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Directors Report of JK Paper Ltd.

Mar 31, 2016

The Directors have pleasure in presenting the 55th Annual Report along with Audited Financial
Statements of the Company for the financial year ended 31st March, 2016.

FINANCIAL RESULTS

Rs in Crore (10 million)

2015-16 2014-15

Gross Sales 2881.45 2514.97

Profit Before Finance Costs and 420.83 266 49

Depreciation (PBIDT)

Profit before
Depreciation and Tax (PBDT) 222.43 62.56

Profit/(Loss) After Tax (PAT) 79.56 (12.74)

DIVIDEND

Your Company has posted significantly improved performance during the year. However,
there is a need to conserve cash for reduction in debts and for future projects, The
Directors therefore recommend a Dividend of Re. 0.50 per share on the expanded Equity
Share Capital. The Dividend outgo would amount to Rs. 8.94 crores (inclusive of Dividend
Distribution Tax of Rs 1.51 crores).

APPROPRIATIONS

The amount available for appropriation, including surplus from the previous year
including debenture redemption reserve written back, stood at Rs. 291.53 crores. The
Directors propose this to be appropriated as under:

(Rs crore)

- General Reserve 57.00

- Dividend 7.43

- Corporate Dividend Tax 1.51

- Surplus carried to Balance Sheet 225.59

PERFORMANCE REVIEW

The Company recorded its highest ever Sales of Rs 2881.45 crores during the year an
increase of 14.6% over the previous year. The Company achieved its highest ever sales
volumes of 4.60 Lacs MT. Both our Units operated at near-full capacities compared to 91 %
in the previous year. The Company''s efforts in enlarging the geographical reach of its
products, strengthening the distribution network and introduction of new products in the
last 2 years are showing positive results. However, realizations continued to be a matter
of concern due to cheaper nil duty imports from ASEAN countries and consequent inability
of Indian manufacturers to pass on cost increases to the market. During the year the
company focused on further optimizing the utilization and operating parameters of the new
project at Unit JKPM which led to significant improvement in EBIDTA margins. As you are
aware the Company had stepped up its plantation efforts and it is satisfying to note that
the efforts has paid off, with greater proportion of the requirement being met out of
material sourced from shorter distances which reduces the overall delivered costs at our
mills. Exports accounted for about 48553 MT as against 40332 MT in the Previous Year.

With better operating efficiencies and softer input prices, the Company posted much
improved margin consequently EBIDTA at Rs 420.83 crores was up 57.9% over the previous
year. The Company''s Profit Before Tax was significantly up at Rs I 15.12 crores compared
to a loss of Rs 51.03 crores during 2014-15 and Net Profit for the year was Rs 79.56
crores against loss of Rs 12.74 crores during previous year.

During the year under review, your Company had issued 1, 19,10,000 Equity Shares of Rs.
10/- each at a price of Rs. 42/- (including premium of Rs. 32/-) aggregating to Rs. 50
Crore on Preferential basis to the Promoter and constituents of the Promoter Group.
Consequently, the paid-up Equity Share Capital of the Company increased to Rs. 148.53
Crore from Rs. 136.62 Crore. The proceeds of the said issue have been used towards
augmenting the Net Worth of the Company.

NEW PROJECTS

The newly commissioned mill at UnitJKPM is one of the most modern in the Indian industry.
The technological edge and economies of scale provided by the new machine have enabled
the Company to lower its cost of production and to scale up market share in office papers
quite steeply. Average capacity utilization of the new mill stood at 104% for the year
under consideration.

The Company''s joint venture with Oji Holdings Corporation and Marubeni of Japan commenced
its operations in July 2014. The high end corrugated box making unit is however faced
with slow pick up due to sluggish sales in end user segments. It might take 2-3 years
more to reach full capacity utilization. The emergence of online retail and consequent
demand for corrugated packaging offers exciting opportunities.

AWARDS AND RECOGNITION

Our commitment towards Safety & Environment, Quality & Operational Excellence and HR
practices continue to garner appreciation from various industry and social bodies. Some
of the accolades and awards received during the year are as follows:

a. UnitJKPM bagged 1st Prize among Pulp and Paper Industries in India, in the prestigious
"National Energy Conservation Award 2015" organized by Ministry of Power and Bureau of
Energy Efficiency (BEE), Govt, of India.

b. Unit JKPM was adjudged Winner at the prestigious "7th -SRISTI- G- CUBE (Good Green
Governance) Award -2015" organized by SRISTI publication

c. Unit JKPM bagged the "Energy Efficient Unit" in "16th National Award for Excellence
in Energy Management-2015" organized by CM held on 2nd and 3rd September 2015 at
Hyderabad

d. Unit CPM received Genentech Environment Gold Award 2015 from Greentech Foundation
(NGO- Registered under Indian Societies Act) New Delhi.

e. Unit CPM received the "Best Social Innovative Project Award" by 5th World CSR
Congress on 18th February 2016

INDUSTRIAL RELATIONS

The industrial relations at our plants continued to remain peaceful and cordial
throughout the year. Our continuous dialogue with the union and workers representatives
has improved the industrial harmony and work culture. Our engagement with the workforce
has improved the work environment, quality of life, productivity and skill. By
introducing various new work practices along with automation, we have succeeded in
increasing productivity.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31 st March 2016 in the prescribed form MGT -9 is
attached as Annexure-1 to this Report and forms part of it.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees or securities and investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the financial
statements.


The Company has not made any provision during the financial year 2015-16 for the purchase
of, or subscription for, shares in the company by trustees of JK Paper Employees'' Welfare
Trust, which was formed by the Company in the year 2004 for the welfare of the employees
of the Company, for the shares to be held by or for the benefit of the employees of the
company.

RELATED PARTY TRANSACTIONS

During the financial year ended 3 Ist March 2016, all the contracts or arrangements or
transactions entered into by the Company with the Related Parties were in the ordinary
course of business and on arm''s length basis and were in compliance with the applicable
provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015.

Further, the Company has not entered into any contract or arrangement or transaction with
the Related Parties which could be considered material in accordance with the Policy of
the Company on materiality of Related Party Transactions. In view of the above,
disclosure in FORM AOC-2 is not applicable.

The Related Party Transaction Policy as approved by the Board is available on the website
of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Wilhelmus Johannes Maria Wienk retires by rotation and being eligible offers himself
for re- appointment at the ensuing Annual General Meeting (AGM).

Shri. O.P. Goyal was reappointed as Whole-time Director of the Company from 7th September
2015 till 30th September 2018 by the Members at the AGM of the Company held on 24th
September 2015.

The Board of Directors of the Company re-appointed Sh. Harsh Pati Singhania as Vice
Chairman & Managing Director of the Company for a period of five years w.e.f. 31st
January 2017, subject to the approval of the Members at the forthcoming AGM of the
Company.

All the Independent Directors of the Company have given requisite declarations that they
meet the criteria of independence as provided in Section 149(6) of the Companies Act,
2013 and also Regulation I6(l)(b) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

There was no change in Managing Director, Whole- time Director, Chief Finance Officer and
Company Secretary, collectively the Key Managerial Personnel, during the year under
review.

INTERNAL FINANCIAL CONTROLS

The Company has in place an adequate budgetary control system and internal financial
controls with reference to financial statements. No reportable material weaknesses were
observed in the system during the year. Further, the Company has laid down internal
financial control policies and procedures which ensure accuracy and completeness of the
accounting records and the same are adequate for safeguarding of its assets and for
prevention and detection of errors and frauds, commensurate with the size and nature of
operations of the Company. The policies and procedures are also adequate for orderly and
efficient conduct of business of the Company. The Company also has a robust management
information system for the timely preparation of correct and accurate financial
information.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has been one of the foremost proponents of inclusive growth and has
continued to undertake projects for overall development and welfare of the society in the
fields of environment, conservation of natural resources, health, education, rural
development and livelihood interventions etc.

The Company has requisite Corporate Social Responsibility (CSR) Policy in accordance with
the provisions of the Companies Act 2013 and rules made there under. The contents of the
CSR Policy are disclosed on the website of the Company.

Even though, the company was not required to spend towards CSR since it incurred a net
loss of Rs. 120.86 crore in the preceding three years, it has spent Rs. 105.36 lac
towards CSR activities during the Financial year 2015-16.

A detailed report on Company''s CSR activities along with the Annual Report on the CSR activities
undertaken by the Company during the financial year under review, in the prescribed format is
annexed to this Report as Annexure-2.

AUDITORS

(a) Statutory Auditors and their Report

M/s S S Kothari Mehta & Co., Chartered Accountants, have been appointed as Auditors of the Company
to hold the office from the conclusion of the 53rd AGM held on 27th September 2014 until the
conclusion of the 56th AGM to be held in the year 2017, subject to ratification of the appointment
by the members at the respective AGMs. Accordingly, matter relating to the appointment of the
Auditors will be placed for ratification by members at the forthcoming AGM. The observations of
the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes
are self explanatory.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors
appointed Shri Namo Narain Agarwal, Company Secretary in Practice as Secretarial Auditor to carry
out Secretarial Audit of the Company for the financial year 2015-16 . The Report given by him for
the said financial year in the prescribed format is annexed to this Report as Annexure-3. The
Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

(c) Cost Auditor and Cost Audit Report

The Audit of the cost records of the Company for the financial year ended 31st March 2016, is being
conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and their Report will be filed with the
Ministry of Corporate Affairs, Government of India.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the financial year under review, there were no significant and material orders passed by the
Regulators or Courts or Tribunals which would impact the going concern status of the Company and
its future operations.

CONSERVATION OF ENERGY ETC.

The details as required under Section I34(3)(m) read with the Companies (Accounts) Rules, 2014 is
annexed to this Report as Annexure-4 and forms part of it.


PARTICULARS OF REMUNERATION

Disclosure of the ratio of the remuneration of each director to the median employee''s remuneration
and other requisite details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5
(I) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as
amended, is annexed to this Report as Annexure-5. Further, Particulars of Employees pursuant to
Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of
Section 136 of the said Act, the Report and Accounts are being sent to all the members of the
Company and others entitled thereto, excluding the said particulars of employees. Any member
interested in obtaining such particulars may write to the Company Secretary. The said information
is available for inspection at the Registered Office of the Company during working hours.

CORPORATE GOVERNANCE: including details pertaining to Board Meetings, Nomination and Remuneration
Policy, Performance Evaluation, Risk Management, Audit Committee and Vigil Mechanism:

Your Company reaffirms its commitment to the highest standards of corporate governance practices.
Pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Management Discussion and Analysis, Corporate Governance
Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made
part of this Annual Report.

The Corporate Governance Report which forms part of this Annual Report also covers the following:

a) Particulars of the four Board Meetings held during the financial year under review.

b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior
Management including, inter alia, the criteria for performance evaluation of Directors.

c) The manner in which formal annual evaluation has been made by the Board of its own performance
and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

e) Details regarding Risk Management.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared by the Company in accordance with the
applicable Accounting Standards. The Audited consolidated financial statements together with
Auditors'' Report form part of the Annual Report.

A report on the performance and financial position of each of the subsidiaries and associates
included in the Consolidated Financial Statements is presented in a separate section in this Annual
Report. Please refer to AOC-I annexed to the Financial Statements in the Annual Report.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company,
Consolidated Financial Statements along with relevant documents and separate audited accounts in
respect of subsidiaries are available on the website of the Company.

During the financial year under review, Habras International (Singapore) Pte. Ltd., became your
Company''s subsidiary.


DEPOSITS

Pursuant to the approval of members by means of a Special Resolution at the AGM held on 27th
September 2014, the Company has continued to accept deposits from the public, in accordance with
the provisions of the Companies Act, 2013 and rules there under.

The particulars in respect of the deposits covered under Chapter V of the said Act, for the
financial year ended 31st March 2016 are:

(a) Accepted during the year Rs. 12.66 crores;

(b) Remained unclaimed as at the end of the year - Rs.0.87 crores;

(c) Default in repayment of deposits or payment of interest thereon at the beginning of the year
and at the end of the year - Nil; and

(d) Details of deposits which are not in compliance with the requirements of Chapter V of the said
Act - Nil.

DIRECTORS'' REPONSIBILITY STATEMENT

As required under Section I34(3)(c) of the Companies Act, 2013, your Directors state that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures, if any;

(b) the accounting policies have been selected and applied consistently and judgments and estimates
made are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in
accordance with the provisions of the said Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) the proper internal financial controls to be followed by the Company have been laid down and
that such internal financial controls are adequate and were operating effectively; and

(f) the proper systems have been devised to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors acknowledge the continued support and cooperation received from the Central
Government, State Governments, Shareholders, participating Financial Institutions and Banks,
Customers, Dealers and Suppliers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and
hard work, put in by every member of the Team JK Paper.

On behalf of the Board of Directors

New Delhi Bharat Hari Singhania

Date : 25th July, 2016 Chairman


Mar 31, 2015

The Directors have pleasure in presenting the 54th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

Rs in Crore (10 million)

2014-15

Sales 2514.97

Profit Before Finance Costs and

Depreciation (PBIDT) 266.49

Profit before Depreciation and Tax (PBDT) 62.56

Profit/(Loss) after Tax (PAT) (12.74)

Surplus brought forward 223.23

Total amount carried to Balance Sheet 210.49

DIVIDEND

In view of the losses, the directors regret their inability to recommend dividend.

PERFORMANCE REVIEW

The Company recorded the highest ever sales at Rs 2514.97 Crore (up 24%) during the year as compared to Rs 2025.47 Crore in the previous year. The Operating Profit (PBIDT) increased to Rs 266.49 Crore (up 92%) from Rs 138.51 Crore in the previous year. Higher interest and depreciation on account of the Company's new project at Jaykaypur, Odisha which was commissioned in the previous year impacted net profit (PAT). The Company has stabilized operations of the project during the year and supplemented it by appropriate marketing efforts. As a result loss for the year was significantly reduced to Rs 12.74. Crore as compared to Rs 77.19 Crore in the previous year. The Company recorded the highest ever production of 4.14 Lac tonnes (up 26%) and sales of 3.98 Lac tonnes (up 24%) as compared to 3.28 Lac tonnes and 3.21 Lac tonnes respectively in the previous year. Overall capacity utilization (including new plant) was over 90%.

Wood prices which had increased substantially (by 33%) in the previous year continued its upward trend though at a slower pace of 13%. There is an evidence of increased wood availability due to social farm forestry done by the paper industry. As the availability increases further, we expect a favorable impact on raw material prices in future. Hardwood pulp prices which were ruling lower during much of the year exhibited upward trend towards last quarter of the financial year. This trend is continuing till this time but does not seem sustainable due to surplus global capacities and prices are likely to remain stable going forward. Increase in rail freight resulted in higher landed cost of linkage Coal, though international Coal prices continued to be low. The Company had increased sales realization by 8% during 2013-14; however the economic slowdown and domestic surplus resulted in improvement of only [% in the current year. The Company is continuously focusing on improving operating efficiencies and minimizing cost for better financial performance. The Company has also engaged external consultants to provide outside-in perspective in its endeavour to optimize cost and unlock value.

The Company has been aggressively pursuing farm forestry efforts to develop sufficient raw material resources within 200 Km of its mills. The Company continued its focus on this programme and has covered 16,934 hectares during the year thus achieving a cumulative acreage of 1,32,934 hectares from the inception of its farm forestry programme. The Company had to import lesser quantities of wood logs and wood chips as a result of improved availability during the year.

The developed markets are experiencing decline in Paper consumption due to widespread use of electronic media, however growth in packaging paper & board continues due to demand from its end use segments. Contrary to this, the Indian Paper and Board Industry has been growing at 7%, which is one of the highest in the world. At 14.5 Mn tonnes, the India ranks amongst the top 15 Paper and Board markets globally. The lower per capita consumption of 12 Kg as compared to world average of 57 Kg indicates that the growth is likely to continue. Some of the value added segments in Paper and Board are likely to grow at higher rate thus offering new product opportunities for the Company. With this growth the market is projected to reach 20 Mn tonnes by 2020.

The Company has been following a policy of focusing on value added products like Copier Paper, Coated Paper, Virgin Fibre Packaging Boards and High end Maplitho Paper which has paid rich dividends. The Company's wide distribution network along with emphasis on meeting customer expectations has helped it to establish a leadership position in the market, despite strong competitive challenges. The recent expansion has increased its ability to provide high quality paper in-line with changing end user requirements at competitive costs.

OFFICE PAPER PROJECT

As you are aware that the Company has set up a 2,15,000 TPA Pulp Mill, a 1,65,000 TPA Paper Machine and a 55 MW captive power plant at Unit JKPM in Odisha.

You will be happy to note that after the teething issues, the new facilities have stabilized in short time. The plant performance in its first full year of operations has been up to expectations with the company realizing cost advantages on account of reduced wood, water and energy consumption.

The technology and scale provided by the new project will help the Company to produce high quality printing paper at reasonable costs and further strengthen its position in Office Papers. The Average capacity utilization for the new paper machine for the year 2014- 15 was 94% and full capacity utilization in February 2015.

CORRUGATED PACKAGING PROJECT

The Company's JV with Oji Holdings Corporation and Marubeni Corporation of Japan to produce High- end Corrugated Packaging commissioned its plant at Neemrana, Rajasthan in July 2014. The production is being steadily ramped up and 100% utilization is likely to be achieved in next 2/3 years. The high quality corrugated packaging from this facility is gaining acceptance among Consumer Durables, Electronics, Auto Components, FMCG and Food Processing Industries. The emergence of online retail and consequent demand for corrugated packaging is also creating exciting market opportunities for the venture.

CUSTOMER SATISFACTION AND QUALITY

The Company has always been at the forefront in providing value added products and services to its customers. JK Paper's obsession with Quality and Customer Satisfaction has been a major strength in its attaining and retaining a leadership position in the Indian Paper Industry. The Company's wide distribution network has also extended a similar belief in fulfillment of expectations of the customers, big or small. JK Paper became the first Indian Company to produce and sell high quality Colorlok papers in India. This tie up with HP, helped in producing world class printing paper for the increasingly demanding Indian customers.

The Company continues to conduct regular audit for its quality standards and customer satisfaction through research conducted both in-house and by an independent agency. Customer feedback is taken seriously with prompt actions for resolution and prevention of future occurrence. The product and quality standards are also benchmarked with the best in class to bring about continuous improvement and exceed customer expectations. This process helps to understand changing customer preferences and develop products that meet their requirements.

Continuous interaction between the customers and factory is promoted through mill visits to generate valuable ideas that could be used for quality improvement, new product development and service enrichment. These customer visits help in showcasing the Company's state of the art manufacturing facilities and building a strong long term relationship with them.

AWARDS AND RECOGNITION

The Company has been committed towards ensuring high standards of Safety and Environment, Quality & Operational Excellence and HR practices. It is a matter of great satisfaction that these initiatives taken by the Company have been appreciated at various industry forums.

The Company received following accolades during the year;

- Unit - JKPM was awarded the certificate for Well- Managed Group Plantation by Forest Stewardship Council in 2014.

- Unit CPM was presented the Certificate of Honour - 2013 from Gujarat Safety Council.

- Unit CPM received Greentech Environment Management Award 2014 from Greentech Foundation, New Delhi.

- Unit CPM received First Position in Importer Category by single industry at 1CD Ankleshwar from Container Corporation of India Ltd (CONCOR).

- Unit JKPM received the state safety award for the year 2011 and 2012.

ENVIRONMENT

The company is committed to health and safety of its employees and its neighboring communities and believes in pursuing its business growth objectives in a socially responsible and ecologically sustainable way. It has been a pioneer in adopting latest environment friendly processes and technologies in its manufacturing processes with an aim to have minimum impact on the environment. The recent new project at Unit JKPM has corroborated the Company's' endeavour in that direction. It has helped to minimize consumption of natural resources like wood, water and coal while minimizing waste and emissions to the environment The use of Elemental Chlorine Free (ECF) technology has eliminated the direct use of Chlorine thus minimizing environmental impact and safety hazard,

Both its production units are certified for ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. The Occupational Health and Safety process is implemented through periodic safety audits, safety observations, TPM Internal Audits and Environment Audits focusing on Safety Health and Environment (SHE) related issues.

At Unit CPM, the use of Treated Effluent for Irrigation under the Zero Discharge Scheme Phase-I (Part A & B) has increased from 56 % in previous year to 62 % in the current year. In Phase II about 80 - 90 Ha of additional land has been covered for irrigation with our Treated Effluent. It is a matter of great satisfaction that treated effluent from the plant is being effectively utilized for Agriculture, Subabul, and Eucalyptus plantations. Combined Recharging cum Rain water harvesting system (RWH) has been installed in the company's colony premises as a part of water conservation efforts, Solar heaters have also been installed for utilization of clean energy.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial throughout the year under review. We acknowledge the wholehearted support and cooperation provided by employees at all levels of the organization during commissioning and stabilization of the new project and the valuable contribution made by them towards the growth of your company. A number of employee welfare initiatives have been implemented by the company which have significantly helped in improving the work environment, productivity, discipline and enriching employees quality of life. Our continuous dialogue with the union and workers representatives have ensured transparency and improved the industrial harmony to create a positive work environment

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31st March 2015 in the prescribed form MGT-9 is attached as Annexure- I to this Report and forms part of it

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees or securities and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the financial statements.

The Company has not made a provision of money during the financial year 2014-15 for the purchase of, or subscription for, shares in the company by trustees of JK Paper Employees' Welfare Trust which was formed by the Company in the year 2004 for the welfare of the employees of the Company, for the shares to be held by or for the benefit of the employees of the company.

RELATED PARTY TRANSACTIONS

During the financial year ended 31st March 2015, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on arm's length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement.

Further, the Company has not entered into any contract or arrangement or transaction with the Related Parties which could be considered material in accordance with the Policy of the Company on materiality of Related Party Transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.

The Related Party Transaction Policy as approved by the Board is available on the website of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

With enactment of the Companies Act, 2013, all the six Independent Directors of the Company, namely - Shri Arun Bharat Ram, Shri M.H. Dalmia, Shri R.V. Kanoria, Shri Shailendra Swarup, Shri Udayan Bose and Shri Sandip Somany, were appointed by the members at the Annual General Meeting (AGM) held on 27th September 2014 under Section 149 of the Act for a term of five consecutive years commencing from the date of the AGM. All Independent Directors of the Company have given declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Art, 2013 and also Clause 49 of the Listing Agreements with the Stock Exchanges.

Shri Shailesh Haribhakti who was liable to retire by rotation at the last Annual General Meeting of the Company held on 27Lh September 2014 had not offered his candidature for reappointment as a Director due to SEBI's impending limits on the number of Boards that he could serve on and consequently he ceased to be a director of the Company w.e.f. 27.09.2014.

Shri O.P. Goyal retires by rotation and being eligible offers himself for re-appointment at the ensuing AGM.

Further, in terms of Section 203 of the Companies Act, 2013, Shri Harsh Pati Singhania, Vice Chairman and Managing Director, Shri O.P. Goyal, Whole Time Director, Shri V. Kumaraswamy, Chief Finance Officer and Shri Suresh Chander Gupta, Company Secretary were appointed as "Key Managerial Personnel" (KMP) of the Company on their existing terms and conditions.

INTERNAL CONTROL SYSTEM

The corporate internal audit team consisting of Chartered Accountants and system experts review the internal control system on a regular basis to improve its effectiveness besides verifying statutory compliances, Based on Annual Internal Audit programme as approved by Audit Committee of Board, regular internal audits are conducted covering all offices, factories and key areas of the business. Findings are placed before Audit Committee, which reviews and discusses the actions taken with management. The Audit Committee also reviews the effectiveness of Company's internal controls and regularly monitors implementation of audit recommendations.

The Company has also put in place a comprehensive budgetary control system. Key performance goals are set for each of the units and product lines. The performance against these goals are monitored and reviewed on a periodic basis and corrective actions as needed are initiated.

The Company has in place adequate internal financial controls with reference to financial statements and no material reportable weakness was observed in the system. Further, the Company has in place adequate internal controls commensurate with the size and nature of its operations.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has been one of the foremost proponents of inclusive growth and since inception, has been continuing to undertake projects for overall development and welfare of the society in the fields of environment, conservation of natural resources, health, education, rural development, etc.

The Company has framed Corporate Social Responsibility (CSR) Policy in accordance with the provisions of the Companies Act 2013 and rules made there under. The contents of the CSR Policy are disclosed on the website of the Company.

Even though, the company was not required to spend towards CSR since it incurred a net loss of Rs.8.09 Crore in the preceding three years, it has spent Rs.77.83 lac towards CSR activities during the Financial year 2014-15,

A detailed report on Company's CSR activities along with the annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure-2.

AUDITORS

(a) Statutory Auditors and their Report

M/s S S Kothari Mehta & Co., Chartered Accountants, have been appointed as Auditors of the Company to hold the office from the conclusion of the 53rd Annual General Meeting held on 27th September 2014 until the conclusion of the 56th Annual General Meeting to be held in year 2017, subject to ratification of the appointment by the members at the respective AGMs to be held in the years 2015 and 2016. Accordingly, matter relating to the appointment of the Auditors will be placed for ratification by members at the forthcoming Annual General Meeting. The observations of the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes are self explanatory.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Naratn Agarwal, Company Secretary in Practice as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2014-15 . The Report given by him for die said financial year in die prescribed format is annexed to this Report as Annexure-3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

(c) Cost Auditor and Cost Audit Report

Pursuant to order of the Central Government dated 30th June 2014, your Company did not fall within the ambit of Cost Audit for the year 2014- 15. However, pursuant to the revised order of the Central Government dated 31st December 2014, Cost Audit of the Cost Records of the Company is mandatory from the financial year starting I" April 2015 and M/s R.J. Goel & Co., Cost Accountants have been appointed as Cost Auditors of the Company to conduct cost audit of cost records for the financial year 2015-16 subject to ratification of their appointment and remuneration at the forthcoming Annual General Meeting of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the financial year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which would impact die going concern status of the Company and its future operations.

CONSERVATION OF ENERGY ETC.

The details as required under Section 134(3)(m) read with the Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure-4 and forms part of it.

PARTICULARS OF REMUNERATION

Information in accordance with die provisions of Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding remuneration and other details is annexed to this Report. However, as per the provisions of Section 136 of die said Act, the Report and Accounts are being sent to all the members of die Company and others entitled diereto, excluding die aforesaid information, Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. The said information is available for inspection at the Registered Office of the Company during working hours.

CORPORATE GOVERNANCE

Corporate Governance - including details pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management, Audit Committee and Vigil Mechanism:

Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report.

The Corporate Governance Report which forms part of this Report, also covers the following:

a) Particulars of the four Board Meetings held during the financial year under review.

b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.

c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

e) Details regarding Risk Management.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared by the Company in accordance with the applicable Accounting Standards. The Audited consolidated financial statements together with Auditors' Report form part of the Annual Report

A report on the performance and financial position of each of the subsidiaries and associates included in the

Consolidated Financial Statements is presented in a separate section in this Annual Report. Please refer to AOC-1 annexed to the Financial Statements in the Annual Report.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, Consolidated Financial Statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

During the financial year under review, no company has become or ceased to be your Company's subsidiary and joint venture. In terms of Section 2(6) of Companies Act 2013, your Company has become an associate of Bengal & Assam Company Ltd.

DEPOSITS

Pursuant to the approval of members by means of a Special Resolution dated 27th September 2014, the Company has continued to accept deposits from the public, in accordance with the provisions of the Companies Act, 2013 and rules there under.

The particulars in respect of the deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2015 are - (a) Accepted during the year Rs. 2.23 Crore; (b) Remained unclaimed as at the end of the year - Rs. 0.63 crore; (c) Default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year - Nil and (d) Details of deposits which are not in compliance with the requirements of Chapter V of the said Act - Nil.

DIRECTORS' REPONSIB1LITY STATEMENT

As required under Section 134(3)(c) of the Companies Art, 2013, your Directors state that:-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures:

(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) the proper internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and

(f) the proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors acknowledge the continued support and cooperation received from the Central Government, State Governments, Shareholders, participating Financial Institutions and Banks, Customers, Dealers and Suppliers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of the Team JK Paper.

On behalf of the Board of Directors

New Delhi BHARAT HAR1 S1NGHANIA Date : 3rd August, 2015 Chairman


Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the 53rd Annual Report and Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS

Rs in Crore (10 million)

2013-14

Sales 2025.47

Profit Before Finance Costs and

Depreciation (PBIDT) 138.51

Profit before Depreciation and Tax (PBDT) 16.65

Profit/(Loss) after Tax (PAT) (77.19)

Surplus brought forward 300.42

Total amount carried to Balance Sheet 223.23

DIVIDENDS

In view of the losses, the directors regret their inability to recommend dividend.

PERFORMANCE REVIEW

The Company''s sales during the year increased to Rs 2025.47 Crore (up 18%) from Rs 1721.38 Crore in the previous year. The Operating Profit (PBIDT) stood at Rs 138.51 Crore, however the Company recorded a loss amounting to Rs 77.19 Crore as a result of higher interest and depreciation burden arising from commissioning of Company''s new project (Rs 1775 Crore excluding notional losses on forex loans) at Jaykaypur, Odisha, slower ramp up of production and severe cost increase. Total production at 3,28,321 tonnes and Sales at 3,21,094 tonnes represented an increase of 12% and 11% respectively over the previous year and are highest ever achieved by the Company. Overall capacity utilization (including new plant) was 85%.

During the year, there was a severe increase in wood prices (37%) and coal (15%). Though, the Company was able to increase sales realization (12%), it was inadequate to cover the steep cost increase thereby impacting the profit margins. Cost compression measures adopted by the company helped to moderate the impact of higher input costs. Hardwood pulp prices which were ruling higher during start of the year declined during second half of the year but weakening of Rupee negated the impact on landed cost. With the expected commissioning of new large scale pulp capacities in Latin America, prices are likely to remain stable going forward.

The growth of Indian Paper and Board industry at 6.5% is one of the fastest in the world. At 13 million tonnes per annum, the Indian Paper and Board market ranks amongst the top 15 globally. Furthermore the large population base and low penetration (per capita consumption at 11 Kg as compared to world average of 56 Kg) indicates the future potential for growth. JK Paper has always focused on providing value to its customers through differentiated products/ services and led the transition of paper from being a commodity to a Branded product. The Company introduced high quality "ColorLok" papers in India to address the changing needs of customers, which have occupied a unique position in the minds of its end customers. The Virgin Fibre Board and Coated Papers produced by the Company are similarly recognized for their quality and functional properties. All this has resulted in the Company achieving a leadership position in Office Papers segment and being ranked one of the top 2 players in Coated Paper and Virgin Fibre Board market.

Wood is the primary raw material for the paper industry, however in the recent years the domestic supply has failed to catch-up with demand from various consuming industries. This has led to sharp increase in wood prices and consequently higher input costs for the paper industry. To tide over this situation the Company imported some quantities of wood logs and wood chips during the year. The industry will have to resort to such imports till the demand supply gap is addressed in the next couple of years. The Company had foreseen this situation and had intensified its farm forestry activities to develop raw material bank within 200 Km radius of the mills. During the year the Company covered 14,877 hectares, thus achieving a cumulative acreage of 1,16,000 hectares from the inception of its farm forestry programme.

INDUSTRY SCENARIO

The industry growth was muted due to economic slowdown and decrease in spending across the board. With gradual improvement in the economy and growth drivers in place such as changing lifestyles, increasing organized retail and government spending on education, the paper and board consumption is bound to increase. However, increased supply in domestic market due to new capacities and Cheaper imports from ASEAN countries at zero duty are likely to pose some challenges in the short term.

Office Papers: The market scenario for uncoated paper improved during the year and some price increases could be effected and sustained in the market. These are early indicators that the capacity overhang created in the last couple of years is partly getting absorbed. This augurs well for the Company as it will achieve full capacity during FY 2014-15 from its new facility at Unit JKPM. The Company''s market share has already increased to 26% from 19% in 2013-14.

The Company introduced JK MAX in 67 gsm and JK CMAX in 72gsm to cater to some unaddressed segments of the market. The products have been received favourably and are gaining popularity. The existing brands "JK Copier","JK Easy Copier", "JK Copier Plus", "Sparkle" and "Cedar" continued to cement their position further in the market. The Company''s products "JK Excel Bond", "JK Ledger" and "MICR Cheque Papers" cater to niche segments and enjoy patronage from corporate customers.

Coated Papers: The market for Coated Papers continued to grow, however reduced corporate spending due to economic slowdown resulted in slower demand growth. Imports from China and Indonesia continued unabated preventing any significant price increases. Weakening of Rupee against the Dollar created a temporary slowdown in imports but lack of additional domestic supply assisted in recovery for imports. The Company''s Brands "JK Cote" and "JK Supercote" continue to attract a wide variety of customers..

Packaging Board: The Company focuses only on high end segment of Virgin Fibre Board with its brands "JK

Tuffcote" and "JK Ultima". Market growth for the targeted segment continues to be robust due to increasing thrust on good quality packaging for consumer products. Inspite of competition from new entrants the Company has maintained its position as the 2nd largest player in the market. With shift from low end packaging and increasing organized retail, the market is expected to continue its growth momentum. The Company will continue to maintain its position in this attractive market.

Maplitho Paper: With the new capacity at Unit JKPM now operational, the Company plans to re-enter this segment, which was created by your company, with a superior product offering. The market for Maplitho paper is large and growing at stable rate thus providing a good opportunity for the Company to leverage its Brand recall with this category.

NEW PROJECTS

The Company has been a market leader in Office Papers segment which has been witnessing strong growth in recent years. The domestic capacities were not sufficient to meet demand. Sensing this opportunity the Company embarked upon an ambitious project at Unit JKPM to increase the Company''s annual capacity from 2,90,000 tonnes to 4,55,000 tonnes per annum. This involved setting up a 2,15,000 TPA pulp mill, a 1,65,000 TPA paper machine and a 55 MW captive power plant along with other necessary utilities. The Project utilizing state of the art technology from reputed global equipment suppliers involved a capital investment of Rs 1775 Crore excluding notional losses on forex loans.

The plant was commissioned on 30th August 2013 and is now operating consistently and delivering superior quality paper. The Average capacity utilization for the last quarter of 2013-14 was 89%, with a maximum of 93% achieved in the month of February 2014. Adoption of contemporary technology in this plant has helped in reducing consumption of wood, water, and energy while improving margins for the Company. The Company intends to leverage the scale and technology advantage provided by the new plant to optimize input costs further while delivering enhanced performance of its office papers.

Last year, the Company forayed into High-end Corrugated Packaging segment through a joint venture with Oji Holdings Corporation and Marubeni Corporation of Japan. The JV will manufacture high quality packaging products required by Consumer Durables, Electronics, Auto Components, FMCG and Food Processing Industries at its manufacturing facility in Neemrana, Rajasthan. Trial production from the plant is expected to commence in Q2 of 2014-15.

CUSTOMER SATISFACTION AND QUALITY

The Company''s leadership position in the market is due to its customer focused approach in the pursuit of offering value added products. Through its various touch points the Company is able to understand customer needs and develop new products that meet them. The product and quality standards are also benchmarked with competition to bring about continuous improvement and exceed customer expectations. Use of pigment dyes was adopted in all products to improve quality and satisfy the changing needs of customers.

Customers are invited to the mills at regular intervals to have a firsthand feel of the manufacturing processes and also have close interaction with factory personnel. Such interactions have generated many opportunities for close collaboration in areas of new product development and service.

ENVIRONMENT

The environmental management practices at JK Paper have been centered on using sustainable practices for its operations. Both its production units are certified for ISO 9001 : 2008, ISO 14001 : 2004 and OHSAS 18001 : 2007. The Occupational Health and Safety process is implemented through rigorous Safety Audits, TPM Internal Audits & Environment Audits. The Company not only tries to comply with stipulated regulations but also to exceed them through conscious efforts at all levels. The operational teams focus particularly on conservation of natural resources used during manufacturing and productive recycling of waste.

The new plant at Unit JKPM uses Elemental Chlorine Free (ECF) technology that obviates direct use of Chlorine thus minimizing environmental impact and safety hazard. The new production line has thus improved our compliance with environmental standards and has also resulted in major savings through reduction in usage of water, fuel and raw materials.

At Unit CPM, treated effluent from the mill is used for irrigation of nearby farm lands. Currently more than half of the treated effluent is being used for this purpose which is likely to increase substantially at the end of next phase currently in progress. It is a matter of great satisfaction to us that the Company has been able to create livelihood opportunities for nearby farmers by providing access to nutrient rich quality water for Agriculture, Subabul and Eucalyptus plantations. Combined Recharging cum Rain water harvesting system (RWH) is implemented in the company''s housing colony to ease the burden on natural sources. The Company has also installed solar heaters for utilisation of solar energy.

AWARDS AND RECOGNITION

Awards and recognition received by the Company reinforce its belief that the Company is moving in the right direction to achieve higher levels of operational performance and social commitments. It is a matter of great satisfaction that various initiatives taken by the Company have received recognitions at esteemed forums.

Unit - JKPM has been awarded the following;

- Green Manufacturing Excellence Award-2013 from Frost & Sullivan.

- National Safety Award-2011 for outstanding performance in industrial safety.

- Golden Peacock Environment Management-2013.

- Greentech Award-2013 for outstanding achievement in Safety.

- Appreciation for Good practices in Quality Systems by FICCI.

Unit - CPM has been awarded the following;

- Greentech Safety Gold Award-2013.

- Greentech HR Silver Award-2013 for outstanding achievement in paper sector.

- World CSR Congress Best Sustainability Award-2013.

- IPMA Award-2013 for Energy Conservation.

- Greentech Environment Gold Award- 2013. DIRECTORS

Shri Shailesh Haribhakti, who is liable to retire by rotation at the forthcoming Annual General Meeting (AGM) has not offered his candidature for reappointment as a Director, due to SEBI''s impending limits on the number of Boards that he can serve on. He will hold office as Director till the date of ensuing AGM.

Shri Udayan Bose and Shri M.H.Dalmia retire by rotation at the ensuing AGM and being eligible are proposed to be appointed as Independent Directors of the Company to hold office for a term of five consecutive years from the ensuing AGM. Shri R.V.Kanoria, Shri Shailendra Swarup, and Shri Arun Bharat Ram whose period of office is liable to determination by retirement of Directors by rotation are also proposed to be appointed as Independent Directors of the Company to hold office for a term of five consecutive years from the ensuing AGM. The Company has also received declarations from the said Directors about their independence pursuant to Section 149 of the Companies Act, 2013.

The Board recommends these appointments as aforesaid.

CORPORATE SOCIAL RESPONSIBILITY

A detailed report on the Company''s CSR activities is given separately in the Annual Report.

AUDITORS

M/s. S S Kothari Mehta & Co, Chartered Accountants, Auditors of the Company, retire and are eligible for re-appointment. The observations of the Auditors in their Report on Accounts read with the relevant notes are self-explanatory.

COST AUDIT

M/s R.J.Goel & Co., Cost Accountants, Delhi conducted the Cost Audit for the financial year ended 31st March 2013 and as required, Cost Audit Report was duly filed with Ministry of Corporate Affairs, Government of India on 19.09.2013.

The Audit of the Cost Accounts of the Company for the financial year ended 31st March 2014 will be conducted by the said firm and the Report will be submitted to the Ministry of Corporate Affairs, Government of India.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details of energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed under Section 2l7(l)(e) of the Companies Act, 1956 read, with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed to this Report and forms part of it.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 2l7(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in Annexure to the Directors'' Report. However, as per the provisions of Section 219 (l)(b)(iv) of the Companies Act, l956, the Annual Report is being sent to the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Secretary at the Company''s New Delhi address.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis, Corporate Governance Report and Auditor''s Certificate regarding compliance of conditions of Corporate Governance are made a part of this Annual Report.

SUBSIDIARY COMPANIES

The accounts of the wholly-owned subsidiaries i.e. Jaykaypur Infrastructure & Housing Limited (JIHL)and Songadh Infrastructure & Housing Limited (SIHL) and of the subsidiary i.e., JK Enviro-tech Limited (JKETL) have been consolidated as required by applicable Accounting Standards. With reference to the General Circular No. 2/2011 dated 8th Feb. 2011, issued by the Ministry of Corporate Affairs, Government of India, copies of the Balance Sheet, Statement of Profit & Loss, Reports of the Board and the Auditors of the aforesaid Subsidiary Companies have not been attached to the Balance Sheet of the Company. However, annual accounts of the Subsidiary Companies and the related detailed information of the Holding and Subsidiary Companies, shall be made available to the shareholders seeking such information at any point of the time. The annual accounts of the Subsidiary Companies are also available for inspection by any shareholder at the Registered and Head Offices of the Company and that of the Subsidiary Companies concerned.

DIRECTORS'' REPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period;

iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis.

INDUSTRIAL RELATIONS

Industrial Relations continued to be cordial and healthy. The Company could overcome challenges faced during commissioning of the new project with continued support of all the workmen, staff and unions. During the year, the Company amicably concluded its long term wage agreement with the trade unions at both the plants. The credibility of the company among its stakeholders is growing continuously because of its commitment to continuously address people issues with openness and transparency. Several initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce

ACKNOWLEDGEMENT

The Directors acknowledge the continued support and cooperation received from the Central Government, State Governments, Shareholders, participating Financial Institutions and Banks, Customers, Dealers and Suppliers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of Team JK Paper.

On behalf of the Board of Directors

BHARAT HARI SINGHANIA

Chairman

New Delhi

Date : 21st May, 2014


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the 52nd Annual Report and Audited Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

Rs in Crore (10 million)

2012-13

Sales 1,721.38

Profit Before Finance Costs and 144.41 Depreciation (PBIDT)

Profit before Depreciation and Tax 110.25 (incl. Exceptional Items)

Profit after Tax 37.70

Surplus brought forward 271.56

Total amount available for 309.26 appropriation

APPROPRIATIONS:

Capital Redemption Reserve 0.03

Debenture Redemption Reserve 0.82

Dividend (incl. Tax on Dividend) 7.99

Surplus carried to Balance Sheet 300.42

TOTAL 309.26

DIVIDENDS

With a view to conserve cash and reduced profitability for the year, the Directors recommend a dividend of 5% on the Equity Share Capital (Rs. 0.50 Per share). The total outgo including tax on account of dividend would be Rs. 7.99 Crore.

DIRECTORS

Your Directors express their profound grief and sorrow on the sad demise of Shri Hari Shankar Singhania, Chairman of the Board of Directors, JK Paper Limited and President JK Organisation, on 22nd February 2013. He was associated with the Group''s Paper business for over 50 years. Under his leadership, an integrated pulp and paper mill of 18,000 TPA was established at Unit JKPM, Odisha in 1962. Since then, the capacity of JK Paper''s business has grown to 2,90,000 TPA. The ongoing expansion project was also started by him, which will further enhance the Company''s capacity to 4,55,000 TPA. He not only provided vision to the paper industry in India but also worked hard for its development and growth.

Shri Singhania, who learnt the ropes of business under his illustrious father late Lala Lakshmipatji, was actively involved with J.K. Organisation since 1951, from the young age of 18 years, and held various positions before he assumed the Chairmanship of various Companies. Shri Singhania contributed immensely not only in the progress of your Company but also in the growth of industrialization and economic development of India for which he received numerous prestigious Indian & International awards and recognitions. Your Directors pay their respectful homage and tribute to this extraordinary human being, a great leader, an iconic industrialist and a leading statesman.

Shri S.K. Pathak, a Member of the Board passed away on 4th January 2013. Shri Pathak joined the Board of the Company on 24th April 2004, and had a very rich business experience. The Board places on record its sincere appreciation of the valuable services and guidance rendered by him to the Company during his tenure.

Shri Bharat Hari Singhania and Shri Shailendra Swarup were appointed as Additional Directors of the Company pursuant to Section 260 of the Companies Act, 1956 with effect from 21st May 2013. In terms of Section 260 of the said Act, they will hold office as Directors upto the date of the ensuing Annual General Meeting. The Company has received notices in writing from members proposing candidature of Shri Bharat Hari Singhania and Shri Shailendra Swarup for being appointed as Directors, liable to retire by rotation and the Board recommends their appointment.

The Board of Directors at its meeting held on 21st May 2013 appointed Shri Bharat Hari Singhania as Chairman and Shri Harsh Pati Singhania as Vice-Chairman of the Board of Directors of the Company. They shall now be Chairman and Vice-Chairman & Managing Director respectively, of the Company.

Shri R.V. Kanoria, Shri Arun Bharat Ram and Shri Dhirendra Kumar retire by rotation and being eligible offer themselves for re-appointment at the Annual General Meeting.

PERFORMANCE REVIEW

The Company''s Sales during the year was Rs. 1,721.38 Crore, Operating Profit (PBIDT) Rs. 144.41 Crore and PAT amounted to Rs. 37.70 Crore. In volume terms, Production of 2,92,582 tonnes and Sales at 2,90,420 tonnes were the highest ever recorded. Overall capacity utilization increased to 101% and savings were achieved in power and fuel consumption. Continuous review of outstandings and inventory helped in optimizing the working capital cycle and fund utilization. Despite these favourable factors, profit was adversely affected due to unprecedented increase in raw material prices without commensurate increase in selling prices.

During the year, global hardwood pulp prices were stable but weakening of rupee adversely impacted the landed cost of pulp for the Company. With increase in global supplies, pulp prices are likely to remain stable in the near future.

JK Paper has always believed in offering differentiated products to its target markets. The high quality "ColorLok" papers have occupied a distinct position in the minds of consumers. Similarly JK''s Brands are recognised by their customers in Virgin Fibre Board and Coated Paper segment for their superior quality and high standards of service. The Company''s strong brand equity is evident from the fact that it is a market leader in Office papers and ranks among the top 2 players in Coated Paper and Virgin Fibre Board market. Over the years, the Company has established a strong distribution network that provides a distinct competitive advantage in the geographically dispersed Indian market.

Increased demand for wood from consuming industries coupled with shortage of supply due to tree disease and uprooting of plantations in earlier years led to unprecedented increase in raw material prices. The Company intensified its efforts in promoting farm forestry to maximize availability of wood in its catchment areas. During the year, the Company covered 11,300 hectares with plantation taking the cumulative acreage under this programme to 1,01,500 hectares. The Company has drawn up ambitious plans for next 3/4 years keeping in view increased raw material requirements from the expansion Project. It is also exploring opportunities in South East Asia to secure raw material supplies for its operations in India.

INDUSTRY SCENARIO

The industry witnessed a significant decline in profitability on account of raw material price rise and its inability to pass on the input cost increases fully. Growth was impacted by slowdown in economic activity and lower spends. Despite this, India continues to be one of the fastest growing paper markets in the world. The lower per capita consumption compared to the world average indicates the future potential for growth. Greater thrust on literacy and education, changing lifestyle, growth in organised retail and higher disposable income in rural areas will fuel paper and board consumption in the country.

Office Papers: While there was some impact of slowdown on the Office Papers market due to its linkage with corporate and economic activity, the new production capacities that came on stream during the previous year have now been absorbed. The scenario improved towards the end of the year and the company could pass on input cost increases partially through price revisions. The situation should ease further as the economic activity picks up.

The Company''s brands "JK Copier", "JK Easy Copier", "JK Copier Plus", "Sparkle" and "Cedar" continue to enjoy a strong market position. The company also enjoys a strong brand equity in niche segments through products like "JK Excel Bond", " JK Ledger" and "MICR Cheque Papers".

Coated Papers: Growth in Coated Paper segment was muted due to decreased marketing spends by businesses. Coated Paper prices continued to be under stress due to increased imports from Asian countries. Weaker Rupee provided some relief as landed prices of these imports rose. "JK Cote" and " JK Supercote" continue to attract a wide variety of customers due their superior quality and recorded higher sales volume during the year.

Packaging Board: The Packaging Board segment maintained its growth momentum during the year due to increasing demand for value added packaging. The demand is being driven by growth in organized retail and continuous shift from low quality Packaging Boards to superior varieties. The company''s brands "JK Tuffcote" and "JK Ultima" are well established in this highly demanding segment. Despite augmentation of capacity in 2010-11, the capacity utilization stood at 108% due to growing demand for the Company''s products.

EXPANSION & NEW VENTURES

In order to address the opportunity in the Office Papers and enhance the Company''s leadership position in this segment, an ambitious expansion Project is nearing completion at Unit JKPM with an outlay of Rs. 1653 Crore. This would enhance the Company''s annual capacity from the current 2,90,000 tonnes to 4,55,000 tonnes per annum. This consists of a 2,15,000 tpa pulp mill, 1,65,000 tpa paper machine , 55 MW Power plant and requisite utilities.

The machines used for the expansion have been sourced from leading global and domestic suppliers and incorporate state of the art technology. With this, the Company will be able to minimize environmental impact by conserving water and energy besides reducing emissions. It will also render scale economies and lead to more efficient use of fibre. All this will result in improvement of margins for the Company. Quality of paper produced will be of international standards and will cater to evolving customer needs. Production is expected by 2nd quarter of the current financial year.

Your Company has identified High-end Corrugated Packaging as a market with high growth potential and has decided to venture into this segment. JK Paper has entered into a Joint Venture agreement with Oji Holdings Corporation and Marubeni Corporation of Japan for setting up a modern manufacturing facility for Corrugated Packaging. The Capital outlay is estimated at Rs. 150 Crore. The plant will manufacture high quality packaging products required by Consumer Durables, Electronics, Auto Components, FMCG and Food Processing Industries.

CUSTOMER SATISFACTION AND QUALITY

JK Paper has been constantly endeavouring to upgrade product quality so that its offerings meet customers'' expectations. It has also been developing new tailor made products to meet consumer''s specific end-use requirements.

In line with the Company''s regular practice, customers were invited at regular intervals to mills, personnel from our manufacturing units also visited the customers at their respective facilities to interact on various quality related parameters. The feedback received from customers was used for understanding their changing needs and undertake product upgradation initiatives. This also helped to create a greater feeling of bonding between the consumers, production and marketing team.

Based on customer insights the Company undertook development of new products like ''Finesse'' - a substantially improved version of printing grade paper, higher GSM C1S paper for digital printing segment, Blade Wrapper for specific end uses etc.

CORPORATE SOCIAL RESPONSIBILITY

''If we want to have a successful business, then we must have a successful society around us'', is the abiding motto that drives JK Paper Ltd''s Corporate Social Responsibility initiatives. The targeted interventions are in sectors like Community Asset Building, Livelihood Promotion, Health Care, Awareness & Capacity Building, Promotion of Education Services, Infrastructure Development, Adult Literacy, Skill Development, Women & Child Development and Promotion of Sports.

The Company has been imparting education through its schools at both the manufacturing units at Odisha and Gujarat with a combined strength of over 3,200 students. Of this about 55% of the children come from under-privileged sections of society. The successful Adult Literacy Programme (ALP) that focuses on tribal women has now covered over 7,300 people since its inception with over 2,000 benefitting in 2012 alone.

Under Government''s PPP model, the Company adopted ITI, Ukai near its Unit CPM in Gujarat in the year 2008. After being declared as ''Centre of Excellence'' last year, this year its student intake rose to 391. It has helped ITI pass outs to improve their understanding of trades and become better skilled to get employment in the industry.

Company continues to provide basic health services through Mobile Dispensary, Health Camps and Awareness programmes, Community Health Interventions like Maternal & Child Health care. During the year about 7800 people have benefitted from the health camps at both the mills. A detailed report on the Company''s CSR activities is given separately in the Annual Report.

ENVIRONMENT

JK Paper Limited continues to focus on adoption of best environmental practices in order to perform better than the stipulated standards. The ISO 14001:2004 & OHSAS 18001:2007 systems help us in our commitment towards safety and environment.

Conscious efforts are made to develop and implement schemes for energy and water conservation, minimizing emissions and waste. Through a continuous process of Reduce, Recycle and Reuse, the manufacturing units have been continuously optimizing their water consumption. Thrust is given on activities for reduction of solid waste generation, finding ways for effective reutilisation of the solid waste, reduction of effluent colour, sustainable forestry practices, effective use of by-products as alternative fuel .etc

A 5.4 MW TG at Unit JKPM has been dedicated to energy generation through bio-fuels. This is first such power project in Odisha State and has been registered at NLDC for REC. Green power generated from this TG is 20% of the factory''s total consumption saving fossil fuel.

The new production line at Unit JKPM will improve our compliance with environmental standards and there will be major savings in water, fuel and raw materials.

AWARDS AND RECOGNITION

It is a matter of great pride that the Company''s endeavour and commitment to achieve higher level of operational performance and environmental excellence has been recognized at various forums. Both Units of the Company received the CII National HR Excellence Award 2012 for strong commitment to HR Excellence. The Company also received Talent Management Award at Asia''s Best Employer Brand 2012 hosted by Employer Branding Institute, World HRD Congress and Stars of Industry Group Unit - JKPM has been awarded the following;

a) Greentech award for outstanding achievement in Safety Management

b) National safety award for outstanding performance in Industrial Safety during performance year 2010 from ministry of Labour & Employment, Government of India

c) Gold award in paper sector by Greentech Foundation for Environment Management.

d) Silver award in paper sector for CSR by Greentech Foundation

e) Business World FICCI CSR Award 2011-2012

Unit - CPM has been awarded the following;

a) Greentech Environment Gold Award 2012 in paper sector for outstanding achievement

b) Winner of Golden Peacock environment management Award 2012

c) Best sustainability performance award by World CSR congress

d) IPMA Award 2011-12 for Energy conservation

e) Golden Jubilee Trust award by South Gujarat Chamber of Commerce of & Industry (SGCCI) for "Excellence in Improving Productivity"

AUDITORS

M/s. S S Kothari Mehta & Co, Chartered Accountants, the Statutory Auditors of the Company are eligible for re-appointment at the ensuing Annual General Meeting. The observations of the Auditors in their Report on Accounts read with the relevant notes are self- explanatory.

The Auditors have confirmed that they have undergone the peer review process of the Institute of Chartered Accountants of India and hold a valid certificate issued by the ''Peer Review Board'' of ICAI.

COST AUDIT

The Cost Audit Report for the financial year ended 31st March, 2012 was filed by the Cost Auditor with the Ministry of Corporate Affairs, Government of India, on 01-01-2013.

The Cost audit for the year ended 31st March 2013 will be conducted by M/s. R.J. Goel & Co., Cost Accountants and the reports will be submitted to the Ministry of Corporate Affairs, Government of India.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details of energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed under Section 2l7(l)(e) of the Companies Act, 1956 read, with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, l988 is annexed to this Report and forms part of it.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 2l7(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in Annexure to the Directors'' Report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Secretary at the Company''s New Delhi address.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis, Corporate Governance Report and Auditor''s Certificate regarding compliance of conditions of Corporate Governance are made a part of this Annual Report.

SUBSIDIARY COMPANIES

The accounts of the wholly-owned subsidiaries i.e. Jaykaypur Infrastructure & Housing Limited (JIHL) and Songadh Infrastructure & Housing Limited (SIHL), have been consolidated as required by applicable Accounting Standards. With reference to the General Circular No. 2/2011 dated 8th Feb. 2011, issued by the Ministry of Corporate Affairs, Government of India, copies of the Balance Sheet, Statement of Profit & Loss, Reports of the Board and the Auditors of the aforesaid Subsidiary Companies have not been attached to the Balance Sheet of the Company. However, annual accounts of the Subsidiary Companies and the related detailed information of the Holding and Subsidiary Companies, shall be made available to the shareholders seeking such information at any point of time. The annual accounts of the Subsidiary Companies are also available for inspection by any shareholder at the Registered and Head Offices of the Company and that of the Subsidiary Companies concerned.

DIRECTORS'' REPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period;

iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial throughout the year under review. Several initiatives implemented by the Company have significantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce. Our openness and transparency in dealing with people issues and several IR initiatives implemented by the Company have been gaining all round faith of different stake-holders.

ACKNOWLEDGEMENT

The Directors acknowledge the continued support and cooperation received from the Central Government, State Governments, Shareholders, participating Financial Institutions and Banks, Customers, Suppliers and Dealers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of Team JK Paper.

On behalf of the Board of Directors

BHARAT HARI SINGHANIA

Chairman

New Delhi

Date : 21st May, 2013


Mar 31, 2012

The Directors have pleasure in presenting the 51st Annual Report and Audited Accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS

Rs in Crore (10 million)

2011-12

Sales and Other Income 1,557.10

Profit Before Finance Costs and 176.31 Depreciation (PBIDT)

Profit Before Depreciation and Tax 125.06

Profit After Tax 49.32

Surplus brought forward 249.29

Total amount available for appropriation 298.61

APPROPRIATIONS:

Debenture Redemption Reserve 0.66

Capital Redemption Reserve 0.06

General Reserve 2.50

Dividend:

- On Preference Shares 0.01 (incl. Ta x on Dividend)

- On Equity Shares 23.82 (incl. Ta x on Dividend)

Surplus carried to Balance Sheet 271.56

TOTAL 298.61

DIVIDENDS

Your Directors are pleased to recommend a dividend of 15% on the expanded Equity Share Capital (Rs. 1.50 per share). The dividend payable on Preference Share Capital (including interim dividend) at the specified rate is Rs. 0.01 Crore. The total outgo including tax on account of dividend would be Rs. 23.83 Crore.

PERFORMANCE REVIEW

The Company's Sales and Other Income during the year was Rs. 1,557.10 Crore, Operating Profit (PBIDT) Rs. 176.31 Crore and PAT stood at Rs. 49.32 Crore. The Company's production was 2,83,038 tonnes and sales increased to 2,77,599 tonnes as against 2,67,081 tonnes.

Operating Profit (PBIDT) was considerably impacted due to increase in raw material price, lower receipt of linkage coal resulting in purchase of open market coal at much higher price and increase in other input costs. The Company was able to offset some of these cost increases by higher productivity and efficiencies. However, market conditions did not favour increase in product prices to fully compensate the cost increases during the year.

International hardwood pulp prices declined from a level of US $ 770/MT in April 2011 to as low as USD 550/MT during December 2011. Since then it has increased again by USD 150/MT. However, much of the benefits due to the drop in pulp prices were neutralized by the depreciation in rupee vis-à-vis the US Dollar.

JK Paper has been constantly creating value with its Brand driven strategy and the brands of the Company are synonymous with premium quality paper. It is the ability to understand customers' aspirations and develop products for those needs and fulfil them which have given us the "first mover advantage" in many products.

Our long standing relations with channel partners also helped us to withstand competition. The Company is the market leader in office papers and among the top 2 players in coated paper and high end packaging board segment.

The Company was able to increase acreage under farm forestry significantly in 2011-12 by aggressive efforts. This will augment supplies of wood from our nearby catchment area and help us reduce transportation of wood from long distances.

The Company carried out some upgradation and de-bottlenecking in its Packaging Board plant at Unit CPM which enhanced its capacity from 60,000 tpa to 84,000 tpa. The Company's factories have been consistently operating at more than 100% of its stated capacities. This is due to continuous improvements and modernisation of plant and machinery. In order to better reflect the current production capabilities, the management considers it appropriate to re-state the installed capacity at 2,90,000 tpa.

INDUSTRY SCENARIO

India's per capita consumption of paper and board has shown consistent rising trend in recent years and it is expected that the market size will rise to 20 million tonnes by 2020 from around 10.5 million tonnes in 2010-11. Despite the slower growth last year due to economic slowdown, medium to long term growth potential of the industry remains bright.

Low per capita consumption of paper and board, at around 9.5 kg, vis-à-vis the average World consumption of 58 kg., along with increasing literacy levels, higher spending on education sector, changing urban lifestyles as well as better economic growth augur well for sustained growth of the Indian Paper industry.

Office Papers: The market for office papers was adversely affected last year due to general economic slowdown and the consequent lesser spends by corporate and other sectors. Bunching of capacity additions in recent years added to the market pressure. However, there are signs of improvement and sales have picked up to some extent in the last quarter of the year. This trend is likely to continue in the coming quarters.

Coated Papers: The two-side coated segment where your Company operates exhibited a growth of about 12% during the year and continues to grow robustly due to high growth in corporate retailing and shift in marketing and branding methodology. However, the prices were adversely impacted during much of the year due to higher imports from China and South Korea at low prices. In the recent months, steep depreciation of the Rupee coupled with reduced pressure from these sources have enabled the industry in improving realisations.

Packaging Board: The overall segment has grown at around 9-10% during the last year. The main reasons for this increase in demand are rising disposable incomes and retail boom both of which call for superior grade packaging. This is resulting in shifting of lower quality packaging board to premium quality packaging board. The Company opines that these trends are likely to sustain in the medium to long term thus making this sector poised for growth. JK Paper has been focussing on the upper end of Packging Board which is benefitting from the shifts.

EXPANSION

JK Paper's expansion cum modernization project is on track. It envisages enlarging the annual capacity from the current 2,90,000 tonnes to 4,55,000 tonnes per annum by early 2013. The Rs. 1,653 crore expansion project achieved financial closure with financing done through a mix of funding viz: Rights Issue, FCCBs, Internal Accruals, Rupee-debt from Indian Banks and Forex-debt from multilateral development funding institutions.

This expansion plan will enable us to retain our leadership position in the Office Paper segment. New production line will manufacture multi-purpose cut size Office Papers. The machines from Germany and Finland incorporate the latest technology and are being sourced from the world leaders in the respective fields.

By introducing contemporary technology, the Company will be able to conserve water and energy besides reducing emissions and waste discharge. It will also give us scale economies, help reduce consumption of coal and lead to more efficient use of fibre which will help the Company in being more cost competitive.

Physical progress of the project is as per schedule, and project is expected to be complete by end of this calendar year. Commercial production is expected during beginning of next calendar year.

To part finance the above expansion at Unit JKPM, at district Rayagada, Odisha and to fund expenditure for general corporate purposes, your Company had during the year under review issued 5,84,70,686 Equity Shares of Rs. 10 each at a price of Rs. 42 (including premium of Rs. 32) aggregating to Rs. 245.58 Crore on Rights basis in the ratio of three Equity Shares for every four Equity Shares held on the Record Date i.e. 27th July 2011.

Consequent to the Rights Issue, the paid-up Equity Share Capital of the Company increased w.e.f. 3rd September 2011 to Rs. 136.62 Crore from Rs. 78.15 Crore. The proceeds of the Rights Issue are being utilised as per objects of the issue and pending full utilisation, the balance amount are invested in mutual funds and fixed deposits with banks.

Your Company had also issued unsecured & unlisted Foreign Currency Convertible Bonds (FCCBs) aggregating to Euro 35 Million (equivalent to Rs. 226.14 Crore) to European Development Financial Institutions in May, 2011. Various loans have also been negotiated from domestic and international banks/ institutions and the project finance stands fully tied-up.

CUSTOMER-IN CULTURE AND QUALITY

JK Paper has been committed to meeting customers needs by offering them a range of products that confirm to their varied requirements. We have been doing this through regular and continual up gradation in product quality, modernization and adoption of latest technology & processes, and strict adherence to quality standards and pro active customer interaction.

Customers are periodically invited to the Mills for interaction with our workmen and staff. This makes the Company staff more quality conscious and customer focussed. The Company has been taking up regular audits to identify the areas for improvement and take appropriate corrective and preventive measures. This has helped to understand customer preference and prepare ourselves to stay ahead of competition. Last year, we developed new products for specific segments like C1S coated boards (Natural shade), Playing Card Boards, and Up gradation of JK Easy copier shade etc.

CORPORATE SOCIAL RESPONSIBILITY

The Company has been focusing on four major areas in CSR activities: Education, Health care, Skill development, Livelihood interventions and Community development. A detailed report on the Company's CSR activities is given in the Annual Report.

Adult Education Model has successfully enabled many illiterate women, especially tribal and SCs/ STs, to become literates through our community based Adult Education Centres. Till now we have created around 5,300 literates under this scheme. Recent years have seen up-scaling of activities in this area.

Unit CPM has adopted an ITI to help to reduce the gap between training of students and industry's requirements. The Company's initiative has been recognised by Government by making this ITI a Model Centre in Gujarat for other business units to emulate.

Self Help Groups (SHG): Our efforts have motivated many tribal women to organize into SHG. They have initiated different income generating activities like hill broom binding, phenyl making, tamarind processing and a host of other activities that fi nd ready market in nearby urban areas.

Basic health services including free medicines to ST & SC people through health camps were organised in nearby villages at regular intervals. Over 6,300 patients have availed the services last year.

Community development initiatives through "SPARSH": To carry out our CSR activities in a focused and systematic manner we have formed an NGO "SPARSH". Through this we have been organising structured activities in two broad areas viz. Livelihood Interventions and Health Care Interventions.

ENVIRONMENT

JK Paper believes in the betterment of the Environment and its Safety. It has been introducing cleaner and environment-friendly technologies. Both the units of the Company are ISO 9001-2000, ISO 14001 certified for their Quality and Eco-friendly operations and OHSAS-18001 Certified for Health, Safety and Security.

The Company has been pursuing continuous improvement activities which have helped it conserve resources. Better technology combined with process innovation and efforts by all concerned have helped it achieve savings in water consumption through recycling, reuse and minimising waste water discharge. We have also been able to conserve energy through this approach and reduce its gas/air emissions as well.

AWARDS AND RECOGNITION

It is a matter of great satisfaction that your Company has continued to be conferred several awards in recognition of its commitments to excellence, efficiency & environment friendliness.

Unit JKPM has been awarded the following;

(a) Greentech Environment Excellence Award for Outstanding achievement in Safety Management.

(b) Silver Award in Paper Sector from Greentech Foundation.

(c) National Award for Excellence in Energy Management 2011 as an "Energy Efficient Unit" from Confederation of Indian Industries (CII), and

(d) Second Prize for "Best Practices in Industrial Relations" from Confederation of Indian Industries (CII), Bhubaneswar.

Unit CPM has been awarded the following;

(a) CII National HR Excellence Award – Strong Commitment to HR Excellence, 2011,

(b) Greentech Foundation CSR Gold Award – 2011,

(c) Greentech Safety Gold Award – 2011, and

(d) South Gujarat Chamber of Commerce & Industry Productivity Award – 2011.

DIRECTORS

During the year Mr. Wim Wienk has joined the Board of the Company as a nominee of the FCCB investors. He is an Additional Director and would be appointed as a Director liable to retire by rotation at the forthcoming Annual General Meeting of the Company. Smt. Vinita Singhania, Shri Udayan Bose and Shri M.H. Dalmia retire by rotation at the ensuing Annual General Meeting and being eligible to offer themselves for re-appointment.

AUDITORS

The observations of the Auditors in their Report on Accounts read with the relevant notes are self- explanatory.

M/s. Lodha & Co., Chartered Accountants, the Auditors of the Company have not offered themselves for re- appointment at the ensuing Annual General Meeting. The Board of Directors wish to place on record its sincere appreciation of the services rendered by M/s Lodha & Co.

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, have given their consent to be appointed as Auditors of the Company. The Auditors have confirmed that they have undergone the peer review process of the Institute of Chartered Accountants of India and hold a valid certificate issued by the 'Peer Review Board' of ICAI.

COST AUDIT

The Cost Audit Report for the financial year ended 31st March, 2011 was filed by the Cost Auditor with the Ministry of Corporate Affairs, Government of India, on 28th Sept. 2011 (due date 30th Sept. 2011).

The Cost audit for the year ended 31st March, 2012 will be conducted by M/s. R.J. Goel & Co., Cost Accountants, and the reports will be submitted to the Ministry of Corporate Affairs, Government of India in due course.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details of energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed under Section 217(1) (e) of the Companies Act, 1956 read, with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed to this Report and forms part of it.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in Annexure to the Directors' Report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Secretary at the Company's New Delhi address.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis, Corporate Governance Report and Auditor's Certificate regarding compliance of conditions of Corporate Governance are made part of this Annual Report.

SUBSIDIARY COMPANIES

The accounts of the Wholly-Owned Subsidiaries i.e. Songadh Infrastructure & Housing Limited (SIHL) and Jaykaypur Infrastructure & Housing Limited (JIHL), have been consolidated as required by applicable Accounting Standards. With reference to the General Circular No. 2/2011 dated 8th Feb. 2011, issued by the Ministry of Corporate Affairs, Government of India, copies of the Balance Sheet, Statement of Profit & Loss, Reports of the Board and the Auditors of the aforesaid Subsidiary Companies have not been attached to the Balance Sheet of the Company.

However, annual accounts of the Subsidiary Companies and the related detailed information of the Holding and Subsidiary Companies, shall be made available to the shareholders seeking such information at any point of the time. The annual accounts of the Subsidiary Companies are also available for inspection by any shareholder at the Registered and Head Offices of the Company and that of the Subsidiary Companies concerned.

DIRECTORS' REPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i. in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period;

iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial throughout the year under review. Our openness and transparency in dealing with people issues and several path-breaking IR initiatives implemented by the Company have significantly helped not only in signing of Long Term Wage Agreement but also improving the overall atmosphere at our plants.

ACKNOWLEDGEMENT

The Directors acknowledge the continued support and cooperation received from the Central Government, State Governments, Shareholders, participating Financial Institutions, Banks and other Lenders, Customers, Suppliers and Dealers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of Team JK.

On behalf of the Board of Directors

HARI SHANKAR SINGHANIA

Chairman

New Delhi

Date : 14th May, 2012


Mar 31, 2011

The Directors have pleasure in presenting the 50th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2011.

FINANCIAL RESULTS

Rs in Crore (10 million) 2010-11 2009-10

Gross Sales 1,432.97 1,299.57

Profit before Interest and 265.77 245.46 Depreciation

Interest & Financial Charges 45.70 48.49

Profit before Depreciation 220.07 196.97

Profit before Tax 148.45 126.93

Provision for Tax 42.03 35.90

Profit after Tax 106.42 91.03

Surplus brought forward 174.51 111.95

Total amount available for 280.93 202.98 appropriation

APPROPRIATIONS:

Capital Redemption Reserve 0.11 0.21

General Reserve 11.00 10.00

Debenture Redemption 22.94 Nil Reserve

Debenture Redemption (22.94) Nil Reserve Written Back

Dividend:

- On Preference Shares 0.01 0.03 (incl. Ta x on Dividend)

- On Equity Shares (incl. Tax 20.51 18.23 on Dividend)

Surplus carried to Balance Sheet 249.30 174.51

TOTAL 280.93 202.98

DIVIDENDS

Considering the better performance during the year, your Directors had declared an interim dividend of 22.50% on the Equity Capital (Rs. 2.25 per share) on 28th January, 2011. The dividend paid on Preference Share Capital (including interim dividend) at the specifi ed rate is Rs. 0.01 Crore. The total outgo including tax on account of dividend was Rs. 20.52 Crore. In order to conserve funds for the on-going Expansion at Unit JKPM, the Board proposes that the Interim Dividend be treated as Final Dividend for the year ended 31st March, 2011.

PERFORMANCE REVIEW

The Company’s Gross Sales during the year was Rs 1,432.97 Crore, the Operating Profit (PBIDT) was Rs. 265.77 Crore and PAT stood at Rs 106.42 Crore as against Rs. 91.03 Crore during the previous year, an increase of 17%. These represent the highest Gross Sales, PBIDT and PAT achieved by the Company.

The Company’s production increased to 286,019 tonnes (previous year 273,755 tonnes, up 4.5%) and sales stood at 267,081 tonnes as against 265,045 tonnes. Overall, plant capacity utilization was 119% and it is heartening to note that the Packaging Board plant operated at 125 % of its installed capacity. The Company, however, cut back its outsourced volumes due to volatility in the international markets and limited domestic supplies.

Operating Profit (PBIDT) was higher despite increase in raw material cost and price of purchased pulp. Continued spikes in crude oil prices, made several petroleum based chemicals costlier. Lower availability of linkage coal and increase in the price of coal also contributed to higher cost of production. Though the Company was able to contain some of these cost increases due to higher productivity and effi ciencies, it was constrained to raise paper prices during the year. PAT was higher by 17%, despite a higher provision for taxes of Rs 42.03 Crore (previous period Rs 35.90 Crore).

The Indian Paper and Paper Board industry is among the 15 largest in the world by volume. Per capita consumption in the country has increased from 8 Kg to 9.6 Kg over the last 3 years. This, however, is far below the Asian per capita consumption of 35 Kg.

The Company has been following a policy of focussing on value added products, which has paid rich dividends. As a

result, it has strong presence in the segments of Copier Paper, Coated Paper and Virgin Fibre based Packaging Boards.These have all shown rapid growth in demand. The Companys wide distribution network along with emphasis on meeting customer expectations has helped it establish a leadership position in the market, despite strong competitive challenges. JK Paper continues to be the highest producer of Copier and Office Paper in the Country with well established Brands like "JK CopierYJK Easy Copier"."JK Copier Plus","Sparkle", and "Cedar". During the year it tied up with HP to introduce high performance "ColorLok" papers which gives better printability and saves consumption of ink. The Company has also been targeting niche segments through speciality products like "JK Excel Bond", "JK LedgerVMICR Cheque papers" etc.

The market for coated paper continues to grow well. Domestic coated paper prices hardened during the year due to rising costs of inputs. "JK Cote", the Companys coated paper continues to attract a wide variety of customers.

The Packaging Boards business achieved highest production volumes with increased sales of Virgin Fiber based Boards. Demand continues to be strong and JK Paper has established itself as a leading player in this highly demanding segment with Brands like "JK Ultima", "JKTuffcote","JK Neo Purefil" etc.The Board machine was rebuilt in March 2011, which added 24,000 TPA of capacity.

Global pulp and paper industry recovered sharply during the year to reach pre-crisis levels. Prices of pulp rose significantly though they are expected to decline over the next 6-9 months. International paper prices also went up during the year.

In 2010-11 the Company took steps to overcome the setback in plantation activities due to outbreak of "gall disease" last year. It increased plantation to cover 6700 Ha. during the year. As a result of plantation activities taken up by the Company, its share of wood sourced from farm forestry in total raw material use has been on the rise.

EXPANSION

During the year your Company placed orders for major plant and machinery for its expansion program at Unit JKPM. The Rs. 1650 Crore Project envisages

setting up a 215,000 TPA Pulp Mill, 165,000 TPA Paper machine, 55 MW Power block with all requisite auxiliaries.

The equipment is being sourced from leading international and domestic suppliers and incorporates efficient & contemporary technologies. The plant will

deliver not only high- quality end product but will also result in lower cost of operation and have a beneficial impact on the environment.

A dedicated team has been put in place for

implementing the Project, aided by external technical consultants. Photocopier and Office papers from the new facility will be available for sale towards the later part of FY 2012-13.

The Company is at an advanced stage of achieving financial closure through an appropriate mix of internal accruals, debt & equity.

CUSTOMER SATISFACTION AND QUALITY

The Companys commitment and success in delivering

high quality products and services to customers has been a major reason for its attaining and retaining a leadership position in the Indian Paper Industry. JK Papers obsession towards Quality and Customer Satisfaction is reflected in understanding and fulfillment of expectations of the customers, big or small. This in turn has been a key factor in its growth and the advantage that the Company has been able to build over the years in terms of a wide and loyal distribution network.

JK Paper became the first Indian Company to produce and sell ColorLok copier paper in India.This exclusive tie up with HP, helps us in bringing in world class printing paper for the increasingly demanding Indian

customers.

The Company continues to conduct regular audit for its quality standards and customer satisfaction

through research conducted in-house and also by an independent agency. This helps it to be in constant touch with changing customer preferences and develop its products to stay well ahead of the curve.

CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to the health and safety

of its employees and its neighbourhood and believes

in pursuing its business growth objectives in a socially responsible and ecologically sustainable way.

We strive to actively contribute to the social and economic development of the communities in which we operate. Our CSR efforts are focused on helping the citizens of our vicinity lead a healthier, happier & more meaningful life.

Towards this end a new School building was opened with spacious premises and all modern infrastructure for housing the English medium Singhania Public School at Unit CPM, Gujarat. This CBSE School is open to children of employees as well as those from surrounding communities. It has received enthusiastic response in the whole of Tapi district.

The Company has been pursuing an adult education model to help adults become literate through community based Adult Education Centers. Teachers from villages have been nominated to spread literacy in the peripheral villages.

Basic health services through distribution of free medicines and organizing of health camps is done at regular intervals to serve underprivileged communities. More than 5500 persons have benefi ted from such programs and 1760 children have been immunized during the year.

The Company continued with its efforts towards empowerment of women through Self Help Groups (SHGs) that have already been established. During the year more activities for income generation of these predominantly tribal women were undertaken. Several young girls were also trained in embroidery and tailoring and were educated on health and hygiene through activities like Balika Mandals.

ENVIRONMENT

JK Paper has always laid emphasis on adoption of best environmental management practices in order to go beyond stipulated standards. Both the production units strive continuously to benchmark best practices and inculcate them in their systems. The ISO 14001: 2004 and OHSAS 18001 : 2007 certifi cation of both the units bears a testimony of our commitment towards Safety and Environment. The occupational Health and Safety process is implemented through periodic Safety Audits, Safety observations, TPM

Audits and Environment Audits focusing on SHE issues.

It is really matter of great pride that JK Paper Ltd. was nominated as one of the 6 fi nalists worldwide for the "Environmental Strategy of the Year Award 2010” sponsored by Pulp and Paper International, UK. These global awards recognize the achievements of Companies, mills and individuals in the sector based on their contribution to the Environment, Adoption of superior technology and equipment with respect to resource conservation, energy and eco-friendliness.

A number of schemes for energy and water saving were identifi ed during the audit under Cleaner Production Programme of IFC Washington. Many of these schemes have been implemented along with internally generated ideas which have resulted in reducing the Water requirement by 11% and Electricity requirement by 6% per Tonne of production over the last two years.

At Unit CPM, a project is underway for usage of treated effl uent water for irrigation in nearby areas. Combined recharging cum Rain Water Harvesting (RWH) system has been implemented at our plant and its housing colony. In its pursuit of excellence in Environmental management practices, the Company also operates lime sludge recycling plant at both its factories.

AWARDS AND RECOGNITION

It is a matter of great satisfaction that JK Paper has been conferred "Dun & Bradstreet – Rolta Corporate Award 2010” as the top Indian Company in the Paper Industry.

Unit CPM was awarded "Greentech Environment Gold Award – 2010” and "Greentech Safety Gold Award – 2010” in the Paper Sector from Greentech Foundation, New Delhi. Unit JKPM also received the "Greentech Environment Excellence Award – 2010” in the Silver category. These awards are a recognition of exemplary environmental and safe operation systems being practiced at the Mills, and refl ect our commitment towards Environment Protection and Safety.

Quality circles at Unit JKPM bagged 6 awards in the Gold category and also a Best Case study presentation Award at the 19th Koraput Chapter Convention. Tw o quality circles also received recognition in the "Excellent” category at the National Convention on

Quality Circles held at Visakhapatnam between 27th and 29th December 2010.

The Industrial Health & Safety Department, Government of Gujarat, also gave "Shram Veer Award" to one of our employees for innovative idea and productivity improvements.

DIRECTORS

ShriArun Bharat Ram, Shri Dhirendra Kumar and Shri Shailesh Haribhakti retire by rotation at the ensuing Annual General Meeting and being eligible offer

themselves for re-appointment.

Shri Shailendra Swarup ceased to be a Director on the Companys Board from 28th January, 2011 The Board places on record its sincere appreciation of the valuable services rendered by him during his tenure.

AUDITORS

M/s. Lodha and Co., Chartered Accountants, the Auditors of the Company are eligible for re- appointment at the ensuing Annual General Meeting. The Auditors have confirmed that they have undergone the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of ICAI. The observations of the Auditors in their Report on Accounts read with the relevant notes are self-explanatory.

COST AUDIT

The Cost Audit Report for the financial year ended 31st March 2010 was filed by the Cost Auditor with the ministry of Corporate Affairs, Government of India, on 07.09.2010 (Due date 30.09.2010).

The Cost audit for the year ended 31st March 2011 will be conducted by M/s. R.J. Goel & Co., Cost Accountants and the reports will be submitted to the Ministry of Corporate Affairs, Government of India.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details of energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed under Section 2l7(l)(e) of the Companies Act, 1956 read, with the Companies (Disclosure of Particulars in the Report of Board of

Directors) Rules, 1988 is annexed to this Report and forms part of it.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in Annexure to the Directors Report. However, as per the provisions of Section 2l9(l)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Companys New Delhi address.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis, Corporate Governance Report and Auditors Certificate

regarding compliance of conditions of Corporate Governance are made a part of this Annual Report.

SUBSIDIARY COMPANIES AND SCHEME OF ARRANGEMENT

The accounts of the wholly-owned subsidiaries i.e. Songadh Infrastructure & Housing Limited (SIHL) and Jaykaypur Infrastructure & Housing Limited (JIHL), have been consolidated as required by applicable Accounting Standards. With reference to the General Circular No. 2/2011 dated 8th Feb. 2011, issued by the Ministry of Corporate Affairs, Government of India, copies of the Balance Sheet,Profit& Loss Account, Reports of the Board and the Auditors of the aforesaid Subsidiary Companies have not been attached to the Balance Sheet of the Company. However, annual accounts of the Subsidiary Companies and the related detailed information of the holding and subsidiary Companies.shall be made available to the shareholders seeking such information at any point of time.The annual accounts of the subsidiary companies are also available for inspection by any shareholder at the Registered and Head Offices of the Company and that of the Subsidiary Companies concerned.

The Scheme of Arrangement, between the Company and the wholly owned subsidiaries of the Company (SIHL and JIHL) and their respective Shareholders (the

Scheme) was sanctioned by the Hon’ble High Court of Orissa on 1st October 2010 and by the Hon’ble High Court of Gujarat on 24th December 2010. Upon fi ling the certifi ed copies of the Orders of the Hon’ble High Courts of Orissa and Gujarat with the respective Registrar of Companies, the said Scheme became effective on 20th January 2011 ("Effective Date”) and become operative w.e.f "The Appointed Date” i.e. 1st April 2009 as per the Scheme.

Consequently the CPM Staff Housing Undertaking and JKPM Staff Housing Undertaking of the Company stood transferred and vested in SIHL and JIHL respectively, w.e.f. 1st April, 2009 as going concerns. The consideration as per the Scheme has been settled by the Subsidiary companies and further necessary steps as required by the scheme are being taken.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period;

iii. proper and suffi cient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and

for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial throughout the year under review. We acknowledge the wholehearted support and cooperation provided by employees at all levels of the organization and appreciate the valuable contribution made by them towards the growth of your company. Several Industrial Relations initiatives implemented by the Company have signifi cantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

ACKNOWLEDGEMENT

The Directors acknowledge the continued support and cooperation received from the Central Government, State Governments, Shareholders, participating Financial Institutions and Banks, Customers, Suppliers and Dealers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of Team JK.

On behalf of the Board of Directors

HARI SHANKAR SINGHANIA Chairman

New Delhi Date : 29th April, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 49th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2010.

The Company is paying tribute to Lala Lakshmipat Singhania (1910-1976), on his Birth Centenary Year. Late Lala Lakshmipat Singhania was a key architect of JK Organization, a true visionary, who believed in the philosophy of inclusive growth for all sections of the society. The best ever performance by the Company is a benefi ting tribute to the great founder.

FINANCIAL RESULTS

Rs in Crore (10 million)

2009-10 2008-09

Gross Sales 1,299.57 1,268.34

Profi t before Interest and 245.46 182.24

Depreciation

Interest & Financial Charges 48.49 58.47

Profi t before Depreciation 196.97 123.77

Profi t before Tax 126.93 54.08

Provision for Tax 35.90 16.07

Profi t after Tax 91.03 38.01

Surplus brought forward 111.95 93.90

Total amount available for 202.98 131.91

appropriation

APPROPRIATIONS:

Capital Redemption Reserve 0.21 0.40

General Reserve 10.00 3.50

Dividend:

- On Preference Shares 0.03 0.06 (incl. Tax on Dividend)

- On Equity Shares (incl. Tax 18.23 16.00 on Dividend)

Surplus carried to Balance Sheet 174.51 111.95

TOTAL 202.98 131.91

DIVIDENDS

Your Directors are pleased to recommend a dividend of 20% on the Equity Capital. The dividend payable on Preference Share Capital (including interim dividend of Rs. 0.01 Crore) at the specifi ed rate is Rs. 0.03 Crore. The total outgo including tax on account of dividend would be Rs. 18.26 Crore.

PERFORMANCE REVIEW

The Company’s Gross Sales during the year was Rs. 1,299.57 Crore, the Operating Profi t (PBIDT) was Rs. 245.46 Crore (an increase of 35% over previous year) and PAT stood at Rs 91.03 Crore as against Rs. 38.01 Crore during the previous year, an increase of 140%. These represent the highest ever Gross Sales, PBIDT and PAT achieved by the Company.

The Company’s production increased to 273,755 tonnes (previous year 254,816 tonnes, an increase of 7.4% over previous year) and sales stood at 265,044 tonnes as against 256,918 tonnes in previous year. Overall, plant capacity utilization was 114% and it is heartening to note that the recently started Packaging Board plant operated at 118% in its second full year of operations. The Company, however, cut back its outsourced volumes due to volatility in the international markets and diffi culty in getting supplies domestically.

The growth in Operating Profi t (PBIDT) was possible due to increased capacity utilization in all the production lines, sales of more value added products in Packaging Board, strategic purchase of imported pulp at lower prices, and soft crude oil prices which made several petroleum based chemicals rule easy. Government’s stimulus package also helped the industry in containing the effect of the slow down in demand in the early part of year. Interest expense came down signifi cantly to Rs 48.49 Crore from Rs 58.47 Crore during the previous year, a decrease of 17%. This was possible due to large re-payment of loans out of cash generation, tighter credit and stocking policies leading to a reduction in working capital funds. The PAT consequently was higher by 140%, despite a higher provision for taxes at Rs 35.90 Crore (previous period Rs 16.07 Crore).

After the turmoil in the fi nancial markets during the previous year, the year saw the beginnings of a recovery in the world economy, even if unevenly across geographies. India was one of the earliest to recover from the crisis and its monetary and fi scal management before and during the crisis has been acclaimed widely. Despite a year of drought, industrial activity exhibited growth. This was refl ected in Paper industry as well. Although, there was some sluggishness in output prices during the early part of the year due to cost cutting measures by several Government Departments and the corporate sector and new paper capacities coming on stream, prices recovered in the last quarter due to smart demand pick up.

Low per-capita consumption, increasing GDP growth rates, increased emphasis on education and literacy, growth in organized retail and demand for better quality papers and boards augur well for the sustained growth of the industry.

The Company is well positioned to take advantage of this growth due to its presence in all high value added segments. All the three major segments – Copier, Coated and Virgin Fibre based Packaging Boards – have grown for the last 4-5 years at double digit rates. Positive growth continued even during the turmoil seen in the last 18 months. The Company’s extensive distribution reach and depth helps it in tackling competitive and price pressures.

The demand for the Company’s fl agship copier papers is linked to the performance and growth of the industrial sector, levels of activity in the service sector, besides use in the household and education sector. Although it had a modest start, the overall annual growth rate for the segment clocked double digits. During the last quarter most of the pipeline inventories got cleared, leading to hardening of prices. The Company continues to be the market leader in the segment with offerings across the entire spectrum with its well known brands such as JK Copier, JK Easy Copier, JK Copier Plus, Sparkle, and Cedar. Besides this, the Company also focuses on niche segments through specialty products like JK Excel Bond, MICR Cheque papers etc.

Coated paper prices were volatile during the fi rst half of the fi nancial year, tracking international prices and increased imports of coated paper. However, JK Paper was able to improve its performance through improved effi ciency and lower chemical cost, even though realization fell marginally. The outlook for JK Cote, the Company’s coated paper remains favourable especially as prices in the international market have moved up due to surge in paper price.

The Packaging Board business achieved substantial growth and turned in a strong performance. Production reached 118% of installed capacity with the entire production being high value added virgin fi bre based boards by the middle of the year. Yo u would be happy to note that all major brands – JK TuffCote, JK Ultima, and JK PureFil are now widely recognized and well received by the end consumers. Most of the end user industries using value added Packaging Boards such as the grades marketed by JK Paper are growing at a fast clip which should translate into better growth and profi t performance for the segment.

During the year, the prices of imported pulp fell sharply. The Company increased its stock levels and resorted to strategic buying of pulp when the international prices touched their lowest levels in several years. This contributed signifi cantly to profi tability in the packaging board business. However, towards the end of the year, the pulp prices have once again risen sharply due to demand pick-up in China, restrictions in global wood supply and temporary capacity shuts in Chile due to the earthquake in February 2010. As a result, the Company has had to pass on part of these increases to its end customers.

While input costs remained under control, the availability of adequate quantity of linkage coal continues to pose problems.

Availability of raw material (wood) of appropriate quality at affordable prices will govern the growth and profi tability of the paper industry. To ensure continued availability the Company continued to pursue farm forestry during the year with renewed focus on plantation within a 100 km radius of factory locations. However, plantation activity for the entire industry suffered due to emergence of gall disease leading to destruction of saplings and trees and resultant reduction in new plantation acreage. The industry hopes to recover from this in the coming year. The share of wood sourced from JK Paper farm forestry is steadily increasing and has touched 76% during the year.

EXPANSION

As mentioned previously, the Copier segment is growing steadily every year. In order to maintain the Company’s leadership in this segment, JK Paper has embarked upon a major expansion programme. The programme envisages installation of a new paper machine of 150,000 tpa and pulp mill of 200,000 tpa along with utilities. This will help the Company in taking advantage of newer and more effi cient pulping technology, besides upgrading the quality of its copier paper. A dedicated team of qualifi ed professionals have been put in place to work out the details of implementation. The Company will fi nance the project through an appropriate mix of debt, internal accruals and equity.

CUSTOMER SATISFACTION AND QUALITY

Any product is built on quality and the key is consistency in features and its performance. This in turn works as the key differentiator in developing a ‘Brand’ USP delivering a positive consumer experience. The Company’s Quality Policy is to actively engage with the customer and provide them with desired quality products. For this it has dedicated technical service teams which work on providing end-to-end solutions. This intrinsic strength of JK Paper has enabled it to produce winning brands and stay ahead in the quality race in the Indian paper industry.

Keeping this philosophy in mind, the Company introduced high bright copier paper with brightness in the range of 97 degree ISO. The packaging board brands likes Endura, JK Club Card etc. introduced this year are testimony to the Company’s policy of tailoring its offerings to meet the constantly evolving needs of its consumers.

This is supplemented through constant market feedback and in-house research. The Company conducts periodic customer satisfaction surveys through in- house as well as independent agencies, which provides it with directions for product development, and service levels.

JK Paper’s constant obsession towards excellence resulted in its winning the TPM Consistent Commitment Award this year, taking it a level up from winning the TPM Excellence Award- First Category previously.

CORPORATE SOCIAL RESPONSIBILITY

The Company has always believed in pursuing its business growth objectives in a socially responsible and ecologically sustainable way. It is committed to the health and safety of its employees and those in the neighbourhood and believes in inclusive growth.

JK Paper believes in committed to go beyond the stipulated environment standards and ensuring energy conservation and productive recycling of waste. Both its production units are certifi ed for ISO 9001, ISO 14001 and OHSAS 18001. During the year our ISO 9001:2000 certifi cation was upgraded to ISO 9001:2008 and OHSAS 18001:1999 certifi cation was upgraded to 18001:2007.

The Company relentlessly pursues cleaner production processes that inherently reduce pollution levels and require lesser resources per unit of output. During the previous year the International Finance Corporation conducted a Cleaner Production assessment which helped in identifying several specifi c initiatives for cost savings, low-cost upgrades and reducing the energy and water consumption. It provided a loan of USD 3 million to implement these initiatives. This is estimated to result in 17% reduction in water consumption and 10% savings in energy consumption. The savings envisaged equal the average annual water consumption of 75,000 Indian households and energy use of 9,100 families.

The Company has installed lime sludge recycling plants at both its factories. State-of-the-art industrial Effl uent Treatment Plant (ETP) ensures that the Company’s effl uents are well within the norms prescribed. The quality of effl uents, water and air emissions are tested and monitored on an ongoing basis.

Treated effl uents are re-cycled and used in factory processes or towards horticulture. In view of the acute drought and severe water shortage in the country, we have installed rainwater harvesting systems in our premises.

Our focus is on all-round development of the communities around our plants located in distant rural area and tribal belt. This includes education, health and family welfare, infrastructure development, social causes, sustainable development and livelihood generation. During the year another 21 Adult Literacy Centers were opened in the nearby villages, 26 Mobile medical camps in nearby villages to provide health care facilities to unprivileged people were organized. 25 Women Self-Help Groups have been formed in 12 adopted villages with a membership of 294 rural Women, mostly belonging to Tribal Community. As a part of Health Education, 29 Balika Mandals with 466 adolescent girls were formed for sensitizing the target audience on basics of health care.

The Company’s social farm forestry programme, provides better livelihood opportunities to farmers as an endevaour to build a better, sustainable way of life for the weaker sections of society.

To further intensify our efforts on the Community Development front and thereby to create a better quality of life to the people of the society in the vicinity, we have formed a new NGO named SPARSH.

AWARDS AND RECOGNITION

Unit JKPM was awarded “National Energy Management Award – 2009” by Confederation of Indian Industry (CII), and “Best Practices in Industrial Relations – 2009” award by Hooghly Chamber of Commerce and Industry, Collate. For promoting water conservation through recycling & reuse, this unit has also been awarded the prestigious “Ground Water Augmentation” award (Bhumijal Samvardhan Puraskar), from the Ministry of Water Resources, Government of India. The Directorate of Factories & Boilers, Government of Orissa, Bhubaneswar, has given “State Safety Award” to one of our employees for saving human life.

Unit CPM was awarded the “National Energy Conservation Award - 2009” by Bureau of Energy, Government of India, in appreciation of the efforts in Resource Conservation in Pulp & Paper Sector. The unit has also won, “Greentech Environment Excellence Gold Award – 2009” as well as “Greentech Safety Silver Award – 2009” from Greentech Foundation.

During the year, both the units were also awarded “Excellence in Consistent TPM Commitment Award – 2009” by Japan Institute of Plant Maintenance.

DIRECTORS

Shri R.V. Kanoria, Shri S.K. Pathak and Shri Shailendra Swarup retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

AUDITORS

M/s Lodha and Co., Chartered Accountants, the auditors of the Company are eligible for re-appointment at the ensuing Annual General Meeting. The Auditors have confi rmed that they have undergone the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certifi cate issued by the ‘Peer Review Board’ of ICAI. The observations of the Auditors in their Report on Accounts read with the relevant notes are self-explanatory.

COST AUDIT

The Cost audit for the year ended 31st March 2010 will be conducted by M/s R.J. Goel & Co., Cost Accountants and the reports will be submitted to the Ministry of Corporate Affairs, Government of India.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details of energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read, with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed to this Report and forms part of it.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in Annexure to the Directors’ Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Secretary at the Company’s New Delhi address.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis, Corporate Governance Report and Auditor’s Certifi cate regarding compliance of conditions of Corporate Governance are made a part of this Annual Report.

SUBSIDIARY COMPANIES AND SCHEME OF ARRANGEMENT

Both Songadh Infrastructure & Housing Limited and Jaykaypur Infrastructure & Housing Limited became wholly-owned subsidiaries of the Company during the year. Accordingly, the Accounts of the Companies have been consolidated as required by applicable Accounting Standards. In terms of the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profi t & Loss Account, Reports of the Board and the auditors of the aforesaid Subsidiary Companies have not been attached to the Balance Sheet of the Company. However, the related detailed information of the annual accounts of the Subsidiary Companies will be made available to the investors seeking this information at any point of the time. The annual accounts of the Subsidiary Companies are also available for inspection by the investors at the Registered and Head Offi ces of the Company and that of the Subsidiary Companies concerned.

A Scheme of Arrangement, which provides for the transfer and vesting of the CPM Staff Housing Undertaking to Songadh Infrastructure & Housing Limited and JKPM Staff Housing Undertaking to Jaykaypur Infrastructure & Housing Limited, has been fi led with the High Courts of Gujarat and Orissa for their approval, pursuant to Sections 391 to 394 of the Companies Act.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profi t & Loss of the Company for that period;

iii. proper and suffi cient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial throughout the year under review. Several Industrial Relation initiatives implemented by the Company have signifi cantly helped in improving the work culture, enhancing productivity and enriching the quality of life of the workforce.

ACKNOWLEDGEMENT

The Directors acknowledge the continued support and cooperation received from the Central Government, State Governments, Shareholders, participating Financial Institutions and Banks, Customers, Suppliers and Dealers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of Team JK.

On behalf of the Board of Directors

HARI SHANKAR SINGHANIA Chairman

New Delhi

Date : 17th May, 2010