Some nations, though, have done exceptionally well. With 8.7 per cent
 GDP growth in 2009, and double-digit performance over the last three
 consecutive quarters, China seems set to hit 10 per cent GDP growth in
 the calendar year 2010. And having posted 7.4 per cent growth in 2009-
 10, India ought to be able to grow by at least 8.5 per cent in 2010-11.
 In general, Asia has shown remarkable rebound. According to The
 Economist, Indonesia is expected to grow by 5.9 per cent in 2010;
 Malaysia by 6.8 per cent; South Korea by 6.3 per cent; and Taiwan by
 7.7 per cent. These are impressive growth rates.
 
 The importance of Asia is also evident in the writing and printing
 paper industry.  In 2009-10, growth in demand was driven primarily by
 the emerging Asian economies.  The developed world witnessed a
 contraction in demand, while the Asian pulp and paper market increased
 its global share to around 39 per cent.
 
 With this backdrop, let me start with your Companys objective of
 sustainable growth in scale, size and profitability. There are three
 critical guidelines that BILT continues to adopt in its growth
 strategy. These are: O Positioning and operating in markets that have
 strong domestic demand. As of now, BILTs manufacturing facilities are
 in India and Malaysia. India continues to have one of the lowest per
 capita paper consumption of around 8 kg. Given Indias growth
 trajectory and the size of the population, there is considerable scope
 of steadily growing and developing this market across a wide array of
 products. The Malaysian market, too, has strong domestic demand.  O
 Developing cost effective manufacturing and distribution. BILTs
 production facilities are in low cost economies, namely India and
 Malaysia. In addition, the Company continues to strive to squeeze out
 every element of cost in its day to day operations. You will get some
 details of the managements initiatives on the cost front in the
 section on Operations in the chapter on Management Discussion &
 Analysis.  O Focusing on technology and innovation.
 
 In a mature industry like writing and printing paper, technology and
 innovation are critical for reaping incremental benefits. BILT has a
 strong focus on R&D, which is continuously leveraged to improve
 operational efficiencies. Your Company continues to be very innovative
 in marketing. It has actively created new segments, introduced new
 products and restructured its distribution. These improvements
 continued through 2009-10 and played a very important role in helping
 BILT grow or maintain its market share while fulfilling the all
 important objective of profitability.
 
 A brief outline of your Companys performance for 2009-10 shows
 encouraging progress: O Net sales grew by 34 per cent to Rs.3,795
 crore.  O EBIDTA increased by about 26 per cent to Rs.838 crore.
 
 0 PAT (after minority interest and profits of associated companies)
 rose by 17 per cent to Rs.197 crore.
 
 While the details are given in the chapter on Management Discussion &
 Analysis,
 
 1 will highlight some of the underlying developments that have
 contributed to this performance.
 
 The paper industry is about creating, and making the best use of scale.
 Not surprisingly, therefore, BILT has been on an expansion drive over
 the last few years. In India, it has successfully commissioned and
 started commercial production of 190,000 metric tonnes per annum (MTPA)
 of additional capacity at Bhigwan; and another 165,000 MTPA of extra
 capacity at Ballarpur.
 
 These new capacities have come on stream when several other players in
 India have also increased their scale of operations.  It is estimated
 that some 1.2 million metric tonnes (MT) will be added to the existing
 capacity of 10.8 million MTPA during the next two years. While there is
 no doubt about the long term growth in demand, in the short run, this
 additional capacity does create competitive pressures. In this context,
 a major achievement for your Company in 2009-10 was to successfully
 sell almost all its extra output — of around 116,000 MT of new
 production at Bhigwan and 73,000 MT at Ballarpur — without compromising
 on pricing. This was achieved by a judicious selection of product mix,
 creation of new market segments and enhancing efficiencies of the
 distribution network to reach a larger market.
 
 This strength of sales and marketing is critical to your Companys long
 term goals. It is important that as we continue to strategically
 develop or acquire new production capacities, we have a team in place
 that has the ability to profitably sell all that we produce.
 
 Your Company acquired Sabah Forest Industries Sdn. Bhd. (SFI) in 2007.
 You may recall that in 2008-09, given the demand downturn, operations
 at SFI were under severe stress. There were losses and large stock pile
 up.
 
 I am pleased to inform you that the situation has completely turned
 around in 2009-10. SFI has posted its highest ever revenue and profits.
 This was achieved through a focused effort at improving internal
 systems and processes and by strategic market repositioning. A revival
 in demand in Malaysia also helped in the cause. Today, your Company is
 well positioned to service the Malaysian and related markets with an
 operational base that has excellent access to raw materials. I expect
 SFI to contribute significantly to BILTs improved performance in the
 years to come.
 
 I am also happy to report to you that your Company has increased its
 exports.  In 2009-10, some 14 per cent of its output from India was
 exported. While this is a modest beginning, it has opened doors to
 several new geographies and created a bridgehead for BILT in new
 markets. Despite being at a nascent stage, this export growth has given
 encouragement to the strategic premise of catering to world demand from
 technologically capable, low cost production facilities.
 
 The other related businesses, including office stationary supplies and
 retail, have continued to expand according to plan. Some highlights are
 given below: O The rayon grade pulp business at
 
 Kamalapuram, which was under stress in 2008-09 due to a dip in demand
 for viscose fibre, its main consumer segment, has recovered and
 generated profits, thanks to a revival in demand.  O BILTs market
 share in India in the coated wood-free segment increased from 39 per
 cent in 2008-09 to 48 per cent in 2009-10.  O BILT continues to be the
 largest player in the uncoated wood-free segment. Within this, it is
 also the leader in the higher value Hi Bright segment, with a market
 share of 37 per cent in 2009-10.
 
 O With its well known brands in the copier market — Copy Power, Image
 Copier and BILT Matrix — your Company accounts for a 25 per cent share.
 
 O Driven by three key brands — BILT Matrix, Royal Executive Bond and
 BILT Ten on Ten — your Companys office supplies and stationery
 business grew by over 30 per cent, taking the total turnover to Rs.244
 crore in 2009-10. Today, BILTs foray in office supply products has
 grown to 40,000 outlets across 300 locations in India.
 
 O Your Company entered the office supply retailing business with the
 launch of its first store in June 2008 under the brand name ‘P3
 (Paper, Print and Pens). These are early days. Even so, I am happy to
 inform you that the business achieved a turnover of Rs. 52 crore in
 2009-10, and the management expect to double this in 2010-11. Your
 Company currently has 11 stores with a plan to add 50-odd stores in the
 next three years.
 
 BILT has always focused on being a good corporate citizen, and has
 stressed upon sustainable growth and community development — especially
 so, given that most of its units are located in deep hinterlands and
 use natural resources like wood. We continue to stress on corporate
 social responsibility (CSR). I urge you to read the chapter on CSR
 which details some of your Companys achievement on this front.
 
 In the last few years, your Company launched an extensive programme for
 growth. This included capacity creation, acquisitions and new market
 entries. These required many investments and significant capital
 outlays. As of today, it is clear that BILT has proved its project
 execution skills.  2009-10 is a step in the right direction.  Potential
 has been converted to value, which is a reflection of your Companys
 operating capabilities, marketing skills and financial acumen. As your
 Companys Chairman and chief fiduciary, I expect the management to
 achieve similar, if not better results, in the years to come.
 
 My thanks to all your Companys employees who have done a marvellous
 job.  And to you, for believing in this business and being with us. We
 remain committed to enhancing shareholder value in every aspect of the
 business.
 
 GAUTAM THAPAR 
 CHAIRMAN