Jaiprakash Associates

The Directors of your Company are pleased to present the 11th Annual
 Report together with the Audited Accounts of the Company for the year
 ended March 31, 2008.
 
 WORKING RESULTS
 
 The working results of the Company for the year under report are as
 under:
 
                                                     (Rs. in Crores)
 Financial year ended                    31.03.2008      31.03.2007
 
 Gross Revenue                              4273.89         3575.45
 
 Profit before Depreciation & Tax           1046.65          782.96
 
 Less: Depreciation                          203.30          163.05
 
 Profit before Tax                           843.35          619.91
 
 Less: Provision for Tax
 Current Tax                                 157.76          195.09
 
 - Deferred Tax                               69.55            6.90
 
 - Fringe Benefit Tax 6.37 233.68 
                                               3.02           205.01
 
 Profit after Tax                            609.67           414.90
 
 Add:
 
 - Profit brought forward                   1110.06           900.38
 
 - DRR no longer required                     60.00          1170.06 
 
                                              32.00           932.38
 
 Profit available for appropriation         1779.73          1347.28
 
 Less: Transferred to:
 
 - Provision for Dividend
 
 Pertaining to Previous Year
 (including Dividend Tax)                      0.06             - 
 
 - Reserve for Premium
 
 on FCCB                                      36.82            31.98
 
 - Debenture Redemption
 
 Reserve                                      34.85            71.33
 
 -  General Reserve                           61.00            43.00
 
 -  Interim Dividend                          67.74            43.74
 
 - Proposed Final Dividend                    46.86            35.08
 
 - Tax on Dividends                           19.47           266.80 
 
                                              12.09           237.22
 
 Balance carried to Balance Sheet           1512.93          1110.06
 
 Basic Earnings Per Share                      5.42             3.82
 
 [Face value Rs. 2 per share]
 
 Diluted Earnings Per Share                    5.32             3.55
 
 [Face value Rs. 2 per share]
 
 The results of the current year reflect an encouraging growth over that
 of previous year as under: -
 
 SI.   Results                    Unit
 No.
 
 1.    Profit before tax          Rs. Crore
 
 2.    Profit after tax           Rs. Crore
 
 3.    Earnings per share
      (Face Value Rs.2)           Rs.
 
 
 Year            Year         Increase
 ended           ended
 31.03.2008      31.03.2007
 
 843.35          619.91        36.0%
 
 609.67          414.90        46.9%
 
   5.42            3.82        41.8%
 
 DIVIDEND
 
 Your Directors had declared two interim Dividends of 15% each on July
 14,2007 and January 12, 2008 for the financial year ended March 31,
 2008. The Board has recommended a final dividend (proposed) of 20%
 which will be paid after your approval at the ensuing Annual General
 Meeting. The final dividend will absorb an amount of Rs. 46.86 Crores
 (excluding dividend tax of Rs. 7.96 Crores). Thus the total dividend
 for the year would aggregate to 50% leading to pay out of Rs. 114.60
 Crores (excluding tax on dividend of Rs. 19.47 Crores).
 
 SUB-DIVISION OF THE FACE VALUE OF EQUITY SHARES OF THE COMPANY
 
 Pursuant to the approval of the shareholders accorded on November 24,
 2007 through Postal Ballot, each equity share of the face value of Rs.
 10 was sub-divided into five equity shares of the face value of Rs. 2
 each, effective December 26, 2007. Consequently, the sub- divided
 equity shares of the face value of Rs. 2 each have been issued to such
 shareholders who held the equity shares of Rs. 10 each of the Company,
 on December 26, 2007, being the Record Date.
 
 SHARE WARRANTS ISSUED ON PREFERENTIAL BASIS TO PROMOTER GROUP COMPANY
 
 Considering the growth opportunities in different fields of business
 interest of the Company and with a view to augmenting the long term
 resources for growth & diversification plans and for general corporate
 purposes, in accordance with the approval of shareholders received
 through postal ballot on January 18, 2008, the Company had, during the
 year, issued 5,00,00,000 (five crore) Warrants on preferential basis to
 Jaypee Ventures Private Limited (a Promoter Group Company), entitling
 the holder to apply for allotment of one Equity Share of Rs.2 at a
 premium of Rs.395 on full payment, per Warrant, in one or more
 tranches.
 
 After receipt of in-principle approvals for listing of the shares
 underlying the said Warrants from BSE on January 21, 2008 and from NSE
 on January 22, 2008 and on receipt of 10% up-front payment from Jaypee
 Ventures Private Limited, the Warrants were allotted on January 22,
 2008.
 
 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
 
 To meet requirement of funds for its on-going and growing business,
 your Company had, during the year under report, issued Foreign Currency
 Convertible Bonds (FCCBs) for USD 400 Million. The particulars about
 conversion, outstanding amount, coupon, etc. in respect of FCCB Issues
 made by the Company are detailed at para 26 of the Corporate Governance
 Report forming part of this Report.
 
 CHANGES IN SHARE CAPITAL
 
 The paid-up capital of the Company on March 31, 2007 stood at Rs.
 219,23,96,540. During the year ended March 31, 2008, 1,60,024 FCCBs
 have been converted into 7,53,24,147 Equity Shares of Rs. 2 each
 thereby raising the share capital by Rs. 15,06,48,294.  Thus, the
 paid-up capital of the Company as at March 31, 2008 stood at Rs.
 2,34,30,44,834.
 
 OPERATIONS
 
 1.0 ENGINEERING DIVISION
 
 1.1 New Contracts
 
 1.1.1 During the year under report, your Company was awarded contracts
 for the following works:-
 
 (i) Development of the prestigious Access-Controlled 8-Lane Expressway,
 about 1,047 Kms long, from Greater Noida to Ballia in the State of
 Uttar Pradesh along the left bank of river Ganga on Design,
 Engineering, Finance, Construction, Operation, and Maintenance (DBFO)
 basis for a concession period of 35 years. The Project, valued at an
 estimated sum of Rs. 29,825 Crores, includes 12,281 hectares of land at
 eight locations to be given to the developer for development on ninety
 years lease. Jaypee Ganga Infrastructure Corporation Ltd., a 100%
 subsidiary of your Company - which has already signed the Concession
 Agreement, will implement the Project.
 
 (ii) Construction of Civil & Structural and Mechanical & Electrical
 Fabrication & Works of Clinkerisation Unit at Satna and Grinding Unit
 at Bhilai of Bhilai Jaypee Cement Limited in the States of Madhya
 Pradesh and Chhatisgarh respectively at a Project value of Rs. 128
 crore excluding cost of steel and cement.
 
 1.1.2 Your Company, on its own, has been pre-qualified to participate
 in the tender, invited on turnkey basis, for the following projects:
 
 (i) 1,500 MW Tipaimukh Hydro-electric Project in Manipur State; and
 
 (ii) 1,000 MW Pakal Dul Hydro-electric Project in J & K State.
 
 1.1.3 Your company has also submitted Application for Pre-
 qualification for Civil & Hydro-mechanical works including Penstock
 liners of Vishnugad Pipalkoti Hydro Electric Project (4x111 MW) in the
 State of Uttarakhand on EPC contract basis and is expected to be
 qualified soon.
 
 1.2 Works in Progress
 
 Presently the Company is executing works of the following major
 projects:
 
 SI.  Name of the Project                Location of
 No.  under Execution                    the Project
 
      Works pertaining to:
 
 1.   Baglihar -I & II, HEP              Jammu & Kashmir
 
 2.   Karcham Wangtoo HEP                Himachal Pradesh
 
 3.   Turnkey construction of            Andhra Pradesh
      Srisailam Left Bank Canal
      Tunnel Scheme including
      Head Regulator etc. of
      Alimineti Madhava Reddy
      Project
 
 4.   Taj Expressway (six-lane           Uttar Pradesh
      165 km) connecting Noida              (NCR)
      and Agra and related activities
 
 5.   Zirakpur-Parwanoo Highway          Punjab. Haryana
      From Km 39.860 to                  &
      Km 67.000 of NH - 22 on            Himachal Pradesh
      BOT basis
 
 6.   Ganga Expressway                   Uttar Pradesh
     (Eight-lane 1047 km long)
      connecting Greater Noida and
      Ballia and related activities
 
 7.   Civil & Structural and              Madhya
      Mechanical & Electrical             Pradesh and
      Fabrication & Erection works        Chattisgarh
      of Clinkerisation Unit at Satna
      and Grinding Unit at Bhilai of
      Bhilai Jaypee Cement Limited.
 
 
 Contract Price         Nature of
 (Base Value)           Project
 (Rs. in crore)
 
 2,152                  Power
                        Generation
                       (900 MW)
 
 4.150                  Power
                        Generation
                       (1000 MW)
 
 1,925                  Irrigation
                        Tunnels
 
 6,000                  Expressway
                        and Real Estate
                        Project
 
   414                  Highway
                        Project
 
 29,825                 Expressway
                        and Real Estate
                        Project
 
 128(Excluding          Cement Project
 cost of steel
 & cement)
 
 Projects being Executed in Joint Venture, with the Company as the
 Leader
 
 8.   Sri Rama Sagar Project            Andhra Pradesh
      Flood Flow Canal
      Package - 2
 
 9.   Polavaram Project Right
      Main Canal Package - 4            Andhra Pradesh
 
 10.  Veligonda Feeder and              Andhra Pradesh
      Teegaleru Canal Project-2
 
 11.  Rajiv Sagar Lift Irrigation       Andhra Pradesh
      Project (Dummugudem)
 
 12.  GNSS Main Canal from              Andhra Pradesh
      km 119.000 to km 141.350
      including construction of
      CM & CD works
 
 
 187              Irrigation Canal
 
 301              Irrigation Canal
 
 347              Irrigation Canal
 (Revised)
 
 282              Lift Irrigation
                  Project
 
 112              Irrigation Canal
 
 The progress of work on all the projects is generally satisfactory.
 
 1.3. Works Completed
 
 During the year, your Company has completed the works on the following
 Projects:
 
 (i) Teesta- V Hydro-electric Project (510 MW) in Sikkim.
 
 (ii) Omkareshwar Hydro-electric Project (520 MW) in Madhya
 Pradesh.  
 
 (iii) Contract for construction of civil works of Zone-Ill Laole-
 Quazigund Section of Katra-Baramullah Railway Line in J&K State was
 foreclosed by mutual consent without any liability on either side.
 
 Thus during the year reported, your Company completed Projects with
 power generation capacity of 1,030 MW.  Besides, 390 MW Dulhasti Hydro
 Electric Project in the State of Jammu & Kashmir was handed over to
 NHPC during the year, after completion of all works.
 
 2.0 CEMENT DIVISION
 
 2.1 Operations
 
 The production and sale of Cement and Clinker during the year, as
 compared to the previous year, are as under:-
 
                               2007-08        2006-07
 
 Cement Production (MT)        67,76,663      66,80,910
 
 Clinker Production (MT)       51,35,109      51,02,939
 
 Cement Sale (MT)
 (including Self-Consumption)  67,63,237      66,38,409
 
 Clinker Sale (MT)                 -           1,00,095
 
 The cement and clinker production for the year under report registered
 a growth over the previous year.
 
 The combined increased capacity of Jaypee Rewa Plant, Jaypee Bela
 Plant, Jaypee Cement Blending Unit and Jaypee Ayodhya Grinding
 Operation (JAAGO) as on March 31, 2008 was 7 million tonnes per annum.
 The Directors are pleased to report that Phase-I of Chunar and Dalla
 Cement Plants in Uttar Pradesh and Grinding Unit in Haryana have been
 successfully commissioned during the months of February and March 2008.
 
 During the year under review, 93% of the power requirements of the
 cement plants at Rewa and Bela were met from captive power plants
 entailing substantial saving in cost of production.
 
 2.2 Expansion Plans
 
 The Company has undertaken creation of new/enhancement of existing
 capacities of cement/cement products, directly or through Joint Venture
 and Special Purpose Vehicles over a period of next four years within an
 approximate capital outlay of over Rs. 3.000 Crores.
 
 3.0 HOTEL & REAL ESTATE DIVISION
 
 Your Company is developing a premium Golf-centric complex of about 8
 million Sq. ft. at Jaypee Greens, Greater Noida, primarily consisting
 of high end residential development, besides a 220 rooms boutique Spa
 Resort under construction which is likely to be operational by end
 2009. The Golf course, the largest in India and the third largest in
 Asia, has created a unique niche for itself among connoisseurs.
 
 The Jaypee Greens Golf Resort, categorised as a Five Star Deluxe Hotel
 as well as the Holiday Resort - the Jaypee Residency Manor at
 Mussoorie, owned by the Company, are being managed by Jaypee Hotels
 Limited, a subsidiary of your Company and are operating satisfactorily.
 
 DIVERSIFICATION
 
 A.  WIND POWER PLANT
 
 The Company has fully commissioned its Wind Turbine Generators with an
 aggregate capacity of 49 MW (40.25 MW in Maharashtra and 8.75 MW in
 Gujarat) as on March 31, 2008.  Out of the total installed capacity of
 49 MW, 16.25 MW (13 Generators, each with a capacity of 1.25 MW) was
 commissioned at Dhule, Maharashtra during December 2006 to March 2007.
 The remaining 32.75 MW was commissioned at Sangli, Maharashtra (24 MW
 -16 Generators, each with a capacity of 1.5 MW) during September 2007
 to March 2008 and at Kutchh, Gujarat (8.75 MW 7 Generators, each with a
 capacity of 1.25 MW) in March 2008.
 
 The electricity generated is being sold to Maharashtra State
 Electricity Distribution Company Ltd. in Maharashtra and Gujarat Urja
 Vikas Nigam Limited in Gujarat.
 
 B.  DEVELOPMENT OF DONGRI TAL II COAL BLOCKS IN MADHYA PRADESH
 
 The Company has received a Letter of Intent (LOI) from Madhya Pradesh
 State Mining Corporation Limited (MPSMCL) for formation of another
 Joint Venture Company (JVC) for mining of Coal in Dongri Tal II Coal
 Block in District Sidhi in M.R In terms of the LOI, MPSMCL would be
 allotted 51% of issued equity shares in the JVC in consideration of
 conferring mining rights on the JVC and your Company would be required
 to hold 49% equity in the JVC. The new JVC shall be floated in due
 course.
 
 C.  ENERGY FROM MUNICIPAL SOLID WASTE AT CHANDIGARH
 
 The Plant at Chandigarh for producing alternate source of energy from
 Municipal Solid Waste is almost ready for commissioning within a month.
 
 D.  EXPLORATION AND DEVELOPMENT OF OIL AND NATURAL GAS
 
 The Government of India has awarded the South Rewa Basin in Madhya
 Pradesh with an approximate area of 13,000 sq. km. for exploration and
 development of the largest on- shore Oil-Gas Block to the Consortium of
 the Company and Prize Petroleum Corporation Limited, a Company with
 vast experience in the field of Oil and Gas exploration. The Companys
 stake in the Consortium is 90% and balance 10% is of Prize Petroleum
 Corporation Limited (PPCL) which will act as the Operator. A Production
 Sharing Contract has been executed between the President of India and
 the Consortium.
 
 Keeping in view the advantages to have substantial stake in the capital
 of PPCL, the Company has taken necessary steps for acquisition of
 present shareholding of 45% of PPCL held by ICICI Bank Limited and
 ICICI Venture Funds Management Company Limited
 
 The Company shall also participate in the bidding for exploration of
 Oil and Natural Gas under New Exploration Licensing Policy
 
 - Seventh Round for which the Government of India has invited bids.
 
 E.  MANUFACTURE OF IRON AND STEEL
 
 During the year, the Company has purchased and taken possession of the
 assets of Malvika Steels Limited at Jagdishpur in Uttar Pradesh that
 were put up for sale through an open auction by the Debt Recovery
 Tribunal (DRT). This acquisition and revival of the Steel Plant would
 be a step in the direction of backward integration.
 
 Steel Authority of India Limited, the only other Bidder in the auction
 has appealed before the Presiding Officer, DRT who has ordered to
 maintain status quo on deposit of an amount equal to the sale value of
 assets. The Company has preferred an appeal before Debt Recovery
 Appellate Tribunal against the Order of Presiding Officer, DRT, which
 is pending.
 
 F.  OTHER DIVERSIFICATION INITIATIVES
 
 Companys other diversification initiatives include development and
 mining of Coal, setting-up of pit-head based Thermal Power Station,
 construction of Expressways and development of Sports Complex. These
 are being implemented through different subsidiaries of the Company.
 Details of these initiatives are furnished under the heading
 Subsidiaries.
 
 SUBSIDIARIES
 
 As on March 31,2008, the Company had following fifteen subsidiaries
 engaged in different business activities:
 
 1.  Jaypee Hotels Limited (72.18%)
 
 2.  Jaiprakash Hydro-Power Limited (63,34%)
 
 3.  Jaiprakash Power Ventures Limited (80.56%)
 
 4.  Jaypee Karcham Hydro Corporation Limited (100%)
 
 5.  Jaypee Powergrid Limited (74%)
 
 6.  Jaypee Cement Limited (100%)
 
 7.  Gujarat Anjan Cement Limited (99.88%)
 
 8.  Madhya Pradesh Jaypee Minerals Limited (70%)
 
 9.  Jaypee Infratech Limited (98.96%) w.e.f. 05.04.2007
 
 10.  Bhilai Jaypee Cement Limited (74%) w.e.f. 11.04.2007
 
 11.  Himalyan Expressway Limited (100%) w.e.f. 25.05.2007
 
 12 Gujarat Jaypee Cement & Infrastructure Limited (100%) w.e.f.
 26.12.07
 
 13. JPSK Sports Private Limited (61.70%) w.e.f. 07.03.2008
 
 14 Bokaro Jaypee Cement Limited (74%) w.e.f. 13.03.2008
 
 15. Jaypee Ganga Infrastructure Corporation Limited (100%) w.e.f.
 18.03.2008
 
 Since the first financial years of Companies at serial no. 13 to 15
 will close on March 31, 2009 the consolidated Balance Sheet reflects
 the consolidated accounts of the other 12 subsidiaries.
 
 After March 31, 2008 one more subsidiary namely Jaypee Arunachal Power
 Limited has been incorporated on April 23, 2008 to put up a Power
 Project in Joint Venture with Government of Arunachal Pradesh.
 
 The status of the aforesaid subsidiaries is as under:
 
 HOTEL AND RELATED BUSINESS
 
 1. Jaypee Hotels Limited (JHL)
 
 Jaypee Hotels Limited (JHL), a 72.18% subsidiary of your Company, has
 shown improvement in all performance parameters compared to previous
 year. While gross revenue and gross profit registered a growth of over
 32% and 25% respectively, profit before and after tax witnessed an
 upswing of over 30% and 28% respectively.
 
 The Board of Directors of JHL has declared a dividend of 18% for the
 year ended March 31, 2008.
 
 The future for the Hotel Industry in India holds high promise and with
 the forthcoming Commonwealth Games being hosted by India, at New Delhi,
 JHL is expected to perform better in the coming years.
 
 POWER AND RELATED BUSINESS
 
 2. Jaiprakash Hydro-Power Limited (JHPL)
 
 300 MW Baspa-ll Power Station
 
 During the year under report, the power station with an availability of
 99.91%, has generated 1274.16 million units of electricity including
 12% free power to Himachal Pradesh State Electricity Board/ Government
 of Himachal Pradesh. The net saleable energy for the year was 1121.26
 million units, out of which 1050.06 million units was primary energy
 and the balance 71.20 million units was secondary energy. The Plant is
 expected to generate at full design energy during the current year.
 Profit after tax during the reporting period was Rs. 213.39 Crores as
 against Rs. 199.54 Crores during the previous period. The Board of JHPL
 had paid an interim dividend of 7.5% in September 2007 and has
 recommended a final dividend of 7.5 % for the year ended March 31,
 2008.
 
 3. Jaiprakash Power Ventures Limited (JPVL)
 
 400 MW Vishnuprayag Power Station
 
 The Vishnuprayag Power Station of this subsidiary has been operating
 satisfactorily with generation and plant availability exceeding the
 normative availability and design energy. The Plant availability and
 Energy generated during the year under report were as under:-
 
 Plant Availability
 
 Plant Availability     Generation (million units)
 
                        Actual        12% Free          Saleable
                        Energy        Energy to         Energy to
                        delivered     Government        U.P. Power
                                      of Uttarakhand    Corporation
                                                        Ltd.
 
 99.14%                 1846.89        221.63             1625.26
 
 (Against normative                                    (Against design
 availability of 90%)                                   saleable energy
                                                        of 1545.88)
 
 JPVL had declared and paid in October 2007, an interim dividend of 12%
 for the Financial Year ended on March 31, 2008. In view of the
 satisfactory working results, the Board of JPVL has decided to
 recommend to the Members a Final Dividend of 8% for the Financial Year
 ended March 31, 2008. Thus the total dividend for the year 2007-08
 aggregates to 20% of the Companys Paid-up Share Capital leading to an
 aggregate pay out of Rs.121.30 Crores (including Dividend Distribution
 Tax of Rs. 17.62 Crores) for the year.
 
 JPVL has taken major initiatives to further pursue the power business
 in a big way either directly or by participating/investing in other
 companies and/or forming Joint Venture companies, as under:
 
 (i) Hydropower Projects in Arunachal Pradesh
 
 Lower Siang Project (2000 MW) and the Hirong Project (500 MW) in Joint
 Venture with the Government of Arunachal Pradesh.
 
 (ii) Hydropower Projects in Meghalaya
 
 450 MW Kynshi-ll project and the 270 MW Umngot hydro-electric project
 in Joint Venture with Government of Meghalaya.
 
 (iii) Thermal Power Project in Madhya Pradesh
 
 A pit-head based 1320 MW Thermal Power Plant, using super- critical
 technology, at Nigrie, M.R
 
 4.  Jaypee Karcham Hydro Corporation Limited (JKHCL)
 
 Jaypee Karcham Hydro Corporation Limited (JKHCL), a wholly owned
 subsidiary of your Company, is setting-up the Karcham Wangtoo
 Hydro-electric Project (1000 MW) in Kinnaur District of Himachal
 Pradesh on Build, Own and Operate basis.
 
 The project is scheduled to be commissioned by November 2011.  JKHCL
 has obtained all statutory approvals required for setting up of the
 Project. The Project is progressing satisfactorily.
 
 5.  Jaypee Powergrid Limited (JPL)
 
 This company, a Joint Venture of Jaiprakash Hydro-Power Ltd.  and
 Powergrid Corporation of India Limited is setting up the Transmission
 Line for evacuation of Power from the Karcham Wangtoo Project of the
 Jaypee Group. Central Electricity Regulatory Commission has granted
 Transmission License to this subsidiary.
 
 Feasibility report of the Project & Detailed survey of route alignment
 for the transmission line in the 230 km. stretch from Karcham Wangtoo
 to Abdullapur sub-station of PGCIL and loop- in-loop-out with
 Baspa-Jhakri line has been completed during the year.
 
 The Project is scheduled to be completed in June, 2010.
 
 CEMENT BUSINESS
 
 6.  Jaypee Cement Limited (JCL)
 
 As on March 31, 2008, JCL holds 99.88% equity shares of Gujarat Anjan
 Cement Limited. The Company is exploring opportunities of setting
 up/acquiring new/existing cement plants in India. JCL is also in the
 process of acquiring mines in Andhra Pradesh for its proposed Cement
 Project.
 
 7.  Gujarat Anjan Cement Limited (GACL)
 
 This Company, a subsidiary of Jaypee Cement Limited, is setting up a
 cement plant of 4.00 mtpa capacity at village Vayor, Taluka Abdasa in
 Distt. Bhuj (Phase I of 1.20 mtpa & Phase II of 2.80 mtpa) and grinding
 unit of 2.40 mtpa (Phase I & Phase II of 1.20 mtpa each) at Wanakbori
 in Distt. Kheda in Gujarat. Phase I of the Project is expected to be
 completed by November 2008 followed by Phase II in March 2010.
 
 8.  Bhilai Jaypee Cement Limited (BJCL)
 
 BJCL, incorporated on April 11, 2007, as a Joint Venture between the
 Company and Steel Authority of India Ltd. (SAIL) with management
 control vested in your Company, is setting-up a 2.2 million tonne per
 annum capacity split-located Cement Plant at Bhilai in Chattisgarh and
 at Babupur, Satna in Madhya Pradesh.  The Project is due to be
 commissioned by April 2010.
 
 Required land for the Grinding Unit at Bhilai has been acquired on
 long-term lease basis from SAIL. Land for setting up the Clinkerization
 Unit at Babupur, Satna has also been purchased.
 
 The Company has entered into a long-term Agreement with SAIL for
 operating its Limestone Mines on right to use basis as well as for
 supply of Slag for manufacture of Cement.
 
 9.  Bokaro Jaypee Cement Limited (BOJCL)
 
 BOJCL, the second joint venture between the Company and SAIL with
 management control vested in the Company, was incorporated on March 13,
 2008 to set up a 2.1 million tonne per annum capacity Cement Plant at
 Bokaro in Jharkhand. This Project is expected to be commissioned in
 2010.
 
 BOJCL shall source slag from SAIL and clinker from your Company for
 production of cement.
 
 10.  Gujarat Jaypee Cement & Infrastructure Limited (GJCIL)
 
 The Company has signed an Agreement with Gujarat Mineral Development
 Corporation Limited (GMDCL) on January 8, 2007 for setting up of a 2.4
 million tonnes per annum capacity Cement manufacturing plant with
 captive power station and captive Jetty in Kutch Distt. of Gujarat,
 through a Special Purpose Vehicle (SPV) viz. Gujarat Jaypee Cement &
 Infrastructure Limited. This SPV, which was incorporated on June 20,
 2007 shall have equity contribution of 74% from the Company and 26%
 from GMDCL.  Preparatory work for implementation of this Project has
 started.
 
 COAL MINING
 
 11.  Madhya Pradesh Jaypee Minerals Limited (MPJML)
 
 MPJML, a joint venture with Madhya Pradesh State Mining Corporation
 Limited (MPSMCL), shall develop and mine coal from the Coal Block at
 Amelia (North) in M.R This company shall feed coal to the pit-head
 based 1320 MW Thermal Power Plant being set up by JPVL at Nigrie, M.R
 Detailed Project Report and Composite Geological Report for the Project
 has been received in June 2007 and August 2007 respectively. Mining
 lease for the Project is expected to be executed shortly. Approval for
 construction of private assisted Railway siding for the Project has
 also been received from Railways. Necessary tie-up for supply of power
 for the Project has also been made.
 
 EXPRESSWAYS AND RELATED BUSINESS
 
 12.  Jaypee Infratech Limited (JIL)
 
 JIL was incorporated on April 5,2007 as a wholly owned subsidiary for
 implementation of 160 km long 6-lane Access-Controlled Taj Expressway
 Project which was awarded to your Company by Taj Expressway Industrial
 Development Authority (TEA) on Build, Own, Operate and Transfer basis.
 After obtaining necessary approval, implementation of the Project has
 been assigned to JIL. JIL shall also develop Real Estate in five
 different locations along the Expressway. The Company has invested
 Rs.955 Crores in the equity capital of JIL out of the total Equity
 Share Capital of Rs. 965 Crores. Jaypee Group Employees Welfare Trust
 holds balance Equity Share Capital of Rs. 10 Crores. Construction work
 for the Expressway is in full swing and is progressing satisfactorily.
 
 13.  Jaypee Ganga Infrastructure Corporation Limited (JGICL)
 
 JGICL was incorporated in March 18, 2008 as a wholly owned subsidiary
 of the Company for implementation of the prestigious 1047 km. long
 8-lane Access-Controlled Expressway connecting Greater Noida with
 Ghazipur- Ballia, namely Ganga Expressway Project. The Project includes
 development of land parcels, adjacent to the Expressway, in eight
 different locations. The Ganga Expressway Project was awarded by Uttar
 Pradesh Expressway Industrial Development Authority (UPEIDA) on Design,
 Build, Finance and Operate basis. After obtaining necessary approvals,
 the Concession Agreement was executed between Uttar Pradesh Expressway
 Industrial Development Authority (UPEIDA) and JGICL. Preparatory work
 for the Project has started.
 
 14.  Himalyan Expressway Limited (HEL)
 
 HEL was incorporated on May 25, 2007 as a wholly owned subsidiary for
 implementation of 27.14 km long Zirakpur- Parwanoo Road Project in the
 States of Punjab, Haryana and Himachal Pradesh on BOT basis under NHDP
 Phase-IIIA, as awarded by the National Highways Authority of India
 (NHAI). The work on the Project is progressing satisfactorily.
 
 SPORTS AND RELATED BUSINESS
 
 15.  JPSK Sports Private Limited (JPSKSPL)
 
 JPSK Sports Private Limited was incorporated on October 20, 2007 for
 developing a Greenfield state-of-the-art Sports Complex including Car
 Race track suitable for Formula One race with related integrated
 support infrastructure including Township(s) and auxiliary facilities.
 
 Your Company alongwith its affiliates has acquired 74% equity shares in
 JPSKSPL. The remaining 26% Equity Capital is held by two Strategic
 Partners and their affiliates.
 
 JPSKSPL has successfully concluded Race Promotion Contract (F1
 Contract) with reputed parties based in UK and Ireland for conducting
 the Grand Prix of India to be a round of the FIA Formula One World
 Championship.
 
 Preliminary activities in developing the Project have already
 commenced.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The statement as required under Section 212 of the Companies Act, 1956,
 in respect of the subsidiaries of the Company is annexed and forms an
 integral part of this Report. The consolidated financial statements of
 the Company and its subsidiary companies, prepared in accordance with
 Accounting Standard (AS)-21 Consolidated Financial Statements
 prescribed by the Institute of Chartered Accountants of India, form
 part of the Annual Report and Accounts.
 
 Since the first financial year of three subsidiaries viz. Bokaro Jaypee
 Cement Limited, Jaypee Ganga Infrastructure Corporation Limited and
 JPSK Sports Private Limited would end on March 31, 2009, Balance Sheets
 of these subsidiaries have not been prepared and hence have not been
 included in the consolidated financial statements as at March 31, 2008.
 
 In terms of the approval of the Central Government accorded under
 Section 212 (8) of the Companies Act, 1956 the Audited Balance Sheets
 as at March 31, 2008 in respect of the subsidiaries of the Company have
 not been attached to the Balance Sheet of the Company. However, the
 requisite information for each subsidiary has been disclosed. The
 annual accounts of the subsidiary companies and the related detailed
 information will be made available to the investors of the
 Company/subsidiary companies seeking such information at any point of
 time. The Annual Accounts of the subsidiary companies will also be kept
 for inspection by any investor in its Head Office and that of
 subsidiary company concerned.
 
 The Directors are of the opinion that the subsidiaries of your Company
 have bright future.
 
 OUTLOOK
 
 Keeping in view the performance and future prospects of the Companys
 business, the expansions and diversifications being undertaken and the
 business of its subsidiaries, your Company is poised for sustained
 growth and the outlook is bright.
 
 DIRECTORATE
 
 During the year under report, the following Directors resigned from the
 Directorship of the Company:
 
 Shri Gunjit Singh w.e.f. July 9, 2007, Shri Sameer Gaur w.e.f.
 September 9, 2007, Shri Suren Jain w.e.f. December 10, 2007, Shri A.K.
 Jain w.e.f. December 11, 2007 and Shri D.N. Davar w.e.f. January 25,
 2008.
 
 The Board places on record its appreciation for the valuable
 contributions of the above Directors during their respective tenure on
 the Board.
 
 Shri Jaiprakash Gaur, the visionary Founder Chairman of the Group
 submitted his resignation as Chairman of the Company and his
 resignation was reluctantly accepted by the Board almost a year back.
 The spirit of entrepreneurship and the unique value system introduced
 by Shri Jaiprakash Gaur in managing the affairs of the Company,
 however, continued to be the guiding force in placing the Company on a
 roburt and rapid growth path.
 
 The Board unanimously decided that it would be an honour for the
 Company to have Shri Jaiprakash Gaur back on the Board as its most
 coveted member so that the unique and unmatched contributions of Shri
 Jaiprakash Gaur could help the Board in strategic policy formulation
 and monitor its implementation with added zeal and confidence for a
 rapidly growing Company like this, with interest in diverse fields
 
 The Board accordingly proffered Shri Jaiprakash Gaur to join the Board.
 In deference to the persistent requests from all the members of the
 Board, Shri Jaiprakash Gaur agreed to join the Board to contribute in
 actualizing the goals set by the Company including enhancing
 stakeholders value.
 
 Accordingly, Shri Jaiprakash Gaur was appointed as Director w.e.f.
 December 14, 2007 in the causal vacancy caused due to resignation of
 Shri Suren Jain.
 
 Further, Shri R.K. Singh was appointed w.e.f. October 15, 2007 in
 casual vacancy of Shri Sameer Gaur, Shri Ranvijay Singh was appointed
 w.e.f. December 14, 2007 in casual vacancy of Shri A.K. Jain and Shri
 S.C. Gupta was appointed w.e.f.  February 21, 2008 in casual vacancy of
 Shri D.N. Davar.
 
 Shri R. K. Singh was appointed as Whole-time Director with effect from
 October 15, 2007. His appointment and remuneration was approved by
 shareholders on November 24, 2007. Similarly, Shri Ranvijay Singh was
 appointed as Whole-time Director with effect from December 14, 2007.
 His appointment and remuneration was approved by shareholders on
 January 18, 2008.
 
 The newly appointed Directors have brought with them rich wealth of
 varied experience which, pooled with the existing expertise of your
 Board, would go a long way in charting the course of the Company.
 
 Shri Sunny Gaur was re-designated by Board on December 14, 2007 as
 Managing Director (Cement).  Similarly, Shri Pankaj Gaur was
 re-designated by Board on December 14, 2007 as Joint Managing Director
 (Construction).
 
 S/Shri B. K. Taparia, S.C. Bhargava, Pankaj Gaur, B. K. Goswami and S.
 D. Nailwal, Directors would retire by rotation at the forthcoming
 Annual General Meeting of the Company. Proposals for their re-
 appointment have been included in the Notice of the Annual General
 Meeting for your approval.
 
 DEPOSITS
 
 Fixed deposits received from the shareholders and the public as on
 March 31,2008 stood at Rs. 190,09,05,000. Deposits of Rs. 1,58,11,000
 due for repayment on maturity remained unclaimed by the depositors as
 on March 31, 2008.
 
 PARTICULARS OF EMPLOYEES
 
 A statement showing the particulars of employees, pursuant to Section
 217(2A) of the Companies Act, 1956 read with the Companies (Particulars
 of Employees) Rules, 1975, is annexed and forms an integral part of
 this Report.
 
 PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE EARNINGS & OUTGO
 
 Particulars with respect to conservation of energy, technology
 absorption, foreign exchange earnings & outgo, pursuant to Section
 217(1)(e) of the Companies Act, 1956, read with the Companies
 (Disclosure of Particulars in the Report of Directors) Rules, 1988 for
 the year ended March 31,2008 are annexed and form an integral part of
 this Report.
 
 NOTES ON ACCOUNTS
 
 The observations of Auditors and Notes on Accounts are self-
 explanatory.
 
 AUDITORS
 
 M/s. M. R Singh & Associates, Chartered Accountants, Auditors of the
 Company shall retire at the conclusion of the ensuing Annua! General
 Meeting and, being eligible, offer themselves for re-appointment.
 
 CORPORATE GOVERNANCE
 
 Report on Corporate Governance and Management Discussion & Analysis
 Report, in terms of Clause 49 of the Listing Agreement are annexed and
 form part of this Annual Report. A certificate from the Auditors
 confirming compliance with the conditions of Corporate Governance is
 also annexed.
 
 EMPLOYEE RELATIONS
 
 Employee relations continued to be cordial throughout the year. Your
 Directors wish to place on record their sincere appreciation for the
 excellent spirit with which the entire team of the Company worked at
 all sites and other offices and achieved commendable progress.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, the
 Directors, based on the representation received from the operating
 management, certification by the CEO and CFO to the Board of Directors
 and after due enquiry, confirm in respect of the audited annual
 accounts for the year ended March 31, 2008:
 
 i) that in the preparation of the annual accounts, the applicable
 accounting standards had been followed and that there were no material
 departures;
 
 ii) that the Directors had, in consultation with the Statutory
 Auditors, selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company for the year ended March 31, 2008 and the profit of the
 Company for that period;
 
 iii) that the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with
 
 the provisions of the Companies Act, 1956 for safeguarding the assets
 of the Company and for preventing and detecting fraud and other
 irregularities;
 
 iv) that the Directors had prepared the annual accounts on a going
 concern basis.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to place on record their appreciation for and
 gratitude to various departments and undertakings of the Central and
 State Governments, IDBI Bank Ltd., The Life Insurance Corporation of
 India, General Insurance Corporation of India and its Subsidiaries,
 IFCI Limited, ICICI Bank Ltd , AXIS Bank Limited, Export-Import Bank of
 India and Consortium of Banks led by Canara Bank and valued customers,
 for their valuable support and co-operation.
 
 Your Directors also wish to place on record their appreciation of the
 wholehearted and continued support extended by the Shareholders and
 Investors, which had always been a source of strength for the Company.
 
                                            On behalf of the Board
 
                                                  MANOJ GAUR
 May 3, 2008                                  Executive Chairman