To The Members
 
 The Direcors have he pleasure o presen he 53rd Annual Repor of he
 Company along wih he audied accouns for the year ended 31 st March,
 2012.
 
 WORKING RESULTS                        2011-12           2010-11
 
 Finished Production of Paper & 
 Paperboards                             50,890 MTs         50,223 MTs
 
                                    (Rs.In Lacs )       (Rs. In Lacs )
 
 Gross Sales                          17,869.00          17,318.35
 
 Net Sales excl Excise Duy            17,022.76          16,657.09
 FINANCIAL RESULTS
 
 Operating Profit                      2,461.24           2,566.88
 
 Less: Finance costs                     226.19             205.23
 
 Gross (Cash) Profit                   2,235.05           2,361.65
 
 Less: Depreciation                      614.36             482.13
 
 Profit before Exceptional 
 items & Tax                           1,620.69           1,879.52
 
 Exceptional Items : Profit on 
 Sale of shares in Associate Co.         463.67
 
 Electricity Tax relating to earlier 
 years                                   (75.73)               —
 
 Profit before tax                     2,008.63           1,879.52
 
 Provision for Taxtincluding 
 deferred tax                            481.38             480.00
 
 Profit after tax for the year         1,527.25           1,399.52
 
 Less: Income tax of earlier years       (12.39)             12.25
 
 Net Profit after Tax                  1,539.64           1,387.27
 Add : Balance Surplus 
 brought forward
 from the previous year                5,673.27            4775.79
 
                                       7,212.91           6,163.06
 APPROPRIATIONS :
 
 Transfer to General Reserve            (154.00)           (139.96)
 
 Proposed Dividend @ 22% 
 (Previous year 20%)                    (330.00)           (300.00)
 
 Provision for Dividend Tax              (53.53)            (49.83)
 
 Balance Surplus carried forward       6,675.38           5,673.27
 
 OPERATIONS
 
 Gross sales for he financial year 2011t12 increased to Rs.  178.69
 crores as agains Rs. 173.18 crores in he previous year.
 
 Operaing volumes in boh he Paper Plan as well as Prining & Packaging
 Division, were marginally higher. Capaciy uilizaion in Paper Plan was
 90.88% (las year 89.68%).  Alhough he Average Ne Selling Price (NSRP)
 could be increased by abou 6%, cos of direc inpus such as wase paper,
 fuel, dyes, chemicals and sores & spares consumed increased by about
 10% per MT, eroding the direct conribuion margin by abou 410 Rs/M. The
 boom line impac of his on he performance of he paper division was abou
 210 lacs. Fuel prices were higher on supply consrains winessed in he
 economy. Raw maerial prices increased sharply based on inernaional
 rends and due a seep depreciaion in he value of he rupee in he las wo
 quarers of he financial year. The planned mainenance shudown of Paper
 Machine No. 1 for 3 weeks for rebuilding as well as a criical breakdown
 of Cotgeneraion plan for 3 weeks in Q3, affeced producion volumes.
 Replacemen of old components, in paper plant and box plant led to
 increase in repairs & maintenance expenses.
 
 During he year he Company sold shares held in Bhadra Packaids Pv. Ld.,
 an Associae Company & realized a gain of Rs. 4.64 crores (repored as
 excepional iem). Dividend received from Bhadra Packaids (P) Ld was Rs.
 1.74 crores and is repored as Oher income. Aenion of members is drawn o
 he fac ha his income is nontrecurring as he shares have been sold as
 repored above. Afer making a higher depreciaion provision of Rs. 614.36
 lacs (Previous year Rs.482.13 lacs), net profit increased from Rs. 13.87
 crores to Rs. 15.39 crores.
 
 FINANCES
 
 During the year, cash flow & liquidity remained comfortable.
 
 Sources of funds Rs.            in lacs Deployment of funds     Rs.in lacs
 
 Cash flow from operating 
 activities                      2,179 Repayment of Term Loans     288
 
 Dividend received                 174 Finance Cost                224
 
 Interest Income                    34
 
 Proceeds from Sale of 
 Investment in
 
 Associate Concern                 518 Income tax                  518
 
 Increase in Securiy Deposis         3 Dividend & Dividend Tax     345 
 Term Loan drawn                   200
 
 Decrease in Working Capital       494 Capital Expenditure & 
                                       Advances                  1,929
 
 Decrease in cash & cash 
 equivalents                       279 Decrease in Short Term
                                       Borrowings                  577
 
 TOTAL                           3,881 TOTAL                     3,881
 
                                                     31.03.12   31.03.11
 
 Long Term Debt t o Equity Ratio                        0.12      0.15
 
 Current Ratio                                          1.85      1.84
 
 Capial expendiure and advances includes subsanial amouns owards Prining
 & Packaging Division.  There are no overdue deposits or unclaimed
 matured Fixed Deposits as on 31t3t2012.
 
 CURRENT PROSPECTS
 
 During he firs quarer of he curren year, he oupu is similar o he rend
 in he previous year and operaing profis are abou he same. The marke
 condiions for paper are exremely compeiive wih supply from new
 capaciies ousripping demand. Whils here has been a seep increase in raw
 maerial and fuel prices due o a seep depreciaion in he rupee, i has
 been exremely difficul o push hrough an increase in selling prices due
 o demandtsupply siuaion in he paper marke. The brigh spo on he horizon
 is he internal demand from the Printing & Packaging Division, which is
 seeing an encouraging response from box consuming Brand Owners.  The
 combinaion of high inflaion, poor growh in demand and a capaciy
 overhang will ensure ha capaciy in his segmen remains fla in he near
 erm. Your managemen however perceives an opporuniy for growh by
 enhancing is box manufacuring capaciy wih a new plant a anoher locaion.
 Various sie opions are under evaluaion. An increase in paper making
 capaciy hrough browntfield improvemens o suppor he higher conversion
 capaciy planned is seen as he way forward.
 
 Overall Turnover and operaing profi is expeced o be beer, mainly due to
 higher volume of value addition through conversion.
 
 During he year 2011t12 overall economic growh of India was lower a 6.5%
 as agains 8.5% in he las year.  Manufacturing sector growth was down at
 2.9% (8.8%).
 
 CAPITAL EXPENDITURE PLANS
 
 The Company is now aking up he upgradaion of he exising paper machines
 o increase oupu by abou 25% on PMt4 & 5 for brown grades. Capial
 expendiure is planned for he Prining & Packaging Division o increase
 overall volumes and produciviy. This will be financed hrough deb &
 inernal accruals, o obain opimum reurns. Large capial expendiure, and
 subsanial capaciy increase is under consideraion and will be aken up a
 he opporune time.
 
 CORPORATE GOVERNANCE
 
 Securiies & Exchange Board of India (SEBI) in order o improve he
 sandard of Corporae Governance has inroduced cerain amendmens in he
 Lising Agreemens wih he Sock exchanges. Same have been complied wih & a
 report on this is attached.
 
 Directors'' Responsibility Statement:
 
 As required by new amendments to Companies Act, 1956, we state that:
 
 While preparing he Annual Accouns, he Company has followed he
 applicable Accouning Sandards, referred o in Section 211 (3tC) of the
 Companies Act, 1956.
 
 The Direcors have seleced such accouning policies and applied hem
 consisenly and has made judgemens and esimaes ha are reasonable and
 pruden, so as o give rue and fair view of he sae of affairs of he
 Company as at 31t3t2012 & of the profit of the Company for the
 financial year 2011t12.
 
 The Direcors have aken proper & sufficien care for he mainenance of
 adequae accouning records in accordance wih he provisions of he
 Companies Ac, for safeguarding he asses of he Company and for prevening
 and deecing fraud and other irregularities.
 
 The Directors have prepared the annual accounts on a going concern
 basis.
 
 ISO 9001 CERTIFICATION
 
 Company''s Qualiy Managemen Sysems (QMS) have been audied by Bureau
 Verias Cerificaion India Pv Ld and ISO 9001: 2008 Cerificaion is
 awarded o he Prining & Packaging Division of he Company. This
 Cerificaion is valid for a period of 3 years.
 
 RESEARCH & DEVELOPMENT
 
 Several special applicaion grades have been developed & successfully
 inroduced during he year o caer o stringent customer specific
 requirements.
 
 ENERGY CONSERVATION MEASURES
 
 The pariculars required under he Companies (Disclosure of pariculars in
 he Repor of Board of Direcors) Rules, 1988 with regard to energy
 conservation measures are furnished in the Annexure.
 
 ENVIRONMENTAL PROTECTION
 
 Your company has always endeavored o remain in harmony wih is
 ecotsphere and ried o equiably balance he ineres of all sakeholders in
 i, ofen going beyond he sauory imposiions placed by regulaory
 auhoriies. In such effors are included he insallaion of a 0.5 acre hold
 ank and a 2 km delivery pipeline for irrigaing oherwise dry lands. The
 reaed effluen waer is uilized for irrigaion purposes in the nearby
 fields of third party farmers with excellent crop yields.
 
 The Company has insalled & been operaing he Elecro Saic Precipiaor
 (ESP) Sysems for is Boilers for conrolling dus emission and dust
 extractor system for controlling dust at its fuel handling system.
 
 Cenrifuge and oher machineries have been insalled for effluen reamen.
 New fuel shed wih roofing, conrols dust emissions and conserves the
 resources.
 
 DIVIDENDS
 
 Your Direcors recommend a Dividend of 22% i.e. f 2.20 per equiy share
 off 10 each as agains f 2 per equiy share last year(20%). The total
 distribution including dividend tax amounts to f 383.53 lacs (f 349.83
 lacs)
 
 PARTICULARS OF EMPLOYEES
 
 Particulars of employees pursuant t o Section 217 (2A) of the Companies
 Act, 1956 are annexed.
 
 LABOUR RELATIONS
 
 The industrial relations climate in the Company during the year was
 generally cordial and harmonious.
 
 DIRECTORS
 
 In erms of Secion 255 of he Companies Ac, 1956 Mr Dineshchandra C Pael
 & Mr S R Chandrasekara Sey, reire by roaion and hey, being eligible,
 offer hemselves for reappoinmen. Your Direcors recommend ha he proposed
 resolutions for their reappointment be passed.
 
 AUDITORS
 
 There are no adverse comments by the auditors in their report annexed
 herewith.
 
 The Audiors Ms B S Ravikumar & Associaes reire a he conclusion of his
 Annual General Meeing and are eligible for reappointment. Your
 Directors recommend that t he proposed resolution appointing them be
 passed.
 
 APPRECIATION
 
 Your Direcors ake his opporuniy o place on record heir appreciaion for
 services rendered by he employees, sales agents, Banks & Financial
 Institutions.
 
                              for and on behalf of he Board of Direcors 
 Nanjangud                                           Manish M. Patel
 
 24th May, 2012                            Chairman & Managing Director