It gives me great pleasure to welcome you all to the 9th 
 Annual General Meeting of Jaiprakash Associates Ltd. (JAL). 
 The Company’s accounts for the year ended March 31, 2006, 
 along with the Directors’ report, Auditors’ report and Management 
 Discussion and Analysis, have already been circulated to you. 
 With your permission, I would like to take them as read.
 
 'POWER'ing India
 Your Company took the pioneering step of participating in 
 development of 300 MW BASPA-II Hydroelectric Project on BOO
 basis through its subsidiary Jaiprakash Hydro-Power Ltd. In 1992, 
 which was commissioned in 2003.
 
 The company has once again demonstrated its mettle by 
 commissioning its second BOO project 400 MW Vishnuprayag 
 Hydroelectric Project for its subsidiary Jaiprakash Power 
 Ventures Ltd., 6 months ahead of schedule.
 
 The above projects along with 1000 MW Karcham-Wangtoo 
 Hydroelectric Project being developed through the subsidiary 
 Jaypee Karcham Hydro Corporation Ltd. (JKHCL) would add 8 billion 
 units of clean and green energy by 2011 to the national grid.
 
 Each of these projects is a Run-of-the-River project devoid of 
 concerns related to rehabilitation, resettlement and submergence. 
 With a total hydropower generating capacity of 1700 MW your Company 
 JAL shall be the largest entity in hydropower in Private Sector by 2011.
 
 The successful validation of business model of Baspa II allowed 
 JKHCL to raise standalone non-recourse financing of Rs. 3920 crore. 
 The Entire debt for the project has been tied up and Rs. 750 crore 
 of equity already injected as on date.
 
 The Power Purchase Agreement for Karcham-Wangtoo has been signed 
 on 21st March 2006 with PTC for 704 MW (constituting 80% of 
 saleable power). Balance 20% of saleable power (176 MW) will be 
 sold as merchant power, bringing additional upside to the stakeholders.
 
 Your company has also signed MOA’s for development of over 2000 
 MW of Hydroelectric projects on BOO basis in the North East. 
 They company is extending its footprints in the power sector 
 by setting up pit head based Thermal Power Stations in 
 two phases of 500 MW each in district Siddhi and a 
 50 MW Wind Power Project in district Dhule of Maharashtra
 in two phases of 25 MW each. The first phase of the Wind 
 Power Project is expected to be commissioned by January 2007 
 and the second phase in early part of the next financial year.
 
 Government of India’s thrust for development of 50,000 MW of 
 hydropower by 2017 and objective to provide power for all by 
 2012 is bound to provide huge opportunities to your company 
 in this sector.
 
 The group aims to achieve a total Power generation capacity 
 of 5000 MW by the year 2014.
 
 ValuengineeringYour company has been well entrenched in 
 infrastructure projects for over 40 years with specialization 
 in multipurpose River Valley & Hydropower projects and has 
 been involved in development of 10000 MW of hydro power projects 
 during last about 25 years. It has had an inspiring track record 
 of completing for the nation 3350 MW in 2003-06 and would be 
 completing Hydro Power projects of 4010 MW (in various capacities)
 during 2006-07.
 
 JAL is the only engineering company in India to be assigned 
 CR-1’ rating by ICRA for hydro power (EPC contracts) with average 
 values of up to Rs. 2500 crore. The rating was upgraded last year 
 from Rs. 2000 crore to Rs. 2500 crore reiterating the strong 
 contract execution capabilities of your company.
 
 Today, JAL is the only Indian E&C Company having the experience, 
 resources and talent to execute hydropower projects irrespective 
 of their size and intricacies involved, from concept to commissioning.
 
 Your company is also mandated to develop the 160 km long expressway
 connecting Noida with the heritage city of Agra with ribbon 
 development of 25 million square meters of land along the expressway. 
 With its glorious track record of completing challenging projects, 
 this project when completed, would be another landmark contribution 
 towards nation building. 
 
 Cementing Growth 
 
 The Company’s cement production facility at Rewa at
 7 million tones per annum is the largest single location 
 cement manufacturing complex in the country with 100% of 
 power requirement being sourced from Company’s own captive thermal 
 power plants.
 
 While the Cement Production of our country went up from 23 MTPA 
 in 1982-83 to 152.9 MTPA in 2005-06, a growth of 100 MTPA over 
 a 20 year period, the per capita consumption cement went up 
 from 33 kg in 1982 to 125 kg in 2005. Cement being a core sector 
 industry needs to keep pace with the requirement of rapidly growing
 India. The per capita consumption is slated to be in excess 
 of 200 kg by 2010. The cement capacity is set to grow by another 
 100 MTPA over the next 5 years of which your company would have 
 a 15 % share, which will ensure that your company has a significant
 presence across, North, Central and East India. 
 
 The company has taken necessary steps to take possession of the 
 assets of UP State Cement Corporation Ltd. (in liq), the sale 
 of assets of which were confirmed in favor of the company by 
 Hon’ble High Court of Judicature at Allahabad on the 11th of 
 October 2006. Revival and modernization are in process to ensure 
 commencement of cement production to its capacity (>2.0 MTPA) 
 between March’07 and March’08. The 3.0 MTPA cement capacity 
 at District Solan, Himachal Pradesh is in an advanced stage
 of implementation and shall be commissioned between April’07 
 and March’08. Your company has been issued an LOI by SAIL
 to set up in JV with them a 2.5 MTPA cement capacity with 
 clinkerisation at Satna and slag based grinding facility 
 at Bhilai. Jaypee Cement Ltd. a subsidiary of your company 
 acquired Gujarat Anjan Cement Ltd. to set up a 1.2 MTPA cement
 plant at Bhuj, Gujarat. Your company has taken up work in 
 district Sidhi, MP for setting up a 1.5 MTPA cement plant. 
 Work on these projects is underway and the commissioning of 
 these projects will take place during the fiscal year 2008. 
 Your company shall also establish a 2 MTPA capacity in 
 Himachal Pradesh based on recently allotted Chamba
 limestone deposit by 2009.
 
 All new capacities are coming up with their own Captive Thermal
 Power Plants which will ensure most competitive power costs from 
 inception. The new units are strategically located to ensure fly 
 ash and savings in freight on onward movement of cement.
 
 With the great strides made in conserving energy in every tonne 
 of cement produced and with enhancement in usage of 
 environmentally challenging materials, your Company is amongst 
 the first cement company in India to be accredited to receive 
 CDM benefits.
 
 New Horizons
 Given JAL’s experience and strengths in engineering & construction
 project management in-house cement production, it is placed in 
 an advantageous position to diversify in the emerging E&C sectors 
 such as Expressways and Real Estate. The merger of Jaypee Greens Ltd.
 with your company has initiated your company in the real estate 
 business. Your company is developing 7.3 lac square meters of premier 
 residential/commercial real estate at the Jaypee Greens Complex 
 in Greater Noida. Your company aims to achieve to turnover of 
 approx. Rs. 5000 crore from this development over the next 5 years.
 
 Your company has entered into a Joint Venture agreement with 
 MP State Mining corporation for development of Amelia North Coal
 Block, in district Sidhi, Madhya Pradesh. JAL is in the process 
 of setting up first phase of 500 MW Thermal Power Plant with fuel 
 linkage having been secured through coal block and your cement plants
 being located within 50 kms of Thermal Power Plant shall gainfully 
 use the fly ash being produced, thereby adding economic value 
 along the entire process.
 
 JHPL, a subsidiary of your company has signed an MOU with 
 Powergrid corporation of India Ltd. to form a JV company for 
 implementation of the transmission system associated with 
 the 1000 MW Karcham Wangtoo Hydroelectric Project. Your 
 company will have a 74% stake in the Joint Venture. 
 This would be your company’s vehicle for its foray in the 
 growing power transmission business.
 
 I have touched upon some of these initiatives during interaction 
 of last year and you will observe focused approach of your 
 company has paid rich dividends in our journey of being an 
 integrated power player in this decade.
 
 Your company has also bid in consortium with Prize Petroleum Ltd.
 for the onland block of South REWA in the recently concluded 
 round of NELP VI.
 
 Financial Review
 The year saw JAL’s turnover go up to 26% to Rs. 3669 crore,
 PAT by 208% to Rs. 640 crore and the EPS consequently grew by 
 165% to Rs. 31.26. The above results are inclusive of porfit 
 of Rs. 361.37 crore from Offer for Sale of JHPL shares held by 
 the company.
 
 The salient financial indicator’s such as the average cost of 
 borrowings by the company, net block, shareholders funds and 
 net capital employed have successively grown to contribute to 
 higher profitability of the company. You will be pleased to 
 know that while your company successfully issued fresh FCCB’s 
 of Euro 165 million in March 2006, with a conversion price 
 of Rs. 558.773 per share, the FCCB’s issued in 2005 saw 
 a conversion rate of 84.06% as of 30th September 2006. 
 This only exhibits the confidence reposed by the international 
 investor community in your company.
 
 While the previous year saw the market capitalization of
 your company cross the USD 1 Billion mark for the first time,
 I am pleased to inform you that the current market capitalization
 of your company is over USD 2 Billion, almost doubling the 
 shareholder wealth in a short span of over a year.
 
 Your company, with strong fundamentals, formidable presence 
 in becoming infrastructure sector of the country and strong 
 focus in creating shareholder wealth in long term is aptly
 poised for sustained growth and improved profitability.
 
 Faith Moves Mountains
 Our vast country, endowed with all natural resources, with 
 collective will of over one billion countrymen is on threshold 
 of realizing its true potential in this century. With strong 
 fundamentals of democracy firmly in place, the untapped opportunities 
 are being seized with greater passion and conviction. The Indian 
 economy continues to grow on a robust note after 14 years of
 reform process which have made every sector take into stride 
 the challenges, which in turn have only helped Corporates and 
 Government Agencies to be competitive and growth oriented.
 
 Government of India’s belief to take the economic growth in the 
 country on the next plane of double digit growth in this decade 
 has opened gates of opportunities, as never before. With emphasis 
 on investment on course in development of Indian infrastructure, 
 your Company is well poised to harness not only its fullest potential, 
 but also in the process enhance the shareholders value on a consistent 
 basis.. 
 
 Education, Enlightenment and Empowerment
 As corporate citizens it is our responsibility to ensure that 
 the benefits of our growth are shared not just with the members 
 of our organization but also benefit the local environment in 
 which we operate, and the economically and educationally challenged 
 strata in our work surroundings also benefit. I firmly believe 
 that quality education on an affordable basis is the biggest 
 service which as a corporate citizen we can provide.
 
 Jaiprakash Sewa Sansthan, a not-for-profit trust, supported by 
 Jaypee Group has provided platform for various educational facilities, 
 today imparting education in different streams to more than 16,000 
 students all over the country, across the entire spectrum of the 
 education curve.
 
 The Jaypee education system plans to take the vision of service 
 to society through quality education to another plane by expanding 
 its infrastructure to provide education to a universe of 100,000 
 students in less than a decade from now.
 
 Acknowledgements
 Journey thus far has been made possible with the support and
 encouragement by Central and State Governments, Bankers, 
 Financial Institutions, Technocrats, Investors and all 
 dear Shareholders. We seek their continued patronage.
 
 I greatly value the collective efforts of entire JAYPEE Team and 
 the contribution & involvement of my colleagues on the Board.
  
 For and on behalf of the Jaypee Group Jaiprakash Gaur