MANAGEMENT DISCUSSION & ANALYSIS

ECONOMIC SCENARIO India's Gross Domestic Product growth grew at 7.6% in the financial year 2015-16  from 7.2% in the brvious year. Private consumption, manufacturing and services experienced a measured but a slower growth. Expansion in fixed investment picked up indicating a continuing gradual recovery in capital expenditure. Agricultural production grew by 1.1%, with monsoon rainfall at 12% below normal crimped the summer crop planted area.

Low global oil prices, a positive base effect, and tight monetary policy kept consumer price inflation benign at an average of 4.8% in the year. Core inflation has trended downward for nearly 2 years and now hovers just above 4%.

India is set to emerge as the world's fastest-growing major economy ahead of China, as per a recent report by the World Bank. The improvement in India's economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, RBI's inflation focus supported by benign global commodity prices. According to a Goldman Sachs report released in September 2015, India could grow at a potential 8% on average between 2016 and 2020, powered by greater access to banking, technology adoption, urbanisation and other structural reforms.

GLOBAL PAPER INDUSTRY Across the globe, over 400 million MT of pulp, paper and board are produced.

The largest producer countries, US, China, Japan and Canada, make up more than half of the world's production. Global annual per capita paper & board consumption is about 57 kgs.

The global paper and pulp mills industry has contracted slightly over the past five years, primarily due to the transition to digital media and paperless communication across most developed economies. However, manufacturing booms in many emerging markets have partially offset the decline by driving increased demand for paper used in packaging materials.

Over the next five years, industry revenue is expected to resume slow expansion, though growth in developing markets will outpace revenue increases in the United States and Europe. According to Poyry's World Paper Markets 2020, "world demand for paper and paperboard is forecast to grow by 2.1% annually in the long term, reaching an estimated 490 million tons by the year 2020." Countries such as India and China show vastly increasing demand for paper for books, newspapers and periodicals.

The combination of reduced demand in North America along with the increased supply (and demand) of cheap paper from overseas has dealt great harm to a formerly powerful North American industry. The North American and EU paper markets are being hard-hit by low-price imports, primarily from Asia.

With the decline in the consumption of printed materials there has been a commensurate drop in pricing. The effect compounds. Paper manufacturing is a demanding, capital-intensive and low-margin industry, and when prices drop too low, it is simply no longer cost-effective to manufacture paper. (Industries with higher margins and different cost structures can manufacture at cost, just to cover overhead. This is not the reality for the paper manufacturing business.)

Asia Pacific is turning dominant in the industry due to improvement in changing lifestyle of consumers, rapid urbanization, and rise in disposable income. A combination of factors such as demographic and economic conditions, and environmental regulations has had a significant impact on the industry dynamics.

54% of the paper and board produced globally is used for packaging. Writing & printing paper makes the second largest market for paper at 27%. Half the global paper is consumed in Europe and North America.

Paper is made from renewable resources, primarily from cellulose tree fiber, by dicing and pounding wood, and treating it with water, chemicals, heat, and mechanical beaters to dissociate the fibers. The wood pulp is sbrad onto large moving screens to drain, flattened by rollers, dried, and collected in large rolls. Several varieties, types and thicknesses of paper are produced according to the raw wood used, the pulping process, the additive chemicals used and the rolling process.

Recycled fiber and other sources such as agricultural residue are also becoming more commonly used in pulp and paper making.

Recent trend shows, several global pulp and paper companies are moving their production to the southern hemisphere due to lower production costs and proximity to fast growing pulpwood plantations. Adoption of responsible pulpwood plantation practices is another dynamic that is getting the attention of producers. Pulp and paper production often provides well needed jobs in many areas where other employment opportunities are limited.

Responsibly produced and used paper has many advantages over non-renewable alternative materials, minimizing harmful impact on forests, climate and water. The industry in general has been in the forefront of stewardship to bring about sustainable forestry, clean pulp and paper manufacturing, and promote responsible paper consumption.

Prices for wood pulp can fluctuate sharply from year to year. The end prices tend to reflect not only demand for paper, but also the dynamics of the raw material trends. Several manufacturers have been able to distinguish their products with strong quality and brand identity in what is otherwise a commodity market. These manufacturers have been able to reduce the significance of pricing in the competitive equations.

The pulp and paper industry priorities across the globe can be summarized as follows:

• Wood fiber is grown, sourced and re-used in a responsible way. Maximizing the use of recycled fibers and sourcing virgin fiber from credibly certified natural forests and plantations is tending to reduce paper's ecological footprint.

• With the use of clean technology, the manufacturing process does minimize pulp and paper products' impact on climate change and water. Carbon dioxide emissions from the manufacturing process is being reduced by investing in new plants, retrofitting existing plants, heat recovery and increased paper recycling.

• Sustainable consumption practices help to reduce the environmental impact of paper.

INDIAN PAPER INDUSTRY The geographical sbrad of the industry as well as market is mainly responsible for regional balance of production and consumption. There is near self-sufficiency with the indigenous production of most varieties of paper and paperboards. Certain varieties of specialty papers are however, imported.

The operating capacity of the industry currently stands at around 14 million tons. During 2015-16, domestic production is estimated to be 11 million tons. As per industry estimates, over all paper consumption has now touched 13 million tons.

The industry grew with the rising level of literacy, improving well-being of the people and surging aspiration levels. Paper usage has increased over the years. Yet, the per capita consumption in the country is estimated to be barely 10 kgs compared with 75 kgs in China, 156 kgs each in European Union, 159 kgs in Korea, Taiwan, Hong Kong, Singapore & Malaysia, 215 kgs in Japan, 221 kgs in North America, while the global average itself is a healthy 57 kgs.

India has 17% of the world's population yet accounts for only about 3% of the world's production of paper and paperboard. The estimated turnover of the industry is approximately Rs.50,000 crore, contributes Rs.4,500 crore to the exchequer and provides employment to more than 0.5 million people directly and 1.5 million people indirectly.

Most of the paper mills have been in existence for a long time and hence brsent technologies fall in a wide spectrum ranging from oldest to the most modern. The mills use a variety of raw material viz. wood, bamboo, recycled fiber, bagasse, wheat straw, rice husk, etc.; approximately 35% are based on wood, 40% on recycled fibre and 25% on agro-residues.

India's wood resources suitable for paper production are inadequate. Cost of wood is hence much higher in comparison to the rest of the world. Since there is conspicuous absence of enabling policies favoring corporate plantation or farming, securing future wood supplies will be the industry's biggest challenge.

Wood based segment of the paper industry meets its current requirements mainly through social/farm forestry and supplements it with purchases from the state forest development corporations. A few manufacturers have even explored import of raw wood from neighboring countries. In the recent budget, the government has announced basic customs duty cut on import of woods.

The paper industry in India is majorly categorized into writing and printing (W&P), paperboard and newsprint segments. Paperboards constitute approximately 43% of the demand volume, while W&P accounts for approximately 35%. Newsprint makes for another 17%. Specialty papers make the balance 5%.

Major varieties of W&P are creamwove, maplitho, cut-size and coated paper. Recent trends indicate higher quality paper segments such as cut-size and coated varieties have been gaining volumes, while creamwove has a stable market. Maplitho, cut-size and coated paper command higher realizations, while creamwove is a volume runner. According to industry estimates, creamwove commands 50% of the W&P market, maplitho occupies 33% and cut-sizes constitute the balance 17%.

Paperboard, primarily used for industrial purposes, consists of kraft paper board, virgin board and recycled board. Kraft paper is produced in several varieties generally differentiated by properties of strength and grammage. Paperboard varieties include coated/uncoated duplex, chromo and triplex boards.

Cost competitiveness has differentiated the performance of paper mills, largely affected by location of the mills. Successful mills have been located near source of raw material i.e. wood as well as near source of coal, water and skilled labor. Availability and cost of power had also had a bearing on the performance of paper mills.

So far, the growth in paper industry has mirrored the growth in GDP. Demand is driven by general commercial activity and population growth. The profitability of individual companies depends on efficient operations, as products are sold mainly based on price. Big companies have advantages in distribution and can supply large customers. There are few economies of scale in manufacturing; large and small producers operate the same kinds of plants - large producers just have more of them. Small companies can compete successfully by making specialty products or serving a small geographical market.

India is a fast growing market for paper globally and it brsents an exciting scenario; the operating capacity of the industry currently stands at 14 million MT. Of these, packaging production is about 5.9 million MT, W&P constitutes 4.8 million MT, newsprint makes for 2.5 million MT and Specialty Papers about 0.8 million MT. Amongst W&P, uncoated paper accounts for 88% or about 4.2 million MT and the balance 12% is made up of coated paper (art board, art paper and chrome paper).

Uncoated W&P is expected to increase rapidly to the level of 6.4 million MT by 2022 from the current level of 4.2 million MT. Paperboard production is estimated to increase from the brsent 5.9 million MT to 7.6 million MT by as early as 2017-18 with improved FMCG sales, wider reach of organized retail, penetration of healthcare into the rural economy, sustained demand for packaged products in line with rising aspiration levels and changing lifestyles.

It is estimated by industry experts that an increase in consumption by one kg per capita on a 100 basis point increase in GDP, would lead to an increase in demand of 1 million MT. With growth in GDP and increase in literacy, paper consumption in India is bound to go up. In fact, consumption in India is estimated to touch 20 million MT by 2020.

THREATS & OPPORTUNITIES

For the Indian paper industry, strong economic growth has been accompanied by equally robust demand for paper. The demand drivers and growth triggers have come from a combination of factors:

• Rising level of national income;

• Growing per capita disposable income;

• Improving aspiration levels of the people;

• Expanding population;

• Widening sbrad of education and literacy throughout the country; and

• Increasing size of the service industry, higher level of industrial activity and rising corporate spending.

There is therefore enormous potential for the paper industry in the country. Yet, this is accompanied by serious challenges, primarily from rising raw material cost. Wood prices have tended to harden over the past 36 months. Worse, supplies tended to dry up from time-to-time with the result several paper producers have had to import expensive fiber/raw wood.

Given the wood resources and availability are limited across the country, cost of wood is much higher in India as compared to elsewhere in the globe. The official policies do not permit corporate farming which hampers securing wood and hence is a major challenge for the paper producers.

While the upstream companies with their integrated manufacturing facilities are able to partially shield themselves, non-integrated manufacturers are facing the brunt of the steep rise in pulp prices.

The paper and paperboard industry is determined to overcome the challenges such as enhancing competitiveness to face global competition, economies of scale, modernization of mills, building new capacities, meeting incremental demand of paper, productivity/quality improvement, creation of robust raw material base, environmental upgradation and green technologies. Until these constraints are overcome, manufacturers in the industry will find it difficult to compete with external threat or the supply overhang that persists in the paper and paperboard industry.

COMPANY PERSPECTIVE

International Paper APPM Limited (formerly known as The Andhra Pradesh Paper Mills Limited) is one of the largest integrated paper and pulp manufacturers in India.

Incorporated in 1964, the Company produces writing, printing and cut-size papers for foreign and domestic markets and offers a wide range of superior quality specialty grade products that are custom engineered to suit specific and diverse range of applications. These products are designed to provide outstanding converting performance, functional excellence and exceptional finish quality.

The well-known cut-size papers of the Company offer a wide range of office documentation and multipurpose papers, from economy to brmium grades, ideal for both home and commercial use. The papers are available in best-in-class brightness and produced with elemental chlorine free (ECF) pulp technology. The range is perfect for high volume photocopying and high-quality color printing needs and engineered to run flawlessly on all types of photocopiers, laserjet and inkjet printers, fax machines and multi functional devices.

The production facilities at Rajahmundry and Kadiyam (includes a recycle unit) have a total production capacity of 241,000 TPA. The Company employs around 2,500 employees and is headquartered at Hyderabad.

In 2011, the Andhra Pradesh Paper Mills Limited was acquired by International Paper (IP), a USD 22.4 billion American pulp and paper company founded in 1898. In the first significant domestic acquisition by a foreign paper company, IP bought 75% stake in the Company. IP, headquartered in Memphis, Tennessee, USA is the largest pulp and paper company in the world, with approximately 55,000 employees across 24 countries.

In December 2013, the Company was renamed as International Paper APPM Limited. The name change was intended to recognize the parentage of International Paper, while maintaining the link to the history and positioning of the Andhra Paper brand. This is also to ensure that future investments in brand-building are directed around the IP brand leveraging the Group's global brsence and technology.

IP APPM is focused on people safety, efficiency enhancements and social and community programs backed up with its own pioneering work in raw material generation through social farm forestry. Across the Company, there is a strong strategic focus to drive future growth through building on the organization strengths to produce the highest in quality, ramping up of volumes and be a cost effective producer of paper.

The Company has always been conscious of its corporate responsibilities and follows a strict environmental policy. Investments continue to be made in achieving ambitious benchmarks to remain ahead of all compliance standards. Such efforts have helped protect and regenerate the natural resources, conserve energy and water, improve productivity and set a good environmental track record at the mills.

IP APPM has hugely improved its competitive strength and brsently has the ability to overcome the brssure points that confront the industry. Several initiatives undertaken have improved the organizational capabilities, a few of which include: continued access to pulp of the highest quality, revamped processes incorporating the latest in production technology, enhanced manufacturing capacity, reduced use of fossil fuel, increased recovery process to recycle chemicals and water, improved productivity and quality of products, upgraded environmental technologies, all of which are leading to the production facilities becoming cost-competitive in manufacturing economics.

IP APPM is one of the largest integrated pulp & paper manufacturers in India and has done pioneering work in several areas in the pulp and paper industry in India. The Company holds ISO 14001, ISO 9001 & OHSAS 18001 certifications as well as the Forest Stewardship Council (FSC) Chain of Custody (COC) certification.

The Company's manufacturing units are briefly described below:

Unit:Rajahmundry is an integrated wood based paper mill with a rated capacity to produce 174,000 MT of finished paper and 181,500 MT of bleached pulp annually.

The unit manufactures uncoated writing and printing paper - mainly cut-sizes, industrial papers and posters using Casuarina and Subabul as main source of pulp woods.

Unit:Kadiyam, the second manufacturing unit, has a rated capacity to produce 67,000 MT per annum of finished paper such as cream wove, azurelaid, colored cut-sizes, kraft liner using recycled fiber and purchased pulp as base raw materials.

The paper industry is capital intensive with a large gestation period. Payback is partly earned through better product characteristics and value realization and partly by improving productivity. In its endeavor to match global standards, IP APPM has invested heavily in environment friendly technologies that facilitate increasing the overall quality of products and demonstrating productivity gains.

Over the past few years, IP APPM invested in certain key equipments and processes which include the following:

• A chipper line which enables more homogenous chips which in turn help produce good quality pulp;

• A continuous digester that works on low solid and low temperature cooking of chips;

• A two-stage oxygen delignification plant followed by an elemental chlorine free bleaching plant;

• A non-condensable gas burning system suitable for high volume and low concentration gases;

• A chemical recovery system based on high steam economy evaporation and crystallization technology for higher solids concentration;

• A recausticizing plant;

• A rotary lime kiln;

• A 34 MW turbine with a power boiler to supplement captive power;

• A diffused aeration system with cooling tower to improve the efficiency of the effluent treatment plant;

• Installation of state-of-art 8-pocket brcision cut-size sheeter;

• Replacement of root blowers by energy efficient and environment friendly turbo blowers;

• Installation of white liquor oxidation plant for maintaining chemical balance in pulp and recovery plant;

• New drag chain conveyor and dust extraction system for controlling lime dust;

• Odour control of foul condensate system; and,

• Bark firing system.

These plants and processes ensure consistent pulp quality with high strength properties, low consumption of utilities and chemicals and offer economies of scale. The Company has improved the economics of production in the mill and exceeded current environmental norms applicable in the country.

The Company has been striving to produce higher grade varieties of paper that are in demand in the addressable markets. During the past two years, several newer and high-end writing and printing varieties were introduced.

In the cut-size and graphic papers, 90+ brightness paper was launched. For all grades, marketing and distribution is done primarily through a network of dealers. Some large consumers are also being catered to directly and the Company participates in government tenders. IP APPM products are exported to Middle East, North Africa and Latin America.

RAW MATERIAL

The Company has been in the forefront of pioneering work in raw material generation through social farm forestry. Indeed, IP APPM is becoming a driving force in sustainability in the paper manufacturing arena through focused social and community programs.

Starting from 1989, IP APPM has been the first to recognize the need to actively promote agro forestry with private land holders/farmers to meet its raw material needs in a sustainable manner. IP APPM has done path breaking work to develop its unique model of farm forestry that has helped the Company not only to create adequate supplies of wood in the catchment area but also develop a sustainable source of pulpwood for the future. The Company distributes saplings, at concessional rate, from its nurseries and counsels farmers on the best methods to grow them thereby conserving natural resources and creating a healthier environment.

In 2015-16, IP APPM could source all its requirement of pulpwood within a radius of 350 kms (primarily within Andhra Pradesh and Telangana) and as in the past several years, majority of the procurement was obtained from the Company's own farm forestry initiative. The farm forestry program is based on developing massive plantations on marginal and degraded farm lands.

As in the past, the Company ensures that it gets majority of its requirement of pulpwood from its farm forestry efforts. While doing so, IP APPM supports farmer welfare programs

Sales volume

and champions the cause of an eco-friendly environment. The clonal saplings distributed by the Company have started yielding results and the farmers have reported more than 100% improvement in yield per acre of wood produced.

During 2015 planting year, approximately 225 million quality saplings were distributed covering an area of 31,300 hectares under plantation, as against development and distribution of 220 million saplings covering an extent of 30,656 hectares during the brvious 2014 planting year. Research on clonal development has resulted in introduction of high yielding, disease resistant clones that are versatile to a wide variety of agro-climatic conditions in inland and coastal areas.

During the financial year, in order to have meaningful relationship with the farmers, the Company has started a unique initiative through the digital system by launching www.rythukosam.com  and Rythukosam Smart Card. The farmers now have a direct access to avail best practices and communicate with the Company.

The initiatives taken so far with high yielding, short rotation planting stock will enhance raw material availability, sbrad over 245,000 hectares. These have generated a potential of over 123 million man-days especially in rural areas, so far.

The Company's sustainable farm forestry program rebrsents a strong competitive advantage and has become an economic driver for regeneration of forests, maximization of plantation productivity, improvement in the finances of farmers which in turn would augment the long-term raw material security of the mill.  2014-15 2015-16

PERFORMANCE REVIEW

The year was challenging with intense competition & our overall sales volume increased marginally though pricing was under severe brssure until 3rd quarter of the fiscal year. In this background, the endeavor therefore was to become competitive and succeed despite the headwinds.

The strategy of the Company was to adopt the best practices that International Paper stands for: the way we operate our business, the way we serve our customers, and the way we lead, develop and grow our people. The essential element of our long-term value creation strategy is to be one of the best respected companies in India. Throughout the year, all aspects of the business continued to be centred on safety, people, customers, operational excellence, sustainability and thereby become profitable and generate a free cash flow.

Paper production

In a bid to ensure long-term sustainable growth, the Company has adopted strategic principles that enhance overall performance. The Company strived to become the low cost producer; fine tune customer support processes and systems to add excellence in delivery; and expand in printing and writing segments to be a leading supplier of brmium grade products in the Indian market.

Despite a challenging environment, sales volume was 217,706 MT as compared to 215,846 MT in 2014-15. 20% of the revenues were from exports (brvious year 14%) with domestic sales accounting for the balance 80%.

IP APPM produced 217,795 MT of paper in the year ended March 2016 as against 216,619 MT in 2014-15. Capacity utilization remained above 90% during the year. Productivity and overall machine efficiency (OME) were enhanced. In specific, gains were made in fiber, energy and chemical costs as well as by savings on overheads

As in the earlier years, deliberate and continuous efforts were made to become a low cost producer, raising the operating efficiencies and optimizing material consumption. Power consumption per ton of paper produced was lower by 9.4% as compared to 2014-15.

Coal consumption came down by 5.1% despite the marginal increase in paper production. Chemical cost and usage came down, while the recovery percentage was maintained at 98% during the year. Control on overhead expenses also yielded significant results.

Improving the manufacturing reliability was an aggressive initiative with better planning and scheduling as well as focused machine wise product strategy to secure continuous runs and lower downtime. This strategy helped keep the on-time-in-full (OTIF) performance above 85%.

The net revenue from operations was flat compared to brvious year. However the EBIDTA margin improved significantly, up by 29.2% at Rs.137.1 crore as compared to Rs.106.1 crore in the brvious year. EBIDTA as percentage of revenue increased to 12% in 2015-16 from 9% in 2014-15. Improvement in EBIDTA primarily happened on the backdrop of savings in costs related to fiber, chemical, power & overhead reduction.

Debt was reduced by repayment of Rs.27.5 crore with the result the debt-equity ratio was lower at 1.05:1 as against 1.21:1 at the beginning of the year. Interest cost as a percentage of both volume sold and revenue came down.

The Company generated Rs.111 crore cash from operations (after tax of Rs.8.8 crore) in the year under review as compared to Rs.128 crore (after tax of Rs.0.41 crore) in 2014-15. The net profit for the year was Rs.36.9 crore while the brvious year had ended with a marginal profit of Rs.25 lakhs.

The year hence witnessed a remarkable turnaround despite the challenges of a sluggish market and severe competitive brssures.

IP APPM understands that financial risks can distort the financial reporting and disclosures. IP APPM recognizes that such risks, if not managed well, can affect its customers, employees, shareholders and other stakeholders. To manage these risks, the Company has designed various controls around its key financial processes and carries out periodical assessments of the adequacy and effectiveness of such controls.

Such controls are tailor made keeping the business and operation environment and dynamics of IP APPM. A combrhensive control design and assessment framework has been brpared to see through the risks and periodic changes are made in line with emerging complexities and business needs. Impact of the financial risks and Company's exposures are managed optimally without hampering the business growth and opportunities. The systems are aligned to deliver safe, reliable and compliance focused business practices.

The rigorous internal financial control policies and procedures facilitate orderly and efficient conduct of business, enable adherence to corporate policies, safeguard assets, brvent and detect frauds and errors and ensure timely brparation of accurate, complete and reliable financial statements.

The controls and procedures are designed to provide adequate disclosure including deviations from control systems; enable evaluation of the effectiveness of the laid down systems; and offer reasonable assurance about the disclosure and reporting practices.

INFORMATION TECHNOLOGY

SAP FICSM (Finance, Capital, Source, Maintenance, Order Management and Manufacturing) implementation enabled us to be part of IP's standard application portfolio with global processes. Also, it integrates sales force for order management. Banking operations are active with interface connectivity which has provided seamless flow of transactions from Bank to Business.

Global methodology in project systems, plant maintenance and product costing got activated. There is no manual intervention while reporting monthly figures to Hyperion system. All inventory points in manufacturing processes are tracked and BOM's activated for each stage. Barcode process is used for tracking inventory.

New weighment scale software, 'Scale Boss' is in use. There are simplified and standardized processes with greater integration to cross modules (Production, finance and costing). This is an efficient system providing long-term viability for operations.

FICSM has transformed and streamlined the APPM business processes by enriching them with global best practices. The benefits include simplified, standardized and streamlined business processes with greater integration across the enterprise.

HUMAN RESOURCES

There is a continuous effort to improve the working environment with focus on employee well-being and capability building to enable them to perform at their best for the Company. We develop leaders at global platforms at regular intervals as a part of our commitment to engage and retain talent. We offer robust leadership development efforts to hone employee skills and help keep the Company ahead of the curve.

People are our real strength & while pursuing best-in-class performance, the Company is significantly increasing its investment in its employees with training and development. IP APPM invests in training and knowledge at all levels in order to align employees with requirements on safety, customer support, market needs, operational excellence, technology upgradation, process improvements, innovation and behavioral competencies.

Post-training, participants have been able to demonstrate a different attitude and add significant value at work. A delegated authority structure has further improved the Company performance as the knowledge base is well sbrad within the organization leading to dynamic benchmarking amongst departmental teams. The performance management system is administered as an enabling tool to help associates achieve both short term and longer term goals. Overall, employee engagement levels stand elevated.

As a responsible organization, the Company strongly advocates cultural diversity by rotating talent across the globe within International Paper and nurtures them through best-in-class training & development facilities.

In order to achieve planned growth, each team member is encouraged to perform to potential. The Company embraces flexibility, open mindedness and innovation with the result individuals and teams find new paper solution, an innovative logistics answer or a bold marketing idea.

There has been a visible qualitative improvement with change in approach and thought process. In a positive work environment, the operating teams have been able to promise and perform to meet expectations.

The decentralized professional management structure is fully empowered. The Company stands revitalized today and the employees remain encouraged with the market opportunities and ready for business challenges.

Training in safety practices, enhancing operations and providing practical proposals have gone a long way towards improving occupational safety. IP APPM strives to achieve a zero incident rate since it attaches great importance to safety of its employees. Potential risks have been identified by critical task observation and suitable control measures developed.

OUTLOOK

We have created a platform for growth while working with our priorities. Despite the  challenges in the external environment, the entire team at IP APPM is committed to making sure that the brsent momentum is maintained in the future as well.

In order to create a vibrant organization that works for sustainable growth, considerable up-gradation has been done to the systems and processes to enhance productivity, performance and accountability; significant investment has been made in people development, operational excellence, customer contact and sustainable solutions; increased employee engagement; considerable work done to become a low cost producer; improved manufacturing reliability levels; and overall created a winning organization. All of these are being put together to make IP APPM an increasingly better and a more competitive company.

The results are beginning to show. The Company is performing better on all fronts and has been expanding its operational efficiency across the value chain to gain the competitive edge. The focus continues to be on safety, customer support excellence, product development, supply chain management, quality control, OME, strategic market alliances and volume expansion.

With the expected increase in GDP, paper industry can look forward to traction in demand. At IP APPM, the endeavour is to grow better than the market and given the improvements in the internals, the outlook is promising.