The Directors have pleasure in presenting the Sixty Fifth Annual
 Report together with the Audited Statement of Accounts for the
 financial year ended 30 June 2010.
 
 FINANCIAL HIGHLIGHTS
 
                                                     IN RS. CRORE
 
                                 consolidated           standalone
 
 particulars                 2009-10     2008-09     2009-10    2008-09
 
 Net Sales                   3794.59     2824.69     1020.58     999.33
 
 Profit before Interest 
 and Depreciation             818.36      655.76      193.10     232.96
 
 Less: Interest and 
 Finance Charges (Net)        237.12      170.82       22.32      13.78
 
 Profit before Depreciation   581.24      484.94      170.78     219.18
 
 Less: Depreciation           301.89      232.55       83.37      76.95
 
 Net Profit for the 
 year before Tax              279.35      252.39       87.41     142.23
 
 Less: Provision for 
 Taxation                      38.94       64.51       29.13      16.84
 
 Net Profit after Tax         240.41      187.88       58.28     125.39
 
 Less: Minority Interest       43.41       21.16         —          —
 
 Add: Share of Profit in 
 Associate Companies           ----         1.58         —          —
 
 Add: Balance brought 
 forward from the 
 previous year                496.52      404.09      302.53     227.14
 
 Add: Debenture Redemption 
 Reserve no longer 
 required                       7.50        7.50        7.50       7.50
 
 Less: Adjustment for change 
 in holding of subsidiary/ 
 associate company                         25.86
 
 Leaving a surplus of         701.02      554.02      368.31     360.03
 
 Which your directors 
 recommend, be 
 appropriated as follows:
 
 Transfer to General 
 Reserve                       15.00       25.00       15.00      25.00
 
 Payment of Dividend:
 
 Proposed Dividend on 
 65,55,23,839 Equity 
 Shares of Rs. 2/- each @ 
 25 per cent                   32.78       27.78       32.78      27.78
 (Previous year 2008-09 
 on 55,55,23,839 Equity 
 Shares @ 25 per cent)
 
 Add: Dividend Tax              5.44        4.72        5.44      4.72
 
 Balance carried 
 forward to next 
 years Accounts              647.80      496.52      315.09    302.53
 
 OPERATIONS
 
 The net sales of your Company increased by 34 per cent over the
 previous year to Rs.  3794.59 crore. Despite significantly higher
 depreciation and finance charges on account of significant on stream
 capacity expansions, your Company increased its net profit after tax by
 almost 28 per cent over the previous year to Rs. 240.41 crore.
 
 During the year, there were significant turnarounds in the pulp
 business at Kamalapuram and the Malaysian operations at Sabah Forest
 Industries Sdn. Bhd. (SFI), your Companys Malaysian subsidiary. SFI
 registered an annual domestic volume growth of 30 per cent.
 
 A detailed review of the consolidated performance of your Company is
 contained in the Management Discussion and Analysis Report, which is
 given as a separate chapter in the Annual Report.
 
 DIVIDEND
 
 After analysing the profitability of the Company, the Directors have
 recommended payment of dividend of Rs. 0.50 per Equity
 
 Share of Rs.2/- each (previous year Rs.  0.50 per Equity Share of Rs.
 2.00 each on 55,55,23,839 Equity Shares) on the Equity Share capital of
 your Company for the financial year ended 30 June 2010.
 
 DIRECTORATE
 
 Mr. Gautam Thapar, Chairman and Mr.  Sanjay Labroo, Director retire by
 rotation at the forthcoming Annual General Meeting, and being eligible,
 offer themselves for re- appointment.
 
 The aggressive growth plans of Avantha Group have resulted in enhanced
 role of Mr.  Thapar at the Group level and accordingly, he stepped down
 as Executive Chairman with effect from 1 April 2010 and your Directors
 re-designated him as Non Executive Chairman of your Company with effect
 from that date and placed on record its deep appreciation for the
 valuable contributions made and insights provided by Mr Thapar during
 his tenure as Executive Chairman of your Company.
 
 During the year, Mr. Shardul S. Shroff, in order to comply with
 Voluntary Guidelines issued by Ministry of Corporate Affairs, which
 provide that an individual should not remain
 
 as an Independent Director in a Company for more than six years,
 requested to relieve him as an Independent Director. He was appointed
 as an Independent Director on the Board of your Company on 19 July
 2001. The Directors, at their meeting held on 20 April 2010 accepted
 his request with immediate effect and placed on record its appreciation
 for the valuable contributions and insights provided by Mr. Shroff
 during his tenure as a Director of your Company. The details of the
 Directors being recommended for re- appointment are contained in the
 Corporate Governance Report.
 
 PROMOTER GROUP
 
 The Avantha Group includes some companies of the BM Thapar Group, since
 vested with Mr. Gautam Thapar and the erstwhile LM Thapar Group
 companies bequeathed to Mr. Gautam Thapar. The BM Thapar Group and LM
 Thapar Group were recognised by the Securities and Exchange Board of
 India by its Order dated 8 October 2001 (as modified from time to
 time). Therefore, your Company and Mr.  Gautam Thapar, along with the
 following entities, constitutes a Group, as defined under the
 Monopolies and Restrictive Trade Practices Act, 1969: BILT Graphic
 Paper Products Limited, Ballarpur International Holdings B.V.,
 Ballarpur Paper Holdings B.V., Ballarpur International Paper Holdings
 B.V., Ballarpur International Graphic Paper Holdings B.V., TAF Assets 2
 B.V., Sabah Forest Industries Sdn. Bhd., BILT Tree Tech Limited,
 Ballarpur Speciality Paper Holdings B.V., Ballarpur Packaging Holdings
 B.V., Ballarpur International Packaging Holdings B.V., Ballarpur
 Packaging Holdings Private Limited.
 
 JG Containers (Malaysia) Sdn. Bhd., Mirabelle Holdings LLC, Avantha
 Holdings Limited, BILT Paper Holdings Limited, KCT Papers Limited, KCT
 Chemicals and Electricals Limited, APR Sacks Limited, THE Paperbase
 Company Limited, Blue Horizon Investments Limited, Avantha Realty
 Limited, BILT Industrial Packaging Company Limited, Biltech Building
 Elements Limited, UHL Power Company Limited, Asia Aviation Limited,
 Toscana Lasts Limited, Toscana Footwear Components Limited, NQC Global
 (Mauritius) Limited, NQC International (Mauritius) Limited, NewQuest
 Services Private Limited, Avantha Technologies Limited, NewQuest
 Insurance Broking Services Limited, Avantha Power and Infrastructure
 Limited, Korba West Power Company Limited, TKS Developers Limited,
 Jhabua Power Limited, Jhabua Power Investments Limited (earlier known
 as Gleneagles Healthcare Holdings Private Limited), Global Green
 Company Limited, Global Green USA Limited, GG International N.V.,
 Intergarden N.V., Intergarden (India) Private Limited, Dunakiliti
 Kanzervuzem Kft, Greenhouse Agraar Kft, Floragarden Tarim Gida Sanay ve
 Ticaret A.S., Solaris Holdings Limited, Solaris Chemtech Industries
 Limited, Solaris Industrial Chemicals Limited, Salient Business
 Solutions Limited, Salient Knowledge Solutions Limited, Salient
 Financial Solutions Limited, Salient Business Solutions USA, Inc.,
 Sairam Infra Projects Private Limited, Avantha Foundation, Avantha
 International Holdings B.V., Avantha International Asset B.V., Corella
 Investments Limited, Gyanodaya Prakashan (P) Limited, Himalayan
 Hideaways Private Limited, Imerys NewQuest (India) Private Limited,
 Karam Chand Thapar and Bros. Limited, Leading Line Merchant Traders
 Private Limited, Lustre International Limited, Mirabelle Trading Pte.
 Limited, MTP NEW Ocean (Mauritius) Limited, Orient Engineering
 Commercial Co.  Limited, Oyster Buildwell (P) Limited, Prestige Wines
 and Spirits Pvt. Limited, Puszta Konserv Kft Hungary, Saraswati Travels
 (P)
 
 Limited, Seer Buildwell (P) Limited, Sohna Stud Farms Private Limited,
 The Pioneer Limited, Ultima Hygiene Products (P) Limited, Vani Agencies
 Private Limited, Vanity Propbuild (P) Limited, Varun Prakashan (P)
 Limited, Crompton Greaves Limited, CG Energy Management Private
 Limited, CG Capital and Investments Limited, CG-PPI Adhesive Products
 Limited, Malanpur Captive Power Limited, Brook Crompton Greaves
 Limited, CG Actaris Electricity Management Limited, CG Lucy Switchgear
 Limited, International Components India Limited, CG International B.V.,
 Pauwels International N.V., Pauwels Americas Inc., PT Pauwels Trafo
 Asia, Pauwels Trafo Gent N.V., Pauwels Canada Inc., Pauwels
 Transformers Inc., Pauwels Trafo Ireland Limited, Pauwels France SA,
 Pauwels Trafo Belgium N.V., Pauwels Trafo Service N.V., Pauwels Middle
 East Trading and Contracting Limited, Crompton Greaves Hungary Kft,
 Transverticum Kft, Ganz Transelektro Villamossagi Zrt., Microsol
 Holdings Limited, Microsol Limited, Viserge Limited, Microsol UK
 Limited, Crompton Greaves Germany Gmbh, MSE Power Systems Inc., MSE
 West LLC, Societe Nouvelle de Maintenance Tranformateurs and Microsol
 Inc. , Avantha Business Solutions Inc., Pyramid Healthcare Solutions
 Inc.
 
 SUBSIDIARY COMPANIES
 
 Your Company has two Indian subsidiaries viz. BILT Tree Tech Limited
 (BTTL) and BILT Graphic Paper Products Limited (BGPPL) and Nine foreign
 subsidiaries i.e. Seven based in The Netherlands namely Ballarpur
 International Holdings B.V. (BIH), Ballarpur International Graphic
 Paper Holdings B.V.  (BIGPH), Ballarpur Paper Holdings B.V.  (BPH),
 Ballarpur Speciality Paper Holdings B.V. (BSPH), Ballarpur
 International Paper Holdings B.V. (BIPH), Ballarpur Packaging Holdings
 B.V.(BPGH) and Ballarpur International Packaging Holdings B.V.
 (BIPGH), and two based in Malaysia i.e.  Sabah Forest Industries Sdn.
 Bhd. (SFI) and Ballarpur Packaging Holdings Private Limited (Labuan
 offshore Financial Services Authority) (BPHPL).
 
 During the year, three Netherlands based subsidiaries were incorporated
 namely BSPH, BPGH and BIPGH, on 5 October 2009, 26 February 2010 and 3
 March 2010 respectively and one subsidiary in Malaysia i.e. BPHPL, was
 incorporated on 5 March 2010 under Offshore Companies Act, 1990,
 Labuan.
 
 BTTL is a direct subsidiary and BGPPL is a step down subsidiary of your
 Company.
 
 As on date, BIH is a wholly owned subsidiary of your Company and
 holding Company of BIGPH with an equity stake of 79.53 per cent and the
 balance 20.47 per cent is held by two Private Equity Investors viz.
 JPMorgan Mauritius Holdings VII Limited (7.60 per cent) and Lathe
 Investments Pte. Ltd., a wholly owned subsidiary of Government of
 Singapore Investment Corporation (12.87 per cent). BPH is a wholly
 owned subsidiary of BIGPH. BPH owns 97.80 per cent of the paid up
 capital in SFI. BIPH is a wholly owned subsidiary of BPH and holds
 approx. 100 per cent of paid up equity share capital in BGPPL. BSPH and
 BPGH are wholly owned subsidiaries of your Company.  BIPGH is a wholly
 owned subsidiary of BPGH and holds 100 per cent ordinary shares of
 BPHPL.
 
 Your Company has made an application to the Central Government for
 obtaining an exemption under Section 212 of the Companies Act, 1956,
 from annexing to this Report, the Annual Reports of the abovementioned
 subsidiaries, for the year ended 30 June 2010. However, if any Member
 of the Company or its subsidiaries so desires, the Company will make
 available the Annual Accounts of the subsidiaries to them, on request.
 The same will also be available for inspection at the Registered and
 Head Office of your Company and of its subsidiaries, during working
 hours upto the date of the Annual General Meeting.
 
 The details of each subsidiary with respect to capital, reserves, total
 assets, total liabilities, details of investment (except in case of
 investment in subsidiaries), turnover, profit before taxation,
 provision for taxation, profit after taxation and proposed dividend are
 detailed in the Annual Report.
 
 CONSOLIDATION OF ACCOUNTS
 
 As required by Accounting Standards AS- 21 and AS-23 of the Institute
 of Chartered Accountants of India, the financial statements of your
 Company reflecting the consolidation of the Accounts of your Company
 and its 11 subsidiaries mentioned above are annexed to this Report.
 
 CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION
 AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 As required by the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988, the relevant particulars pertaining
 to conservation of energy, research and development, technology
 absorption and foreign exchange earnings and outgo are given in the
 prescribed format as an Annexure to this Report.
 
 PARTICULARS OF EMPLOYEES
 
 The statement of particulars, required pursuant to Section 217(2A) of
 the Companies Act, 1956 read with the Companies (Particulars of
 Employees) (Amendment) Rules, 2002, forms a part of this Report.
 However, as permitted by the Companies Act, 1956, the Report and
 Accounts are being sent to all Members and other entitled persons
 excluding the above statement. Those interested in obtaining a copy of
 the said statement, may write to the Company at its Registered Office
 and the same will be sent by post. The statement is also available for
 inspection at the Registered Office, during working hours upto the date
 of the Annual General Meeting.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Your Directors would like to assure the Members that the financial
 statements for the year under review conform in their entirety to the
 requirements of the Companies Act, 1956.
 
 Your Directors confirm that:
 
 O The Annual Accounts have been prepared in conformity with the
 applicable Accounting Standards; O The Accounting Policies selected and
 applied on a consistent basis, give a true and fair view of the affairs
 of your Company and of the profit for the financial year; O Sufficient
 care has been taken that adequate accounting records have been
 maintained for safeguarding the assets of your Company; and for
 prevention and detection of fraud and other irregularities; O The
 Annual Accounts have been prepared on a going concern basis.
 
 PREFERENTIAL ALLOTMENT OF SECURITIES
 
 During the year, in order to augment the balance sheet of your Company,
 meet its long term capital requirements for pursuing expansion/growth
 opportunities and general corporate purposes, your Directors had
 approved infusion of fresh equity capital in your Company.
 
 Accordingly, pursuant to the approval of Members of the Company at
 their Extraordinary General Meeting held on 3 March 2010, an amount of
 Rs. 300 crore was raised by your Company by allotment on 17 March 2010
 on preferential basis of 4.5 crore Equity Shares of Rs. 2/- each, at a
 price of Rs. 30/- per Equity Share and 5.5 crore Unsecured Compulsorily
 Convertible Zero Coupon Bonds (ZCB) at a price of Rs.  30/- per ZCB,
 convertible into 5.5 crore Equity Shares of Rs. 2/- each within 18
 months from the date of allotment to BILT Paper Holdings Limited
 (BPHL), a Promoter of your Company. The ZCB were converted into 5.5
 crore Equity Shares of Rs. 2/- each, pursuant to the request of BPHL on
 11 June 2010. Consequently, the paid up equity share capital of your
 Company increased by Rs. 20 crore pursuant to allotment of 10 crore
 equity shares of Rs. 2/- each and balance Rs. 280 crore was credited to
 securities premium account.
 
 AUDITORS
 
 The Statutory Auditors of your Company, M/s. K. K. Mankeshwar & Co.,
 retire at the ensuing Annual General Meeting and being eligible, offer
 themselves for re-appointment.  Your Company has received a letter from
 the Statutory Auditors to the effect that their re- appointment, if
 made at the ensuing Annual General Meeting, would be within the limits
 prescribed under section 224 (1B) of the Companies Act, 1956.
 
 COST AUDIT
 
 As per the provisions of Section 233B of the Companies Act, 1956, an
 audit of Cost Accounts in respect of Paper manufactured by your Company
 at its three units shall be carried out by the Cost Auditors of your
 Company and the Reports on the same will be submitted to the
 appropriate authorities, as required under the relevant rules.
 
 CORPORATE GOVERNANCE
 
 The Auditors, M/s. K. K. Mankeshwar & Co., have certified your
 Companys compliance of the requirements of Corporate Governance in
 terms of Clause 49 of the Listing Agreement with the Stock Exchanges.
 The Report on Corporate Governance together with the said certificate
 is attached and forms part of this Report.
 
 FIXED DEPOSITS
 
 Your Company had, effective August 2004, discontinued acceptance of
 fresh deposits/ renewal of deposits. There is no deposit due for
 maturity.
 
 Deposits of Rs. 1.02 crore due for repayment as of 30 June 2010 were
 unclaimed by 375 depositors. As at the date of this Report, Rs. 0.05
 crore has been claimed and repaid from this total unclaimed amount.
 
 ACKNOWLEDGEMENT
 
 Your Directors place on record their sincere appreciation for the
 contributions made by the employees through their dedication, hard work
 and commitment in achieving your Companys performance. In an
 increasingly competitive environment, the collective dedication of
 employees is delivering superior and sustainable shareholder value.
 
 Your Directors also acknowledge the support and co-operation extended
 by the Financial Institutions, Analysts, Banks, Government Authorities,
 Customers, Vendors, Shareholders and Investors at large and look
 forward to their continued support.
 
                           For and on behalf of the Board of Directors
 
                                       GAUTAM THAPAR
                                       Chairman
 
                                       R. R. VEDERAH
                                       Managing Director
 
                                       B. HARIHARAN
                                       Group Director (Finance)
 
 Date  19 August 2010
 Place New Delhi