PAPER INDUSTRY

Analysis:
 History:
India first Machine-made paper was manufactured in 1812. During this
time there were 15 mills with a total production of lakh tones. In India the
Soft wood is the principal raw material used for making paper especially
newsprint and high-class printing papers. With rise in population and
broadening of education the demand for paper has been constantly
escalated. Owing to very narrow forest resources wood pulp is in a
shortage. As soft woods grow in temperate climate India is in short
supply of such woods. Thus, in such circumstances the Bamboo became
the major raw materials for the manufacture of paper in the country as it
grows very quickly even after cutting.
Indian paper industry is a vast industry comprising more than 157 paper-
producing divisions all over India. These 157 functional units
manufacture handmade paper worth around Rs.21 cores and provide
employment to approximately 10,000 people. Sanganer village is the
biggest centre in western India humming on the rhythm of the sound of
paper making activities.

 Market Capitalization:
The Indian Paper Industry has the top 15 global players with an output of
more than 6 millions tonnes annually with an estimated turnover of Rs.
150,000 millions. Indian Paper Industry is riding on a strong demand and
on an expanding mood to meet the projected demand of 8 million tonnes
by 2010 & 13 million tonnes by 2020.

 Size of the industry:

Indian Paper Industry accounts for about 1.6% of the world's production
of paper and paperboard. The estimated turnover of the industry is Rs
25,000 crore (USD 5.95 billion) and its contribution to the exchequer is
around Rs. 2918 crore. The industry was delicensed effective from July
1997 by the Government of India & foreign participation is permissible.
Most of the paper mills are in existence for a long time and hence present
technologies fall in a wide spectrum ranging from oldest to the most
modern. Paper in India is made from 40% of hardwood and bamboo fibre,
30 % from agro waste and 30 % from recycled fibre. Newsprint and
 publication paper consumption account for 2 million tonnes, of which 1.2
million tonnes of newsprint paper is manufactured in India and the
remaining 0.8 million tonnes is imported.

 Total contribution to the economy/sales:

Demand of Paper has been around 8% and during the years 2002-07
while newsprint registered a growth of 13% and Writing & Printing,
Containerboard, Cartonboard and others registered growth of 5%, 11%,
9% and 1% respectively. So far, the growth in paper industry has
mirrored the growth in GDP and has grown on an average 6-7 % over the
last few years. India is the fastest growing market for paper globally and
it presents an exciting scenario and paper consumption is poised for a big
leap forward in sync with the economic growth and is estimated to touch
13.95 million tons by 2015-16. The futuristic view is that growth in paper
consumption would be in multiples of GDP and hence an increase in
consumption by one kg per capita would lead to an increase in demand of
1 million tons.

As per industry estimates, paper production is likely to grow at a CAGR

of 8.4% while paper consumption will grow at a CAGR of 9% till 2012-
13. The import of pulp & paper products is likely to show a growing
trend. During last few years, the Indian paper market witnessed a five-
fold jump in the import of coated paper. The total import of this paper
rose to 10,000 tonnes in 2008 from 2,000 tones.

 Employment opportunities:
The industry provides employment to more than 0.12 million people
directly and 0.34 million people indirectly. Some of the paper products
are sheet paper, paper boxes, tissues, paper bags, stationery, envelopes,
and printed-paper products such as books, periodicals, and newspapers.
Specialty papers like sandpaper, blueprint paper, carbon paper are not a
part of paper products industry. Stationery includes greeting cards,
printing and writing papers, school and office papers, etc. The toiletry
products include paper towels, tissue paper, and bath tissue.
Top 5 companies:

1) Tamil Nadu Newsprint & Papers ltd:

It is a government owned company that was established in the year

1979. It is the world’s first “Bagasse” paper mill that manufactures
paper and paper related products by using renewable raw materials
with minimum impact on environment. It offers world class quality
paper and encourages the R&D department to bring the innovative
technologies for sustainable development. TNPL is accredited with
ISO14001:2004 certification for an effective environmental
management system and supplies its products to more than 50
countries across the globe.

2) JK Paper:

It was established in the year 1966 and produces many varieties of

papers and boards. It holds two pulp and paper mills in India, one in
Rayagada, Orissa and the other in Songadh, Gujarat. It is the first
company to invest world class paper mill and offres wide range of
uncoated and coated paper varieties that are used for multi purposes. It
is an ISO certified company and has received many awards including
TPM Excellence Award by Japan Institute of Plant Maintenance. It
cares about the environment and produces best quality paper that meet
the international standards. Jk Bond, JK SS Maplitho, JK MICR
Cheque paper, Jk Parchment paper, Jk SS Pulpboard, JK Cote are
some of the best products offered by the company.

3) West Coast Paper Mills Ltd:

WCPM is one of the oldest and the largest producers of paper for
printing, writing, and packaging in India. Established in 1955, the Mill
is located at Dandeli in Uttara Kannada district in Karnataka. The
global quality paper produced by the Company serves the needs of
innumerable industries in printing, writing, publishing,
 stationary,notebooks and packaging sectors in India, in the process
contributing to the development of the nation.

4) Ballarpur Industries ltd:

Ballarpur group is one of the leading manufacturers of paper In India.

It was one of the oldest paper mills that was established in the year
1945 by Lala Karam Chand Thapar. It holds seven manufacturing
units of which 6 are located in different regions in India and one is
located in Malaysia. It produces bulk coated and uncoated paper and
Avanta group own 49.2% share capital in the company. BILT is
committed to develop its business towards ecological, social and
economic sustainability and provides best quality products. It is a
specialist in producing different types of paper that includes writing &
Printing Paper, Industrial Paper and Specialty Paper.

5) International papers APPM ltd:

International Paper APPM Ltd is one of the largest integrated paper

and pulp manufacturers in India. Established in 1964, the company
produces writing, printing and copier papers for foreign and domestic
markets. Their production facilities at Rajahmundry and Kadiyam
have a total production capacity of 240,000 TPA. The company
employs around 2,500 employees and is headquartered in Hyderabad.

Market Share of above Companies:

1. Tamil Nadu Newsprint and Papers Limited - Rs. 2609.93 Crores
2. JK Papers - Rs. 2312.22 Crores
3. West Coast Paper Mills Ltd - Rs. 1808.09 Crores
4. Ballarpur Industries Limited - Rs. 1746.17 Crores
5. International Papers APPM- Rs. 1247.59 Crores
The contribution of the industry towards the GDP:
The contribution of Paper Industry towards GDP is 1.16%

Corporate Social Responsibility (CSR)

JK Paper & Environment

Our thrust on environment is visible in various eco-friendly processes at our

plant sites for production of pulp and paper. This is done by adopting modern
technology and process innovations.

The farm forestry development program, started in 1991, has created

employment and livelihood opportunities for significant number of people even
as the company sources its raw material requirement from the farm forestry on
low-productive land.

Through its R&D work, we have developed a large number of improved

varieties. These provide 2-3 times higher yield as compared to traditional seed
route plantations.

ENVIRONMENT INITIATIVES

 Continuously pursuing enriching the green cover through its Social Farm
Forestry drive
o Till date in excess of 81000 Ha of land has been planted covering
states of Orissa, Andhra Pradesh, Chattisgarh, Gujarat,
Maharashtra & West Bengal
o On average it has added 7000 Ha annually to its plantation drive by
distributing over 40 million saplings to farmers
o This farm forestry activity since 1990 has cumulatively provided
income for over 45,000 farmers
 Have signed an Emission Reduction Purchase Agreement (ERPA) with
the Bio Carbon Fund of the World Bank covering 3500 Ha mainly owned
by small and marginal farmers associated with JK Paper's plantation
program. This program provides additional income for participating
farmers, besides reducing harmful green house gases and global warming
  Better technology, Process innovation, Recycling, Re-use and minimizing
Waste-water discharge has helped significantly reduce fresh water
consumption & effluent generation per metric ton of paper in recent years

JK Paper & Society

EDUCATION

 Schools - Three schools providing education to over 3000 students with

significant portion of them from SC & ST
 Adult Literacy Programme enabling - 3250 illiterate to become literate.
 Adoption/ Upgradation of Industrial Training Institute ( ITI), Ukai,
Gujarat under PPP route:Providing training in line with industry
requirements. Close to 425 students trained in various trades

HEALTH CARE

 Organising regular General/Disease specific Health Check up camps at

the peripheral villages near the factory sites.
 Providing Financial assistance and support to District Administration for
organising 'Swasthya Mela' (Health Fair)
 Helping tribal mothers to benefit from Janani Surakhya Yojana

LIVELIHOOD INTERVENTIONS

 To improve quality of life of rural poor in and around our Mills by

helping them to organise self help group. Recognising the good work,
Banks coming forward with loans to build confidence of SHGs & help
them scale up their income generating activities.
Financial Statements :

JK Paper
STANDALONE BALANCE
SHEET ------------------- IN RS. CR. -------------------

Mar 17 Mar 16 Mar 15

12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 155.96 148.53 136.62

Total Share Capital 155.96 148.53 136.62

Revaluation Reserves 0.00 2.63 2.92

Reserves and Surplus 1,165.56 747.48 638.46

Total Reserves and Surplus 1,165.56 750.11 641.38

Total Shareholders Funds 1,321.52 898.64 778.00

NON-CURRENT LIABILITIES

Long Term Borrowings 1,299.05 1,437.24 1,598.28

Deferred Tax Liabilities [Net] 97.94 68.75 33.19

Other Long Term Liabilities 53.93 43.74 39.52

Long Term Provisions 1.60 3.59 1.79

Total Non-Current Liabilities 1,452.52 1,553.32 1,672.78

CURRENT LIABILITIES
 Short Term Borrowings 127.75 128.29 244.19

Trade Payables 230.94 192.33 237.62

Other Current Liabilities 449.10 513.46 381.49

Short Term Provisions 12.03 13.94 1.19

Total Current Liabilities 819.82 848.02 864.49

Total Capital And Liabilities 3,593.86 3,299.98 3,315.27

ASSETS

NON-CURRENT ASSETS

Tangible Assets 2,634.29 2,291.96 2,293.12

Intangible Assets 1.41 2.51 3.68

Capital Work-In-Progress 15.51 19.55 27.46

Intangible Assets Under Development 0.00 0.00 0.00

Fixed Assets 2,651.21 2,314.02 2,324.26

Non-Current Investments 28.41 24.62 28.02

Long Term Loans And Advances 52.90 97.82 94.19

Other Non-Current Assets 14.50 25.92 26.75

Total Non-Current Assets 2,747.02 2,462.38 2,473.22

CURRENT ASSETS

Current Investments 242.59 10.00 0.00

Inventories 382.94 337.71 373.58

Trade Receivables 110.81 139.18 145.92

Cash And Cash Equivalents 27.39 14.70 17.35

Short Term Loans And Advances 0.00 173.55 143.07
OtherCurrentAssets 83.11 162.46 162.13
Total Current Assets 846.84 837.60 842.05
Total Assets 3,593.86 3,299.98 3,315.27
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS

Contingent Liabilities 438.09 619.50 781.44

CIF VALUE OF IMPORTS

Raw Materials 0.00 272.94 354.54

Stores, Spares And Loose Tools 0.00 21.78 22.03
Trade/Other Goods 457.17 153.85 59.05
Capital Goods 0.00 0.28 9.08

EXPENDITURE IN FOREIGN
EXCHANGE

Expenditure In Foreign Currency 25.57 32.68 33.62

REMITTANCES IN FOREIGN CURRENCIES FOR

DIVIDENDS

Dividend Remittance In Foreign

Currency - - -

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods 215.14 241.75 187.54

Other Earnings - - -

BONUS DETAILS

Bonus Equity Share Capital - - -

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted

Market
8.83 6.46 11.12
Value
Non-Current Investments Unquoted
Book
19.58 24.16 24.16
Value
CURRENT INVESTMENTS

Current Investments Quoted Market

- 10.01 -
Value
Current Investments Unquoted Book
- - -
Value
SOURCE : DION GLOBAL SOLUTIONS
LIMITED

STANDALONE PROFIT &

LOSS
------------------- IN RS. CR. -------------------
ACCOUNT

Mar 17 Mar 16 Mar 15

12 mths 12 mths 12 mths

INCOME

Revenue From Operations [Gross] 2,736.83 2,548.33 2,259.61

Less: Excise/Sevice Tax/Other Levies 135.42 126.65 121.06
Revenue From Operations [Net] 2,601.41 2,421.68 2,138.55
Other Operating Revenues 27.20 33.04 20.28
Total Operating Revenues 2,628.61 2,454.72 2,158.83
Other Income 26.45 14.75 12.15
Total Revenue 2,655.06 2,469.47 2,170.98

EXPENSES

Cost Of Materials Consumed 1,268.40 1,293.18 1,295.20

Purchase Of Stock-In Trade 222.66 171.30 66.39
Changes In Inventories Of FG,WIP
And
-4.69 19.30 -25.33
Stock-In Trade
Employee Benefit Expenses 217.97 182.24 166.00
Finance Costs 187.64 198.40 203.93
Depreciation And Amortisation
Expenses 119.53 107.31 113.59
Other Expenses 411.84 382.62 402.23
Total Expenses 2,423.35 2,354.35 2,222.01

Profit/Loss Before Exceptional, 231.71 115.12 -51.03

ExtraOrdinary Items And Tax
Exceptional Items 0.00 0.00 0.00
Profit/Loss Before Tax 231.71 115.12 -51.03

Tax Expenses-Continued
Operations

Current Tax 47.42 0.00 0.00

Less: MAT Credit Entitlement 46.59 0.00 -1.29
Deferred Tax 68.05 35.56 -39.58
Total Tax Expenses 68.88 35.56 -38.29
Profit/Loss After Tax And Before
162.83 79.56 -12.74
ExtraOrdinary Items
Profit/Loss From Continuing
162.83 79.56 -12.74
Operations
Profit/Loss For The Period 162.83 79.56 -12.74

EARNINGS PER SHARE

Basic EPS (Rs.) 10.79 5.56 -0.93

Diluted EPS (Rs.) 9.45 5.03 -0.93

VALUE OF IMPORTED AND INDIGENIOUS RAW

MATERIALS

Imported Raw Materials 0.00 314.04 378.01

Indigenous Raw Materials 0.00 979.14 917.19
STORES, SPARES AND LOOSE TOOLS

Imported Stores And Spares 0.00 22.67 14.11

Indigenous Stores And Spares 0.00 37.52 77.64

DIVIDEND AND DIVIDEND

PERCENTAGE

Equity Share Dividend 7.43 7.43 0.00

Tax On Dividend 1.51 1.51 0.00
Equity Dividend Rate (%) 15.00 5.00 0.00