To the Members,
The Directors have pleasure in presenting the 61st Annual Report along with Audited
Financial Statements of the Company for the financial year ended 31st March 2022.
FINANCIAL RESULTS
Rs in crore (10 Million)
| Particulars |
2021-22 |
2020-21 |
| Revenue from Operations |
4165.76 |
2,969.15 |
| Profit before Finance Costs and Depreciation & Tax (EBITDA) |
1023.09 |
701.41 |
| Profit before Depreciation and Tax (PBDT) |
930.44 |
607.04 |
| Profit After Tax (PAT) |
511.09 |
322.19 |
DIVIDEND
Your Directors are pleased to recommend a Dividend of Rs 5.50 per share (55%) on the
Equity Share Capital of Rs 169.40 crore for the financial year ended 31st March 2022. The
dividend outgo will be Rs 93.17 crore. The dividend payout is in accordance with
the Dividend Distribution Policy of the Company, subject to deduction of tax at source, as
may be applicable.
RESERVES AND APPROPRIATIONS
The amount available for appropriation, including surplus from the year, stood at Rs
1515.51 crore. The Directors propose this to be appropriated as under:
Rs in crore (10 Million)
| Item |
2021-22 |
2020-21 |
| General Reserve |
200.00 |
200.00 |
| Dividend for 2020-21 |
67.76 |
- |
| Surplus carried to Balance Sheet |
1247.75 |
1004.42 |
PERFORMANCE REVIEW
The operating results of your Company for the financial year 2021-22 has been one of
great satisfaction. Despite challenges from 2nd wave of Covid 19 during the early part of
the year, supply disruptions and steep input price increases during the year, the Company
declared its highest ever Sales, EBIDTA and PAT. The Gross Sales, EBIDTA and PAT were
increased by 40%, 46% and 59% respectively compared to 2020-21.
The Company’s inherent strengths of its people, brand loyalty, customer
centricity, high operating efficiencies and the continued expansion of its plantation
efforts in nearby areas have combined to make this performance possible. Your Company
continues to outperform its peers and maintains its leadership position in several of its
segments.
The impact of the Pandemic on the operations of the Company was largely confined to the
beginning of the year. With the educational institutions and offices gradually opening up
towards the end of the year, the demand for the Company’s writing and printing papers
improved, resulting in higher realizations. The prices of key inputs like Coal, Wood,
imported Pulp and certain Chemicals increased sharply during the year. These were largely
passed in the market and partially made up by improved operating efficiencies. The Company
operated its SOPs during the entire Pandemic period and worked with the local communities
and Government to vaccinate its staff and their families. The Company also lent its
services to the local administration in tackling the pandemic and minimize its impact in
the neighborhood. While the Industry scenario both domestic and overseas, the market and
demand supply balance and other operating conditions are elaborated in the Management
Discussion and Analysis section, the situation regarding supply of Coal and Wood and key
inputs like imported pulp and chemicals continue to remain a matter of concern.
NEW PROJECTS AND SUBSIDIARIES
(i) Packaging Board Project at Unit CPM
As reported last year, the Company had embarked upon an expansion of its Virgin Fibre
Board (VFB) capacity by 170,000 TPA at Unit CPM to take advantage of its strong market
standing, good growth arising from changes in organised retail and need for more
eco-friendly, aesthetic and consumer-friendly packaging. This comprises of a new Board
Machine with an integrated pulp mill and related utilities having a capacity of 150,000
TPA. The Board is happy to report that the project commenced its commercial production on
14th January 2022. Inspite of frequent disruptions due to covid during the last two years,
the total project was completed at a cost of around Rs 1950 crore, net of GST.
With this the Company’s total capacity for Packaging Boards is 270,000 TPA which
gives it an approximate market share of 20%. The board machine has ramped up well and
average capacity utilisation in April 2022 was 90%. The products have been accepted well
not only in India but in overseas markets as well. The team is focused on optimizing all
the operating parameters so as to get the desired quality with optimum yields and full
output.
(ii) Progress at The Sirpur Paper Mills Ltd. (SPML)
Since takeover in August 2018, the Company has been investing in upgrading various
sections and has replaced the Power systems for better efficiency. The Board is happy to
note that the unit has seen steady increase in capacity utilization during the last year.
The average capacity utilization for the year 2021-22 was 72%. This is despite Covid
related disruptions from time to time.
The quality of products has been upgraded significantly and is well accepted in the
market, as observed with the prices of end-products reaching parity with similar products
of other leading players.
(iii) Investments in JKPL Packaging Products Ltd. (JKPPPL)
With growing industrialization and e-commerce markets, the corrugated packaging segment
is expected to grow at a healthy rate. Your Company has formed a subsidiary – JKPL
Packaging Products Limited (JKPPPL) - to diversify into this area. JKPPPL has acquired a
green field site at the Hi-Tech Cycle Valley, Ludhiana. Your Board approved an investment
of Rs 150 crore for this project which is being funded by equity from JKPL and Loans from
Domestic banks. As on date all the key contracts for execution of the project have been
awarded. The project is planned to go on stream in March 2023.
(iv) Acquisition of Embedded systems and Electro Optics Business
During the year, your Company acquired the Embedded systems and Electro Optics Business
of Deepti Electronics and Electro Optics Pvt. Ltd. through a Business Transfer Agreement.
CAPITAL STRUCTURE AND CREDIT RATING
During the year under review, there has been no change in the Authorised and Paid-up
share capital of the Company. As on 31st March 2022, the Authorised Share Capital of the
Company was Rs 500 crore and Paid-up Share Capital was Rs 169.40 crore. The Company has
issued and allotted 12,500 rated, unlisted, secured, redeemable, non-convertible
debentures aggregating to Rs.125 crore on private placement basis.
As reported last year, the Company achieved financial closure for its Packaging Board
Project from Indian and foreign banks with a mix of domestic loans, foreign currency loans
from both overseas financial institutions and overseas arms of domestic banks, besides
internal accruals. This was to optimize the interest costs. The financial risks arising
out of these are being managed with a mixture of option and forward contracts, which are
reviewed periodically.
In order to optimize cost of working capital funds, the Company continued to raise
Commercial Papers (CPs) at competitive rates during the year. Over time with a mixture of
CPs, Buyers’ and Suppliers’ Credit in foreign exchange, Rupee Export Credit and
Working Capital Demand Loan, the Company hopes to maintain its cost of working capital
borrowing. The Company has met all its financial repayment obligations during the year and
also prepaid Rs. 96 crore of loan additionally ahead of its scheduled repayments. JK Paper
maintained its long-term credit ratings with CRISIL and India Ratings of AA –
(minus)/Stable inspite of impact of COVID on its operations, delay of Packaging Board
Project at Unit CPM and additional debt taken for the project. The Company continues to
enjoy the highest A1+ credit rating for its short-term debt.
COMPLIANCE WITH SECRETARIAL STANDARDS
The applicable Secretarial Standards issued under Section 118 of the Companies Act,
2013 (‘the Act’) have been complied with.
AWARDS AND RECOGNITION
Our commitment towards Safety & Environment, Quality & Operational Excellence
and HR practices continue to garner appreciation from various industry chambers and social
bodies. Some of the accolades and awards received during the year are as follows:
a) CPM received The Best Employer Brand Award from Gujarat Best Employer Brands Awards
in Sep 2021.
b) JKPM received 22nd National Award for Excellence in Energy Management from CII in
Sept 2021.
c) 7 Teams of JKPM Unit received excellence and Par Excellence Award in 35th National
Convention on Quality Concepts organised by Quality Council forum of India in December
2021.
d) CSR Team Award 2020-21 in the Category CSR & Community Development Initiatives
– awarded by Odissa CSR forum in October 2021.
e) JKPM bagged 2 winner awards for Best Safety Awards from Ministry of Labour &
Employment – Govt of India under the National Safety award 2018 in November 2021.
f ) JK Paper won the CSR Gold Award from a leading Odiya daily newspaper group Sambad
under Corporate Excellence Award – 2022.
g) Unit JKPM won the Platinum Award at the first Industry4.0 Awards & Conference
organized by FICCI under the Overall Digital Transformation category.
INDUSTRIAL RELATIONS
Industrial Relations at both units of the Company continued to remain peaceful and
cordial throughout the year. We value the long association of our employees including
contractors and their workmen to sustain industrial harmony and create a positive work
environment. By introducing various new work practices along with automation, we have
succeeded in enhancing manpower productivity. We encourage continuous interaction,
dialogues and participation of local villagers and other stakeholders in collaborating
various social interventions.
ANNUAL RETURN
Pursuant to the provisions of the Act, the Annual Return of the Company is available on
the website of the Company and can be accessed at
https://jkpaper.com/wp-content/uploads/2022/05/ Annual-Return-2020-21.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of loans, guarantees or securities and investments in terms of the
provisions of Section 186 of the Act are given in the financial statements.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2022, 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 Act and SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 (‘the Listing Regulations’).
Form AOC-2 containing details of the material Related Party Transactions entered during
the Financial Year 2021-22 as per Policy, is attached as Annexure-1 to this Report and
forms part of it.
SEBI vide its Notification dt. 9th November 2021 has amended the provisions relating to
Related Party and Related Party Transactions, effective from 1st April 2022. Accordingly,
amended Policy on Materiality of Related Party Transactions and on Dealing with Related
Party Transactions is available on the website of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Harsh Pati Singhania (DIN: 00086742) was re-appointed as Vice Chairman &
Managing Director of the Company for a period of five years w.e.f. 1st January 2022 by the
Members at the Annual General Meeting (AGM) of the Company held on 31st August 2021 and
accordingly will continue to be a Key Managerial Personnel of the Company.
Smt. Deepa Gopalan Wadhwa (DIN: 07862942) was re-appointed as an Independent Director
of the Company for second term of five consecutive years w.e.f. 27th June 2022 by the
Members at the AGM of the Company held on 31st August 2021. The Board is of the opinion
that Smt. Deepa Gopalan Wadhwa has high integrity and relevant experience.
Shri A.S. Mehta (DIN: 00030694) was re-appointed as President & Director of the
Company for a period of three years w.e.f. 1st April 2022 by the Members at the AGM of the
Company held on 31st August 2021 and accordingly will continue to be a Key Managerial
Personnel of the Company.
Shri Sushil Kumar Roongta (DIN: 00309302), retires by rotation and being eligible
offers himself for re-appointment 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 under the Act and Listing Regulations.
Shri KR. Veerappan has been appointed as the Chief Finance Officer and Whole time Key
Managerial Personnel of the Company w.e.f. 14th May 2022 and Shri V. Kumaraswamy had
ceased to be the Chief Finance Officer and Whole time Key Managerial Personnel of the
Company w.e.f. close of business hours of 13th May 2022.
Except as stated above, there was no other change in Directors and Key Managerial
Personnel of the Company of the Company, during the year under review.
INTERNAL CONTROL SYSTEM
The Company has a robust internal control mechanism across all offices, plants and key
functions. There is a Corporate Internal Audit team consisting of qualified professionals
and system experts. In addition, services of external Audit firms and other specialized
agencies are also availed to further strengthen its effectiveness. Regular internal audits
are conducted to review the internal control systems and compliance thereof as per the
annual audit plan approved by Audit Committee of the Board. The findings of the Audit team
are reviewed by the Audit Committee and corrective actions are initiated, where necessary.
In addition, the Company also follows a Compliance monitoring software tool to capture
status of all applicable statutory compliances online.
The Company has also developed a set of documented Risk Control Matrices for all major
functions and no material reportable weakness was observed during the year.
The Company also has a comprehensive budgetary control system in sync with its
Strategic Business Plan. Key performance targets are set for each Plant and product lines.
The actual performance against these targets is periodically monitored and corrective
actions as needed are initiated.
CORPORATE SOCIAL RESPONSIBILITY
The core of your Company’s CSR activity is centered around creation of sustainable
livelihood opportunities within the parameters of SDG’s and the national
developmental priorities- farmers, women, and youth. The CSR footprint of the Company has
exceeded 800 villages in states of Odisha, Gujarat, Rajasthan and Uttar Pradesh touching
more than 4,00,000 individuals and 60,000 households. The diversity of the interventions
ranges from Farmer Producer Organization, Women Self- Help Groups, Water Harvesting, Soil
Conservation, Youth Enterprises, Community Health, Disaster relief, Digital Literacy
amongst others. Company’s CSR interventions have been co-opted by the local
authorities and integrated with the overall development programmes. The programmes have
been widely reported as model programs in the media and have been visited by important
dignitaries from the government and development sector. The Company has a Corporate Social
Responsibility (CSR) Policy in accordance with the provisions of the Act. CSR Policy of
the Company is displayed on the website of the Company.
Annual Report on the CSR activities undertaken by the Company during the financial year
ended 31st March 2022, in the prescribed format, is annexed to this Report as Annexure-2
and forms part of it.
AUDITORS & THEIR REPORTS
(a) Statutory Auditors
In accordance with the provisions of the Act and Rules made thereunder, M/s Lodha &
Co., Chartered Accountants, were appointed as Auditors of the Company to hold office from
the conclusion of the 56th AGM held in the year 2017 till the conclusion of 61st AGM of
the Company to be held in the year 2022. Accordingly, the term of office of said Auditors
shall expire at the conclusion of the forthcoming AGM.
In terms of the provisions of Section 139 of the Act and the Rules made thereunder,
your Directors have recommended re-appointment of M/s Lodha & Co., Chartered
Accountants, as Statutory Auditors of the Company for another term of five consecutive
years from conclusion of the ensuing AGM of the Company till the conclusion of the 66th
AGM of the Company to be held in the year 2027, for approval of Members of the Company.
M/s Lodha & Co. have given their consent to act as Statutory Auditors of the Company
and have further confirmed that their appointment, if made, at the forthcoming AGM shall
be in accordance with conditions specified in the Act.
The observations of the Auditors in their report on Accounts and the Financial
Statements, read with the relevant notes are self-explanatory. The Auditor’s Report
does not contain any qualification, reservation, adverse remark or disclaimer. During the
year under review, the Auditors have not reported any matter under Section 143(12) of the
Act, therefore no detail is required to be disclosed.
(b) Secretarial Auditor
The Board of Directors had appointed Shri Namo Narain Agarwal, Company Secretary in
Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the
financial year 2021-22. The Report given by him for the said financial year in the
prescribed format, pursuant to the provisions of Section 204 of the Act and Regulation 24A
of the Listing Regulations, is annexed to this Report as Annexure-3 and forms part of it.
The Secretarial Audit Report does not contain any qualification, reservation, adverse
remark or disclaimer.
Pursuant to provisions of Regulation 24A of the Listing Regulations, during the year
under review, the Company has one material unlisted subsidiary incorporated in India- The
Sirpur Paper Mills Limited (SPML). Secretarial Audit Report of Shri Namo Narain Agarwal,
Secretarial Auditor, for FY 2021-22 of SPML in the prescribed format is annexed to this
Report as Annexure – 3(i).
(c) Cost Auditors
In accordance with the provisions of Section 148(1) of the Act, the Company has
maintained cost accounts and records. The Cost Audit for the financial year ended 31st
March 2021 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and the Cost
Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India.
The Audit of the Cost Records for the financial year ended 31st March 2022, is being
conducted by the said firm and the Report will also 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 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. Further, during the year under review, no applications
were made or no proceedings were pending as at the end of the year under the Insolvency
and Bankruptcy Code, 2016.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of
the Company which have occurred between the end of the financial year of the Company and
the date of this report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no material change in the nature of business of
the Company.
CONSERVATION OF ENERGY ETC.
The details as required under Section 134(3)(m) of the Act 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 Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is annexed to this Report as Annexure-5 and forms part of it.
Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules, also
form part of this Board Report. However, in terms of provisions of Section 136 of the Act,
the Annual Report for the financial year 2021-22 is 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 also available for inspection at the Registered Office of the Company
on working days during working hours.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of corporate governance
practices. Pursuant to Regulation 34 read with Schedule V of the Listing Regulations,
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 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) 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) Details with respect to composition of Audit Committee and establishment of Vigil
Mechanism.
e) Details regarding Risk Management.
f ) Dividend Distribution Policy.
g) Disclosures under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
SUSTAINABILITY AND BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f ) of the Listing Regulations, the Sustainability and
Business Responsibility Report of the Company for the financial year ended 31st March 2022
is given in a separate section and forms part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the financial year 2021-22
have been prepared in accordance with the Act and applicable Indian 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
joint ventures included in the Consolidated Financial Statements is presented in a
separate section in this Annual Report. Please refer to Form AOC-1 annexed to the
Financial Statements forming part of the Annual Report.
Pursuant to the provisions of Section 136 of the Act, Standalone audited financial
statements, Consolidated audited financial statements along with relevant documents and
separate audited financial statements of each of the subsidiaries are available on the
website of the Company.
During the financial year under review, JKPL Packaging Products Limited became wholly
owned subsidiary of the Company and no other company has become or ceased to be
subsidiary, joint venture or associate of the Company.
DEPOSITS
Pursuant to the approval of members by means of a Special Resolution at the AGM held on
27th September 2014, the Company is accepting deposits from the public and its members, in
accordance with the provisions of the Act and Rules made thereunder.
The particulars in respect of the deposits covered under Chapter V of the said Act, for
the financial year ended 31st March 2022 is annexed to this Report as Annexure-6 and forms
part of it.
DIRECTORS’ RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Act, 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 unstinted support and cooperation received from the
Central Government, State Governments, Stakeholders, participating Financial Institutions
and Banks, Customers, Dealers and Suppliers.
The Board wishes to record its highest appreciation of the total commitment, dedication
and hard work, put in by every employee and member of the Team JK Paper.
|
On behalf of the Board of Directors |
| Place: New Delhi |
Bharat Hari Singhania |
| Date: 13th May, 2022 |
Chairman |
+91-9892691696
