Dear Shareholders,
 
 Talking to you through this letter and sharing with you my thoughts
 about what I feel has been our corporate journey like during the course
 of these twenty -odd years and the events marking the evolution of your
 Company, has always been a unique source of immense pleasure for me.
 There is no gainsaying the fact that it is through this letter that I
 have always been able to shed light on how we plan to successfully
 tread the long and tortuous path ahead with our ever-reliable partners
 in you accompanying us thereby adding to the joy and thrill of this
 wonderful journey.
 
 Friends, I, for one, hold that the unique feature of time is that it
 could be both- your biggest benefactor as well as adversary. If the
 time is favourable for you, all your endeavours would yield tremendous
 fruit for you. In the same breath, I would like to observe that if the
 time is not propitious for you, no matter how strenuously you strive,
 success would elude you. In such trying times, you may be on a sticky
 wicket, odds may seem stacked against you, but what matters is how
 tenaciously you battle those unfavourable times by summoning all your
 courage. No matter what condition and situation you are in, never give
 up, feel the heat, feel the pressure; that''s when your true character
 shows up. This holds particularly true in respect of a corporate
 entity.
 
 In the light of my observations I would like to remind you that this
 year has not been that encouraging financially for our country. A
 worrisome decline in the GDP as well as downgrading of Indian economy
 by Credit Rating Agencies like Standard & Poor''s have not augured well
 for Indian entrepreneurs. Dwindling interest of the foreign investors
 in our economy and consequent drop in the inflow of foreign investments
 in India are sure pointer to the fact that the state of affairs of
 Indian economy is gloomy and calls for urgent remedial measures.
 Needless to say that this has had a negative impact on Indian
 industries with your company being no exception to this.
 
 To add to the woes of Indian entrepreneurs devaluation of Indian
 currency vis-a- vis US dollar has been a cause of
 
 nagging concern for us. The huge amounts we are required to pay to our
 overseas suppliers for the imports of raw materials has been taking a
 heavy toll on the financial prospects of Indian companies and eating
 into their profits. I regret to say that we have been at the receiving
 end due to the nosedive Indian currency has witnessed in its value over
 the last few months. I hope the situation would change for the better
 sooner rather than later. Besides volatility in equity market that has
 been characterising Indian industrial scenario for quite a while now
 has only further added to our problems. Let me add that the adversities
 being encountered by Indian industries do not end here itself. Steep
 rise in crude oil has badly hit our prospects. Surging prices of crude
 oil in international market have a cascading effect on the prices of
 fuel which are a lifeblood for us. Resultant rise in transportaion cost
 has contributed to the shrinkage in the profits of many an Indian
 companies. Having said that I would like to add that I feel obligated
 to disclose that we have also suffered on account of this spiralling
 cost of crude oil.  Apart from this various factors like political
 scenario in Asia, Euro zone problem, natural disaster in Japan have
 also cast a shadow on our financial prospects in the year gone by.
 
 In the context of these remarks, I would like to remind you that last
 year we had to cope with the unprecedented challenge thrown up by the
 enormous losses your beloved Company had to suffer. I concede )
 unequivocally that that scenario was '' distressingly disturbing for us,
 but I derive tremendous satisfaction from the fact that in the face of
 that extraordinary situation our spirit was high and undaunted. And it
 is the happy outcome of that collective will to fight off unfavourable
 times that for the first time in its history since its emergence on the
 corporate landscape of the country in 1991, your Company has achieved a
 turnover of Rs. 1090.44 crores.  By any yardstick, it is no mean
 achievement. Although, your Company registered losses to the tune of
 Rs. 295.01 crores this year too, we take heart from the fact that we
 have been able to manage the daunting situation created by last year''s
 massive losses pretty well. The very fact that we have not allowed the
 situation to slip further even while carrying on all our corporate
 activities with the same gusto speaks volumes about the constancy of
 our purpose that is to script a turnaround in the fortunes of your
 Company.
 
 Before I delve deep into varied aspects of the situation we faced last
 year and the one which is going to unfold this year, I would like to
 acquaint you with the fact the factors which accounted for losses
 previous year were not a far cry from the ones playing spoilsport this
 year too with the first and the foremost factor being the cement plant,
 which is the biggest flagship project of your Company, not running to
 its full capacity. Pragmatic as you are, you can imagine with perfect
 clarity that if a cement project commissioned with Rs. 900 crores of
 rupees, raised through a variety of sources, having been funneled into
 it, runs at 40% of its actual installed capacity; it is bound to have a
 telling impact on the financial health of an industrial unit. Coupled
 with this is the fact that the cement unit is still running below the
 break-even point. This explains partly for the below par financial
 performance put up by your Company this year.  Besides, what we have
 noted this year with a sense of discomfiture is that although there has
 been a steep rise in the costs of raw materials (waste paper,
 chemicals, etc.) required for the production of papers of various
 brands, there has been no proportionate rise in their selling price,
 which has resulted in the shrinkage of our earnings. These major
 factors, in turn, caused the problem of cash liquidity for us thereby
 adding to the gravity of the situation for us.
 
 Friends, no. doubt, it is a tricky path to redemption. The coming times
 may give us a bumpy ride, given the fact that we have an enormous task
 of making good the losses at hand. But please mark my words carefully
 when I say that it is not that we are sitting with equanimity.  There
 is light at the end of the tunnel and that light would definitely begin
 to show up as the strenuous efforts we have taken to set things right
 begin to fructify in the days ahead.  I hope you would concur with me
 that our overriding objective at the moment has to be to win back that
 position of eminence in the corporate world. And that should not prove
 to be too difficult a challenge for us given the fact that the
 fundamentals of your Company are strong enough to absorb shocks of this
 nature. Not many companies could have survived the ordeal of this type
 or shown the grit to step back from the brink as we did to deal with
 the aftermath of the losses we had suffered last year.  What I find
 particularly striking about our corporate group is that we never
 underestimate our problems; nor our capacity to deal with them. When
 faced with a challenge, we look for a way, not a way out. Now let me
 shed light on what exactly we intend to do to adopt course correction
 and retrieve the situation so that our growth story does not peter
 away.
 
 Friends, your Company having achieved a turnover of over Rs. 1000
 crores has indeed come as a shot in the arm for us. We would make even
 more vigorous bid to push this figure up further so that we could
 accomplish our goal of becoming a profit-making unit again. The very
 fact that during the past two years the quantum of losses suffered by
 us has remained by and large the same, although this year the volume of
 turnover was significantly higher (by about 40%) as compared to that
 achieved by us during previous year, should convince you that we are
 raring to pull things back. Individually we are a tiny drop; together
 we are an ocean. It is the time to think and act collectively and I am
 sure the combined effort of MIL as a group, the Board of Directors
 included, would see us emerge triumphantly from this critical period.
 
 Secondly and equally significantly, we have introduced several
 cost-cutting measures wherever required and possible. This is designed
 to blunt the effect of escalating cost of production. I would however,
 hasten to add that this would never be at the expense of the quality of
 our products. We are very much conscious of the fact that our /
 products, which have always been a cut above the rest, are the
 touchstone for quality and introducing cost- cutting measures would not
 at all mean compromising with quality. I would like all our dear
 patrons to note that dilution of quality has always been and would
 always remain alien to our corporate culture.
 
 The process of recovery, which we have already set in motion, being an
 ever-evolving process, may take some time to fructify, but it is an
 incontrovertible fact that it would produce the intended results sooner
 rather than later. To endeavour to ramp up sales of our products would
 be another integral component of this vitally important process.
 Needless to say, the higher the volume of sales, the brighter would be
 our prospects of staging an early recovery.
 
 Friends, what I would like to underline is that the most important area
 which requires our immediate attention is to augment our revenues.  All
 other issues are its derivatives. One such issue is the optimum
 utilisation of power. In view of the burgeoning cost of coal, the
 elixir for Power Plant, the necessity for ensuring optimum utilisation
 of power has emerged as the one of paramount importance. We would take
 meticulous care to see that maximum production possible is achieved
 while ensuring least possible consumption of power. The productivity
 –linked bonus scheme introduced by your Company is aimed at
 facilitating the attainment of this goal.
 
 You take my words at their face value when I vouch that I am determined
 to see that your anguish is mitigated and your concerns are addressed.
 I''m a firm believer that past is past. You don''t look back at things
 because that is history. I always believe in looking forward. And I
 have absolutely no doubt that the string of measures taken by us would
 soon have a palpable impact and MIL would soon find itself on the path
 to glory. Let me remind you that in the past too there have been times
 when MIL has been beset by a dip in performance; when its rivals
 questioned its ability to bounce back.  Despite that lull in
 performance the corporate world had never doubted the prowess of your
 Company to script a golden chapter of its corporate history. That
 enthused and made MIL to rise above the lull and start performing well
 again, much to the bemusement of its rivals.
 
 Let me reveal that unfazed by these setbacks, we would continue to make
 hectic bid to turn MIL into an investment magnet of India. Let me make
 a valid point that barring these back-to-back two years, the growth
 graph of your Company was always on ascendancy all these years.
 Although our growth momentum has decelerated in the past two years,
 there is no reason to believe that we cannot reclaim high growth path
 again.  You study the corporate history of many an established entity
 and you would invariably find that they too had to endure such
 agonising periods before coming out with flying colours. Let us hope
 that in our case too ice is finally going to break and the far-reaching
 initiatives we have launched to counter this situation culminate in
 heart-warming results with everything going according to the script.
 Let me assure you categorically that the recent steps taken by the MIL
 think- tank to turn the tide would be sustained. Footprints on the
 sands of time are not made by sitting. My conviction is that if you
 have the courage to begin, you have the courage to succeed.
 
 Before signing off, I would like to express my sincere gratitude to you
 for having been the pillar of MIL strength and having propped it up all
 these years. I hope and trust that your relation with MIL grows and
 deepens in the days to come. It has really been an honour and privilege
 for me to be at the helm of affairs of this great Organisation, which,
 I am sure, would bounce back with a bang with the good wishes and
 active support of all its stakeholders in general and yourselves in
 particular.
 
 Thanking you,
 Yours truly,
 
 Nandlal Maloo,
 
 Managing Director