MANAGEMENT DISCUSSION AND ANALYSIS :

The Company operates in the Specialty Papers segment which have specific end use and requirement such as packaging for food products, laminated products for Decor Industry and various other applications. Compared to commodity paper grades such as Writing and Printing and other general products, specialty papers have higher cost of production and fetch commensurate higher price. In order to be ahead of the competition, it is imperative for the Company to continuously review its basket of products, develop new products and optimize others. More recently new products such as Bake Oven Paper for baking of cakes etc, Slip Easy Paper for baking paper cups, Parchment and Grease Resistant papers for oily foods have been developed and introduced to the market. Some of them and other products have been successfully exported to Europe and other markets. The market share of the Company in the specialty paper segment has been virtually stagnant in view of unfair competition from unrestricted imports especially from China at effectively lower duty and tariff and wide sbrad usage of plastics. The natural growth in the specialty paper segment and the increasing awareness about negative aspects of usage of plastics, therefore, has not been resulting in improvement in Company's share. The Company views the threat of unfair competition from imports, as aforesaid to be a short term and expects the new Government to ultimately recognize such an impediment which would need to be sternly removed. Similarly the fair legal mechanism, if introduced and implemented by the Government would allow the Company substantial benefit arising out of replacement of plastics by paper. The Company, regardless of these expectations, continues to intensify its efforts in all directions on cost reduction within the overall constraints of debrciated Rupee and higher energy costs.

a building of 94 mid-sized luxury flats has been completed, taking the total of such buildings to 4. The Company has now commenced a project named 'Greenville' on a land of about 9000 Sq.Mtr where residential / commercial complex would be constructed. The Company's accounts include a tax free profit of Rs. 11.43 Crores being its share from the Partnership firm in respect of the aforesaid building completed and stocks of few flats sold by the firm. The existing internal controls of the Company are periodically reviewed by the audit Committee and are considered quite adequate. The Company employs about 500 employees and Company's relations with the labour remained cordial.