JK Paper Ltd

The Directors have pleasure in presenting the 64^th Annual Report along with Audited Financial Statements of the Company for the financial year ended 31^st March 2025.

FINANCIAL RESULTS Rs. in crore (10 Million)

The Board is pleased to recommend dividend of Rs. 5.00 per equity share (50%) for the financial year ended 31^st March 2025, subject to approval of members at the forthcoming Annual General Meeting and deduction of tax at source, as may be applicable. The dividend outgo will be Rs. 84.70 crore.

The amount available for appropriation, including surplus for the year under review, stood at Rs. 2,512.78 crore. The Directors propose this to be appropriated as under: Rs. in crore (10 million)

The financial year 2024-25 was characterized by both challenges and successes. The year presented distinct obstacles, with a marked decrease in margins compared to the previous year. Despite these difficulties, the Company demonstrated significant resilience, supported by strategic investments and an unwavering commitment to reinforcing our business foundation.

Despite the year per se being a challenging year, the Company achieved highest ever sale of 8.06 lac MT during the year

(Previous Year 7.94 lac MT). Sharp rise in imports at very low price has adversely affected price realizations significantly, resulting into lower profitability margins, particularly for packaging board business of the Company. Pricing pressure continued throughout the year across most of the categories due to increase in imports. Packaging Board grew by 3.6% during the year despite lower growth seen in FMCG and other consumer industries.

The fluctuating global economic conditions due to geopolitical tensions created unpredictability in market dynamics, affecting demand and supply chains throughout the year.

Availability of wood continued to be a major challenge this year resulting in substantial increase in input costs. Lower wood plantation during covid period affected the raw material availability in the last couple of years, resulting into sharp increase in wood prices and impacting the profitability severely in FY 2024-25. The Company increased its plantation acreage in the last two years by more than 50% compared to previous 2 years average, which is expected to increase the availability of wood in the coming years and rationalize its prices. The Company distributed more than 13.21 crore saplings covering over 87000 acres of plantation in the financial year under review. Corrugated Packaging business continues to witness volatility in kraft paper prices during the year resulting in shrinking of margins on account of lag in passing through impact.

On the financial front, the Company continues to remain healthy with positive cash flow generation and tightened the cost controls during challenging time. The Company continued to deleverage its Balance Sheet with additional prepayments wherever possible leading to improvement in credit profile and reduced financing costs.

Your Company sustained its leadership through a strong focus on people, brand loyalty, customer-centric strategies, operational efficiency, and robust plantation initiatives.

To become self-sufficient in hardwood BCTMP for producing Packaging Board and address the issue of price volatility and availability, the Company is setting up a BCTMP Mill at Unit CPM, Songadh, Gujarat, having capacity of 125,000 ADMT per annum. Project is going on as per the schedule and expected to be commissioned during the second half of financial year 2025-26.

The Company acquired the remaining 15% equity stake in its subsidiary companies, HPPL and SPPL. Following this acquisition, both HPPL and SPPL became wholly owned subsidiaries of the Company w.e.f. 17^th May 2024.

The Company acquired 60% equity shares of RWPL for cash consideration funded out of internal accruals, resulting RWPL becoming a subsidiary of the Company w.e.f. 3^rd February 2025. RWPL, is engaged in the corrugated packaging business and this acquisition is in line with the long-term strategic objective of the Company. It gives an opportunity to the Company to have a greater footprint in the western region of India.

The Company acquired 62.14% equity shares of QVPL for cash consideration funded out of internal accruals, resulting QVPL becoming a subsidiary of the Company w.e.f. 25^th March 2025. QVPL is engaged in the business of manufacturing, marketing and exporting of Animal Nutrition Products including Feed Additives & Growth Promoters. This strategic acquisition positions the Company for growth in a promising and rapidly expanding industry segment.

The Board of Directors of the Company has approved a Composite Scheme of Arrangement, providing for merger of its wholly owned subsidiaries viz. Horizon Packs Private

Limited, Securipax Packaging Private Limited, and JKPL Utility Packaging Solutions Private Limited into the Company thereby, consolidating its paper and packaging businesses into a single entity. Additionally, the Scheme provides that Enviro Tech Ventures Limited (a subsidiary of the Company) will undergo restructuring, by way of demerger of demerged undertaking (excluding paper and packaging and investment in subsidiary Company viz. The Sirpur Paper Mills Limited) into PSV Agro Products Private Limited. Subsequently, residual Enviro Tech Ventures Limited will also be merged into the Company. The Scheme aims to enhance operational efficiency, optimize capital utilization, eliminate intra-group transactions, simplify regulatory compliance and ensures the interests of shareholders and creditors. The Scheme is subject to necessary approvals from regulatory authorities, shareholders, and creditors and is expected to be completed within 12 to 18 months.

During the year under review, there has been no change in the Authorised, Issued, Subscribed and Paid-up share capital of the Company. As on 31^st March 2025, the Authorised Share Capital of the Company was Rs. 500 crore and Paid-up Share Capital was Rs. 169.40 crore.

The Company continued to have a prudent working capital management and operating efficiencies resulting in positive cash generation. During the year the Company has repaid Loans to the extent of Rs. 350 crore which has led to reduction in overall borrowing from Rs. 1811 crore in FY 2023-24 to Rs. 1475 crore in FY 2024-25.

The Company kept a close watch on domestic & global economic scenario and moved timely to use various forex and interest rate derivative structure to optimize the overall finance cost in an increasing interest rate scenario.

CRISIL Ratings Limited (CRISIL) – CRISIL has reafirmed its rating for Long term and Short term borrowing facilities. Current Long Term Rating is CRISIL AA/Stable, Short Term Rating is CRISIL A1+ and Fixed Deposit Rating is CRISIL AA/Stable.

India Ratings and Research (Ind-Ra): Ind-Ra has reafirmed its rating for Long Term and Short term borrowing facilities. Current Long Term Rating is IND AA/Stable, Short Term Rating is IND A1+ and Fixed Deposit Rating is IND AA/Stable.

India Ratings and Research (Ind-Ra) has also reafirmed the long-term Credit Rating of The Sirpur Paper Mills Ltd., subsidiary of the Company. Current Long Term Rating is IND AA/Stable, Short Term Rating is IND A1+.

The applicable Secretarial Standards issued under Section 118 of the Companies Act, 2013 (‘the Act') have been complied with.

Our commitment towards Safety & Environment, Quality & Operational Excellence, Sustainability and Corporate Social Responsibility initiatives continue to garner appreciation from various industry chambers and social bodies. Some of the prominent accolades and awards received during the year are as follows:

National Award for Manufacturing Competitiveness 2023-24 by International Research Institute for Manufacturing (IRIM), Mumbai.

International Safety Award 2024 in Merit category organized by British Safety Council.

FAME National Award 2023-24 for E_orts to achieve Excellence in Occupational Health & Safety by Foundation for Accelerated Mass Empowerment (FAME), India.

OASME Award 2023-24 for dedicated efforts to promote MSME Sector in Odisha and in recognition of the ability as the "BEST MOTHER PLANT" for the year 2023-24 by Odisha Assembly of Small & Medium Enterprises (OSAME).

CSR Times Award 2024 for empowering States Through Sustainable Development in the special category of the CSR Project Nutan Gyan Vardhani: Care of Specially- abled Children by Ministry of Goa.

3 G old Awards – Pulpmill, Recovery plant and improvement; and 2 Silver Awards - Instrumentation improvements and QA&TS improvement at CII Kaizen Competition.

Achieved another milestone in Energy sector with getting award of ‘Excellent Energy Efficient Unit'.

Star Champion Award, in the "CII Champion Trophy" competition.

The Company maintained peaceful and harmonious industrial relations across its Units throughout the year barring an illegal strike called on 17^th March 2025 by a section of workmen at Unit CPM. After negotiations and signing of Long Term Wage Agreement, the strike was called off on 17^th April 2025. Notwithstanding the above, we deeply appreciate the longstanding commitment of our employees, including contractors and their workforce, in fostering industrial harmony and a positive work environment. Through the implementation of new work practices and automation, we have successfully enhanced manpower productivity. We actively promote ongoing interaction, dialogue, and collaboration with the local community and other stakeholders to drive various social initiatives. Our commitment to employee well-being, skill development, and inclusive growth remains a priority, ensuring a motivated workforce and a sustainable business ecosystem. Through proactive engagement, we continue to build trust and strengthen our relationships with all stakeholders, contributing to long-term socio-economic progress.

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://www.jkpaper.com/pdf/agm/Form_MGT-7_for_Website.pdf

The particulars of loans given, guarantees or securities provided and investments made in terms of the provisions of Section 186 of the Act and the purpose for which the loans/guarantees/ securities are proposed to be utilised are given in the financial statements.

During the financial year ended 31^st March 2025, 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 Safety Obligations & Disclosure Requirements) Regulations, 2015 (‘Listing Regulations').

Form AOC-2 containing details of the material Related Party Transactions entered during the financial year 2024-25 as per Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions, is attached as Annexure-1 to this Report and forms part of it.

The said Policy is available on the website of the Company and the weblink for the same is https://www.jkpaper.com/ pdf/company-policy/Policy_on_Materiality_of_RPTs_and_on_ dealings_with_RPTs.pdf

During the year under review, Shri S.K. Roongta (DIN: 00309302) was redesignated as an Independent Director for a term of up to five consecutive years, effective from 23^rd August 2024, and requisite resolution in this regard was passed by the Members at the AGM held on 3^rd September 2024. The Board is of opinion that Shri S.K. Roongta has high integrity and relevant experience. The tenure of Shri R.V. Kanoria (DIN: 00003792) and Shri Sandip Somany (DIN: 00053597) as Independent Directors concluded on 22^nd August 2024. They were appointed as Non-Executive Non-Independent Directors, effective from 4^th September 2024, and requisite resolutions in this regard were passed by the Members at the AGM held on 3^rd September 2024.

Shri Anoop Seth (DIN:00239653), who was appointed as Non-Executive Independent Director of the Company w.e.f. 27^th September, 2022, for a period of three consecutive years by the Members on 17^th November, 2022, is proposed to be reappointed as Independent Director of the Company for a further term of five consecutive years w.e.f. 27^th September 2025, subject to approval of the Members at the ensuing AGM of the Company.

Shri Dhirendra Kumar (DIN: 00153773), Non-Executive Non-Independent Director of the Company, retired by rotation at the AGM of the Company held on 3^rd September 2024. The Board wishes to place on record its sincere appreciation of the valuable contributions and guidance received from him during his tenure.

Shri Deepak Gupta, Company Secretary of the Company ceased to be the Company Secretary & Compliance Officer and a whole time Key Managerial Personnel of the Company with effect from closing business hours of 8^th November 2024.

Shri Pradeep Joshi, has been appointed as the Company Secretary & Compliance Officer and a whole time Key Managerial Personnel of the Company w.e.f. 13^th December 2024.

All the Independent Directors of the Company have given requisite declarations at the beginning of the year that they meet the criteria of independence as provided under the Act and Listing Regulations and there is no change in the circumstances as on the date of this report which may affect their status as an independent director.

Except as stated above, there was no other change in Directors and Key Managerial Personnel of the Company.

The Company is committed to maintaining a robust and effective internal control framework across all offices, plants, and key functions. This ensures a structured system for business planning, goal review, risk evaluation and management, financial reporting, regulatory compliance, asset protection, fraud prevention, and IT security validation. These controls are continuously refined to align with evolving business needs, regulatory changes, and industry best practices, ensuring transparency, accountability, and operational excellence. A dedicated Corporate Internal Audit team, comprising qualified professionals, subject matter experts supported by independent audit firms and specialized agencies, conducts regular internal audits as per the annual audit plan approved by the Audit Committee. The audit process not only reviews existing control systems but also identifies areas for improvement, ensuring a culture of continuous improvement. Audit findings are reviewed by the Audit Committee, and corrective actions are taken as needed to mitigate risks and strengthen controls and governance.

The Company has developed a comprehensive risk management framework to identify, evaluate, and manage risks across all major functions and business segments. A documented Risk Control Matrix is in place to ensure structured risk assessment and mitigation strategies. During the year under review, no material reportable weaknesses were observed. The Company also has a comprehensive budgetary control system aligned with its strategic business plan. Key performance targets are set for each plant and product line, with periodic monitoring of actual performance against these targets. Corrective actions are taken as needed to address any deviations. For details of risks as required to be disclosed in the Board's Report under section 134(3) of the Act, please refer Management Discussion and Analysis forming part of the Report.

The Company ensures strict adherence to legal and regulatory requirements through a structured compliance management system. A compliance monitoring software tool is being used to track the status of all applicable statutory compliances online. This system enables proactive compliance tracking and timely reporting to mitigate any potential risk associated with non-compliance. The Company remains committed to maintaining high standards of corporate governance and regulatory adherence.

The Company integrates CSR into its core values, guided by a corporate vision that emphasizes care for both the environment and the community. The Company regards CSR as a continuous commitment to operate ethically, responsibly, and sustainably, while contributing meaningfully to the country's socioeconomic development. Your Company's overarching goal is to enhance the quality of life for communities surrounding its operations and to contribute positively to society at large.

With a sustainability and CSR vision centered on holistic community development and long-term impact, the Company is committed to inclusive growth through initiatives that empower individuals, create sustainable livelihoods, and promote social equity. Aligned with the Sustainable Development Goals (SDGs) and national priorities, the Company's CSR efforts focus on key thematic areas including promoting preventive healthcare, education, livelihood generation, women empowerment, rural development, environmental sustainability, conservation of natural resources, promotion of art & culture and promotion of sports.

Over the years, these initiatives have made a significant and measurable impact, reaching over 11.75 lac beneficiaries through strategic collaborations and community-driven programs. The CSR footprint of the Company now extends across 4 states, 1 Union Territory (New Delhi) and 7 districts, positively influencing the lives of more than 11.75 lac people, with a strong emphasis on underserved and marginalized communities. The Company's CSR policy complies fully with the provisions of the Act and is implemented with utmost transparency and accountability under the guidance of a dedicated CSR and Sustainability Committee, ensuring that all programs remain aligned with strategic goals and contribute to inclusive, sustainable development.

The CSR Policy of the Company is hosted on the website of the Company.

Annual Report on the CSR activities undertaken by the Company during the financial year ended 31^st March 2025, in the prescribed format, along with summary of Impact Assessment Report summarizing the outcomes and effectiveness of CSR initiatives is annexed to this Report as Annexure-2 and forms part of it.

In accordance with the provisions of the Act and the Rules made thereunder, M/s. Lodha & Co. LLP., Chartered Accountants, were re-appointed as Statutory Auditors of the Company for their second term of five consecutive years from the conclusion of the 61^st AGM held on 6^th September 2022 till the conclusion of the 66^th AGM to be held in the year 2027.

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.

For the financial year 2024-25, Shri Namo Narain Agarwal, Company Secretary in Practice, was appointed as the Secretarial Auditor to carry out the Secretarial Audit of the Company. His report for the said financial year, provided in the prescribed format in compliance with 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. During the year under review, the Secretarial Auditor has not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed.

The Company has two material unlisted subsidiary incorporated in India, The Sirpur Paper Mills Limited (SPML), and (ii) Horizon Packs Private Limited (HPPL). The Secretarial Audit Reports for FY 2024-25 of SPML and HPPL, issued by Shri Namo Narain Agarwal and M/s Somani & Associates, Secretarial Auditor(s), respectively, in the prescribed format, are annexed to this Report as Annexure – 3(i) and 3(ii), pursuant to Regulation 24A of the Listing Regulations. Pursuant to the amended provisions of Regulation 24A of the Listing Regulations and Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors have approved and recommended the appointment of Shri Namo Narain Agarwal, Company Secretary in Practice, as the Secretarial Auditor of the Company for a term of up to five (5) consecutive years from FY 2025-26 to FY 2029-30, subject to approval by the members at the ensuing AGM. Shri Namo Narain Agarwal has provided his consent to act as the Secretarial Auditor of the Company and has confirmed that his appointment, if made, would be within the limits prescribed under the Act, the Rules made thereunder, and the Listing Regulations. He has further confirmed that he is not disqualified from being appointed as the Secretarial Auditor as per the provisions of the Act, and the Listing Regulations.

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 31^st March 2024 was conducted by M/s R.J. Goel & Co., Cost Accountants, 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 31^st March 2025 is being conducted by the said firm and the Report will also be filed with the Ministry of Corporate Affairs, Government of India. 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.

During the year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which could have impact on 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.

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.

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.

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 Report. However, in terms of provisions of Section 136 of the Act, the Report for the financial year 2024-25 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.

Your Company reafirms 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 & Management Discussion and Analysis Report which forms part of this Annual Report also covers the following: a) Particulars of Board and Committee 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. h) Management Discussion and Analysis of Financial condition and result of operations.

Pursuant to Regulation 34(2)(f ) of the Listing Regulations, the Business Responsibility and Sustainability Report of the Company for the financial year ended 31^st March 2025 in the prescribed format, is given in a separate section and forms a part of the Annual Report.

The Consolidated Financial Statements of your Company for the financial year 2024-25 have been prepared in accordance with the Act and applicable Indian Accounting Standards. The Audited Consolidated Financial Statements together with Auditors' Report forms a 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 (refer 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 and the weblink for the same is https://www.jkpaper.com/financial-results

Pursuant to the approval of members by means of a Special Resolution at the AGM held on 27^th September 2014, the Company has been 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 31^st March 2025 is annexed to this Report as Annexure-6 and forms part of it. The Board has now decided to discontinue the Scheme w.e.f. date of expiry of previous circular issued in the form of advertisement and deposits will be paid to Deposit Holders on their respective due dates.

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.

Your Directors acknowledge the unstinted support and cooperation received from the Central Government, State Governments, participating Financial Institutions and Banks and above all the Customers, Dealers, Suppliers and other Stakeholders.

The Board extends its deepest appreciation for the unwavering commitment, dedication, and hard work of every employee and member of Team JK Paper.