JK Paper Ltd Directors Report.

To the Members,

The Directors have pleasure in presenting the 59th Annual Report along with Audited Financial Statements of the Company for the financial year ended 31st March, 2020.

FINANCIAL RESULTS Rs. in crores (10 million)

Particulars 2019-20 2018-19
Gross Sales 3,254.20 3,469.19
Profit Before Finance Costs and Depreciation & Tax (EBITDA) 984.96 926.05
Profit Before Depreciation and Tax (PBDT) 862.15 803.65
Profit After Tax (PAT) 492.71 437.20

DIVIDEND

In view of improved operating results, your Directors had declared an interim dividend of 40% (H4/- per share) on the Equity Share Capital on 27th February 2020. The Total Dividend outgo including the Dividend Distribution Tax amounted to H85.95 crores. The Board has recommended that the interim dividend declared by it be considered as the final dividend for the financial year ended 31st March 2020.

BUYBACK OF EQUITY SHARES

Encouraged by the financial performance and healthy cash position, the Board has approved Buyback by the Company of its Equity Shares through the open market route from the Stock Exchanges. This is done with the objective of returning surplus funds to shareholders, improving return on equity, optimising capital structure and improving earnings per share, thereby leading to long term increase in shareholders value. The maximum amount approved is H100 crores (Maximum Buyback size) at a maximum price of H130 per Equity Share (Maximum Buyback price). The Maximum Buyback Size will represent 5.67% and 5.71% of the aggregate of the total paid-up Equity Share capital and Free Reserves (including Securities Premium Account) of the Company based on the standalone and consolidated audited financial statements of the Company as on 31st March, 2019, respectively, the date reckoned for calculating eligible amounts.

At the Maximum Buyback Price and for the Maximum Buyback Size, the indicative maximum number of Equity Shares bought back would be 76,92,307 ("Maximum Buyback Shares") which is 4.32% of the total number of fully paid-up Equity Shares of the Company. If the Equity Shares are bought back at a price below the Maximum Buyback Price, the actual number of Equity Shares bought back could exceed the indicative Maximum Buyback Shares.

RESERVES AND APPROPRIATIONS

The amount available for appropriation, including surplus from the year stood at H1243.39 crores. The Directors propose this to be appropriated as under: Rs. in crores (10 million)

General Reserve 200.00
Dividend for 2018-19/2019-20 133.69
Corporate Dividend Tax 27.47
Surplus carried to Balance Sheet 882.23

PERFORMANCE REVIEW

Your Company recorded its best ever financial performance with its highest ever EBIDTA at H984.96 crores (an increase of 6% over previous financial year). Profit Before Tax at H718.59 crores was higher by 6% and Profit After Tax was H492.71 crores higher by 13% over previous financial year. Gross Sales were H3254.20 crores and capacity utilization during the financial year ended 31st March 2020 was 111% despite COVID-19 interruptions during the close of the said financial year.

The better performance was possible due to higher capacity utilization, lower raw material and other input cost and improved operating efficiencies. JK Paper continued its thrust on expanding geographical reach and availability of its products by strengthening the distribution network and responding to market needs by introducing new products. The Companys efforts at promoting plantation activity in the vicinity of its manufacturing units resulted in a greater proportion of raw material requirement being met out of material sourced from shorter distances. This has cut down the total delivered cost of wood at our units. Both the Units (Unit JKPM and Unit CPM of the Company) continued to improve their operating efficiencies to optimize utilization of most inputs. The Companys operating performance ranks among the best in the domestic paper industry.

Lower debt and more efficient working capital management enabled the Company to maintain finance costs despite making investments in the new project and funding the acquisition of The Sirpur Paper Mills Ltd. during the previous financial year. Despite an increase in Depreciation from H125.30 crores to H143.56 crores, Profit Before Tax stood at H718.59 crores compared to H678.35 crores last year, showing an increase of 6%.

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, forming part of this Annual Report.

COVID-19 AND OUTLOOK FOR FY 2020-21

Due to outbreak of COVID-19 pandemic, the Company had to temporarily suspend operations at both its manufacturing facilities - Unit CPM at Fort Songadh, Gujarat and Unit JKPM at Rayagada, Odisha in the last week of March 2020 in compliance with the directives of the Central and respective State Governments. Operations had been resumed in the third week of April 2020 at both its Units. However, the operations continue to be impacted by difficulty in procurement of raw materials, logistic issues both for procuring raw materials and despatch of finished products, non-opening of markets. Due to prevailing uncertainty, the financial and operational impact of COVID-19 is being evaluated by the Company. The Company has put in place "Standard Operating Procedure" (SOP), as per the guidelines and directives of the Ministry of Home Affairs and the Ministry of Health, to safeguard against spread of COVID-19. The Company has organized campaigns to bring awareness amongst all employees and workers on safeguards against COVID-19. Thermal temperature measurements at the entry and exit gates, mandatory use of face masks, hand washing and sanitizing facilities at entry and exit and at different locations of the plant have been put in place along with strict ban on non-essential visitors. Safeguards for social distancing at work place is also being implemented. Meetings, gatherings, travelling etc. are being avoided with focus on video conferencing and other digital modes.

The outlook for FY 2020-21 is heavily influenced by the impact of COVID-19 and the uncertain time it might take the economy and paper markets to come back to normalcy. Much will depend upon the time by which the COVID-19 disease is tamed and the economy gets back on its feet. Some sectors are faced with liquidity issues and some with solvency issues and several key sectors with both. While RBI has announced several high promise measures, the percolation of these measures seem rather tepid given the risk awareness of key lenders – Banks and NBFCs. The expected but delayed stimulus package for industrial and economic revival will have a great bearing on the quality and speed of revival.

Based on the order flow and dispatches after recommencement of operations, feedback from key market players and convertors operations are expected to get back to normalcy only by third quarter of FY 2020-21. The Company is actively looking at exports besides expanding its product basket even those with lesser margins to operate the machines at optimal levels. With these the plants are expected to reach full productive capacity by the second quarter of FY 2020-21. Within its product basket, packaging board segment is experiencing good demand due to higher demand from pharma, food processing and FMCGs.

The Company believes that it can manage the extreme event with its cash balances, liquid investments and undrawn bank limits.

PROJECT EXPANSION

The Company commenced Virgin Fibre Boards (VFB) production in the financial year 2007-08 with an initial capacity of 60,000 TPA at its Unit CPM which was enhanced to 90,000 TPA in the financial year 2013-14. The current production from this facility exceeds 100,000 TPA. This segment has grown at 12% CAGR during the last 5 years and is expected to maintain its growth at double digit rates in the coming years due to changes in organised retail and the quest for more eco-friendly, aesthetic and customer friendly packaging. Looking at this growing demand particularly in the high end VFB and to build its market share, the Company had decided to set up a new Packaging Board facility along with an integrated chemical pulp mill at Unit CPM. Orders for critical equipments and some other areas have been placed and civil construction started in November 2019. The estimated capital cost is about H1935 crores (net of GST). Once completed the capacity for VFB will increase to 270,000 TPA along with a pulping capacity of 160,000 TPA. The new project is likely to take 24 months from zero date to commence production. Post completion of this project the JK Paper will be the second largest producer of VFB in the country with the capacity of 270,000 TPA along with a pulping capacity of 160,000 TPA.

The Company also made several de-bottlenecking and cost optimising investments in critical areas like head box, steam and power systems, finishing equipment, refiners, chemical processing, effluent discharge etc. in its existing facilities during the year totalling over H79 crores.

PROGRESS AT THE SIRPUR PAPER MILLS LTD.

During the previous financial year 2018-19, the Company alongwith its subsidiary had acquired The Sirpur Paper Mills Ltd. (SPML) under the Insolvency and Bankruptcy Code (IBC/Code). Your Company was one of the earliest successful applicant under the then newly enacted Code. The Resolution Plan of the Company was approved by the Honble National Company Law Tribunal (NCLT), Hyderabad Bench on 19th July 2018. The Company after settling the debts of the financial and operating creditors as ordered by the NCLT, took over SPML and started revival activities w.e.f. 1st August 2018. The acquisition was expected to provide synergies of a strategically located 3rd site near to sources of raw material with closer access to Coal and plenty of water. SPML commenced its commercial production on 24th May 2019 on Machine 7 alongwith Boilers and Turbines. After some challenges in stabilising operations all the machines (including Machines 3, 8, and 6 alongwith all allied equipment) commenced commercial production on 1st March 2020 after due refurbishment. There was an additional investment of H210 crores compared to earlier estimates which were met from funds lent by the Company.

Before the COVID-19 lockdown, SPML had ramped up its production and achieved highest production of 286 tons from the Pulp Mill (against a rated capacity of 323 tpd) and 320 tons (rated capacity of 400 tpd) from the Paper Machines. In the month of March, 2020 (up to 21st March, before COVID-19 lockdown) the Company achieved about 70% of the capacity based on actual number of working days. Progress is also being made on improving the quality parameters of the final products to meet customer requirements and expectations. In second phase, the project activities for setting up energy efficient 130 Ton per hour high pressure Boiler and 20 MW high pressure Turbine along with its utilities are in progress. This project with an investment of over H175 crores which will replace the existing low pressure CF Boilers and Turbines will have significant savings on energy cost on production.

The total project cost, as per current estimates including Phase II is H897 crores. This includes the amount settled with the erstwhile creditors of H371 crores. This is being funded by Term Loans from Banks, Capital Subsidy from the Government of Telangana, and issue of Equity/Preference Capital/loan from the Company.

CAPITAL STRUCTURE

During the year under review, there has been no change in the capital structure of the Company. As on March 31, 2020 the Authorised Share Capital was H500 crores and Paid-up capital was H178.24 crores.

The Company has been able to achieve financial closure for its Packaging Board Project from a clutch of Indian and foreign banks. With a view to optimise costs, the Company has contracted 43% of these in foreign currency.

In order to optimise cost of working capital funds, the Company has accessed the Commercial Papers (CPs) market during the year. Over time with a mixture of CPs, Buyers and Suppliers Credit in foreign currency and Working Capital Demand Loan, the Company hopes to further reduce its cost of borrowing.

The Companys improved performance and reduced leveraging enabled it to get a rating upgrade to AA – (minus)/Stable for long term debt and A1+ for 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. Recognised as ‘Indias Best Workplaces in Manufacturing 2020 - Top 30 Great Place to Work

b. Awarded Pollution Control Excellence Award-2019 for effective pollution control measures and sound environmental practices among all manufacturing units in Odisha

c. Safety, Health & Environment Excellence Award by CII, Eastern Region

d. National Safety Award for excellent performance in industrial safety and achieving accident free year-2017 by DGFASLI, Central Government of India

e. Energy Conservation Award 2019 - 2nd Runners up and achieved 5 Star rating in the Large-Scale Industries Category by CII, Eastern Region

f. National Awards for Manufacturing Competitiveness 2018- 19 (Gold Award) by International Research Institute of Manufacturing

g. Kalinga CSR Award 2018 in Gold Category as the most innovative and transformational CSR in Odisha organised by the IQEMS & IPE HYD

h. Odishas "Brand Leadership Award 2020" and "Best Employer Brand Award 2020" by CMO Global & World HRD Congress

i. Best paper award for paper on plantation research and development at Paperex 2019 - 14th International Conference

j. Received 10th CII National HR Excellence Award for Strong Commitment to HR Excellence in year 2019-20

INDUSTRIAL RELATIONS

Industrial Relations at both units of the Company continued to remain peaceful and cordial throughout the year barring some minor incidents which were amicably resolved by continuous dialogues and support by our existing unions, workers representatives, local stakeholders and district administration. We value the long association of our employees including contractors and their workmen to sustain industrial harmony and create a positive work environment; we justly valued the long association with all categories of contract labours and have conferred additional benefits over & above statutory dues. By introducing various new work practices along with automation we have succeeded in enhancing manpower productivity & attendance to the optimum. We encourage continuous interaction, dialogues and participation of local villagers and other stakeholders in collaborating various social intervention.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on financial year ended 31st March 2020 in the prescribed form MGT-9 is annexed to this Report as Annexure-1 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 Act are given in the financial statements.

The Company has not made any provision during the financial year 2019-20 for the purchase of, or subscription for, shares in the Company by trustees of JK Paper Employees Welfare Trust 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 2020, 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 arms length basis and were in compliance with the applicable provisions of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations).

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 Dhirendra Kumar, retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting (AGM).

During the year under review, Smt. Deepa Gopalan Wadhwa was appointed as Non-Executive Independent Director of the Company w.e.f. 27th June, 2019 for a period of three consecutive years and the requisite resolution in this regard was passed by the Shareholders at the Annual General Meeting held on 23rd August, 2019. The Board is of the opinion that Smt. Deepa Gopalan Wadhwa has high integrity and relevant experience.

All the Independent Directors of the Company have given requisite declarations that they meet all the criteria of independence as provided in Section 149(6) of the Act and also Regulation 16(1)(b) of the Listing Regulations and that they are not aware of any circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence and have also complied with Rule 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules 2014.

There was no other change in the Directors or Key Managerial Personnel of the Company, during the year under review.

INTERNAL CONTROL SYSTEM

The Company follows 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 periodically reviewed by the Audit Committee and corrective actions are initiated. In addition, the Company also follows a Compliance monitoring software tool to capture status of all applicable statutory compliances on line.

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

Your Company considers the community as its key stakeholder and is 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.. In line with its belief of considering Community as its key stakeholder and being sensitive to the needs of the community, during the recent outbreak of COVID-19 pandemic, the Company took several initiatives at Community level across its plant locations by undertaking distribution of food kits, face masks, hand sanitisers to needy families and sanitisation of areas around its plant locations. In addition, the Company also assisted the local administration in taking various preventive and safety measures. The Company has a Corporate Social Responsibility (CSR) Policy in accordance with the provisions of the Act and rules made there under. The contents of the CSR Policy are disclosed on the website of the Company.

Annual Report on the CSR activities undertaken by the Company during the financial year ended 31st March 2020, in the prescribed format is annexed to this Report as Annexure-2 and forms part of it.

AUDITORS

(a) Statutory Auditors and their Report

M/s Lodha & Co., Chartered Accountants, have been appointed as Auditors of the Company to hold office from the conclusion of the 56th Annual General Meeting (AGM) held in the year 2017 till the conclusion of 61st AGM of the Company to be held in the year 2022. The observations of the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes are self explanatory. The Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

(b) Secretarial Auditor and Secretarial Audit Report

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 2019-20. 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.

(c) Cost Auditors and Cost Audit Report

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 2019 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as required 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 2020, 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.

MATERIAL CHANGES AND COMMITMENTS

The Company has finalized contracts/purchase orders for its proposed project at Unit CPM. The details of expenditure are given in the para on Project Expansion.

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 employees 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 Report. However, in terms of provisions of Section 136 of the Act, the Annual Report for the financial year 2019-20 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 business 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 five 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.

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 2020 is given in a separate section and forms part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated financial statements of your Company for the Financial Year 2019-20 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, the Standalone audited financial statements, Consolidated audited financial statements along with relevant documents and separate audited financial statements in respect of each of the subsidiaries are available on the website of the Company.

During the year under review, no company has become or ceased to be your Companys subsidiary or joint venture or associate.

DEPOSITS

Pursuant to the approval of members by means of a Special Resolution passed 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 there under. The particulars in respect of the deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2020 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.

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on the financial year ended on 31st March 2020

[Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management & Administration) Rules, 2014]

I. REGISTRATION & OTHER DETAILS:

1. CIN L21010GJ1960PLC018099
2. Registration Date 04.07.1960
3. Name of the Company JK Paper Limited
4. Category/Sub-category of the Company Public Company Limited by Shares/Non-Government Company
5. Address of the Registered office & contact details Registered office:
P. O. Central Pulp Mills – 394 660
Fort Songadh, District Tapi, Gujarat
Ph.No.: 91-2624-220228/ 220278-80
Fax No.: 91-2624-220138
Email ID: sharesjkpaper@jkmail.com
Website: www.jkpaper.com
6. Whether listed company Yes
7. Name, Address & contact details of Registrar and Transfer MCS Share Transfer Agent Limited
Agent, if any. F-65, 1st Floor, Okhla Industrial Area
Phase – I, New Delhi -110 020
Ph. No.: 91-11- 41406149-52
Fax No.: 91-11-41709881
Email ID: admin@mcsregistrars.com
Website: www.mcsregistrars.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the Company shall be stated:

SI. No. Name and Description of main products / services NIC Code of the Product/ service % to total turnover of the Company
1. Paper and Paper board 1701 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SI. No. Name and Address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of Shares held Applicable Section
1 Jaykaypur Infrastructure & Housing Ltd. JK Paper Mills, Jaykaypur – 765 017, Rayagada, Odisha U45201OR2008PLC010523 Wholly Owned Subsidiary 100 2(87)
2 Songadh Infrastructure & Housing Ltd. P. O. Central Pulp Mills- 394660 Fort Songadh, Distt.Tapi, Gujarat U45203GJ2009PLC055810 Wholly Owned Subsidiary 100 2(87)
3 JK Paper International (Singapore) Pte. Ltd. 10 Jalan Besar #10-03, Sim Lim Tower Singapore (208787) Not Applicable Wholly Owned Subsidiary 100 2(87)
4 JK Enviro-tech Ltd. P. O. Central Pulp Mills- 394660 Fort Songadh, Distt.Tapi, Gujarat U73100GJ2007PLC075963 Subsidiary 96.08 2(87)
5 The Sirpur Paper Mills Limited 5-9-22/1/1, 1st Floor, Adarsh Nagar Hyderabad, Telangana- 500063 U21010TG1938PLC000591 Subsidiary 96.27* 2(87)

*Represents aggregate % of shares held by the Company alongwith its subsidiary namely JK Enviro-tech Limited.

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year (As on 1st April 2019)

No. of Shares held at the end of the year (As on 31st March 2020)

Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year
A. Promoters*
(1) Indian
a) Individual/ HUF 1416443 0 1416443 0.79 3553643 0 3553643 1.99 1.20
b) Central Govt 0 0 0 0 0 0 0 0 0
c) State Govt(s) 0 0 0 0 0 0 0 0 0
d) Bodies Corp 84883568 0 84883568 47.62 83583568 0 83583568 46.89 -0.73
e) Banks / FI 0 0 0 0 0 0 0 0 0
f) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(1) 86300011 0 86300011 48.41 87137211 0 87137211 48.88 0.47
(2) Foreign
a) NRI –Individuals 0 0 0 0 0 0 0 0 0
b) Other –Individuals 0 0 0 0 0 0 0 0 0
c) Bodies Corp. 0 0 0 0 0 0 0 0 0
d) Banks / FI 0 0 0 0 0 0 0 0 0
e) Any Other 0 0 0 0 0 0 0 0 0
Sub-total(A) (2): 0 0 0 0 0 0 0 0 0
Total shareholding of Promoter (A) = (A)(1) + (A) (2)* 86300011 0 86300011 48.41 87137211 0 87137211 48.88 0.47
B. Public Shareholding
1. Institutions
a) Mutual Funds 1363766 0 1363766 0.77 1020197 0 1020197 0.57 -0.20
b) Banks / FI 129989 0 129989 0.07 500 0 500 0.00 -0.07
c) Central Govt 12021 0 12021 0.01 16835 0 16835 0.01 0
d) State Govt(s) 0 0 0 0 0 0 0 0 0

* The total shareholding of Promoters at (A) above includes 4,98,81,712 Equity Shares (27.98%) as on 1.4.2019, 75,09,983 Equity Shares (4.21%) as on 31.3.2020 and a change of 23.77% during the year pertaining to constituents of the Promoter Group as per SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2018. The same does not form part of the Promoters as defined in the Companies Act, 2013.

Category of Shareholders

No. of Shares held at the beginning of the year (As on 1st April 2019)

No. of Shares held at the end of the year (As on 31st March 2020)

Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year
e) Venture Capital Funds 0 0 0 0 0 0 0 0 0
f) Insurance Companies

1010448

0

1010448

0.57

400000

0 400000 0.22 -0.35
g) FPIs

10897457

0

10897457

6.11

12402279

0 12402279 6.96 0.85
h) Foreign Venture Capital Funds 0 0 0 0 0 0 0 0 0
i) Others 0 0 0 0 0 0 0 0 0
Sub-total (B)(1):

13413681

0

13413681

7.53

13839811

0 13839811 7.77 0.24
2. Non-Institutions
a) Bodies Corp.
i) Indian

12838492

150

12838642

7.20

10753831

150 10753981 6.03 -1.17
ii) Overseas 0 0 0 0 0 0 0 0 0
b) Individuals
i) Individual shareholders holding nominal share capital upto H1 lakh 25035316 26621 25061937 14.06 30009848 26097 30035945 16.85 2.79
ii) Individual shareholders holding nominal share capital in excess ofRs.1 lakh 29550040 4013500 33563540 18.83 24862736 4013500 28876236 16.20 -2.63
c) Others
(i) Trust and Foundation

1264978

0

1264978

0.71

1856598

0 1856598 1.04 0.33
(ii) Non Resident Individuals

2937776

297000

3234776

1.81

2930288

297000 3227288 1.81 0
(iii) OCB

2500000

0

2500000

1.40

2500000

0 2500000 1.40 0
(iv) Societies 5000 0 5000 0.00 0 0 0 0 0
(v) NBFCs registered with SEBI

61020

0

61020

0.03

16515

0 16515 0.01 -0.02
Sub-total (B)(2):

74192622

4337271

78529893

44.06

72929816

4336747 77266563 43.35 -0.71
Total Public Shareholding (B)=(B)(1)+ (B)(2)

87606303

4337271

91943574

51.59

86769627

4336747 91106374 51.12 -0.47
C. Shares held by Custodian for GDRs & ADRs 0 0 0 0 0 0 0 0 0
Grand Total (A+B+C)

173906314

4337271

178243585

100

173906838

4336747 178243585 100 0

(ii) Shareholding of Promoters

SI. No. Shareholders Name

Shareholding at the beginning of the year (as on 1st April 2019)

Shareholding at the end of the year (as on 31st March 2020)

No. of Shares % of total Shares of the Company %of Shares Pledged / encumbered to total shares No. of Shares % of total Shares of the Company %of Shares Pledged / encumbered to total shares % change in shareholding during the year
1 Bengal & Assam Company Ltd. 36418299 20.43 - 79627228 44.67 - 24.24
Total 36418299 20.43 - 79627228 44.67 -

(iii)Change in Promoters Shareholding (please specify, if there is no change)

SI. No.

Shareholding at the beginning of the year (as on 1st April 2019)

Cumulative Shareholding during the year

No. of shares % of total shares of the Company No. of shares % of total shares of the Company
1 Bengal & Assam Company Ltd.
At the beginning of the year 36418299 20.43 36418299 20.43
Increase in Shareholding due to Acquisition pursuant to Scheme of Arrangement on 24.5.2019. 41923129 23.52 78341428 43.95
Increase in Shareholding due to Inter-se Transfer on 14.6.2019 700000 0.39 79041428 44.34
Increase in Shareholding due to Market Purchase on 18.2.2020 585800 0.33 79627228 44.67
At the end of the year i.e., 31.03.2020 79627228 44.67

(iv) Shareholding Pattern of top ten shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)

Sl. No. Top Ten Shareholders

Shareholding at the beginning of the year (as on 1st April 2019)

Cumulative Shareholding at the end of the year (as on 31st March 2020)

No. of Shares % of total Shares of the Company No. of Shares % of total Shares of the Company
1 P.K. Khaitan jointly with S.K. Somany-Trustees, JK 9828655 5.51 8423655 4.73
Paper Employees Welfare Trust
2 Edgefield Securities Limited 2500000 1.40 2500000 1.40
3 J.K. Credit & Finance Limited 3575000 2.01 2156000 1.21
4 Acadian Emerging Markets Small Cap Equity Fund LLC 1334129 0.75 1396757 0.78
5 LSV Emerging Markets Small Cap Equity Fund, LP** - - 1242800 0.70
6 Pulp and Paper Research Institute 1237978 0.69 1237978 0.69
7 Dolly Khanna 1910749 1.07 1042422 0.58
8 Nav Bharat Vanijya Limited 1191000 0.67 1036200 0.58
9** Apeejay Securities Private Ltd - - 1000000 0.56
10** Deepa Bagla Financial Consultants Private Limited - - 940688 0.53
11 BMF Investments Limited 30089797 16.88 Amalgamated with Bengal & Assam
12 Florence Investech Limited 11833332 6.64 Company Limited

Note: Around 98% of the Shares of the Company are held in dematerialized form and are traded on daily basis. Therefore, the date wise increase/decrease in shareholding is not indicated.

** were not a part of top 10 shareholders in last financial year but forming part of top 10 shareholders as on 31.03.2020.

(v) Shareholding of Directors and Key Managerial Personnel

1. Shri Bharat Hari Singhania, Chairman

For each of the Directors and KMP

Shareholding at the beginning

of the year (as on 1st April 2019)

Cumulative Shareholding during the Year

No. of shares % of total shares of the Company No. of shares % of total shares of the Company
At the beginning of the year 100000 0.06 100000 0.06
Increase in Shareholding due to market purchase on 28.6.2019. 105600 0.06 205600 0.12
Increase in Shareholding due to market purchase from 16.3.2020 to 17.3.2020. 40000 0.02 245600 0.14
At the end of the year i.e. 31.03.2020 245600 0.14

2. Shri Harsh Pati Singhania, Vice Chairman & Managing Director

For each of the Directors and KMP

Shareholding at the beginning

of the year (as on 1st April 2019)

Cumulative Shareholding during the Year

No. of shares % of total shares of the Company No. of shares % of total shares of the Company
At the beginning of the year 171250 0.10 171250 0.10
Increase in Shareholding due to market purchase on 28.6.2019. 158400 0.09 329650 0.19
Increase in Shareholding due to market purchase from 16.3.2020 to 19.3.2020 125000 0.07 454650 0.26
At the end of the year i.e. 31.03.2020 454650 0.26

3. Smt. Vinita Singhania, Director

For each of the Directors and KMP

Shareholding at the beginning

of the year (as on 1st April 2019)

Cumulative Shareholding during the Year

No. of shares % of total shares of the Company No. of shares % of total shares of the Company
At the beginning of the year 225550 0.13 225550 0.13
Increase in Shareholding due to market purchase on 28.6.2019. 316800 0.17 542350 0.30
Increase in Shareholding due to market purchase from 16.3.2020 to 18.3.2020 190000 0.11 732350 0.41
At the end of the year i.e. 31.03.2020 732350 0.41

Note: Sh. Arun Bharat Ram, Sh. Dhirendra Kumar, Sh. M.H. Dalmia, Sh. R V Kanoria, Sh. Sandip Somany, Sh. Shailendra Swarup, Sh. Udayan Bose, Sh. S.K. Roongta and Smt. Deepa Gopalan Wadhwa, Directors and Sh. A.S. Mehta, President & Director of the Company and Sh. V. Kumaraswamy, Chief Finance Officer and Sh. Suresh Chander Gupta, Vice President & Company Secretary of the Company were not holding any shares in the Company at the beginning of the year, i.e. as on 1st April 2019 and at the end of the year i.e. as on 31st March 2020 and hence there was no increase/decrease in their shareholding during the financial year 2019-20.

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

(Rs. in crores)

Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 1,317.30 - 32.41 1,349.71
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 7.67 - 2.59 10.26
Total (i+ii+iii) 1,324.97 - 35.00 1,359.97
Change in Indebtedness during the financial year
Addition 237.57 74.54 22.26 334.37
Reduction 289.54 10.83 16.75 317.12
Net Change -51.97 63.71 5.51 17.25
Indebtedness at the end of the financial year
i) Principal Amount 1,268.46 63.71 38.07 1,370.24
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 4.54 - 2.44 6.98
Total (i+ii+iii) 1,273.00 63.71 40.51 1,377.22

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager

(Rs. in crores)

SI. No. Particulars of Remuneration

Name of MD/WTD/Manager

Sh. Harsh Pati Singhania (Vice Chairman & Managing Director)

Sh. A.S. Mehta (President & Director) Total Amount
1. Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 7.73 3.73 11.46
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 0.83 0.13 0.96
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - - -
2 Commission - as % of Profit 16.75 0.30 17.05
3 Others: Contribution to Provident Fund and Insurance 0.65 0.16 0.81
4. Total (A) 25.96 4.32 30.28
Ceiling as per the Act H73.64 crores (being 10% of the net Profits of the Company calculated as per Section 198 of the Companies Act, 2013)

(The Company does not have Sweat Equity/Scheme for stock option).

B. Remuneration to other Directors

(Rs. in crores)

SI. No. Particulars of Remuneration

Name of Directors

1. Independent Directors Sh. Arun Bharat Ram Sh. M.H. Dalmia Sh. R. V. Kanoria Sh. Sandip Somany Sh. Udayan Bose Sh. Shailendra Swarup Smt. Deepa Gopalan Wadhwa # Total Amount
Fee for attending Board/ Committee Meetings 0.04 0.01 0.08 0.02 0.05 0.03 0.03 0.26
Commission 0.17 0.17 0.17 0.17 0.17 0.17 0.13 1.15
Total (1) 0.21 0.18 0.25 0.19 0.22 0.20 0.16 1.41
2 Other Non-executive Directors Sh. Bharat Hari Singhania (Chairman) Sh. Dhirendra Kumar Smt. Vinita Singhania Shri S.K. Roongta
Fee for attending Board 0.08 0.03 0.03 0.03 0.17
/Committee Meetings
Commission 2.00 0.17 0.17 0.17 2.51
Total (2) 2.08 0.20 0.20 0.20 2.68
Total(B)= (1+2) 4.09
Total Managerial 34.37
Remuneration * (A+B)
Overall Ceiling as per the Act H 81.00 crores (being 11% of the net Profits of the Company as per Section 198 of the Companies Act, 2013). In addition, the Company can pay Sitting fees @Rs.1 lakh to each of the Directors for each of the meetings of the Board and its Committees attended by him/her.

* Total Managerial Remuneration to Vice Chairman & Managing Director, President & Director and other Directors (being the total of A and B) includes, sitting fees of H0.43 crores.

# Appointed w.e.f. 27th June 2019

C. Remuneration To Key Managerial Personnel Other Than MD/Manager/WTD

(Rs. in crores)

SI. No. Particulars of Remuneration

Key Managerial Personnel

Sh. V. Kumaraswamy, Chief Finance Officer Sh. Suresh Chander Gupta, Vice President & Company Secretary Total
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income- tax Act, 1961 3.04 0.92 3.96
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 0.02 0.003 0.023
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 - - -
2 Others: Contribution to Provident Fund and Insurance 0.09 0.002 0.092
Total 3.15 0.93 4.08

(The Company does not have Sweat Equity/Scheme for stock option. Commission-Not Applicable)

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES

There were no penalties, punishment or compounding of offences during the year ended 31st March, 2020.