dues, in proportion
 to their share holding.
 
  During the year ended 31 March 2012, the amount of per share dividend
 recognized for distribution to equity shareholders was Rs. 0.40(RY.31
 March 2011 Rs. 0.40)
 
 (b) Terms of securities convertible into equity shares:
 
 Convertible Warrants:
 
 On August 30,2011 the company has allotted 60,00,000 convertible
 warrants on preferential allotment basis to promoter group company at a
 price of Rs. 61/- which shall be convertible into equity shares (at the
 sole option of warrant holder(s)) at any time within a period of 18
 months from the date of allotment of warrants. The lock-in of shares
 acquired by exercise of the warrants shall befor the period of 3 years.
 
 (e) On 28th January 2010 the Company had issued and allotted Global
 Depository Receipts (GDRs). The said GDRs are listed on at Euro MTF
 Market of Luxemburg Stock Exchange and the funds raised have been and
 are being utilized to finance the Expansion Plan and balance funds
 pending utilization have been placed as deposit with the Foreign Bank.
 The details of funds activity during the year are as follow:
 
 (a) Nature of security and terms of repayment for secured borrowings
 Term loan:
 
 Term Loan in Rupee Currency are secured by way of First hypothecation
 charge on Pari passu basis over the current assets of the company,
 situated at 1423 paiki of village: Rajpur, Taluka: Kadi, Dist:Mehsana.
 Second charge on paripasu basis on all fixed assets, situated at survey
 no 1423 paiki of village: Rajpur, Taluka: Kadi, Dist:Mehsana .The loan
 is further secured by personal guarantee of Managing Director, Promoter
 and a body corporate. Term Loan is carrying rate of Interest (at
 present) from 13% to 14.50% p.a. repayable over a period of 5 years.
 
 Term Loan in Foreign currency are secured by way of First hypothecation
 charge on Pari passu basis over the current assets of the company,
 situated at 1423 paiki of village: Rajpur, Taluka: Kadi, Dist:Mehsana.
 Second charge on paripasu basis on all fixed assets, situated at survey
 no 1423 paiki of village: Rajpur, Taluka: Kadi, Dist:Mehsana .The loan
 is further secured by personal guarantee of Managing Director, Promoter
 and a body corporate. Term Loan is carrying rate of interest(at
 present) from LIBOR  7 to 8.5% repayable over a period of 5 years.
 
 Vehicle Loan:
 
 Secured vehicle loan from banks are secured by hypothecation of
 vehicles and are repayable over a period of 3 years carrying rate of
 interest 6 to 8% p.a. Further loan is guaranteed by Managing Director
 of the company.  Secured vehicle loan from financial institutions are
 secured by hypothecation of vehicles and are repayable over a period of
 3 years carrying rate of interest 9 to 11 p.a.%. Further loan is
 guaranteed by Managing Director of the company.
 
 (b) Terms of repayment for unsecured borrowings Loan from financial
 institution:
 
 The company shall repay the loan in two installments with the first
 installment of Rs. 10 crore payable on 31.03.2015 and second installment
 of Rs. 20 crore payable on 31.03.2016 which carries Rate of interest(at
 present) 15% p.a.
 
 The Company has pledged 11940000 Equity Shares of Face Value of Rs. 2/-
 each, being held by one of its Promoter Group for availing Corporate
 Term Loan of Rs. 30 Crores.
 
 Inter Corporate Deposits:
 
 The company has taken interest free interoperate deposit which is
 repayable after a period of one year.
 
 Loans and advances from related parties:
 
 The company has taken interest free advance from related parties which
 is repayable after a period of one year.
 
 Deferred Tax Liability calculated as above is excluding the assets
 pertaining to Power Generating Units, the income of which being
 deductible u/s 80 IA of The Income Tax Act 1961. As prescribed in ASI 3
 & ASI 5 regarding application of AS 22 in situation of Tax Holiday
 period under Section 80 IA and 80 IB, where the timing difference
 arising in a year is reversed during Tax Holiday period itself, no
 Deferred Tax should be recognized.
 
 Nature of security provided for cash credit facility:
 
 Cash Credit Limit is secured by way of First hypothecation charge on
 Pari passu basis over the current assets of the company, situated at
 1423 paiki of village: Rajpur, Taluka: Kadi, DistMehsana. Second charge
 on paripasu basis on all fixed assets, situated at survey no 1423 paiki
 of village: Rajpur, Taluka: Kadi, DistMehsana .The loan is further
 secured by personal guarantee of Managing Director, Promoteranda body
 corporate.
 
 Nature of security provided for packing credit facility:
 
 Packing Credit Limit is secured by way of First hypothecation charge on
 Pari passu basis over the current assets of the company, situated at
 1423 paiki of village: Rajpur, Taluka: Kadi, DistMehsana. Second charge
 on paripasu basis on all fixed assets, situated at survey no 1423 paiki
 of village: Rajpur, Taluka: Kadi, DistMehsana .The loan is further
 secured by personal guarantee of Managing Director, Promoter and a body
 corporate.
 
 * Based on the information/documents/ parties identified by the company
 and to the extent information available/gathered, information as
 required to be disclosed as per Micro, Small & Medium Enterprise
 Development Act, 2006 have been determined as follows:
 
 Whatever information the company could identify as above were possible
 at the year end only, and in view of this according to the company, it
 could not identify payments beyond due date during the year and to make
 interest provisions to that extent, due to numerous transactions
 concluded during the year as per the agreed terms with the suppliers.
 However the company has made due interest provisions over the requisite
 year end balances.
 
 * Liability towards Investor Education and Protection Fund under
 Section 205C of The Companies Act, 1956 (
 NotDueason31.03.2012/31.03.2011)
 
 Deferral/capitalization of exchange differences:
 
 The company has opted to follow the option granted by notification no
 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs
 relating to limited relaxation in the provision of Accounting
 Standard-11 in respect of Foreign Exchange differences on foreign
 currency loans:
 
 (i) Exchange differences relating to long-term monetary items, arising
 during the year, in so far as they relate to the acquisition of a
 depreciable asset are added to / deducted from the cost of the asset
 and depreciated over the balance life of the asset.
 
 (ii)In other cases such differences are accumulated in a Foreign
 Currency Monetary Item Translation Difference Account and amortized to
 the Profit and Loss account over the balance life of the long-term
 monetary item, however the period of amortization does not extend
 beyond; March 31,2020 [extended by notification no GSR 913(E) dated
 29th December 2011].
 
 - Cost of Fixed Assets and pre-operative expenses, being technical
 matter, are capitalized or allocated to Capital work in progress on the
 basis of data certified by technical person & the management.
 
 - Borrowing cost includes interest and other bank charges including the
 exchange difference arising from foreign currency borrowings to the
 extent that they are regarded as an adjustment to interest costs which
 are directly related to the acquisition& construction of a qualifying
 asset. During the year borrowing cost amounting to Rs.4769.04 Lacs has
 been capitalised.
 
 - Advances to Project suppliers are shown under Long-term loans &
 advances included in Capital advances.
 
 *The balance lying with foreign bank of GDR issue account has been
 taken on the basis of E- statement of account received through mail.
 
 ** Margin Money deposits with a carrying amount of Rs. 874.13 Lacs (31
 March 2011: Rs. 800.70 Lacs are given as margin against Letter of Credit
 open with bank)
 
                                                (Rs. in Lacs)
 
 1 CONTINGENT LIABILITIES AND COMMITMENTS       As at         As at 
 (to the extent not provided for):            March 31,2012  March 31,2011
 
 A. Contingent liabilities
 Guarantees:
 
 -    Bank Guarantee                              526.65        93.16
 
 Other money for which company is 
 contingently liable:
 
 -   Additional Premium on Land *                  18.78        18.78
 
 -   Liability in respect of additional 
 Stamp Duty on purchase of Land                     Not 
                                                Ascertainable    Not 
                                                             Ascertainable
 
 * The Tribunal has cancelled the order regarding additional premium on
 Land and the matter is again referred to The Collectors, Mehsana for
 re-valuation of premium amount.
 
 Defined Benefit Plan
 
 The Company has adopted Accounting Standard 15 (AS-15) (Revised)
 Employee Benefits which is mandatory from accounting periods starting
 from Dec 7, 2006. Accordingly, the Company has provided for gratuity
 and leave encashment based on actuarial valuation done as per Projected
 Unit Credit Method.
 
 I. Expected Employer''s contribution for the next financial year
 
 On the basis of previous year''s trend, company is expecting to
 contribute the same amount as in 2011-12 to the defined contribution
 plan.
 
 For the defined benefit plan company is not liable to contribute any
 amount for leave encashment as the plan is unfunded. However, for the
 gratuity which is funded, company is expecting to contribute such
 amount which can mitigate its future liability.
 
 The estimate of rate of escalation in salary considered in actuarial
 valuation, take into account inflation, seniority, promotion and other
 relevant factors including supply and demand in the employment market.
 The above information is certified by the actuary.
 
 Interest expenses have been shown as net off interest received from
 trade parties, margin money and fixed deposits.
 
 **Surplus of Rs. 171.09 Lacs being the impact of foreign exchange
 fluctuation on account of import, export, and foreign currency working
 capital have been recognized in other operating revenue however deficit
 of Rs. 287.68 Lacs being the impact of foreign exchange fluctuation on
 account of term loan facilities have been recognized in the finance
 cost.
 
 2) Balances of Unsecured Loans, Creditors, Debtors, Loans & Advances
 and other parties are subject to their confirmations and
 reconciliation, due adjustment, if necessary, will be made on receipt
 thereof. However, the management does not expect any material
 difference affecting the current years'' financial statements.
 
 3) Based on the guiding principles given in Accounting Standard on
 Segment Reporting (AS-17) issued by the Institute of Chartered
 Accountants of India, the Company operates mainly in manufacturing and
 processing of Paper products and all other activities are incidental
 thereto, which have similar risk and return, accordingly, there are no
 separate reportable Segment as far as Primary Segment is concerned.
 
 4) DERIVATIVE INSTRUMENTS:
 
 a) The Company has entered into forward contracts to offset foreign
 currency risks arising from the amounts denominated in currencies other
 than the Indian Rupee. The counter parties to such forward contracts
 are banks.
 
 Consequent to the announcement issued by the Institute of Chartered
 Accountants of India on Accounting of Derivatives, details of
 derivatives contracts outstanding as on 31-3-2012 are as under:
 
 5) Till the year ended 31 March 2011, the Company was using
 pre-revised Schedule VI to the Companies Act 1956, for preparation and
 presentation of its financial statements. During the year ended 31
 March 2012, the revised Schedule VI notified under the Companies Act
 1956, has become applicable to the Company. The Company has
 re-classified previous year figures to conform to this year''s
 classification. Previous year figures have been re-arranged and
 re-grouped, wherever necessary to make them comparable with those of
 current year as per revised Schedule-VI.
 
 (*) The Company has not remitted any amount in foreign currencies on
 account of dividends during the year and does not have information as
 to the extent to which remittances, if any, in foreign currencies on
 account of dividends have been made by/on behalf of non-resident
 shareholders. The particulars of dividends payable to non-resident
 shareholders which were declared during the year, are given.