Mar 31, 2022
Your directors take pleasure in presenting their 81st Annual Report of the company together with the Audited Financial Statements for the financial year ended 31st March, 2022.
1. Statement of affairs of the Company:
The performance of the business is detailed out in the Management Discussion and Analysis Report, which forms part of the Annual Report
(Rs in Lakhs) |
||||
Particulars |
Stand Alone |
Consolidated (Group) |
||
31-03-2022 |
31-03-2021 |
31-03-2022 |
31-03-2021 |
|
Revenue from Operations |
1,58,436 |
1,29,488 |
2,10,821 |
1,69,253 |
Profit (EBIDTA) |
27,883 |
32,859 |
41,283 |
39,028 |
Less: a) Interest and Finance Charges |
3,158 |
4,242 |
3,385 |
4,637 |
b) Depreciation |
6,517 |
6,942 |
8,706 |
9,171 |
Profit before Tax |
18,208 |
21,675 |
29,192 |
25,220 |
Tax |
5,278 |
6,343 |
5,278 |
6,343 |
Profit After Tax from Continuing Operations |
12,930 |
15,332 |
23,914 |
18,877 |
Profit / (Loss) from Discontinued Operations |
- |
- |
- |
- |
Less : Tax of Discontinued Operations |
- |
- |
- |
- |
Profit / (Loss) from Discontinued Operations After Tax |
- |
- |
- |
- |
Profit After Tax |
12,930 |
15,332 |
23,914 |
18,877 |
Add : Share of Profit from Joint Veture |
- |
- |
52 |
(381) |
Less : Non-Controlling Share of Profit |
5,152 |
2,198 |
||
Profit / (Loss) after Non controlling interest |
12,930 |
15,332 |
18,814 |
16,299 |
Other Comprehensive Income (OCI) |
70 |
100 |
2,865 |
(681) |
Add : Share of OCI from Joint Veture |
- |
- |
(7) |
14 |
Less : Non-Controlling Share of OCI |
- |
- |
955 |
(291) |
OCI after Non controlling share |
70 |
100 |
1,903 |
(376) |
Total Comprehensive Income (TCI) |
13,000 |
15,433 |
26,824 |
17,829 |
Less : Non-Controlling Share of TCI |
- |
- |
6,108 |
1,906 |
Total Comprehensive Income after minority interest |
13,000 |
15,433 |
20,717 |
15,923 |
3. Summary of Companyâs Operational and Financial performance:
⢠The consolidated revenue from operations increased from Rs. 1,69,253 Lakhs to Rs.2,10,821 Lakhs.
⢠The consolidated profit before tax was Rs.29,192 lakhs against Rs.25,220 lakhs of previous year.
⢠The consolidated profit after tax was Rs.23,914 lakhs against Rs.18,877 lakhs of previous year.
The Board of Directors have recommended dividend of Re. 1/- per Equity Share of Re. 1/- for the year ended March 31, 2022, subject to approval of the Shareholders at the ensuing 81st Annual General Meeting of the Company. The Dividend, if declared by the Shareholders will be paid on or after Thursday August 25, 2022.
In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended (âthe Listing Regulationsâ), the Company has formulated a Dividend Distribution Policy.
The recommended dividend is in line with our Companyâs dividend policy, which is available on the Companyâs website.
The Company has not transferred any amount to the Reserves for the year ended 31st March, 2022.
The Companyâs paid-up equity share capital continues to stand at 12,89,21,160 as on 31st March, 2022.
During the year under review, the Company has not issued any shares or convertible securities. The Company does not have any scheme for the issue of shares, including sweat equity to its Employees or Directors.
7. Financial liquidity
Consolidated cash and cash equivalent as on 31st March, 2022 stood at Rs. 382.78 Lakhs and Rs.309.13 Lakhs in the previous year. The Companyâs working capital management is robust and involves a well-organized process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.
8. Credit Rating
CRISIL, a reputed rating agency, has given the credit rating of A / STABLE for the long-term and A1 for the short-term financial instruments of the Company. This reaffirms the reputation and trust the Company has earned for its sound financial management and its ability to meet its financial obligations.
Facility |
Period |
Rated Value Crores (Rs.) |
Rating assured |
Total Bank loan |
Long-term Rating |
579.96 |
CRISIL A / Stable ( Upgraded from âCRISIL A/Stableâ) |
facility |
Short-term Rating |
CRISIL A1 (Reaffirmed) |
|
F AA-/ Stable (Upgraded from âFA / |
|||
Fixed Deposits |
- |
125.00 |
Stableâ) and further migrated to CRISIL A / Stable. |
The total amount of Deposits outstanding as on 31st March, 2022 was Rs.8,554.11 Lakhs as against Rs.8,507.33 Lakhs outstanding on 31st March, 2021. Deposits matured and unclaimed was Rs.458.85 Lakhs from 360 depositors. Out of the said matured and unclaimed deposits, the company has renewed Deposits of Rs.128.43 Lakhs and Rs.14.09 Lakhs deposits repaid as on the date of the report.
Depositors are intimated about the maturity of deposits with a request to either renew or claim their deposits. As per the provisions of Section 125 of the Companies Act, 2013 read with relevant Rules, deposits remaining unclaimed for a period of seven years from the date of maturity for payment have to be transferred to the Investor Education and Protection Fund (IEPF)
established by the Central Government. Accordingly, during the year, an amount of Rs.0.88 Lakhs towards unclaimed deposits and Rs.0.50 Lakhs towards Stale cheque unclaimed on deposits has been transferred to the IEPF.
10. Particulars of Loans, Guarantees and Investments
The Company has No Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014.
11. Management Discussion and Analysis Report
Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review, is presented in a separate section, forming part of the Annual Report.
12. Particulars of Contracts or Arrangements with Related Parties:
The Company has developed a Related Party Transactions Manual and Standard Operating Procedures for the purpose of identification and monitoring Related Party transactions.
All transactions with Related Parties are placed before the Audit Committee as also the Board for approval.
Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are foreseeable and of a repetitive nature. The transactions entered into pursuant to the approvals so granted are subjected to audit and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis.
The details of contracts or arrangements entered with the related parties along with the Justification is provided in Form AOC 2 as Annexure- 6 of this report.
There were no materially significant related party transactions with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
The policy on Related Party Transactions as approved by the Board may be accessed on the Companyâs website at www.kcp.co.in.
No whole time Director or Managing Director of the company is in receipt of any salary or Commission from Subsidiary company in terms of Section 197(4) of the Companies Act, 2013.
13. Corporate Social Responsibility (CSR)
As part of its initiatives under âCorporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Women empowerment, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.
The Company is committed to identifying and supporting programmes aimed at:
⢠Empowerment of the disadvantaged sections of the society through education, healthcare, drinking water & sanitation and eradicating hunger and poverty, through livelihood generation and skill development;
⢠Supporting environmental and ecological balance through afforestation, soil conservation, rain water harvesting.
⢠Undertake rural development projects;
The Company has constituted CSR Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee has formulated and recommended to the Board, CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Companyâs website at www.kcp.co.in.
The Companyâs CSR Policy as stated earlier is in alignment with the requirements of the Act. The CSR Policy Statement and Report on the activities undertaken during the year is annexed to the Boardâs Report as Annexure 3.
Details of various social projects and initiatives undertaken as part of our Corporate Social Responsibility are given in report on CSR activities which forms part of this Annual Report.
14. Risk Management
The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities.
This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage.
The business risk framework defines the risk management approach across the organization at various levels, including documentation and reporting.
The Board of Directors of the Company has formed a Risk Management Committee to monitor the risk management plan for the Company and ensuring its effectiveness. The key risks identified by the Company and their mitigation measures are as under:
Raw Materials: Limestone being one of the primary raw materials used in the manufacture of cement, it is imperative for the Company to ensure its uninterrupted long-term availability.
Most of the Companyâs mining leases extended up to March 31,2052 thereby ensuring adequate limestone reserves to cater to the requirements of its plants till the said date, whereafter the Company will have to participate in auctions.
To address the above risks, the Company would like to participate in auctions with a view to secure new mining leases for its existing plants as well as
for its expansions at different locations as and when necessary.
Market Competition: The cement industry is witnessing a significant imbalance in its total installed capacity vis-a-vis the capacity utilization. Despite the capacity overhang, capacity expansion still continues, resulting in intense competition and adverse impact on the Companyâs market share, sales volume and profitability.
Cyber Security: With increased reliance on IT systems and the widespread usage of internet for doing business there is a constant threat to the Companyâs sensitive data assets being exposed to unethical hacking and misuse. The ramifications from cyber-attacks may not only been confined to mere loss of data but may result in business and reputation loss.
The Indian Government having recognized the cyber risks, has also introduced tighter Cyber Security laws. Responsibilities have been entrusted to the Directors of the Company under the Companies Act, 2013 to take appropriate steps to ensure cyber security.
The Companyâs cyber security management framework aligns with industry standards and regulations.
The Company has adequate processes and systems in place to review on a regular basis the cyber security risk.
Legal Risks: The risks arising out of pending legal cases are reviewed on a regular basis by the Board from the perspective of probability of imposition of heavy penalty or receiving adverse orders which could have a high financial and/or reputational impact on the Company.
All-important cases are being closely monitored by the Company and a broad strategy is outlined for effective management of litigation related risks.
Financial risk:
The financial risk for our Company emanates from fluctuations in interest rate, exchange rate and commodity prices. Your Company has well defined policies for foreign exchange, treasury investments, interest rate and imported coal hedging. The policies are reviewed periodically to align with the changes in financial market practices and regulations.
The Company has formulated a Risk Management Policy, which is available on company website www. kcp.co.in.
The Companyâs internal financial controls are commensurate with the scale and complexity of its operations.
The controls were tested during the year and no reportable material weaknesses either in their design or operations were observed. The Company has put in place robust policies and procedures, which inter alia, ensure integrity in conducting its business, safeguarding of its assets, timely cementing relationships through Sustainability, Innovation and Inclusivity Integrated Report Statutory Reports Financial Statements preparation of reliable financial information, accuracy & completeness in maintaining accounting records and prevention & detection of frauds and errors.
16. Vigil Mechanism/ Whistle-blower Policy
Over the years, the Company has established a reputation for doing business with integrity and maintained zero tolerance for any form of unethical behavior.
Whistle-blower Policy is the vigil mechanism instituted by the Company to report concerns about unethical behavior in compliance with the requirements of the Act and the Listing Regulations.
The Audit Committee oversees the functioning of this policy.
Protected disclosures can be made by a whistle-blower through several channels to report actual or suspected frauds and violation of the Companyâs Code of Conduct.
Details of the Whistle-blower Policy have been disclosed on the Companyâs website and can be accessed at http://www.kcp.co.in/downloads/investor/corporate-governance/whistle-blower-policy.pdf.
17. Subsidiary, Associate and Joint venture companies
Subsidiary Company:
Our Company does not have any Indian Subsidiary company.
KCP Vietnam Industries Limited, Vietnam is the material subsidiary as per the thresholds laid down under the SEBI Listing Regulations.
The Board of Directors of the Company has approved a Policy for determining material subsidiaries in line with the SEBI Listing Regulations as amended and the Policy has been uploaded on the Companyâs website.
The Audit Committee and Board review the financial statements, significant transactions, working and the financial results of the subsidiary company in Vietnam, KCP Vietnam Industries Limited.
There is no material change in the nature of the business of the subsidiary.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companyâs subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company as Annexure 5.
No company ceased to be its Subsidiary, joint venture or associate company during the year
In terms of provisions of Section 136 of the Companies Act, 2013, separate audited accounts of the subsidiary companies shall be available on its website at www. kcp.co.in.
The Company will make available physical copies of these documents upon request by any shareholder of the Company interested in obtaining the same.
Our company has a joint venture company Fives Cail KCP Limited.
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company for the Financial Year March 31,2022 is uploaded on the website of the Company and can be accessed at http://www.kcp.co.in/agm-reports.html.
19. Human resources / industrial relations
Our Company continuously focus on people related programmes aimed at attracting, developing and retaining talent within organisation by way of:
a) Employee Engagement - Company enjoys high engagement levels from its employees which is reflected in its consistently improving performance. Company continuously aims to enhance the engagement levels of its people by ensuring that its business practices are in alignment with the holistic growth and development of its people which drives them to be actively engaged with the Company.
b) Talent Management - Company is continuously working on strengthening and building talent in
its Human Resources management team for supporting its growth.
c) Work Environment - Company provides a congenial work atmosphere where every employee enjoys his work and It works on creating people practices which makes it the best place to work for everyone.
d) Occupational Health and Safety
Safety of employees and workers is of utmost importance to the Company. To reinforce the safety culture in the Company, it has identified occupational Health & Safety as one of its focus areas. Various training programmes have been conducted at the plants.
The Company continuously undertakes initiatives aimed at providing a healthy and safe workplace to its people.
Company regularly conducts Safety Audit to identify and eliminate potential safety risks through an objective assessment of various equipment. Further, Mock drills on emergency preparedness are conducted to meet any contingency.
Employee Relations at all the Units and divisions of the company remained cordial.
20. Board of Directors & Key Managerial Personnel Board of Directors A. Appointments/ Re-appointments
In terms of Section 152 of the Act, Sri. V. Chandra Kumar Prasad (DIN: 008744154), Non-Executive NonIndependent Director retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking shareholdersâ approval for his re-appointment along with other required details forms part of the Notice.
In terms of Section 152 of the Act, Dr. Subbarao Vallabhaneni (DIN: 008746927), Non-Executive NonIndependent Director, retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking shareholdersâ approval for his re-appointment along with other required details forms part of the Notice.
In terms of Section 152 of the Act, Sri. Ravi Chitturi (DIN: 00328364), Non-Executive Non-Independent Director, retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking
shareholdersâ approval for his re-appointment along with other required details forms part of the Notice.
The relevant details including profiles of Directors retiring by rotation and seeking re-appointment are included separately in the Notice of AGM.
The Board recommends their re-appointments for consideration of the members at the ensuing AGM of the Company.
There was no instance of resignation/ cessation of Directorship during the year under review.
21. Key Managerial Personnel (âKMPâ)
There is no change in the KMP of the Company during the financial year ended on 31st March, 2022 and the KMP of the Company are as under:
1. Dr.V.L. Indira Dutt Chairperson & Managing Director
2. Smt.V. Kavitha Dutt Joint Managing Director
3. Sri.G.N. Murty Chief Financial Officer
4. Sri.Y. Vijayakumar Company Secretary
Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations.
There has been no change in the circumstances affecting their status as independent directors of the Company. During the year under review, the nonexecutive, independent directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses, if any.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of manufacturing, finance, strategy, auditing, tax and risk advisory services, infrastructure, banking, and they hold high standards of integrity.
Regarding proficiency:
The Company has adopted requisite steps towards the inclusion of the names of all Independent Directors in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (âIICAâ).
Accordingly, all the Independent Directors of the Company have registered themselves with IICA for the said purpose. In terms of Section 150 of the Act read with the Companies (Appointment & Qualification of Directors) Rules, 2014 as amended, since all the Independent Directors of the Company except Smt. Janaki Pillai (independent Women Director) have served as Directors for a period of not less than three (3) years on the Board of Listed Companies as on the date of inclusion of their names in the database, they are not required to undertake online proficiency self-assessment test conducted by the said Institute and Smt. Janaki Pillai has appeared and cleared the proficiency test.
23. Remuneration policy and criteria for selection of candidates for appointment as Directors, KMP and Senior Leadership positions
The Company has in place a policy for remuneration of Directors and KMP as well as a well-defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board.
The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive, Non-Executive Directors (by way of sitting fees and commission) and KMP.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the Nomination & Remuneration Committee and the Board of Directors while selecting candidates.
The policy on remuneration of Directors, KMP can be accessed at http://www.kcp.co.in/downloads/investor/ corporate-governance/Remuneration-policy.pdf.
24. Number of meetings of the Board
Five meetings of the Board were held during the year.
For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report.
25. Board effectivenessa) Familiarization programme for Independent Directors
Over the years, the Company has developed a robust familiarization process for the newly appointed Directors with respect to their roles and responsibilities, way ahead of the prescription of the regulatory provisions.
The process has been aligned with the requirements under the Act and other related regulations. This process inter alia includes providing an overview of the industry, the Companyâs business model, the risks and opportunities, the new products, innovation, sustainability measures, digitization measures etc.
Details of the familiarization programme are explained in the Report on Corporate Governance and are also available on the Companyâs website and can be accessed at http://www.kcp.co.in/downloads/investor/ corporate-governance/familiarisation-programmes-for-independent-directors.pdf
The Board carries out its annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration, Risk Management, Stakeholdersâ Relationship and CSR Committees as mandated under the Act and the Listing Regulations, as amended from time to time.
The criteria applied in the evaluation process are explained in the Report on Corporate Governance, which forms part of the Annual Report.
The performance of the board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
In a separate meeting of independent directors, the performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors.
26. Disclosure on Audit Committee
The Audit Committee as on March 31,2022 comprises of the following Members:
Sri. P.S. Kumar (Chairman), Smt. V. Kavitha Dutt, Joint Managing Director, Sri V.H. Ramakrishnan, Sri. Vijay Sankar, and Sri. M. Narasimhappa are the members of the committee.
All recommendations of Audit Committee were accepted by the Board of Directors.
Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s. K.S. Rao & Co., Chartered Accountants, (Firm Registration No.003109S) Hyderabad were appointed as Statutory Auditors of the to hold office from the conclusion of the 80th Annual General Meeting until the conclusion of 85th Annual General Meeting of the company.
The Notes on Financial Statements referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments.
28. Cost Auditors and their Report
As per Section 148 of the Companies Act, 2013 read with Rules framed there under, the Board has appointed M/s Narasimha Murthy & Co, Cost Accountants, Hyderabad and S. Mahadevan & Co, Cost Accountants, Chennai, as the Cost Auditors for the Cement and Engineering units respectively for the year 2021-22. They were reappointed as Cost Auditors for the financial year 202223 to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules.
The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing annual general meeting. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the financial year 2020-21, of M/s Narasimha Murthy & Co, Cost Accountants, Hyderabad and Mahadevan & Co, Chennai as the Cost Auditors, in respect of the various products prescribed under Cost Audit Rules was filed with the Ministry of Corporate Affairs within the due date.
29. Secretarial Auditors and their Report
Pursuant to the provisions of Section 204 of the Act and Rules made thereunder, the Company had appointed Smt. Sobana Pranesh (FCS No: 9825, CP No. 2403) to undertake the Secretarial Audit of the Company for FY 2021-22. The Secretarial Audit Report is annexed in Form No. MR-3 and forms an integral part of this Report. The Secretarial auditor has not expressed any qualification in her Secretarial Audit report for the year under review.
Pursuant to Regulation 24A of Listing Regulations read with SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Annual Secretarial Compliance Report of the Company forms part of this Report and is uploaded on the website of the Company i.e. www.kcp.co.in.
The Board of Directors at their meeting held on May 18, 2022 has appointed Smt. Sobana Pranesh (FCS No: 9825, CP No. 2403) as the Secretarial Auditor for FY 2022-23.
Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government
The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013 and rules made there under.
The Board of Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, the Company complied with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report together with a certificate from the Companyâs auditors confirming the compliance is provided in the Report on Corporate Governance, which forms part of the Annual Report.
31. Business Responsibility and Sustainability Report (BRSR)
In terms of amendment to regulation 34 (2) (f) of SEBI (LODR) Regulations, with effect from the financial year
2022-2023, filing of BRSR shall be mandatory for the top 1000 listed companies (by market capitalization) and shall replace the existing BRR. Filing of BRSR is voluntary for the financial year 2021-22.
As we are in top 1000 listed companies (by market capitalization) For FY 2021-22, we are submitting the BRSR voluntarily.
32. Compliance with Secretarial Standards
The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards (âSSâ) issued by the Institute of Company Secretaries of India (SS1 and SS2), relating to Meetings of the Board and its Committees and General Meetings respectively, which have mandatory application during the year under review.
33. Prevention of Sexual Harassment of Women at the Workplace
KCP is an equal employment opportunity Company and is committed to creating a healthy working environment that enables employees to work without fear of prejudice and gender bias.
As an organization, the Company is committed to ensure that every employee is treated with dignity and respect and works in a conducive work environment, which promotes professional growth of employee and encourages equality of opportunity. The Company has zero tolerance towards any act on the part of any employee, which may fall under the ambit of âsexual harassmentâ at workplace, and is fully committed to uphold and maintain the dignity of every woman employee working in the Company.
The Company has formulated a comprehensive policy on prevention, prohibition and redressal against sexual harassment of women at workplace, which is also in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (âPOSHâ). The said policy has been made available on the internal portal of the Company as well as the website of the Company.
There were no complaints reported during the year
34. Transfer to the Investor Education and Protection Fund
The Unpaid/ unclaimed dividend for seven (7) years or more has to be transferred to the IEPF pursuant to the requirements under the Act.
Further according to the Rules, the shares in respect of which dividend has not been en-cashed by the shareholders for seven consecutive years or more shall also be transferred to IEPF Authority.
Details of which are provided on our website, at http:// http://kcp.co.in/downloads/investor/shareholders-information/unclaimed-dividend.xls
The information required under Section 197(12) of the Companies Act, 2013 and the rules made there under, as amended, has been given in the annexure appended hereto and forms part of this report as Annexure 1.
None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than 2 (two) percent of the Equity Shares of the Company.
a) The ratio of the remuneration of each director to the median employeeâs remuneration for the financial year and such other details as prescribed is as given below:
Director |
Director Remuneration (Rs. Lakhs) |
Median Employeeâs Remuneration (Rs. Lakhs) |
Ratio |
Dr. V.L. Indira Dutt Chairperson and Managing Director |
778.81 |
5.63 |
138.33 |
Smt. V. Kavitha Dutt Joint Managing Director |
584.11 |
5.63 |
103.75 |
b) The percentage increase/ (decrease) in the median remuneration of employees in the Financial Year: (.006%)
c) The number of permanent employees (Management staff) on the rolls of company: 634
d) Is remuneration is as per the remuneration policy of the company: Yes
36. Significant and Material orders passed by the Regulators or Courts
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
37. Conservation of energy, technology absorption, foreign exchange earnings and outgo
The particulars relating to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required to be disclosed under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure- 2 to this Report.
⢠There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.
⢠The Company has not issued any shares with differential voting rights/ sweat equity shares.
⢠There was no revision in the Financial Statements.
⢠There has been no change in the nature of business of the Company as on the date of this report.
⢠There are no proceedings, either filed by KCP or pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other courts during the year 2021-22.
39. Directorâs Responsibility Statement
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Act:
(i) that in the preparation of the Annual Accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2022 and of the profit of the Company for the year ended on that date;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets
of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis;
(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Board of Directors wishes to place on record their gratitude to the Central Government, State Governments, Companyâs Bankers, Customers, dealers and other business associates for the assistance, co- operation and encouragement they extended to the Company. Your directors wish to whole heartedly thank the employees for their sincere and devoted contribution to the companyâs continued performance. Your directors are thankful to the shareholders and deposit holders for their continued patronage.
For and on behalf of the Board of Directors
Place: Chennai Dr. V.L. Indira Dutt
Date: May 18, 2022 Chairperson & Managing Director
Mar 31, 2017
Dear Shareholders,
The Directors have pleasure in presenting their 76th Annual Report of the company together with the Audited Financial Statements for the year ended 31st March, 2017.
1. Financial Results:
(Rs in Lakhs)
Particulars |
For the year ended |
For the year ended |
||
31/03/2017 |
31/03/2016 |
31/03/2017 |
31/03/2016 |
|
Stand Alone |
Consolidated (GROUP) |
|||
Revenue from Operations |
94,899 |
86,199 |
141,365 |
140,976 |
Profit for the year (PBDIT) |
14,434 |
14,965 |
22,751 |
24,139 |
Less: a) Interest and Finance charges |
4,630 |
4,541 |
4,967 |
5,234 |
b) Depreciation |
5,053 |
3,912 |
6,469 |
4,829 |
Profit before Tax |
4,751 |
6,512 |
11,315 |
14,077 |
a) Provision for current tax |
1,026 |
1,392 |
1,137 |
1,461 |
b) Deferred Tax |
1,386 |
2,122 |
1,383 |
2,194 |
c) Short / (Excess) Tax Provision for earlier years |
- |
102 |
11 |
97 |
Add: a) Refund of Income Tax |
- |
- |
- |
- |
b) MAT Entitlement tax |
649 |
1,390 |
628 |
1,420 |
Less : Minority share of profit |
- |
- |
2,107 |
2,410 |
Profit for the Year from Continuing Operations |
2,988 |
4,286 |
7,305 |
9,335 |
Profit / (Loss) from Discontinued Operations |
(36) |
- |
(36) |
- |
Less : Tax expense of Discontinued Operations |
(8) |
- |
(8) |
- |
Profit / (Loss) from Discontinued Operations After Tax |
-28 |
- |
-28 |
- |
Profit for the Year |
2,960 |
4,286 |
7,277 |
9,335 |
Add: Surplus brought forward from earlier year 7,571 |
4,709 |
19,097 |
11,275 |
|
Amount available for appropriations |
10,531 |
8,995 |
26,373 |
20,610 |
Less: |
||||
Transfer to General Reserve |
- |
- |
- |
41 |
Proposed Final Dividend - Equity Shares |
40 |
|||
Interim Dividends Paid -Equity Shares |
- |
1,289 |
- |
1,289 |
Tax on Distributed Profits - Equity shares |
135 |
- |
143 |
|
Surplus at the end of the Year |
10,531 |
7,571 |
26,373 |
19,097 |
2. Financial Performance:
Your Company reported a top-line growth of 10% on Standalone basis and 3% on Consolidated basis over the Previous Year. At Standalone level, the Gross Revenue from operations stood at Rs.94,899 lakhs compared with Rs. 86,199 lakhs in the Previous Year. The Operating Profit before tax (PBDIT) stood at Rs.14,398 Lakhs as against 14,965 Lakhs in the Previous Year. The Net Profit for the year stood at Rs.2,960 Lakhs against Rs.4,286 Lakhs reported in the Previous Year.
The Consolidated Gross Revenue from operations for FY 2017 was at Rs.141,365 (Previous Year: 140,976 Lakhs), The Consolidated Operating Profit(PBDIT) stood at Rs.22,715 Lakhs (Previous Year: Rs.24,139 Lakhs). The Consolidated Profit after tax stood at Rs. 7,277 Lakhs (Previous Year: Rs.9,335 Lakhs).
There are no material changes or commitments affecting the financial position of the company which have occurred between the end of the financial year and the date of this Report.
3. Dividend
The Board of Directors at their Meeting held on May 22, 2017, recommended dividend for approval of the shareholders at the ensuing Annual General Meeting of Re.2/- per share i.e 200% on paid-up share capital of the company for the Financial Year 2016-17 (including Re.1/- as special dividend to Commemorate the 75th year of the company). The Dividend shall be paid to the members whose names appear on Companyâs Register of Members on August 25, 2017 in respect of physical shareholders and whose name appear in the list of beneficial Owners on August 25, 2017 furnished by NSDL and CDSL for this purpose. The dividend if declared at the Annual General Meeting will be paid on or after September 8, 2017.
In terms of Regulation 43A of Listing Regulations, Formulation of Dividend distribution policy is applicable to top 500 listed companies only.
4. Transfer to Reserves
Current yearâs profits along with carried forward balance of previous year amount to Rs.10,531 lacs., The board has not recommended any transfer to Reserves.
5. Share Capital
The paid up Equity Share Capital as at March 31, 2017 is 12,89,21,160. The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme.
No disclosure is required under Section 67(3)(c) of the Companies Act, 2013 in respect of voting rights not exercised directly by the employees of the company as the provisions of the said Section are not applicable and the company has not issued any convertible instruments during the year.
6. Credit Rating
During the year under review, the Rating agency CRISIL has revised (upgraded) the ratings of the Company bank loan facilities and other debt facilities as detailed below.
Long Term Rating |
CRISIL A-/Stable (upgraded from CRISIL BBB /Positive) |
Short Term Rating |
CRISIL A2 (upgraded from A2) |
Rs. 7000 lakhs Non-Convertible Debentures |
CRISIL A-((upgraded from BBB /Positive)) |
Fixed Deposits |
FA/Stable (upgraded from FA-/Positive). |
7. Fixed Deposits:
The total amount of Fixed Deposits outstanding as on March 31, 2017 was Rs.9231.02 Lacs as compared to the figure of Rs.8375.87Lacs as on March 31, 2016 and the total amount of Fixed Deposits matured and remaining unclaimed is Rs.150.05 lacs from 232 Depositors. Fixed Deposits of 48 Depositors amounting to Rs.60.55lacs have been renewed and Fixed Deposits of Rs. 4.10lacs of 14 depositors repaid.
Formal intimations have been sent to Depositors about the maturity of deposits with a request to either renew or claim their deposits. Interms of the provisions of Section 124(5) of the Companies Act, 2013, deposits remaining unclaimed for a period of seven years from the date they became due for payment have to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
Accordingly, during the year, an amount of Rs.63000/-unclaimed deposits has been transferred to the IEPF.
8. Particulars of Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.
9. Consolidated Financial statements
The Consolidated Financial Statements of the Company for the year ended 31st March, 2017 are prepared in compliance with the applicable provisions of the Companies Act, 2013, and as stipulated under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The consolidated financial statements have been prepared on the basis of the Audited Financial Statements of the company, its subsidiary KCP Vietnam Industries Ltd, Joint venture Fives Cail K C P Ltd.
10. Management Discussion & Analysis report:
The Management Discussion and Analysis Report on the operations of the Company, as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms part of this Report.
11. Line 2 Expansion of Brown filed cement project, Muktyala:
Discussed in detail in Management Discussion & Analysis report
12. Inter Corporate Loans and Investments
The Company has no inter corporate loans and investments or Guarantees given in terms of Section 186 of the Companies Act, 2013
13. Related Party transactions:
The details of contracts or arrangements entered with the related parties along with the Justification is provided in Form AOC 2 as Annexure- 6 of this report.
No whole time Director or Managing Director of the company is in receipt of any salary or Commission from Subsidiary company in terms of Section 197(4) of the Companies Act, 2013.
14. Corporate Social Responsibility (CSR)
As part of its initiatives under âCorporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Training, Women empowerment, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.
A Committee of the Board comprising of Smt V L Indira Dutt Joint Managing Director, Smt Kavitha D Chitturi Executive Director, Sri. P.S. Kumar, Sri V Gandhi and Sri Vijay Sankar has been formed to monitor the CSR activities and suggest further improvement to make it more productive.
The Annual Report on CSR activities is annexed herewith as âAnnexure 3â.
Details of various social projects and initiatives undertaken as part of our Corporate Social Responsibility are given in report on CSR activities which forms part of this Annual Report.
15. Risk Management
Our Company has implemented a Risk Management framework aimed at timely identification and assessment of risks and implementing mitigation measures.
These risks are continuously reviewed to ensure their relevance and also to identify existence of any new risks.
The Board of Directors of the Company has formed a Risk Management Committee (even it is not mandatory) to monitor the risk management plan for the Company and ensuring its effectiveness.
The key risks identified by the Company and their mitigation measures are as under:
Financial Risk:
The Financial Risk for your Company emanates from fluctuations in interest rate, exchange rate and commodity prices. Your Company has well defined policies for foreign exchange, treasury investments, interest rate and imported coal hedging. The policies are reviewed periodically to align with the changes in financial market practices and regulations.
Competition Risks:
The Cement Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience and itâs created capacities to increase market share, enhance brand equity / visibility and enlarge product portfolio and service offerings.
16. Internal controls system and their adequacy
The company has designed and implemented a process driven framework for Internal controls within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013 and the necessary control systems considering the business requirements, scale of operations, geographical spread and applicable statues of the company are in place in the organization.
The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.
Internal Audit plays a key role in providing assurance to the Board of Directors. Significant Audit observations and corrective actions taken by the management are presented to the Audit Committee.
17. Human Resources / Industrial Relations
Our Company continuously focus on people related programmes aimed at attracting, developing and retaining talent within organization by way of:
a) Employee Engagement - Company enjoys high engagement levels from its employees which is reflected in its consistently improving performance. Company continuously aims to enhance the engagement levels of its people by ensuring that its business practices are in alignment with the holistic growth and development of its people which drives them to be actively engaged with the Company.
b) Talent Management - Company is continuously working on strengthening and building talent in its Human Resources management team for supporting its growth.
c) Work Environment - Company provides a congenial work atmosphere where every employee enjoys his/her work and It works on creating people practices which makes it the best place to work for everyone.
d) Occupational Health and Safety
Safety of employees and workers is of utmost importance to the Company. Various training programmes have been conducted at the plants such as behavior based safety training program, Visible Safety Leadership program, Logistics Safety program etc.
The Company continuously undertakes initiatives aimed at providing a healthy and safe workplace to its people.
Industrial Relations
Employee Relations at all the Units and divisions of the company remained Cordial.
18. Sustainability
Companyâs sustainability initiatives are focused on low Carbon Emission, use of Alternate fuels, Water & resource conservation and environment management.
Focus on sustainability is manifested in the Company policies being recognized as one of the most energy efficient cement manufacturing organization with low energy consumption levels, use of alternative fuel and raw materials, low GHG emissions, etc.
19. Indian Accounting Standards (IND AS) - convergence.
In terms of MCA notification dated 16.02.2015, Listed Companies having net worth of less than Rs. 500 crores are required to comply with Ind AS in the preparation of their financial statements for accounting period beginning on or after 1st April, 2017, with the comparatives for the period ending 31st March, 2017.
The Company and its subsidiary and joint venture Company will adopt Indian Accounting Standards (Ind AS) with effect from 1st April, 2017.
20. Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism named Whistleblower Policy to deal with instance of Fraud and Mismanagement, if any.
The details of the Whistleblower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
We blink: http: //www.kcp.co.in/downloads/PDF/wb-policy. pdf
21. Report under the Prevention of Sexual Harassment Act
Pursuant to The Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the workplace.
All women, permanent, temporary or contractual including those of service providers are covered under the policy and an Internal Complaints committee has been formed to redress the complaints.
There were no complaints reported during the year.
22. Directors and Key Managerial Personnel
During the year the shareholders of the company have approved the resolutions for appointment of Dr. V.L.Dutt as Executive Chairman, Smt. V.L.Indira Dutt as Managing Director, Smt. Kavitha Dutt Chitturi as Joint Managing Director and re-appointment of Sri.V. Gandhi as Technical director of the company.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Dr.V.L.Dutt , retires by rotation at the forthcoming Annual General Meeting and, being eligible offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The following are the Key Managerial Personnel of the Company:
1. Dr.V.L.Dutt: Chairman and Managing Director
2. Smt.V.L.Indira Dutt: Joint Managing Director
3. Smt.Kavitha Dutt Chitturi : Executive Director
4. Sri.V. Gandhi : Technical Director
5. Sri.G.N.Murty : Chief Financial Officer
6. Sri.Y.Vijayakumar: Company Secretary
23. Board Meetings
During the year five Board Meetings were convened and held and the details are given in the Corporate Governance Report.
The intervening gap between the Meetings was within the period prescribed under the Companies Act,2013 and the SEBI (LODR) Regulations, 2015.
24. Board Evaluation
Pursuant to the provisions of the Companies Act,
2013 and SEBI Regulations, the Board has carried out an Annual Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
The Details of Familiarization programme arranged for independent Directors have been disclosed on website of the company and is available at the following link:
We blink: http://www.kcp.co.in/downloads/PDF/FProgamme. pdf
25. Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013, and Rules made there under the term of office of M/s. Brahmayya & Co, Chartered Accountants, Vijayawada (Firm Registration No.000513S), as the Statutory Auditors of the Company will conclude from the close of ensuing Annual General Meeting of the Company.
The Board of Directors places on record their appreciation to the services rendered by M/s.Brahmayya &Co, Chartered Accountants, Vijayawada as the Statutory Auditors of the Company.
Subject to the approval of the Members, the Board of Directors of the Company have recommended the appointment of M/s. K.S. Rao & Co, Chartered Accountants, (Firm Registration No.003109S) Hyderabad as the Statutory Auditors of the Company.
Accordingly, the Board recommends the resolution in relation to appointment of Statutory Auditors, for the approval by the shareholders of the Company.
There is No Audit qualification for the year under review. 26. Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules,
2014 as amended from time to time, your Company has been carrying out Audit of Cost Records relating to Cement and Engineering Divisions of the company.
The Board of Directors, on the recommendation of Audit Committee, have appointed M/s Narsimhamurthy & Co, Cost Accountants, Hyderabad and M/s Mahadevan & Co, Chennai as the Cost Auditors for the Cement and Engineering Divisions respectively for the year 2017-18.
As required under the Companies Act, 2013, a Resolution seeking memberâs approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.
The Cost Audit Reports for the year 2015-16 were filed by the Cost Auditors within the due date.
27. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Smt. Sobana Pranesh, Company Secretary in Practice (CP No. 2403) to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report is annexed as âAnnexure 7â and forms part of this Report.
There is No Secretarial Audit qualification for the year under review.
The Board has appointed Smt. Sobana Pranesh as Secreterial Auditor of the Company for the Year 2017-18.
28. Subsidiary Company:
Your Company does not have any Indian Subsidiary company.
The Audit Committee and Board review the financial statements, significant transactions, Working and the Financial Results of the Subsidiary company in Vietnam, KCP Vietnam Industries Limited.
There is no material change in the nature of the business of the subsidiary.
A statement containing brief financial details of the subsidiaries is included in the Annual Report in Form AOC 1 as Annexure 5.
The Annual accounts of the subsidiary and the related information will be made available to any member of the Company for inspection at the registered office of the Company during business hours. The Company shall furnish a copy of the details of annual accounts of the subsidiary to any member on request.
The Annual accounts of the subsidiary company will be placed on the website of the company www.kcp.co.in.
No company ceased to be its Subsidiary, joint venture or associate company during the year
29. Transfer of amounts to Investor Education and Protection Fund (IEPF)
Pursuant to sections 124 and 125 and other applicable provisions, if any, of the Companies Act, 2013, all Unclaimed Dividend, and interest on Deposits as well as the principal amount of Deposits, as applicable, remaining unclaimed for a period of seven years from the date they became due for payment, have been transferred to the IEPF established by the Central Government.
30. Transfer of shares to DEMAT account of Investor Education and Protection Fund (IEPF) Authority.
Pursuant to Section 124(6) of the Companies Act, 2013 and Rules, all shares in respect of which dividend has not been claimed by the shareholder for seven consecutive years or more shall be transferred by the Company in the name of Investor Education and Protection Fund (IEPF) and the company is in the process of transferring the said shares to the DEMAT account of IEPF Authority.
31. Corporate Governance:
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Companyâs Auditors confirming compliance forms part of this Report.
32. Remuneration Policy:
The Board of Directors have framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members.
The details of this policy are explained in the Corporate Governance Report and is placed on website of the company: www.kcp.co.in
33. Particulars of Employees
The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - 1 and forms part of this Report.
The above Annexure is not being sent along with this Annual Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days and is also available on the website of the Company.
a) The ratio of the remuneration of each director to the median employeeâs remuneration for the financial year and such other details as prescribed is as given below:
Name of the Director |
Director remuneration (Rs. Lacs) |
Median employeeâs remuneration (Rs. Lacs) |
Ratio |
Dr.V.L.Dutt - CMD |
216.95 |
4.31 |
50 : 1 |
Smt.V.L.Indira Dutt - JMD |
166.05 |
4.31 |
38 : 1 |
Smt.Kavitha Dutt Chitturi - ED |
165.60 |
4.31 |
38 : 1 |
Sri.V.Gandhi - TD |
160.73 |
4.31 |
37 : 1 |
b) The percentage increase/ (decrease) in the median remuneration of employees in the Financial Year: 10.52%
c) The number of permanent employees (Management staff) on the rolls of company: 548
d) Average increase in Managerial Remuneration is at par with increase in remuneration of Employees other than Managerial Personnel and there is/are no exceptional circumstances for increase in the managerial remuneration.
e) If remuneration is as per the remuneration policy of the company: Yes
34. Extract of Annual return
The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is annexed and forms part of this Report as âAnnexure 4â.
35. Significant and Material orders passed by the Regulators or Courts
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
36. Particulars regarding Conservation of Energy, Technology absorption and Foreign exchange earnings and outgo
The information on Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure - 2 and forms part of this Report.
37. Director''s Responsibility Statement
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) that in the preparation of the Annual Financial Statements for the year ended 31st March, 2017, the applicable accounting standards, read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
(b) the Directors have 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 and for preventing and detecting fraud and other irregularities;
(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the Directors have prepared the annual accounts on a ''going concernâ basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems are adequate and operating effectively.
38. Appreciation
The Board of Directors wishes to place on record their gratitude to the Central Government, State Governments, Companyâs Bankers, Customers, Dealers and other Business Associates for the assistance, co- operation and encouragement they extended to the Company.
Your Directors wish to whole heartedly thank the employees for their sincere and devoted contribution to the companyâs continued performance and are thankful to the Shareholders and Deposit holders for their continued patronage.
For and on behalf of the Board of Directors
Place: Chennai (V.L. DUTT)
Date: 22nd May, 2017 Chairman and Managing
Director
Global Economy
Mar 31, 2016
Your Directors take pleasure in presenting their 75th Annual Report of the company together with the Audited Financial Statements
for the financial year ended 31st March, 2016.
1. Financial Results:
Financial Performance and Review:
Financial information - Standalone and Consolidated
(Rs.in lakhs)
For the year ended For the year ended
Particulars 31/3/2016 31/3/2015 31/3/2016 31/3/2015
Stand Alone Consolidated (GROUP)
Revenue from
Operations 86,199 69,669 140,976 127,775
Profit for the
year (PBDIT) 14,965 10,763 24,139 18,073
Less: a) Interest
and Finance charges 4,541 4,886 5,233 5,146
b) Depreciation 3,912 3,431 4,829 4,821
Profit before Tax 6,512 2,446 14,077 8,106
c) Provision for
current tax 1,392 528 1,461 1,020
d) Deferred Tax 2,122 834 2,194 859
e) Short / (Excess)
Tax provision for
earlier years - - 72 97 -77
Add:
a) Refund of Income Tax - - - -
b) MAT Entitlement tax 1,390 487 1,420 497
Less: Minority
share of Profit - - 2,410 1,709
Profit for the Year
from Continuing
Operations 4,286 1,642 9,335 5,092
Profit / (Loss) from
Discontinued Operations - - 83 - -83
Less : Tax expense of
Discontinued Operations - -28 - -28
Profit / (Loss) from
Discontinued Operations
After Tax - -55 - -55
Profit for the Year 4,286 1,587 9,335 5,037
Add: Surplus brought
forward from earlier
year 4,709 4,365 11,275 14,279
Amount available for
appropriations 8,995 5,952 20,610 19,316
Less:
Transfer to General
Reserve - - 41 -
Transfer to Capital
Reserve / Bonus Shares - - - 6,160
Proposed Final
Dividend - Equity
Shares - 967 40 967
Interim Dividends
Paid -Equity Shares 1,289 - 1,289 637
Interim Dividends
Paid -Preference Shares - 66 - 66
Tax on Distributed
Profits- Equity shares 135 197 143 197
Tax on Distributed
Profits- Preference shares - 14 - 13
Surplus at the end
of the Year 7,571 4,709 19,097 11,275
2. Business Performance: Cement Division:
- Average pan-India prices remains stable and registered a moderate growth of 0.6% only against 5% growth in 2014-15. Prices
dropped in North. The Southern region, however , continued to show increase in prices without much variation in volume off-take.
Inspire of that our Company''s cement division registered an impressive performance in 2015-16, aided by the price rise as well as
improvements in volumes.
- KCP Exports Cement to neighboring countries and the realization from the same were affected by slowdown in international prices
and strengthening of US Dollar.
Engineering Division:
- Engineering Unit continues to reel under the lower growth rate of the economy.
- Efforts to bring the unit in to Profits dampened with the record breaking rains followed by devastating flood in Chennai.
- Hence, the engineering unit registered losses in 2015 -16 also.
Power Division:
- Severe drought in river Krishna basin has affected the operation of the hydel unit which generated negligible power. However
the performance of the thermal and other powers units was satisfactory. Surplus power generated at Thermal Power unit was
exported to the state grid and also sold through the Power Exchanges.
- The Renewable Energy Certificates (RECs) accrued to the company were sold at a very slow pace as the market for RECs was not
very active.
The performance of the Company is being discussed in greater detail in the Management Discussion & Analysis Report forming part
of this report.
3. Dividend
During the year the company has declared and distributed an interim dividend of Re 1/ per share (100% on paid-up share capital).
4. Transfer to Reserves
Current year''s Profits along with carried forward balance of previous year amount to Rs. 8995 lakhs.,
the Surplus Account will have Rs. 7571 lakhs to be carried forward to the next year.
The Board has not recommended any transfer to reserves as not mandated by the Act.
5. Share Capital
The paid up Equity Share Capital as on March 31, 2016 is 12,89,21,160. The Company has neither issued shares with differential
rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the
Company, under any Scheme.
No disclosure is required under Section 67(3)(c) of the Companies Act, 2013(Act) as the provisions of the said Section are not
applicable
6. Credit Rating
CRISIL has revised the ratings of the Company bank loan facilities and other debt facilities as detailed below.
CRISIL BBB /Positive(Outlook
Long Term Rating revised from ''Stable'' and rating
reaffirmed)
Short Term Rating CRISIL A2 (Reaffirmed)
Rs. 7000lakhs CRISIL BBB /Positive (Outlook
Non-Convertible revised from ''Stable'' and rating
Debentures reaffirmed)
FA-/Positive (Outlook revised from
Fixed Deposits '' Stable and rating reaffirmed).
7. Fixed Deposits:
The total amount of Fixed Deposits outstanding as on 31st March, 2016 was Rs.8375.87 Lakhs as compared to the figure of
Rs.7977.39 Lakhs as on 31/3/2015. As on 31st March, 2016, Fixed Deposits matured and remained unclaimed were Rs.265.57 Lakhs
from 296 depositors and Fixed Deposits relating to 74 Depositors amounting to Rs.154.19 Lakhs have been renewed and Fixed
Deposits of Rs. 26.08 Lakhs of 22 depositors repaid.
Depositors have been intimated regarding the maturity of deposits with a request to either renew or claim their deposits. As per
the provisions of the Companies Act, 2013,rules made there under deposits remaining unclaimed for a period of seven years from
the date they became due for payment have to be transferred to the Investor Education and Protection Fund (IEPF) established by
the Central Government, during the year, an amount of Rs.21000/-towards unclaimed deposits and Rs.96000/- stale cheque unclaimed
on deposits has been transferred to the IEPF.
The Company has not accepted any deposits which are not in compliance with the requirements of Chapter V of the Companies Act,
2013 and rules made there under.
8. Particulars of Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are provided in the notes to
the financial statements.
9. Consolidated Financial statements
Pursuant to the provisions of the Companies Act, 2013, Rules made there under, Accounting standards and SEBI (LODR) Regulations,
2015, the consolidated financial statements have been prepared on the basis of the audited financial statements of the company,
its subsidiary KCP Vietnam Industries Ltd, Joint venture Fives Cail K C P Ltd.
Pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements of the company, the consolidated
financial statements along with relevant documents are available on the website of the company at the website: www.kcp.co.in
10. Management Discussion & Analysis report:
All matters pertaining to Industry structure and developments, opportunities and threats, segment/ product wise performance,
outlook, risks and concerns, internal control and systems, etc are discussed in Management Discussion & Analysis report forms
part of this report.
11. Hotel Project and Ready Mix Concrete project:
Discussed in detail in Management Discussion & Analysis report
12. Corporate Social Responsibility (CSR)
As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of
Education, Livelihood, Women empowerment, Health, Water and Sanitation. These projects are largely in accordance with Schedule
VII of the Companies Act, 2013.
A Committee of the Board comprising of Smt V L Indira Dutt Joint Managing Director, Smt Kavitha D Chitturi Executive Director,
Sri.P.S.Kumar, Sri V Gandhi and Sri Vijay Sankar has been formed to monitor the CSR activities and suggest further improvement to
make it more productive.
The Annual Report on CSR activities is annexed herewith as "Annexure 3".
Details of various social projects and initiatives undertaken as part of our Corporate Social Responsibility are given in
separate report on CSR activities which forms part of this Annual Report
The unspent amount of Rs.7.71 Lakhs for the year 2014-15 was spent during the year 2015-16.
13. Risk Management
Our Company has implemented a risk management framework aimed at timely identification and assessment of risks and implementing
mitigation measures. These risks are continuously reviewed to ensure their relevance and to also identify the existence of any
new risks.
The Board of Directors of the Company has formed a Risk Management Committee (event it is not mandatory) to monitor the risk
management plan for the Company and ensuring its effectiveness. The key risks identified by the Company and their mitigation
measures are as under:
Financial risk:
The financial risk for your Company emanates from fluctuations in interest rate, exchange rate and commodity prices. Your Company
has well defined policies for foreign exchange, treasury investments management, interest rate and imported coal hedging. The
policies are reviewed periodically to align with the changes in financial market practices and regulations.
Competition Risks:
The Cement Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting
inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience and it''s created
capacities to increase market share, enhance brand equity / visibility and enlarge product portfolio and service offerings.
14. Internal controls system and their adequacy
The company has designed and implemented a process driven framework for Internal Financial controls within the meaning of the
explanation to Section 134(5)(e) of the Companies Act, 2013 and the necessary control systems considering the business
requirements, scale of operations, geographical spread and applicable statues of the company are in place in the organization.
The systems include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and
review framework etc.
Company has designed the necessary internal financial controls and systems with regard to adherence to Company''s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, accuracy and completeness of the accounting
records and the timely preparation of reliable financial information.
15. Human resources / industrial relations
Our Company continuously focus on people related programmes aimed at attracting, developing and retaining talent within
organization by way of;
a) Employee Engagement - Company enjoys high engagement levels from its employees which is reflected in its consistently
improving performance. Company continuously aims to enhance the engagement levels of its people by ensuring that its business
practices are in alignment with the holistic growth and development of its people which drives them to be actively engaged with
the Company.
b) Talent Management - Company is continuously working on strengthening and building talent in its Human Resources management
team for supporting its growth.
c) Work Environment - Company provides a congenial work atmosphere where every employee enjoys his work and It works on creating
people practices which makes it the best place to work for everyone.
d) Occupational Health and Safety
Safety of employees and workers is of utmost importance to the Company. To reinforce the safety culture in the Company, it has
identified occupational Health & Safety as one of its focus areas. Various training programmes have been conducted at the plants
such as behavior based safety training program, Visible Safety Leadership program, Logistics Safety program etc.
The Company continuously undertakes initiatives aimed at providing a healthy and safe workplace to its people.
Company regularly conducts Safety Audit to identify and eliminate potential safety risks through an objective assessment of
various equipment. Further, Mock drills on emergency preparedness in night hours are conducted to meet any contingency.
Industrial Relations
Employee Relations at all the Units and divisions of the company remained cordial.
16. Sustainability
Company''s sustainability initiatives are focused on low carbon emission, use of alternate fuels, water & resource conservation
and environment management. Focus on sustainability is manifested in the Company being recognized as one of the most efficient
cement manufacturing organization with low energy consumption levels, use of alternative fuel and raw materials, low GHG
emissions, etc.
17. Indian Accounting Standards (IND AS) â convergence.
The Ministry of Corporate Affairs (MCA) vide its notification Dt.16/02/2015 has notified the Companies (Indian Accounting
Standards) Rules, 2015.
In Pursuance of this notification the company, its subsidiary and Joint venture company have to adopt IND AS with effect from 1st
April, 2017, with comparatives for the period ending 31st March, 2017.
18. Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism named Whistleblower Policy to deal with instances of fraud and mismanagement, if any.
The details of the Whistleblower Policy is explained in the Corporate Governance Report and also posted on the website of the
Company.
We blink: http: //www.kcp.co.in/downloads/PDF/wb-policy. pdf
19. Report under the Prevention of Sexual Harassment Act
Pursuant to the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules
framed there under Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the
workplace, All women, permanent, temporary or contractual including those of service providers are covered under the policy and
an Internal Complaints committee has been formed to redress the complaints. There were no complaints reported during the year.
20. Directors and KMP
In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the
Company, Smt.V.L.Indira Dutt, Joint Managing Director of the company retires by rotation and is eligible for re-appointment.
During the year Sri.M.R,Ramachandran, Chief Financial Officer retired from the services of the company and Mr.G.N. Murty was
appointed as new Chief Financial officer of the company.
The Independent Directors of the Company have declared that they meet the criteria of independence as laid down under Section
149(6) of the Companies Act, 2013 and SEBI Regulations.
21. Board Meetings
During the year five Board Meetings were convened and held.
The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period
prescribed under the Companies Act,2013 and the SEBI (LODR) Regulations, 2015.
22. Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI Regulations, the Board has carried out an annual evaluation of its
own performance and it''s Chairman, the directors individually as well as the evaluation of the working of its Committees. The
manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
The Details of familiarization programme arranged for independent Directors have been disclosed on website of the company and are
available at the following link:
Weblink:http://www.kcp.co.in/downloads/PDF/ FProgamme.pdf
23. Related Party Transactions
All Related Party Transactions are placed before the Audit Committee and as also the Board for approval and the same were
approved by the shareholders of the company.
Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 of the Companies Act,
2013 are furnished in Form AOC-2 attached to and forms part of this report as Annexure 6
The policy on Related Party Transactions as approved by the Board is placed on the Company''s website.
Web link: http://www.kcp.co.in/downloads/PDF/ rtpolicy.pdf
24. Auditors
At the 73rd Annual General Meeting (AGM) of the Company held on 11th August, 2014, M/s. Brahmayya & Co, Chartered Accountants,
Vijayawada (Firm Registration No.000513S) have been appointed as the Statutory Auditors of the Company for a period of 3 years.
In terms of the provisions of the Companies Act, 2013 and rules made there under it is necessary to get the appointment ratified
by the shareholders in every Annual General Meeting until the expiry of the period of original appointment.
The Board of Directors recommends your ratification of the appointment of M/s. Brahmayya &Co, Chartered Accountants, Vijayawada
(Registration No.000513S) as the Statutory Auditors of the Company for the year 2016-17.
The Board has further recommended for the approval of the Shareholders at the ensuing Annual General Meeting the appointment of
M/s K.S. Rao & Co, Chartered Accountants (Registration No.003109S), Hyderabad as Joint Auditors of the Company for the year
2016-17.
The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further
comments.
25. Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014 as amended, your
Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Narsimhamurthy & Co, Cost Accountants,
Hyderabad and Mahadevan & Co, Chennai as the Cost Auditors for the Cement and Engineering products for the year 2015-16.
The Cost Audit Reports for the year 2014-15 were fi led by the Cost Auditors within due date.
26. Secretarial Audit
Pursuant to Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Company has appointed Smt. Sobana Pranesh, Company Secretary in Practice to undertake the Secretarial Audit of
the Company.
The Report of the Secretarial Audit Report for the year 2015-16 is annexed to the report herewith as
"Annexure 7".
27. Subsidiary Companies:
Your Company does not have any Indian Subsidiary company.
The Audit Committee and Board review the financial statements, significant transactions, working and the financial results of the
subsidiary company in Vietnam, KCP Vietnam Industries Limited.
There is no material change in the nature of the business of the subsidiary. A statement containing brief financial details of
the subsidiaries are provided in Form AOC 1 and attached as Annexure 5.
The annual accounts of the subsidiary and the related information will be made available to any member of the Company for
inspection at the registered offi ce of the Company during business hours. The Company shall furnish a copy of the details of
annual accounts of the subsidiary to any member on demand.
The annual accounts of the subsidiary company will be placed on the website of the company www.kcp. co.in.
No company ceased to be its Subsidiary, joint venture or associate company during the year.
28. Transfer of amounts to Investor Education and Protection Fund (IEPF)
Pursuant to sections 124 and 125 and other applicable provisions, if any, of the Companies Act, 2013, all Unclaimed dividend, and
interest on deposits as well as the principal amount of deposits, as applicable, remaining unclaimed for a period of seven years
from the date they became due for payment, have been transferred to the IEPF established by the Central Government.
29. Corporate Governance:
A separate section on corporate governance practices followed by the Company, together with a certificate from Company''s auditor
confirming the compliance, forms a part of this Annual Report as per SEBI Regulations.
Policy on Directors'' Appointment and Remuneration including criteria for determining qualifications, positive attributes,
independence of a Director, Key Managerial Personnel and other employees. (Section 178 of the Companies Act, 2013)
The Board shall have minimum 3 and maximum 14 directors, unless otherwise approved. The Company shall have such person on the
Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Agreement, Memorandum of
Association and Articles of Association of the Company.
Composition of the Board shall be in compliance with the SEBI Regulations. Majority of the Directors shall have specialized
knowledge/experience in the areas like Banking, Accountancy, Finance, etc.
The Company has constituted the Nomination and Remuneration committee, which has formulated the criteria for determining
qualifications, positive attributes and independence of Directors and recommended a Remuneration policy to the Board Except for
the Chairman and Managing Director, Joint Managing Director, Executive Director and Technical Director, no other directors are
paid remuneration, but are paid only sitting fees.
The Chairman and Managing Director, Joint Managing Director, Executive Director and Technical Director are paid remuneration as
approved by the Shareholders as per the applicable provisions of the Companies Act, 2013 and rules made there under but are not
paid sitting fees.
The Chairman and Managing Director, Joint Managing Director, Executive Director, Technical Director, Company Secretary and Chief
Financial Officer shall be the Key Managerial Personnel (KMPs) of the Company.
All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct.
Independent Directors are not entitled for ESOPs.
Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge,
experience, etc. in their respective filelds.
Particulars of Employees
The information required under Section 197(12) of the Companies Act, 2013 and the rules made there under, as amended, has been
given in the annexure appended hereto and forms part of this report as Annexure 1.
a) The ratio of the remuneration of each director to the median employee''s remuneration for the financial year and such other
details as prescribed is as given below:
Name of the Director Director remuneration Medium employee, Ratio
(Rs, Lakhs) remumeration
(Rs, Lakhs)
Dr.V.L.Dutt - CMD 289.44 3.90 74:1
Smt.V.L.Indira
Dutt - JMD 217.08 3.90 56:1
Smt.Kavitha Dutt
Chitturi - ED 108.54 3.90 28:1
Sri.V.Gandhi - TD 108.54 3.90 28:1
b) The percentage increase/(decrease) in remuneration of each director, Chief Financial Officer (CFO), Company Secretary (CS), in
the financial year:
Name of the
Director Director Director Increase in Percentage
CFO/CS CFO/CS remuneration increase in
(2014-2015 ) (2015-2016) (Rs,Lakhs) remuneration
(Rs,Lakhs) (Rs,Lakhs) (%)
Dr.V.L.Dutt
- CMD 109.56 289.44 179.88 164
Smt.V.L.
Indira
Dutt - JMD 82.17 217.08 134.91 164
Smt.Kavitha
Dutt
Chitturi -
ED 46.44 108.54 62.10 134
Sri.V.
Gandhi - TD 43.50 108.54 65.04 150
Sri.M.Rama
chandran â
CFO Up to: 43.79 15.90 NA NA
Sri. G. N.
Murty - CFO
From:
01.09.2015 Nil 25.20 NA NA
Sri.Y.Vija
yakumar - CS 15.64 17.15 1.51 10
c) The percentage increase/ (decrease) in the median remuneration of employees in the Financial Year: (1.10%)
d) The number of permanent employees on the rolls of company (as on date): 1306
e) The explanation on the relationship between average increase in remuneration and company Performance:
The average increase in remuneration of Directors and other Key managerial Personnel is at par with the Company performance.
f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:
Name Designation CTC % Increase PAT % Increase
(Rs, Lakhs) in CTC (Rs,LAKHS) IN PAT
Dr.V.L
Dutt CMD 289.44 164 4286.02 170
Smt.V.L.
Indira
Dutt JMD 217.08 164 4286.02 170
Smt.
Kavitha
Dutt
Chitturi Executive
Director 108.54 134 4286.02 170
Sri.V.
Gandhi Technical
Director 108.54 150 4286.02 170
Sri.M.R.
Rama
chandran
Upto:
31.08.
2015 CFO 15.90 NA 4286.02 170
Sri.G.N.
Murty
From:
01.09.
2015 CFO 25.20 NA 4286.02 170
Sri.Y
Vijaya
kumar CS 17.15 10 4286.02 170
g) Variations in the Market capitalization of the company, Price Earnings ratio as at the closing date of the current financial
year and previous financial year and percentage increase or decrease in the market quotations of the shares of the company in
comparison to the rate at which the company came out with the last public offer:
Date Issued Closing market EPS PE Ratio Market
Capital price per Capitali-
(Equity shares (Rs,) sation
Share) (Rs, Lakhs)
31.03.2015 128921160 62.75 1.17 53.63 80898
31.03.2016 128921160 82.80 3.32 25 106747
Increase /
(Decrease) Nil 20.05 2.15 (28.63) 25849
% of Increase/
(Decrease) NA 32% 184% NA 32%
Issue Price
of the share
at the last
Pubic Offer
(IPO)
Increase in
market price
as on NA
31.03.2016 as
compared to
Issue (the Company has never gone for any public issue)
Price of IPO
Increase in %
h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last
financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any
exceptional circumstances for increase in the managerial remuneration:
Average increase in managerial remuneration is at par with increase in remuneration of Employees other than Managerial Personnel
and there is/are no exceptional circumstances for increase in the managerial remuneration.
i) The key parameters for any variable component of remuneration availed by the Directors:
Except Dr.V.L.Dutt, Chairman & Managing Director, Smt.V.L.Indira Dutt, Joint Managing Director, Smt. Kavitha Dutt Chitturi,
Executive Director and Sri.V.Gandhi, Technical Director of the Company no director was paid any remuneration.
Sitting Fees was paid to the independent Directors and for the above said whole time Directors variable component was paid in the
form of Commission, which is as per the Remuneration Policy of the Company and in accordance with the provisions of the Companies
Act, 2013 and rules made there under and approved by the shareholders of the company.
j) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive
remuneration in excess of the highest paid director during the year: NA
k) Is remuneration is as per the remuneration policy of the company: Yes
Extract of Annual return:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure 4".
Significant and Material orders passed by the Regulators or Courts
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the
Company and its future operations.
Particulars regarding Conservation of Energy, Technology absorption and Foreign exchange earnings and outgo
Details provided in Annexure: 2 forming part of the Annual report
Director''s Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make
the following statement in terms of section 134 of the Act.
(a) in the preparation of the annual financial statements for the year ended 31st March, 2016, the applicable accounting
standards, read with requirements set out under Schedule III to the Act, have been followed and there are no material departures
from the same;
(b) the Directors have 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 and for preventing and detecting
fraud and other irregularities;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a ''going concern'' basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial
controls are adequate and are operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems
are adequate and operating effectively.
Acknowledgements
The Board of Directors wishes to place on record their gratitude to the Central and State Governments, Company''s Bankers,
Customers, dealers and other business associates for the assistance, co-operation and encouragement they extended to the Company.
Your Directors wish to whole heartedly thank the employees for their sincere and devoted contribution to the company''s continued
performance.
Your Directors are thankful to the shareholders and deposit holders for their continued patronage.
For and on behalf of the Board of Directors
Place: Chennai (V.L. DUTT)
Date: 27th May, 2016 Chairman and Managing Director
Mar 31, 2014
Dear Shareholders,
The Directors have pleasure in presenting their 73rd Annual Report of
the company together with the Audited Accounts for the fi nancial year
ended 31st March, 2014.
Financial Results
Brief summary of the Company''s fi nancial performance (Stand Alone and
Consolidated) is as under:
(Rs in Lacs)
For the year ended For the year ended
Particulars
31-03-2014 31-03-2013 31-03-2014 31-03-2013
Stand Alone Consolidated (GROUP)
Revenue from Operations 72,257 81,701 1,04,310 1,25,493
Profi t for the year (PBDIT) 8,003 11,349 14,765 18,316
Less: a) Interest and Finance
charges 4,473 3,812 4,631 3,971
b) Depreciation 3,410 3,198 4,712 4,442
Profi t before Tax 120 4,339 5,422 9,903
c) Provision for current tax 27 871 449 1,177
d) Deferred Tax 5 866 93 667
e)Tax provision for
earlier years - 8 - 8
f) Minority share of profit 1544 1980
Add:
a) Refund of Income Tax 12 8 12 9
b) MAT Entitlement tax 27 444 90 444
c) Excess Provision of
income tax of earlier
years credited back 11
Profit for the Year 127 3,046 3,449 6,524
Add: Surplus brought forward
from earlier year 5,374 5,234 18,418 20,167
Amount available for
appropriations 5,501 8,280 21,867 26,691
Less: Transfer to Preference
Capital Redemption Reserve 800 700 800 700
Transfer to General Reserve - 450 - 2,191
Proposed Dividend
-Preference Shares 30 55 30 55
Proposed Final Dividend
 Equity Shares 129 645 129 645
Interim Dividends Paid
ÂEquity Shares - 645 1,779 4,271
Interim Dividends Paid
ÂPreference Shares 124 166 124 166
Tax on Distributed Profits
 Equity shares 22 209 22 209
Tax on Distributed Profits
 Preference shares 31 36 31 36
Surplus at the end of
the Year 4,365 5,374 18,952 18,418
Year in retrospect: Cement
- The cement despatches and the average price realization were lower
than the previous year, but economy in power cost and in the cost of
logistics and transportation and market distribution resulted in the
company''s operations for the year under review being considerably
better than in the corresponding year.
- Production also was signifi cantly lower than the previous year.
- The various incentives also contributed to the improvement in the
operations though the realization of the same have not yet
materialized.
- Wide disparity witnessed in the price of cement across the
geographical segments of India resulted in highly skewed profi
tability.
- Export of cement to nearby countries commenced in a modest way.
Engineering:
- The slowdown of the global economy and the sluggishness of the
Indian economy resulted in the signifi cant impact in the year under
review. The company had to resort to taking up low contributory sales
for better utilization of the capacity.Power:
Power:
- All the present captive power units reported gratifying results
thanks to a good monsoon and a reasonable wind pattern last year.
- The company erected and commissioned a Solar Power Plant of 1.15MW
at Muktyala for its captive use.
Dividend from subsidiary
During the year under review the company received a dividend of Rs 1504
lacs (Rs 4390 lacs in the previous year) from its subsidiary, KCP
Vietnam Industries Ltd, Vietnam.
Dividend on Preference Share Capital
Your Directors recommend a dividend of 12% on the Rs 800 lacs
Preference Share Capital of the company for the year 2013-14. On
8/12/2013 the company has redeemed Rs. 700 lacs preference share
capital, along with the corresponding interim dividend for the Rs 1500
lacs preference share capital till the date of the redemption amounting
to Rs. 124.27 lacs and further an amount of Rs.29.72 lacs being the
preference dividend for the balance period on the reduced capital has
been provided.
Redemption of Preference Shares and capital redemption reserve account
Pursuant to the Share subscription agreement dated 23rd November, 2009,
entered with M/s Tata Capital Financial Services Limited (earlier Tata
Capital Limited), Rs.800 Lacs preference share capital is due for
redemption in December 2014. In terms of section 80(1) (d) of the
Companies Act, 1956, a sum of Rs.800 Lacs has been transferred to
capital redemption reserve account.
Dividend on Equity Shares
The Board of Directors has recommended, for approval of the members, a
fi nal dividend of Rs. 0.10 per share (i.e 10 per cent). The fi nal
dividend, if approved, will be paid to members within the period
stipulated by the Companies Act, 2013 and the Companies (Declaration
and Payment of Dividend) Rules, 2014.
Transfer to Reserves
Your Directors recommend the following appropriations from the profi ts
available for appropriation:
To Preference Capital Redemption Reserve Rs. 800 lacs (under the
provisions of the Companies Act, 1956)
To General Reserve NIL
This will leave Rs.4365 lacs in the Surplus Account to be carried
forward to the next year.
The total amount in General Reserve as on 31st March 2014 would stand
at Rs. 27450 lacs.
Management Discussion & Analysis report:
All matters pertaining to Industry structure and developments,
opportunities and threats, segment/product wise performance, outlook,
risks and concerns, internal control and systems, etc are discussed in
Management Discussion & Analysis report forms part of this report.
Projects under implementation:
- The Captive Power Plant with a capacity of 18MW was originally
envisaged with a total outlay of Rs 11300 lacs. The revised project has
gone up marginally to Rs 11900 lacs. Implementation of the same is
nearing completion and commissioning is expected in this quarter.
- The Hotel, on the other hand suffered overruns both in terms of
commissioning time and the cost due to various factors some outside the
control of the company. The project which was envisaged at Rs 6500 lacs
is now estimated to cost around Rs 8500 lacs.
Exit from Biotech Division
Further to the approval of the shareholders on 31/01/2013 by way of
Postal ballot, the company is in the process of selling of its Fixed
Assets in the Biotech business.
Fixed Deposits:
The total amount of Fixed Deposits outstanding as on 31st March, 2014
was Rs.76,39,35,000/- as compared to the fi gure of Rs. 66,50,98,000/-
as on 31/03/2013. As on 31st March, 2014, Fixed Deposits matured and
remained unclaimed were Rs.2,05,03,000/- from 224 depositors. As on the
date of this report, Fixed Deposits relating to None have been renewed
and Fixed Deposits of Rs. 24,73,000/- of 47 depositors repaid.
Depositors have been intimated regarding the maturity of deposits with
a request to either renew or claim their deposits. As per the
provisions of Section 205C of the Companies Act, 1956, deposits
remaining unclaimed for a period of seven years from the date they
became due for payment have to be transferred to the Investor Education
and Protection Fund (IEPF) established by the Central Government.
Accordingly, during the year, an amount of Rs. 2.11 lacs has been
transferred to the IEPF.
Credit Rating
CRISIL which had initially rated the debt facilities as A- Stable has
now revised the rating to BBB (Negative). This was done taking into
consideration both the operations of the year under review and also
based on CRISIL perceptions on the scenario in the segments in which
the company operates.
Corporate Social Responsibility (CSR)
India is a country of myriad contradictions. On the one hand, it has
grown to be one of the largest economies in the world, and an
increasingly important player in the emerging global order, on the
other hand, it is still home to the largest number of people living in
absolute poverty (even if the proportion of poor people has decreased)
and the largest number of undernourished children.
The Ministry of Corporate Affairs has notifi ed the Section 135 of the
Companies Act, 2013 and the Companies (Corporate Social Responsibility
Policy) Rules, 20 I4 effective from 1st April, 2014.
Even before this enactment, the company has in its own way been
contributing to the benefi t of the society by taking steps in
developing the infrastructure of the vicinity of the units. , providing
potable drinking water to the town, and plantation of trees to improve
the environment.
A Committee of Board consisting of Sri.P.S.Kumar, Sri Vijay Sankar
apart from Smt V L Indira Dutt Joint Managing Director and Smt Kavitha
D Chitturi Executive Director has been formed to monitor the CSR
activities and suggest further improvement to make it more productive.
A more detailed report on activities under Corporate Social
Responsibility is furnished separately in this Annual Report.
Directors
The Board of Directors deeply regrets the sad demise of Dr.A.
Ramakrishna an Independent Director of the company on 20th August,
2013. The Board of Directors would like to place on record its sincere
gratitude to Dr. A. Ramakrishna and appreciates the contribution made
by him during his association with the Company.
Pursuant to the provisions of the Companies Act, 2013 and rules made
there under Sri. O Swaminatha Reddy, Sri.V.H.Ramakrishnan and Sri.
Vijay Sankar Directors retiring by rotation and are eligible to be
appointed as Independent Directors of the company and their
appointments are recommended for the approval shareholders of the
company.
Sri.P.S.Kumar, who was appointed in the casual vacancy caused by the
death of Sri. A. Ramakrishna and Sri. M. Narasimhappa appointed as
additional director of the company hold offi ce up to the date of this
Annual General Meeting of the Company and are eligible to be appointed
as Independent Directors of the company and their appointments are
recommended for the approval of shareholders of the company.
Sri. V. Gandhi, Technical Director of the company, retires by rotation
and being eligible has offered himself for re-appointment.
Brief resume of the Directors proposed to be reappointed and other
details as stipulated under Clause 49 of the Listing Agreement are
provided with the Notice convening the Annual General Meeting
Auditors
M/s Brahmayya & CO, Chartered Accountants, Vijayawada, Statutory
Auditors of the company retires at the conclusion of the ensuing Annual
General Meeting.
Pursuant to Section 139 of the Companies Act, 2013 read with the
Companies (Audit and Auditors) Rules, 2014, we have to rotate the
Auditors within a period of three years.
M/s Brahmayya & CO have furnished their written consent and a certifi
cate stating that that the appointment, if made, shall be in accordance
with the conditions as may be prescribed in sub section (I) of Section
139 of the Companies Act, 2013
The Board recommends the appointment of M/s Brahmayya & CO Vijayawada,
as Auditors of the company for a period of three years to hold offi ce
till the conclusion of the 76th Annual General Meeting of the company
subject to ratifi cation by shareholders in every Annual General
Meeting.
The Notes on Financial Statements referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments.
Cost Auditors
The Central Government has approved the appointment of M/s
Narsimhamurthy & Co, Cost Accountants, Hyderabad and M/s Mahadevan &
Co, Chennai as the Cost Auditors for the Cement and Engineering units
for the year 2013-14.
Pursuant to the Companies (Cost Accounting Records) Rules, 2011 M/s
Narsimhamurthy & Co Hyderabad has been appointed to conduct the Cost
audit for the Cement unit and M/s Mahadevan and Co, Chennai has been
appointed to conduct the Cost audit for the Engineering unit of the
company.
The Cost Audit Reports/Cost compliance audit reports for the year
2012-13 were fi led by the Cost Auditors within the due date.
Particulars of Employees
The Information required under Section 217(2A) of the Companies Act,
and the Rules made there under, in respect of employees of the Company,
is provided is in Annexure-1 forms part of this report.
Subsidiary company and consolidated fi nancial statements
The Company has a subsidiary in Vietnam, KCP Vietnam Industries
Limited. There has been no material change in the nature of the
business of the subsidiary.
Pursuant to the provision of section 212(8) of the Companies Act, 1956,
the Ministry of Corporate Affairs vide its circular dated February 8,
2011 has granted general exemption from attaching the balance sheet,
statement of profi t and loss and other documents of the subsidiary
companies with the balance sheet of the Company.
A statement containing brief fi nancial details of the Company''s
subsidiary for the fi nancial year ended March 31, 2014 is included in
the annual report. The annual accounts of the subsidiary and the
related information will be made available to any member of the Company
and are available for inspection by any member of the Company at the
registered offi ce of the company during business hours.
Consolidated Financial Statements
Pursuant to the requirements of Accounting Standard  21 and the
Listing Agreement with the Stock Exchanges, unaudited fi nancial
statements consolidating those of its subsidiary KCP Vietnam Industries
Ltd and its Joint Venture company, Fives Cail KCP Ltd, considering the
minority interest in them and duly audited have been attached to this
Directors'' Report.
Conservation of Energy, Technology absorption, Foreign Exchange Earning
and Outgo:
The particulars as prescribed under section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, are set out in Annexure "2"
to this report.
Transfer of amounts to Investor Education and Protection Fund (IEPF)
Pursuant to sections 205A and 205C and other applicable provisions, if
any, of the Companies Act, 1956, all Unclaimed dividend, and interest
on deposits as well as the principal amount of deposits, as applicable,
remaining unclaimed for a period of seven years from the date they
became due for payment, have been transferred to the IEPF established
by the Central Government.
Corporate Governance and Management Discussion and Analysis:
As per clause 49 of the Listing Agreements entered into with the Stock
Exchanges, Corporate Governance Report with auditors'' certifi cate
thereon and Management Discussion and Analysis are attached and form
part of this report.
As per clause 55 of the Listing Agreements entered into with the Stock
Exchanges, a Business Responsibility and Sustainability Report is
attached and forms part of the annual report.
Human Resource Development
Human Resource Development (HRD) is the framework for helping employees
develop their personal and organizational skills, knowledge, and
abilities. It encompasses providing such opportunities as employee
training, employee career development, performance management and
development, coaching, mentoring, succession planning, key employee
identifi cation, tuition assistance, and organization development.
Development of human resources is essential for any organization that
would like to be dynamic and growth-oriented. Unlike other resources,
human resources have rather unlimited potential capabilities. The
potential can be used only by creating a climate that can continuously
identify, bring to surface, nurture and use the capabilities of people.
The company realizes the importance HRD and has put in place several
measures such as :
- In house training under a class room atmosphere
- Sponsoring for various seminars that would help the employees in
continuously updating their skills.
- Visit to other units to enable the employees see for themselves the
technology developments happening around them.
- Initiating and persuading the employees to go in for higher
education to make them more versatile.
- Arranging for the live demo of other profi table activities for the
spouse to make them possess skills that can be used to generate income.
Director''s Responsibility Statement
Pursuant to the requirement of section 217(2AA) of the Companies Act,
1956, and based on the representations received from the operating
management, the directors hereby confi rm that:
(a) in the preparation of the annual accounts for the fi nancial year
2013-14, the applicable accounting standards have been followed and
there are no material departures;
(b) they have 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 at the end of the fi nancial year and of the profi t of the
Company for the fi nancial year;
(c) they have taken proper and suffi cient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956.
They confi rm that there are adequate systems and controls for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis.
Acknowledgements
The Board wishes to place on record their gratitude to the Central
Government, State Governments, Company''s Bankers, Customers, dealers
and other business associates for the assistance, co- operation and
encouragement they extended to the Company. Your Directors wish to
whole heartedly thank the employees for their sincere and devoted
contribution to the company''s continued performance. Your Directors are
thankful to the shareholders and deposit holders for their continued
patronage.
For and on behalf of the Board of Directors
Place: Chennai (V.L. DUTT)
Date: 22nd May, 2014 Chairman and Managing Director
Mar 31, 2013
Dear Shareholders,
The Directors have pleasure in presenting their 72nd Annual Report on
the Business and Operations of the company together with the Audited
Accounts for the fi nancial year ended 31st March, 2013.
Financial Results
Brief summary of the Company''s fi nancial performance (Standalone and
Consolidated) is as under:
(Rs. In Lacs)
For the year
ended For the year ended
Particulars 31-03-2013 31-03-2012 31-03-2013 31-03-2012
Standalone Consolidated (Group)
Revenue from
operations 81,701 68,725 125493 110557
Profit for the
year (PBDIT) 11,349 15,208 18316 23625
Less: a) Interest
and Finance charges 3812 3795 3971 4154
b) Depreciation 3198 2935 4442 4104
Profit before Tax 4339 8478 9903 15367
c) Current tax 871 1675 1177 1983
d) Deferred Tax 866 1701 667 1685
e) Tax provision for
earlier years 8 28 8 28
f) Minority share of
profit 1980 2146
Add: a) Refund of
Income Tax 8 10 9 11
b) MAT Entitlement 444 1070 444 1070
Profi t for the year 3046 6153 6524 10605
Add: Surplus brought
forward from earlier year 5234 4108 15580 13228
Amount available for
appropriations 8280 10201 22104 23833
Less:
Transfer to Preference
Capital Redemption Reserve 700 500 700 500
Transfer to General Reserve 450 2000 2191 2119
Proposed Dividend -
Preference Shares 55 240 55 240
Proposed Final Dividend -
Equity Shares 645 322 645 322
Proposed Special Dividend -
Equity Shares 645 645
Interim Dividends Paid -
Equity Shares 645 967 4271 4074
Interim Dividends Paid -
Preference Shares 166 166
Tax on Distributed
Profits - Equity shares 209 314 209 314
Tax on Distributed
Profits - Preference shares 36 39 36 39
Surplus at the end of
the year 5374 5234 13831 15580
Year in retrospect:
Cement
Notwithstanding the higher volume of Cement sold, operations were
deeply impacted by the following:
* High incidence of power cost on account of purchase of power under
Open Access resulting from monthly 12 days Power Holiday in the State
of Andhra Pradesh for most part of the year.
* Higher consumption of outside power due to inadequate generation of
power from the Captive Hydel plant.
* Higher logistic costs due to the spread of the cement despatches
across various States .
Engineering:
* Continuance of the recessionary trends which has affected the
operations of the Engineering Division.
* Customers have either not taken delivery of the materials ordered or
in some cases deferring / cancelling the order
Outlook:
Cement:
Given the slight moderation in credit growth in the housing and
commercial real estate sector, growth of demand may be expected to be
between 5%- 8% in year 2013. With the expected stabilization in demand,
capacity utilizations may have bottomed out. But South Zone based
companies especially those from Andhra Pradesh may continue to
experience pressure on capacity utilization. This is due to the
demand-supply gap in the region.
Engineering:
Government''s focus on infrastructure development is expected to keep
demand for the engineering sector high. Continued growth of
manufacturing sector and favorable regulatory policies would further
propel the sector''s growth in the long run. The slowdown it appears may
just be over and the fortune of the Indian engineering industry is
likely to look up.
Dividend from subsidiary
During the year under review the company received a dividend of Rs 4390
lacs from its subsidiary, KCP Vietnam Industries Ltd, Vietnam.
Dividend on Preference Share Capital
Your Directors recommend a dividend of 12% on the Rs 1500 lacs
Preference Share Capital of the company for the year 2012-13. On
08/12/2012 the company has redeemed Rs. 500 lacs preference share
capital, along with the corresponding interim dividend for the entire
preference share capital of Rs 2000 lacs till the date of the
redemption amounting to Rs 165.69 lacs and further an amount of Rs
55.72 lacs being the preference dividend for the balance period on the
reduced capital has been provided.
Redemption of Preference Shares
Pursuant to the Share subscription agreement dated 23rd November, 2009,
entered with M/s Tata Capital Financial Services Limited (earlier Tata
Capital Limited), Rs.700 Lacs preference share capital is due for
redemption in December 2013. In compliance with the provisions of the
Companies Act, 1956, the same amount has been transferred to the
Capital Redemption Reserve created for the purpose.
Dividend on Equity Shares
During the year two interim dividends of Re.0.25 per share (i.e.
Re.0.50 per share) was declared and paid. The Board of Directors has
recommended a fi nal dividend of Rs. 0.50 per share (i.e 50 per cent)
to the members for their approval. The fi nal dividend, if approved,
will be paid to members within the period stipulated by the Companies
Act, 1956.
Transfer to Reserves
Your Directors recommend the following appropriations from the profi ts
available for appropriation:
To Preference Capital Redemption Reserve Rs. 700 lacs (under the
provisions of the Companies Act, 1956)
To General Reserve Rs. 4500 lacs
This will leave Rs 5374 lacs in the Surplus Account to be carried
forward to the next year.
The total amount in General Reserve as on 31st March 2013, after the
proposed appropriation, would stand at Rs.27450 lacs.
Management Discussion and Analysis Report
All matters pertaining to Industry structure and developments,
opportunities and threats, segment/
product wise performance, outlook, risks and concerns, internal control
and systems, etc are discussed in Management Discussion and Analysis
report forms part of this report.
Fixed Deposits:
The total amount of Fixed Deposits outstanding as on 31st March, 2013
was Rs.6650.98 lacs (Rs.6824.18, lacs on 31-3-2012) and Fixed Deposits
matured and remained unclaimed were Rs.133.97 lacs from 268 depositors.
As on the date of this report, Fixed Deposits relating to 58 depositors
amounting to Rs. 3.93 lacs/- have been renewed and Fixed Deposits of
Rs. 20.75 Lacs of 13 depositors repaid.
Depositors have been intimated regarding the maturity of deposits with
a request to either renew or claim their deposits.
As per the provisions of Section 205C of the Companies Act, 1956,
deposits remaining unclaimed for a period of seven years from the date
they became due for payment have to be transferred to the Investor
Education and Protection Fund (IEPF) established by the Central
Government. Accordingly, during the year, an amount of Rs. 2.18 lacs
has been transferred to the IEPF.
Corporate Social Responsibility (CSR)
CSR has been defi ned as the "continuing commit- ment by business to
behave ethically and contribute to economic development while improving
the quality of life of the workforce and their families as well as of
the local community and society at large"
Such a practice cannot have a Sustainable Development without taking
along the rural populace in the path of development.
CSR is not a new concept to the company, the CSR activities are long
being guided by the vision of the Founder Chairman Sri V.Ramakrishna.
The long cherished aim of the company has also been to main- tain
integrity with which a company governs itself, fulfi lls its mission,
lives by its values, engages with its stakeholders, measures its impact
and reports on its activities in a transparent manner.
A Committee of Board consisting of Dr. A. Ramakrishna, Sri Vijay Sankar
apart from Smt V L Indira Dutt Joint Managing Director and Smt Kavitha
D Chitturi Executive Director has been formed to monitor the
CSR activities and suggest further improvement to make it more
productive.
A more detailed report on activities under Corporate Social
Responsibility is furnished separately in this Annual Report.
Directors
The Board of Directors deeply regrets the sad demise of
Sri.P.Kotewararao an Independent Director of the company on 27th
September, 2012. The Board of Directors would like to place on record
its sincere gratitude to Sri.P.Kotewararao and appreciates the
contribution made by him during his long association with the Company.
Sri. O Swaminatha Reddy and Sri. Vijay Sankar Directors, retire by
rotation at the forthcoming Annual General Meeting and being eligible;
offer themselves for reappointment.
Brief resume of the Directors proposed to be re- appointed and other
details as stipulated under Clause 49 of the Listing Agreement are
provided with the Notice convening the Annual General Meeting
Auditors
M/s Brahmayya & CO, Chartered Accountants, Vijayawada, Statutory
Auditors of the company retire at the conclusion of the ensuing Annual
General Meeting. They are, however eligible for reappoint- ment. They
have furnished a certifi cate to the effect that their appointment if
made, will be in accordance with the limits specifi ed in sub section
(IB)of Section 224 of the Companies Act .1956
The Board recommends the reappointment of M/s Brahmayya & CO
Vijayawada, as Auditors of the company to hold offi ce till the
conclusion of the next Annual General Meeting.
The Notes on Financial Statements referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments.
Cost Auditors
The Central Government has approved the appointment of M/s
Narsimhamurthy and Co, Cost Accountants,
Hyderabad and M/s Mahadevan & Co, Chennai as the Cost Auditors for the
Cement units for the year 2012-13.
Pursuant to the Companies (Cost Accounting Records) Rules, 2011 M/s
Narsimhamurthy and Co Hyderabad has been appointed to conduct the Cost
audit for the Cement and Biotech units and M/s Mahadevan and Co,
Chennai has been appointed to conduct the Cost audit for the
Engineering unit of the company.
The Cost Audit Reports/Cost compliance audit reports for the year
2011-12 were fi led by the Cost Auditors within the due date.
Particulars of Employees
Information as per Section 217(2A) of the Companies Act,1956 read with
the Companies(Particulars of Employees) Amendment Rules, 2011 is
provided in Annexure-1 which forms part of this report.
Subsidiary company
The Company has fulfi lled all the conditions pre- scribed under
Section 212(8) of the Companies Act 1956 read with General Circular No.
2/2011 dated 8th February,2011 to avail exemption from publishing the
Balance Sheet and other statements of its subsidiary company, M/s KCP
Vietnam Industries Ltd. Vietnam for the fi nancial year 2012-13.
However, a statement giving certain information as required in the said
cir- cular is placed along with the Consolidated Accounts.
The company will provide to any shareholder, on request and without any
cost, the Balance Sheet and other particulars and statements of
accounts of the subsidiary company, M/s KCP Vietnam Industries Ltd.
Vietnam.The Annual Accounts of the subsidiary will also be available
for inspection at the Registered Offi ce of the Company.
Consolidated Financial Statements
Pursuant to the requirements of Accounting Standard  21 and the
Listing Agreement with National Stock Exchange, unaudited fi nancial
statements consolidating those of its subsidiary KCP Vietnam Industries
Ltd and its Joint Venture company, Fives Cail K C P Ltd, considering
the minority interest in them have been attached to this Directors''
Report.
Conservation of Energy, Technology absorption, Foreign Exchange Earning
and Outgo:
The particulars as prescribed under Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 are attached as Annexure
"2" to this report.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 205A (5) of the Companies Act,
1956, relevant amounts (Dividend and Deposits) which remained unclaimed
for a period of 7 years have been transferred by the Company to the
Investor Education and Protection Fund.
Corporate Governance:
Pursuant to clause 49 of the listing agreement exe- cuted with the
Stock Exchanges, A Management Discussion and Analysis, Corporate
Governance Report, Managing Director''s and Auditor''s Certifi cate
regarding compliance of conditions of Corporate Governance are made
part of the Annual Report.
Human Resource Development
It is rightly said that "machines are important in the production
process but the man behind the machines is more important". He
transforms the lifeless factors of production into useful products.
Human Resources Development (HRD) as a theory is a framework for the
expansion of human capital within an organization through the
development of both the organization and the individual to achieve
performance improvement. Human Resource Development is the integrated
use of training, orga- nizing , and providing career development
efforts to improve individual, group and organizational effec-
tiveness. HRD develops the key competencies that enable individuals in
organizations to perform current and future jobs through planned
learning activities
The company and its workforce go together. Since its inception, each
and everyone associated with it has been a driving force to catapult
its growth to where it is today. The company is proud of its people and
are focussed towards enriching their careers in terms of professional
and personal development. It strives to bring the best and leaves no
stone unturned to ensure that their growth is in line with that of the
organisation.
It is also equally important to retain the human force available and to
this end the company has been devis- ing attractive remuneration
package within the legal framework to ensure that the workforce is
happy and contented. It recognises the fact Productivity is best
brought out when the workforce is taken care of properly.
The total number of employees as an Date is 1566.
Director''s Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confi rm that:
1. In the preparation of the annual accounts, the applicable
Accounting Standards have been followed and that no material departures
have been made from the same.
2. The Selected Accounting Policies were applied consistently and the
Directors 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 at the end of the fi nancial year ended 31st March, 2013 and of
the profi t of the Company for the year ended as on date.
3. They have taken proper and suffi cient care for 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, and
4. They have prepared the annual accounts on a going concern basis.
Acknowledgements
The Board wishes to place on record their gratitude to the Central
Government, State Governments, Company''s Bankers, Customers, Dealers
and other Business Associates for the assistance, co- operation and
encouragement they extended to the Company.
Your Directors wish to whole heartedly thank the employees for their
sincere and devoted contribution to the company''s continued performance
and are thankful to the Shareholders and Deposit holders for their
continued patronage.
For and on behalf of the Board of Directors
Place: Chennai V.L. DUTT
Date: 17th May, 2013 Chairman and Managing Director
Mar 31, 2012
The Directors have pleasure in presenting their 71st Annual Report
together with the Audited Accounts for the financial year ended 31st
March, 2012.
Financial Results
Brief summary of the Company's financial performance (Stand Alone and
Consolidated) is as under:
(Rs. In Lacs)
Particulars For the year ended For the year ended
31-03-2012 31-03-2011 31-03-2012 31-03-2011
Stand Alone Consolidated (GROUP)
Revenue from operations 68,725 36,182 1,10,557 70,467
Profit for the year (PBDIT) 15,208 8,224 23,625 15,288
Less: a) Interest and
Finance charges 3,795 1,394 4,154 1,565
b) Depreciation 2,935 1,233 4,104 2,233
Profit before Tax 8,478 5,597 15,367 11,490
c) Current tax 1,675 1,118 1,983 1,529
d) Deferred Tax 1,701 1,361 1,685 1,380
e)Tax provision for
earlier years 28 - 28 -
f) Minority share of profit - - 2146 1,725
Add:
a) Refund of Income Tax 10 18 11 18
b) MAT Entitlement 1,070 751 1,070 751
c) Excess Provision of
income tax of earlier
years credited back - 248 - 248
Profit for the year 6,153 4,135 10,605 7,874
Add: Surplus brought
forward from earlier year 4,108 2,755 13,228 8,597
Amount available for
appropriations 10,261 6,890 23,833 16,471
Less:
Transfer to Preference
Capital Redemption Reserve 500 - 500 -
Transfer to General Reserve 2,000 1,000 2,119 1,033
Proposed Dividend -
Preference Shares 240 240 240 240
Proposed Final Dividend -
Equity Shares 322 322 322 322
Proposed Special Dividend -
Equity Shares 645 - 645 -
Interim Dividends Paid -
Equity Shares 967 967 4,074 1,396
Tax on Distributed Profits -
Equity Shares 314 214 314 214
Tax on Distributed Profits -
Preference Shares 39 39 39 39
Surplus at the
end of the year 5,234 4,108 15,580 13,227
Segment wise Sales performance
Particulars 2011-12 2010-11
Sales Value % to Total
Sales Sales Value % to Total
Sales
(Rs. In lacs) (Rs. In lacs)
Engineering 14,091 20.50% 13,067 36.12%
Cement 54,232 78.92% 22,375 61.84%
Power 56 0.08% 52 0.14%
Others 346 0.50% 688 1.90%
Total 68,725 100.00% 36,182 100.00%
Year in Retrospect Financial results
There has been a quantum increase in turnover of the company of about
90% consequent to the commissioning of the 1.52 MTPA green field cement
plant at Muktyala during the year under review. The Plant commenced
production with both Cement mills in operation in August 2011 and
during this period of stabilization, achieved an average capacity
utilization of around 49%. The quantity of cement produced from this
Plant was 5,48,991 MTs accounting for about Rs 26,300 lacs of the total
turnover.
During the current year, the new plant has further increased its
capacity utilization and is expected to achieve a figure of about 70%
by the close of the year.
The Engineering Division maintained the turnover of the last year with
a marginal increase of about Rs. 1,024 lacs (8%). Dispatches' continued
to be sluggish in view of the continuing slow recovery of the global
economy. With the weight of the European financial crisis looming
large, world industrial production has been slack with the capital
goods industry, as is natural, bearing the brunt as enterprises cancel
or delay expansions, additions and new ventures. Domestic demand
remained stable but active and contributed to a good portion of the
Order Book.
Overall Financial position
The Profit before Depreciation, Interest and Tax also increased by Rs.
6984 Lacs, that is about 85% over the previous year. The Net Profit of
Rs. 6153 Lacs against Rs. 4135 lacs accounts for an increase of 49%
largely due better cement realization and dividend from Subsidiary. The
continued healthy liquidity
position is a matter of considerable satisfaction even while the
company had to defray substantial amounts towards the New Cement Plant,
the upcoming Hotel Project etc. The income from investment in the
subsidiary, namely KCP Vietnam Industries Ltd in the form of dividend
substantially contributed to this position in addition to the increased
cash generation from operations.
The utilization of working capital limits with Banks was, however
higher on account of the necessity to maintain significant stock of
coal for both the cement units in the face of the uncertainty in its
availability.
Your Directors are confident that the current position will be
sufficient to meet the company's obligations in completing the
on-going Projects, service capital and debt and also take care of
unexpected exigencies.
Power units
The various captive power generating units performed satisfactorily
during the year. Shareholders' attention is drawn to the detailed
Management Discussions and Analysis.
Captive Power Plant at Muktyala
Your Directors are of the opinion that a Captive Power Plant is
essential to protect the large investment in the new cement plant by
ensuring uninterrupted supply of quality power.
However, with the coal situation undergoing considerable changes since
the last report, it has been decided to limit the capacity of the Plant
to 18 MW only with provision for subsequent addition of another 18 MW
at an appropriate time. Power generated over and above the captive
requirement will be sold to third parties at reasonably profitable
market rates.
The Project Cost and the loan component thereof have been suitably
revised.
Upcoming Hotel Project
The Hotel Project at Somajiguda in Hyderabad is progressing well and is
expected to be commissioned before the first half of the next financial
year that is by June 2013. The Hotel will be a four star business
category which has good business potential, under Management Agreements
with a leading international chain.
Replacement of cement Mills at Macherla
With the continuing improvement in production technologies as a result
of innovation on a global scale, to meet competition, eliminate
pollution and increase margins, the company has taken steps to replace
the existing four old grinding mills with a single mill with latest
technology at an estimated cost of Rs. 3400 lacs with a loan component
of Rs. 2100 lacs. The process of replacement is expected to be
completed during the current fiscal.
Outlook for the future
A detailed analysis on the various segments in which the company
operates has been furnished in the Management Discussions and Analysis.
Dividend from subsidiary
During the year under review the company received a dividend of Rs 2800
lakhs from its subsidiary, KCP Vietnam Industries Ltd, Vietnam on its
investment of Rs. 2371 lacs.
Investment in BGE Global Inc
As a strategic investment which would provide the Engineering Unit an
opportunity for growth and also establish an export base, the company,
during the year under review, has invested an amount of USD
9,00,000 equivalent to Rs. 462 Lacs as on 31.3.2012 in a US based
company BGE Global Inc. U S A mainly engaged in providing Engineering
and other related services and also offer key cement machinery and
equipment through its affiliates, The investment comprises USD 150,000
in Common Non Voting Stock of a face value of USD 0.01 per share and
USD 750,000 in Preferred Non Voting Stock of face value of USD 0.01
bearing a fixed dividend of about 2.5% per annum.
Your Directors are of the opinion that the strategic investment will be
beneficial in furthering the interests of its business prospects in the
coming years to meet global competition.
Dividend on Preference Share Capital
Your Directors recommend a dividend of 12% on the Preference Share
Capital of the company. The amount of such dividend is Rs 240 lacs for
the year.
Redemption of Preference Shares
Pursuant to the Share subscription agreement dated 23rd November, 2009,
entered with M/s Tata Capital Limited, 25% of the total subscription
amounting to Rs.500 lacs is due for redemption in December 2012. As
required under the Companies Act, 1956, a Preference Capital Redemption
Reserve of an equivalent amount has been allocated out of the profits
and created during the year under review.
Dividend on Equity Shares
Based on the continued good financial performance and working results
of the company during the last three quarters of the financial year
2011-12 and other relevant parameters, the Board had declared and paid
three interim dividends of 25% each during the financial year amounting
to 75 % (Rs 0.75 per share) as of date.
Your Directors are now pleased to recommend a final dividend of 25% (Rs
0.25 per share) making a total equity dividend of 100% (Rs 1/-per
share) for the year. The total amount of dividend paid on equity
capital excluding Dividend Distribution Tax thereon will be Rs 1,289
lacs, which is the same as in the previous year.
Special dividend on completion of 70th Year
Shareholders will be happy to know that the company has completed 70
years of its existence having been incorporated in 1941. During this
period, it has made consistent progress and taken great strides in
expansions, diversifications etc. to reach a record group turnover in
excess of Rs. 1000 crores. In appreciation of the continued support of
the shareholders and to commemorate the 70th year, your Directors have
considered it appropriate and fit to declare a Special Dividend of
Rs.0.50 per Share that is 50% on the paid up Equity Capital.
The dividend will be paid to members whose names appear in the
Register of Members as on 13th August,2012 and in respect of shares
held in dematerialised form, it will be paid to members whose names are
furnished by National Securities Depository Limited and Central
Depository Services (India) Limited, as beneficial owners as on that
date.
Transfer to Reserves
Your Directors recommend the following appropriations from the profits
available for appropriation:
To Preference Capital Redemption Reserve
(under the provisions of
the Companies Act, 1956) - Rs. 500 lacs
To General Reserve - Rs.2000 lacs
This will leave Rs 5234 lacs in the Surplus Account to be carried
forward to the next year.
The total amount in General Reserve as on 31st March, 2012, after the
proposed appropriation, would stand at Rs.27000 lacs.
Fixed Deposits
The total amount of Fixed Deposits outstanding as on 31st March, 2012
was Rs.6824.18 Lacs as compared to the figure of Rs.7624.61 Lacs as on
31-3-2011. As on 31st March, 2012, Fixed Deposits matured and remained
unclaimed were Rs.141.14 Lacs from 243 depositors. As on the date of
this report, Fixed Deposits relating to 57 depositors amounting to
Rs.28.62 Lacs have been renewed and Fixed Deposits of Rs.20.51 Lacs of
25 depositors repaid.
Corporate Social Responsibility (CSR)
For a business to take responsibility for its actions, that business
must be fully accountable. Social accounting, a concept describing the
communication of social and environmental effects of a company's
economic actions to particular interest groups within society and to
society at large, is thus an important element of CSR.
The rise in popularity of ethical consumerism over the last two decades
can be linked to the rise of CSR.
As global population increases, so does the pressure on limited natural
resources required to meet rising consumer demand (Grace and Cohen
2005, 147). Industrialization, in many developing countries,
is booming as a result of both technology and globalization. Consumers
are becoming more aware of the environmental and social implications of
their day-to-day consumer decisions and are therefore beginning to make
purchasing decisions related to their environmental and ethical
concerns.
The company in its own way has been taking a number of initiatives in
supporting on-going long term projects while undertaking new ones.
With Corporate Social Responsibility in India having acquired a new
dimension and being discussed at Government levels as a formal
necessity for business in the recent years, your company has always
laid considerable stress on voluntary compliance in this regard. It
will be a repetition to state that long before CSR acquired its current
nomenclature, KCP has been actively engaged in setting up projects and
services to take care of surrounding community in its factory zones and
has made their life more meaningful. Education, Health care, Community
welfare measures are major areas in which it has laid its foundations
in the early years of its existence and carefully added to them in
succeeding years.
A more detailed report on activities under Corporate Social
Responsibility is furnished separately in this Annual Report.
Directors
Sri. A. Ramakrishna and Sri V.H.Ramakrishnan, Directors of the Company,
retire by rotation and being eligible offer themselves for
reappointment at the ensuing Annual General Meeting in accordance with
the provisions of the Companies Act, 1956 and Company's Articles of
Association.
Sri. Vijay Sankar had been appointed an Additional Director of the
Company effective from 7th November, 2011 and will hold office till the
conclusion of the ensuing Annual General Meeting. The Company has
presently received a notice in writing from a member, with the
requisite fee proposing the candidature of Sri Vijay Sankar as a
Director of the company subject to retirement by rotation, in terms of
Section 257 of the Companies Act, 1956 to be considered at the ensuing
Annual General Meeting.
A resume of the Directors seeking re-appointment/ appointment is
furnished along with the notice for the Annual General Meeting for the
information of shareholders.
Director's Responsibility Statement
The Directors confirm that:
1. In the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that no material departures
have been made from the same.
2. The selected accounting policies were applied consistently and the
Directors 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 at the end of the financial year ended 31st March, 2012 and of
the profit of the Company for the year ended as on date.
3. They have taken proper and sufficient care for 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, and
4. They have prepared the Annual Accounts on a going concern basis.
Auditors
M/s Brahmayya and Co, Chartered Accountants, Vijayawada, Auditors of
the company retires at the conclusion of the ensuing Annual General
Meeting. They are, however eligible for reappointment. They have
furnished a certificate to the effect that their appointment will be in
accordance with the limits specified in sub section (IB) of Section 224
of the Companies Act, 1956.
The Board recommends the reappointment of M/s Brahmayya & Co
Vijayawada, as Auditors of the company to hold office till the
conclusion of the next Annual General Meeting.
The Notes on Financial Statements referred to in the Auditors' Report
are self-explanatory and do not call for any further comments.
Cost Auditors
The Central Government has approved the appointment of M/s
Narsimhamurthy and Co, Cost Accountants, Hyderabad the Cost Auditor for
the Cement units for the year 2011-12. The Cost Audit Report for the
year 2010-11 was filed by the Cost Auditor within the due date.
Pursuant to the Companies (Cost Accounting Records) Rules, 2011 M/s
Narsimhamurthy and
Co Hyderabad has been appointed to conduct the Compliance audit for the
Biotech unit and M/s Mahadevan and Co, Chennai has been appointed to
conduct the Compliance audit for the Engineering unit of the company.
Revised Schedule VI
It has been notified that in the preparation of the Balance Sheet and
Profit and Loss Account for financial year commencing on or after 1st
April 2011, the Revised Schedule VI as prescribed shall be followed.
The accounts for the year have therefore been drawn in the new format.
The most significant requirement of the Revised Schedule VI is the form
of segregation of Assets and Liabilities to more effectively reflect
their Current and Non Current nature and would be one step toward the
achievement of IFRS.
Human Resources
Realising that human resources are the main assets of an enterprise,
the company follows a policy suited to train and retain talent,
recognise performance, provide motivation and opportunity for growth.
Ensuring that the right person is assigned to the job best suited to
his background and experience, the potential to grow and contribute
towards organisational excellence has been encouraged and nurtured for
mutual benefit. Stability of the workforce and meeting their
aspirations is the foremost objective of the company and to this end
the company has being taking a series of measures which includes
training and development at different levels, merit-based promotions
and other incentives. The families of employees are also brought into
the overall fold in the form of periodical cultural meets, friendly
get-togethers and other welfare measures. The Company has developed a
unique "KCPeers culture" which binds employees together and keeps
them happy resulting a high engagement level in the company.
The total number of employees as on date was 1233. Particulars of
Employees
Information as per Section 217 (2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Amendment Rules, 2011 is
provided in Annexure - 1 forms part of this report.
Subsidiary company
The Company has fulfilled all the conditions prescribed under Sec 212
(8) of the Companies Act 1956 read with General Circular 2/2011 dated
8th February, 2011 to avail exemption from publishing the Balance Sheet
and other statements of its subsidiary company, M/s KCP Vietnam
Industries Ltd. Vietnam for the financial year 2011-12. However, a
statement giving certain information as required in the said circular
is included in the Annual Report.
The company will provide to any shareholder, on request and without any
cost, the Balance Sheet and other particulars and statements of
accounts of the subsidiary company, M/s KCP Vietnam Industries Ltd.
Vietnam. The said Annual Accounts of the subsidiary Company will also
be available for inspection at the Registered/Corporate Office of the
Company.
Consolidated Financial Statements
Pursuant to the requirements of Accounting Standard - 21 and the
Listing Agreement with National Stock Exchange Ltd, financial
statements consolidating those of its subsidiary KCP Vietnam Industries
Ltd and its Joint Venture company, Fives Cail K C P Ltd, considering
the minority interest in them and duly audited have been attached to
this Directors' Report.
Conservation of Energy, Technology absorption, Foreign Exchange Earning
and Outgo
The particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 are attached as Annexure
"2" to this report.
Occupational Health and Safety
We have well defined health and safety policies which are widely
circulated internally to ensure appropriate attention to health and
safety hazards and to build a safe working environment. All the
manufacturing plants have medical facilities with qualified doctors.
Annual medical check-up is mandatory for all employees of the Company.
Training related to safety aspects is provided to all employees prior
to engaging them in respective jobs.
The company insists their lab our contractors to adopt similar
Occupational Health and Safety practices while engaging them for
Company work.
There is a system of periodical review of the activities done in the
area of health, hygiene and safety and to address challenges in these
areas.
Regular personal development sessions like "Art of living" etc. are
also conducted with a view to maintain work life balance.
Transfer of amounts to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Section 205A (5) of the Companies Act,
1956, relevant amounts which remained unpaid or unclaimed for a period
of 7 years have been transferred by the Company to the Investor
Education and Protection Fund.
Corporate Governance
Corporate governance is a term that refers broadly to the rules,
processes, or laws by which businesses are operated, regulated, and
controlled. The term can refer to internal factors defined by the
officers, stockholders or constitution of a corporation, as well as to
external forces such as consumer groups, clients and government
regulations. India's SEBI Committee on Corporate Governance defines
corporate governance as the "acceptance by management of the
inalienable rights of shareholders as the true owners of the
corporation and of their own role as trustees on behalf of the
shareholders. It is about commitment to values, about ethical business
conduct and about making a distinction between personal and corporate
funds in the management of a company."
Corporate Governance has always been at the core of the company's
management philosophy aimed at bringing about a managerial style of
functioning which reflects transparency coupled with efficiency so as
to benefit the larger interests of all stakeholders. The theme of
management is to provide for sufficient internal checks and balances to
ensure professional decision-making in the day-to-day affairs of the
company with minimum exposure to risks. All Directors and employees are
bound by Code of Conduct that
sets out the financial standards to be followed in all actions carried
out on behalf of the company.
A Detailed Report on matters relating to Corporate Governance as
statutorily required is annexed as part of this Annual Report together
with the report of the Auditors on its compliance.
Acknowledgements
Your Directors wish to thank the Central and State Governments,
Financial Institutions, Banks,
Government authorities, customers, vendors and shareholders for their
continued co-operation and support extended. Your Directors wish to
whole heartedly thank our employees for their sincere and devoted
contribution to the company's continued good performance.
Ladies and gentlemen, your involvement as shareholders is deeply
valued. Your Directors look forward to your continued support in all
Endeavour's for stability, growth and prosperity for the company.
Place: Chennai For and on behalf of the Board of Directors
Date: 28th May, 2012 VL DUTT
Chairman and Managing Director
Mar 31, 2011
1.The Directors have pleasure in presenting their 70th Annual Report
together with the Audited Accounts for the year ended 31st March, 2011.
2. Financial Results
(Rs. In Lakhs)
For the year ended For the year ended
PARTICULARS 31-03-2011 31-03-2010 31-03-2011 31-03-2010
Stand Alone Consolidated (GROUP)
Gross Turnover 36,172 41,175 70,467 68,362
Profit for the year
(PBDIT) 8,224 11,053 15,280 17,298
Less:
a) Interest and Finance
charges 1,394 949 1,565 1,336
b) Depreciation 1,233 1,057 2,233 2,167
Profit before Tax 5,597 9,047 11,482 13,795
c) Provision for Current Tax 1,118 3,000 1,529 3,166
d) Deferred Tax 1,361 45 1,380 79
e) Minority share of Profit - - 1,725 1,485
Add:
a) Refund of Income Tax 18 - 18 -
b) MAT Entitlement tax 751 - 751 -
c) Excess Provision of income
tax of earlier years credited
back 248 - 248 10
Net Profit: 4,135 6,002 7,865 9,076
Add Surplus brought forward
from earlier year 2,755 2,347 8,597 5,114
Amount available for
appropriations 6,890 8,349 16,462 14,190
Less Transfer to General
Reserve 1,000 4,000 1,000 4,000
Less Preference Capital
Dividend 240 742 40 74
Less Interim Dividend-
Equity Shares 967 967 1,396 967
Less Dividend proposed -
Equity Shares 322 322 322 322
Tax on Distributed
Profits - Equity 214 219 214 219
Tax on Distributed Profits -
Preference 39 12 39 12
Surplus carried to next year 4,108 2,755 13,251 8,597
Segment wise Sales performance:
2010-2011 2009-2010
PARTICULARS Sales Value % to Total Sales Value
in lakhs Sales in lakhs % to Total
Sales
Engineering 13,067.64 36.13% 16,594.33 40.30%
Cement 22,375.21 61.86% 24,058.00 58.43%
Power 52.14 0.14% 47.56 0.12%
Others 677.55 1.87% 475.26 1.15%
Total 36,172.54 100.00% 41,175.15 100.00%
Analysis of financial results:
Profit before Tax has registered a downward trend in the year under
review as compared to the previous year. The cement industry,
throughout the country suffered severe setbacks in demand and steep
fall in selling prices especially in the fi rst half. Though a number
of reasons could be attributed, some of the more major ones were a
perceptible fall in pub- lic infrastructure spending in the State of
Andhra Pradesh caused by political instability, severe strain on
Government revenues, unusual changes in sea- sonal patterns, market
reaction to a perception of large scale additions to manufacturing
capacity etc. A major part of the year also witnessed scarce avail-
ability of coal necessitating resort to imported coal of larger
quantities at higher prices pushing up the cost of production. The
combination of a multitude of such factors resulted in lower off take,
a slump in the aver- age realization for the product and fall in profi
ts.
The companys dependence on diversifi ed activ- ity within, however,
eased the stress on its overall fi nances in that the Engineering
Division continued to perform comparatively well under the
circumstances. Its operations were at lower levels compared to the
previous year when it had a one-time high value export order.
Also significantly, during the year 2010-11, the new Cement Unit II at
Muktyala completed only the com- missioning of its clinker Plant with
cement production having commenced in the current financial year.
The net cash generation of the company during the year under review was
relatively better in view of a substantially lower provision for
income-tax of Rs. 1118 lacs (Rs.3000 lacs) on the basis of Minimum
Alternate Tax (MAT) resulting from an increased claim of depreciation
under Income-tax Rules on the capitalization of the new Cement Unit
upto the clinkerisation stage.
Overall Financial position:
However, following prudent financial management of working capital,
the companys cash resources have been retained at a healthy level of Rs.
7146 lacs provid- ing sufficient comfort for on-going and other
projects in the pipeline. The utilization of working capital limits
with Banks has also been minimal.
Dividend on Preference Share Capital:
Your Directors recommend a dividend of 12% on the Preference Share
Capital of the company. The amount of such dividend is Rs. 240.00 lacs
for the year.
Sub-Division of Equity Shares:
During the year, Equity Shares of Rs. 10 each were sub-divided into ten
Equity Shares of Rs. 1 each.
Dividend on Equity Shares:
The Board, on a periodical review of the working results of the company
and assessment of the fi nan- cial position, had declared and paid
three interim dividends of 25% each during the financial year
amounting to 75 % (Rs. 0.75 per share) as of date.
Your Directors are now pleased to recommend a final dividend of 25% (Rs.
0.25 per share) making a total equity dividend of 100% (Rs. 1/-per share)
for the year. The total amount of dividend paid on equity capital
excluding Dividend Distribution Tax thereon will be Rs. 1,289 lacs, which
is the same as in the previous year.
Reserves:
Your Directors recommend a transfer to General Reserve, of a sum of Rs.
1000 lacs from out of the Profits available for appropriation for the
year which will leave Rs. 4,108 lacs in the Surplus Account to be carried
forward to the next year. The total amount in General Reserve as on
31st March 2011, after the proposed appropriation, would stand at Rs.
25,000 lacs.
Credit Rating:
The Credit Rating assigned by CRISIL to the company was revised to A-
Positive from (A-Stable) for Term loans and Cash Credit facilities and
continued as P2+ in respect of for Non Fund Based limits.
Fixed Deposits:
The total amount of Fixed Deposits outstanding as on 31st March 2011
was Rs. 7624.61 lacs as compared to the fi gure of Rs. 6224.91 lacs as on
31st March 2010.
As on 31st March 2011, Fixed Deposits amounting to Rs. 130.36 lacs had
matured and remained unclaimed from 229 depositors. As on the date of
this Report, Fixed Deposits relating to 65 depositors amounting to Rs.
28.16 lacs have been renewed and Fixed Deposits of Rs. 4.00 lacs of 17
depositors repaid.
Cement Unit II: Muktyala Cement Project
The expansion of the companys cement production undertaken by way of
establishment of a Greenfield plant at Muktyala, Krishna District,
Andhra Pradesh with a capacity of 1.52 million tons was partly com-
missioned in May 2011. The delay beyond the expected date was mainly
due to unprecedented unseasonal rains hampering completion of certain
portions of civil works and other procedural delays in statutory
matters resulting from intermittent and fre- quent State-wide public
agitations on certain political issues. The final commissioning,
however, coincided with a recovery in cement prices which had
witnessed a downward trend in the earlier part of the year.
The new Plant up to the stage of clinkerisation had however, been
commissioned on 7th March 2011 within the financial year 31.3.2011,
with a total clinker production of 73,638 MTs of which 28,507 MTs had
been transferred to the Cement Unit I at Macherla for grinding into
cement.
The company has now entered into a phase of its becoming a larger
player in the cement industry with a combined production capacity of
2.18 million tons and has taken all steps to enlarge its marketing
operations. Management is also considering various ways and means of
taking the final product nearer to the consumer in the more rewarding
markets. Establishment of grinding units, packing plants, con-
sidering proposals for forward integration etc are in the process of
discussion relating to economic and technical viability and are
expected to be finalized during the course of the current year.
Modernization/Expansion: Engineering Unit
The Unit has completed the modernisation and debot- tlenecking of
operations comprised in the initial phase of its
modernization-cum-expansion proposals at a cost of Rs. 1600 lacs funded
from internal generations.
The second phase of the proposed scheme, namely, the expansion of the
Foundry estimated to cost about Rs. 6000 lacs and expected to be
implemented in 2010- 11 has presently been rescheduled to be taken up
in the second half of the current financial year. This has been
necessitated due to the fact that following the recovery from the
global economic slow-down; cus- tomers are in the process of
consolidating their posi- tion before going in for procurement of
capital goods to increase their capacities. They are seen to be
revisiting their requirements for acquisition of capital machinery and
equipment and enquiries are expected to fl ow in during the current
year. The rescheduling of this phase of the proposal would conserve
resources for the present and save considerable interest cost. The
statutory approvals in respect of civil works have also witnessed
delays and are expected to be in place in time for commencement of
implementation later in the year.
The Banks which had sanctioned term loans for this purpose have been
requested to cancel the same for the present to avoid incurrence of
unnecessary com- mitment and other charges. Fresh proposals would be
submitted at the appropriate time for funding the project.
Diversifi cation: Hotel Project at Hyderabad
Approvals of building plans by the Greater Hyderabad Municipal
Corporation have been slower than expected due to the requirement of
simultaneous clearances from multifarious State agencies. Nevertheless,
the proposal already has on hand NOCs from the Airport Authority of
India, the Fire Department and the Metro Rail authorities and has been
placed and discussed at the level of the High Rise Building Committee
of the Corporation. The final approvals are expected in due course of
time. Pending this, excavation of land is being completed and
consultations in respect of other facilities and amenities for a Hotel
Project have been taken on hand. As reported last year, the con- tract
for civil works has been awarded and work is being carried on as per
schedule commensurate with the statutory approvals.
The company has tentatively agreed on preliminary terms for a
management contract and operation of the Hotel with a leading
international hotel chain. The brand under consideration has models
perceived as a business hotel in the upper middle segment with four
star category standards and is one of the leading franchises on a
global basis. In India, several proper- ties of such brand are coming
up in almost all leading cities and the growth phase for this brand
appears to be impressive. The detailed terms and conditions of the
agreement are under consideration and discus- sions before a final
view is taken and agreed upon.
The estimated cost of the Project, excluding land cost, remains at Rs.
6302 lacs for a 130 room facility for which an in-principle sanction of
a term loan of Rs. 4500 lacs has already been given by a Bank.
Finalization of the loan facility is awaiting the sanction by GHMC of
the plans which is a pre-requisite.
Establishment of a Captive Power Plant:
The proposal of the company to set up a 2x18 MW Power Plant at the site
of New Cement Unit II at Muktyala for captive use of generated power in
its cement production facilities has been finalized. The Detailed
Project Report has been received according to which the Cost of the
Project has been estimated at Rs. 16400 lacs. Based on this, sanction
from a bank has been received for Term Loan of Rs. 11400 lacs.
From a present study of power requirements for the two cement units, it
is expected that a major portion of the total generation of power will
be consumed on a captive basis, with the balance to be sold to the
State Grid or to private consumers through Power Trading companies. The
generation of power at this proposed facility will ensure continuous
supply of quality power to the cement units which will maintain the
quality of the final product in addition to considerable saving in its
cost of production.
The basic input for the proposed Project, namely coal is to be procured
under the Coal Linkage System for which necessary applications to the
relevant authori- ties have been made and approvals awaited.
Corporate Social Responsibility:
Corporate Social Responsibility (CSR) as a form of corporate
self-regulation to practice an intertwined model of business management
system which auto- matically integrates ethical standards to safeguard
the interests of all stakeholders, the public and the sur- rounding
community, has been in vogue in one form or another in the Company over
the years. Viewed as a medium to reward the community in which it
works, management has endeavored to bring in best inter- national
practices in its day-to-day management of its affairs which in itself
provides for the fulfi llment of its responsibility in this direction.
While addressing a care for its various stake holders, it is also seen
as a catalyst to many integrated community service proj- ects which
can, to some extent supplement efforts of the Governments. Clean and
transparent manage- ment is one of the many ways of practicing corpo-
rate social responsibility as it includes public interest, prudent
use of common resources such as energy, air, water and other natural
elements leading to more efficient use of public funds.
The more visible form of Corporate Social Responsibility (CSR) involves
responsibilities of a corporate in the following areas:
- Integrated Rural & Urban Community Development programmes with
communi- ties living in the periphery of its units, includ- ing
provision of potable water, plantation of trees, renovation of places
of worship etc.
- Encouraging voluntary involvement of employees to devote time and
effort to address social issues.
A more detailed report on activities under Corporate Social
Responsibility is furnished separately in this Annual Report.
Management Discussions and Analysis:
Details of Management discussions and analysis for each segment of the
companys business are pre- sented separately for ease of access and
perusal.
Details of Retiring Director seeking re-appointment
Name of
Director Sri. O. Swaminatha Reddy Sri. Pinnamaneni Koteswara Rao
Date of
Birth 25-12-1930 08-09-1929
Nationality Indian Indian
Date of
Appointment 14-03-1991 29-01-1976
Expertise in
specific
general Chartered Accountant and Former
functional
area Banker Agriculturist
Qualifi cation B.Com (Hons),ACA Agriculturist
List of
outside Chair
manships / 1 M/s. Transport Corporation of
India Ltd,
1. Veeraiah Non-co
nventional
Directorships
held Ltd, New Delhi Power
Projects Ltd.,
2. M/s. Surana Ventures Ltd,
Hyderabad
3. M/s. Bhagyanagar India Ltd,
Hyderabad
4. M/s. K.M. Power Pvt. Ltd,
Hyderabad
5. M/s. Thembu Power Pvt. Ltd,
Pune
6. M/s. E.P.R. Gene Technologies
Pvt. Ltd, Hyderabad
7. M/s. E.P.R. Pharmaceuticals Pvt.
Ltd, Hyderabad
8. M/s. E.P.R. Centre for Cancer
Research and Biometrics Pvt. Ltd,
Hyderabad
9. M/s. Sagar Cements Ltd -
Hyderabad
10. M/s. T.C.I. Finance Ltd -
Hyderabad
11. M/s. Sagar Power Ltd - Hyderabad
12. M/s. T.C.I. Developers Ltd -
New Delhi
Chairman /
Member of the 1. Audit Committee à Chairman 1. Audit
Committee-
Member
Committee of
the Board of 2. Remuneration Committee Ã
Directors of
the Company Chairman
3. Investment Committee- Chairman
4. Shareholders Grievance
Committee-Chairman
Chairman / Me
mber of the
Committee of
Directors of
other Public
Limited Compa
nies in
which he / she
is a Director
a) Audit
Committee 1. M/s. Sagar Cement Ltd ÃChairman -
2. M/s. Transport Corp. of India Ltd
ÃChairman
3. M/s. Bhagyanagar India Ltd -
Chairman
4. M/s. Surana Ventures Ltd -
Chairman
b) Sharehol
ders Griev
ance - -
committee
Note: Pursuant to Clause 49 of the Listing Agreement,
Chairmanship/membership of the Audit Committee and the Sharholders
Grievance Committee alone have been considered.
Directors Responsibility Statement:
The Directors confirm that:
1. In the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that no material departures
have been made from the same.
2. The selected accounting policies were applied consistently and the
Directors 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 at the end of the financial year ended 31st March, 2011 and of
the Profit of the Company for the year ended as on that date.
3. They have taken proper and sufficient care for 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, and
4. They have prepared the Annual Accounts on a going concern basis.
Auditors:
M/s Brahmayya and Co, Chartered Accountants, Vijayawada, Auditors of
the company retire at the conclusion of the ensuing Annual General
Meeting. They are, however eligible for reappointment. They have
furnished a certifi cate to the effect that their appointment, if made
will be in accordance with the limits specifi ed in sub section (IB) of
Section 224 of the Companies Act, 1956.
The Board recommends the reappointment of M/s Brahmayya & Co
Vijayawada, as Auditors of the company to hold offi ce till the
conclusion of the next Annual General Meeting.
Cost Auditors:
Pursuant to the directives from the Central Government and the
provisions of Section 233B of the Companies Act 1956, M/s
Narasimhamurthy & Co. Cost Accountants, Hyderabad have been appointed
as Cost Auditors of the company subject to the approval of the Central
Government for the ensuing year to conduct the cost audit of the cement
and Power units of the company.
Human Resources:
Industrial Relations in the company, across all its units, have
remained cordial throughout the year. The employees have always been a
pillar of strength to the company. Your Directors appreciate the
significant contribution made by the employees to the operations of
your company during the year.
The information required on Particulars of Employees as per Sec. 217
(2A) of the Companies Act 1956, read with Companies, (Particulars of
Employees) Amendment Rules, 2011 forms part of this report.
Subsidiary company:
The Company has fulfi lled all the conditions pre- scribed under Sec
212 (8) of the Companies Act 1956 read with General Circular 2/2011 to
avail exemption from publishing the Balance Sheet and other state-
ments of its subsidiary company, M/s KCP Vietnam Industries Ltd.
Vietnam for the financial year 2010-11. However, a statement giving
certain information as required in the said circular is placed along
with the Consolidated Accounts.
The company will provide to any shareholder, on request and without any
cost, the Balance Sheet and other particulars and statements of
accounts of the subsidiary company, M/s KCP Vietnam Industries
Ltd. Vietnam as per Section 212 of the Companies Act, 1956.
Consolidated Financial Statements:
Pursuant to the requirements of Accounting Standard à 21 and the
Listing Agreement with National Stock Exchange, financial statements
consolidating those of its subsidiary KCP Vietnam Industries Ltd and
its Joint Venture company, Fives Cail K C P Ltd, consid- ering the
minority interest in them and duly audited have been attached to this
Directors Report.
Conservation of Energy, Technology absorption, Foreign Exchange Earning
and Outgo:
The particulars as prescribed under Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 are attached as Annexure
"2" to this report.
Cautionary Statement:
Statements in the "Management Discussion and Analysis" describing the
Companys objectives, expectations or predictions are as perceived
currently. Actual results may differ materially from those expressed
in the statement. Important factors that could infl uence the Companys
operations include domestic supply and demand conditions affecting
selling prices of fi nished goods, input prices, changes in government
regulations, tax laws, economic developments within the country and
other factors such as litigation and industrial relations.
Safety and Pollution Control:
The manufacturing units are fully compliant with pol- lution control
measures as directed by the statutory authorities from time to time and
have obtained nec- essary approvals from them.
Adequacy of Internal control systems:
The company firmly believes that Internal control is a process,
designed to provide reasonable assurance regarding the effectiveness
and effi ciency of opera- tions of a company, the reliability on its
systems of financial reporting, compliance with applicable laws and
regulations, effective implementation of transpar- ency in significant
transactions, agreements, con- tracts which may impact its financial
performance, prevention of the occurrence of frauds and collusions in
the conducts of its affairs, adequate reporting sys- tems to apprise
management by way of periodical MIS reports etc. The Board perceives
that this process has been adequately put in place and to ensure its
effective administration and implementation, internal audits are
periodically carried out by duly appointed Internal Auditors
The planning of the internal audit function by the Internal Auditors
typically include test checks and pro- cesses to ensure the adequacy of
the system of inter- nal control, the reliability of data, and the effi
cient use of the organizations resources etc. Internal auditors also
identify control problems and suggest and fol- low up implementation of
solutions for improving and strengthening such controls on a
progressive basis. Internal auditors in their reports to the Board
concern themselves with the entire range of an organizations internal
controls, including operational, financial, and compliance controls.
Quarterly reports are placed and discussed in con- siderable detail by
the Internal Auditors with mem- bers of the Audit Committee and
suggestions and corrective action, where necessary, are taken up and
conveyed to the CFO, Company Secretary and other senior fi nance
functionaries at such meetings. The responses of the concerned offi
cials are also obtained and discussed on the reports of the Internal
Auditors.
Risk Management System:
As a system designed to contain and minimize an organizations exposure
to risk, Risk Management policies have been laid out by the Board. With
opera- tions spanning different segments of business and in different
regions and countries, the company periodi- cally evaluates the
procedures by collating informa- tion in this regard from its operating
units, the policies of Government, the evolving economic development,
emerging competition, changes following technologi- cal upgradation,
improvement in international best practices, study of peer company
approaches etc. Discussions at various levels are held to analyze the
various inputs and take corrective action and make changes in
established risk management policies. A continuing awareness in this
regard is an important ingredient to manage risk.
The Risk Management Policy as formulated by the Board is being followed
as a guide in on-going assessment and the steps to be taken as
necessary from time to time.
Corporate Governance:
The company places significant reliance on a ethi- cal and prudent
governance. It has followed such a system of corporate governance over
a long period of time and the same is enumerated and placed on record.
Transparency in operations by means of professional management with
empowered manag- ers is firmly believed as the heart of a healthy sys-
tem of corporate governance. The various internal controls laid down
for day-to-day operations provide the necessary checks and balances to
prevent collu- sion and subjective decisions and these in turn go to
make governance effective. Authority fl ows down a line of executives
in a given order with top manage- ment seeking to provide leadership
and policy inputs. The mechanism also results in prudent and diligent
decision making at all levels ensuring for the overall benefit of all
stakeholders. It also gives considerable comfort to banks, deposit
holders, vendors, custom- ers and others who interact with the company
in their assessment of the companys performance.
A Detailed Report on matters relating to Corporate Governance as
statutorily required is annexed as part of this Annual Report together
with the report of the Auditors on its compliance.
Acknowledgements:
Your Directors wish to thank the Central and State Governments,
Financial Institutions, Banks, Government authorities, customers,
vendors and shareholders for their continued co-operation and support
extended. We wish to whole heartedly thank our employees for their
sincere and devoted contribu- tion to the companys continued good
performance.
Ladies and gentlemen, your involvement as share- holders is deeply
valued. Your Directors look forward to your continuing support in all
their endeavors.
For and on behalf the Board
Place: Chennai (V. L. DUTT)
Date: 27th, May, 2011 Chairman and Managing Director
Mar 31, 2010
1. The Directors have pleasure in submitting their Annual Report
together with the Audited Accounts of your company for the financial
year ended 31 st March, 2010.
2. Financial Results
(Rs. In Lakhs)
For the year ended For the year ended
Particulars 31-03-2010 31-03-2009 31-03-2010 31-03-2009
Stand Alone Consolidated
(GROUP)
Gross Turnover 41,175 40,046 68,362 58,501
Profit for the year (PBDIT) 11,053 11,369 17,298 15,427
Less a) Interest and finance
charges 949 671 1,336 1,279
b) Depreciation 1,057 914 2,167 2,014
Profit before Tax 9,047 9,784 13,795 12,134
c) Provision for current tax 3,000 3,200 3,166 3,285
d) Fringe Benefit Tax - 30 - -
e) Deferred Tax 45 17 79 22
f) Minority share of profit - - 1,485 793
Add Refund of Income Tax - 54 - 54
Net Profit 6,002 6,591 9,065 8,088
Add excess provision/Deferred
tax credit - - 11 30
Add Surplus brought forward
from earlier year 2,347 2,264 5,167 3,557
Less Amount available for
appropriations 8,349 8,855 14,243 11,675
Transfer to General Reserve 4,000 5,000 4,000 5,000
Dividend-Preference Shares 74 - 74 -
Interim Dividend- Equity Shares 967 967 967 967
Dividend proposed -Equity Shares 322 322 322 322
Tax on distributed Profits
- Equity 219 219 219 219
Tax on Distributed Profits
- Preference 12 - 12 -
Surplus carried to next year 2,755 2,347 8,649 5,167
Segment wise Sales performance:
(Rs. In Lakhs)
2009-2010 2008-2009
Particulars % to Total
Sales Value Sales Sales Value % to
Total Sales
Engineering 16,594.33 40.30% 14,626.08 36.52%
Cement 24,058.00 58.43% 24,962.81 62.33%
Power 47.56 0.12% 35.60 0.09%
Others 475.26 1.15% 421.82 1.06%
Total 41,175.15 100.00% 40,046.31 100.00%
Authorised Share Capital:
In pursuance of the approval of the shareholders at the Annual General
Meeting on 27th July, 2009, the Authorised Share Capital of the company
was restructured as under:
The total number of 5,50,00,000 shares of Rs. 10/each was divided into
1,28,97,748 (One crore twenty-eight lakhs ninety seven thousand seven
hundred and forty eight) Equity shares of Rs. 10/ each and 4,21,02,252
(Four crores twenty one lakhs two thousand two hundred and fifty two)
Unclassified Shares of Rs. 10/ each with power to the Board to divide
the shares in the capital for the time being into several classes and
attach thereto such preferential, deferred, qualified or special
rights, privileges or conditions as may be determined and to classify
and re-classify them from time to time.
Issue of Preference Shares:
Shareholders at the Annual General Meeting held on 27th July 2009 had
authorized the Board of Directors to offer and issue 2,00,00,000 (Two
crores) Redeemable, cumulative, Non-convertible, Preference Shares of
Rs. 10/ each at a coupon rate to be fixed by the Board in one or more
tranches for cash at par or premium on private placement basis to
promoters and their group , associates and /or to any other financial
institution/banks/companies subject to certain conditions. In pursuance
of the same, 2,00,00,000 shares out of the Unclassified and Unissued
shares of Rs 10 each were classified by the Board at their meeting held
on 29th October 2009, as Redeemable, Cumulative, Non convertible
Preference shares of Rs 10/- each. Accordingly, during the year under
review, the Board issued to M/s Tata Capital Ltd, on the basis of a
Subscription Agreement, 2,00,00,000 12% Non Convertible Redeemable,
Cumulative Preference Shares of Rs 10/- each on private placement basis
and the allotment was completed on 9th December 2009.
Proposal for sub-division of the Equity and Unclassified Shares:
Considering the need for ensuring improved marketability of the
companys equity shares which are listed for the benefit of the retail
investor and convenience of bettertrading of the same, the Directors
are of the view that the Equity and unclassified shares in the
authorised, issued share capital of the company which are of the face
value of Rs.10/- each should be subdivided into Equity and unclassified
shares both of Rs.1/- each. Accordingly, suitable resolutions to amend
the relevant clauses of the Memorandum and Articles of Association of
the company are being proposed at this Annual General Meeting and are
recommended for approval by the shareholders. The Company will obtain
necessary approvals from the appropriate authorities where necessary
and notify Stock Exchanges etc. in this regard.
Dividend on Preference Share Capital:
Your Directors recommend a maiden dividend of 12% on the Preference
Share Capital of the company on a proportionate basis from the date of
allotment. The amount of such dividend is Rs 74.30 lacs for the year.
Dividend on Equity Shares:
The Board, based on the performance of the company, had declared and
paid three interim dividends of 25% each during the financial year
making a total of 75% (Rs.7.50 per share). Your Directors are now
pleased to recommend a final dividend of 25% (Rs.2.50 per share) making
a total equity dividend of 100% (Rs.10/- per share) for the year. The
total payment excluding Dividend Distribution Tax thereon will be Rs.
1,289 Lacs which is the same as in the previous year.
Reserves:
Your company proposes to transfer from out of the profits for
appropriation an amount of Rs 4,000 lacs to General Reserve leaving a
sum of Rs 2,755 lacs in Surplus Account to be carried forward to the
next year.
After the above appropriations, the total reserves of the Company as on
31st March 2010, stand at Rs. 27,189 lacs.
Credit Rating:
The Credit Rating assigned by CRISIL to the company at A- Stable for
Term loans and Cash Credit facilities and P2+for Non Fund Based limits
remains unchanged.
Fixed Deposits:
The Companys Scheme of Fixed Deposits both under the Fixed and the
Cumulative deposit category met with overwhelming response from the
shareholders and public alike. The Company thanks the deposit holders
for the confidence reposed by them. As at the end of the year on 31st
March 2010, the total Fixed Deposits stood at Rs. 62,24,91,000/-
compared to Rs. 13,91,50,000/ as on 31st March 2009. As on 31st March
2010, Fixed Deposits matured and unclaimed were Rs.52,07,000/- from 183
depositors. Since then, Fixed Deposits of Rs. 16,75,000/- relating to
53 depositors have been renewed and Fixed Deposits of Rs. 4,11,000/- of
13 depositors repaid.
Projects on hand:
Greenfield Expansion: Muktyala Cement Project
The 1.52 million tons capacity plant being set up at an estimated cost
of Rs 352 crores at Muktyala, Krishna District, A.P has progressed well
and is expected to be commissioned by September 2010. The Plant is one
of the most modern plants of its kind in India with state-of-the-art
technology enabling consider- able reduction in labour, power and other
production costs. Among other statutory approvals, the unit has
received the requisite clearance from the Ministry of Forests and
Environment Protection and the final approval from the State Pollution
Control Board is in the final stages and expected shortly.
Modernization/Expansion: Engineering Unit:
The first phase of the project, namely debottlenecking of the
operations has been completed as per sched- ule. The second phase
consisting of the expansion of the Foundry will be taken up on receipt
of approv- als for civil works for the building from the concerned
authorities. Orders for the equipment for this Phase, which are subject
to short delivery periods, will be placed thereafter and the expansion
completed by the end of the current financial year.
Diversification: Hotel Project at Hyderabad:
As had been reported earlier, the company had proposed to enter the
Hospitality sector by putting to use the valuable land available at
Hyderabad. A busi- ness class Hotel in the three/four Star category has
been planned to be set up at the said land. The Hotel is expected to
cost Rs. 63.02 crores without taking into account any cost for the
land. Financial Closure for the project has been completed with Indian
Overseas Bank, Chennai sanctioning a Term loan of Rs 45 crores. The
balance of Rs. 18.02 crores is to sourced from internal generations of
the company.
Final building plans have been submitted to the Greater Hyderabad
Municipal Corporation and approval for the demolition of the existing
structure at the site has been obtained and has been completed. The
building permit for commencement of civil works is expected shortly. In
the meanwhile, Consultants for Project Management, MEP services,
Structural engineer- ing, Kitchen and F&B areas etc have been appointed
and are at work to finalise the various aspects of the proposed Hotel.
The contract for Civil work has been awarded and the Project is
scheduled to be complete in all respects and the Hotel commissioned
within a period of 24 months. Discussions are also being car- ried on
with the reputed Hotel Chains for franchise options and assistance in
technical management and marketing of the hotel.
Proposal for a Captive Power Plant:
As part of economising the operations at the New Cement Plant at
Muktyala and to ensure continuous supply of adequate quantity of
quality power for the unit, a proposal to set up a Captive Power Plant,
as a natural backward integration, with a capacity of 2x 18 MW is under
active consideration of the company. While initial estimates indicate
that the Capital Cost would be around Rs. 160 crores, a Detailed
Project Report to study the technical and economic feasibility has been
commissioned with a leading Consultancy organization and the same is
expected to be submitted shortly. A decision in this regard will be
taken after studying the said Report.
Proposal for Cement Packing Units:
With a view to take cement nearer to the consumer and take advantage of
logistics in movement of the product, a few packaging units with cement
silos are being planned nearer to the consumer bases at Vijayawada and
other markets. The cost of establish- ing such units are marginal and
substantial saving in marketing costs are expected to flow with quicker
movement of the product to benefit the ultimate consumer.
Corporate Social Responsibility:
The Ministry of Corporate Affairs has brought out a set of voluntary
Guidelines, 2009 for responsible business which will add value to the
operations and contribute towards the long term sustainability of their
business. These guidelines are expected to enable business to focus as
well as contribute towards the interests of the stakeholders and the
Society. As part of the same, companies are encouraged to introduce in
their Corporate Social Responsibility programme, the following matters:
Care for all Stakeholders
Ethical Functioning
Respect for Workers Right and Welfare
Respect for Human rights
Respect for Environment
Activities for social and Inclusive Development.
The Companys Corporate Social Responsibility (CSR) philosophy focuses
on growing the business while ensuring that the concerns encompassing
natu- ral environment as well as the communities that live within its
areas of operation are suitably addressed. An overview of the
activities of the company in the area of CSR is given separately.
Management Discussions and Analysis:
Details of Management discussions and analysis for each segment of the
companys business are presented separately for ease of access and
study.
Insurance and Risk Policy:
All the Insurable interests of your Company includ- ing inventories,
buildings, plant & machinery etc. are adequately covered to take care
of all the normal risks. The company presently has in place a detailed
Risk policy covering the various aspects and action is taken
accordingly.
Details of Retiring Directors:
Sri V H Ramakrishnan and Sri A Ramakrishna, Directors, retire by
rotation at the forthcoming Annual General Meeting and being eligible,
offer themselves for re-appointment.
Brief profiles of the retiring Directors, Sri V H Ramakrishnan and Sri
A Ramakrishna are furnished below:
a) Sri VH Ramakrishnan is a Chartered Accountant and a Cost Accountant
by qualification. He is a retired General Manager of Bank of India with
more than 36 years of experience in industrial finance, international
banking and other related areas in India and abroad. He is on the panel
for Nominee Directors of IDBI and other Financial Institutions.
b) Sri A Ramakrishna is a Structural Engineer by profession and has
over 41 years experience in field of management and technology. He
retired as President and Deputy Managing Director of Larsen and Toubro
Ltd.
Directors Responsibility Statement:
The Directors confirm that:
1. In the preparation of the Annual Accounts, the applicable Accounting
Standards have been followed and that no material departures have been
made from the same.
2. The selected accounting policies were applied consistently and the
Directors 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 at the end of the financial year ended 31st March, 2010 and of
the profit of the company for the year ended as on date .
3. They have taken proper and sufficient care for 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 and
4. They have prepared the Annual Accounts on a going concern basis.
Auditors:
M/s Brahmayya and Co, Chartered Accountants, Vijayawada, Auditors of
the company retire at the con- clusion of the ensuing Annual General
Meeting. They are, however eligible for reappointment. They have
furnished a certificate to the effect that their appoint- ment will be
in accordance with the limits specified in sub section (IB) of Section
224 of the Companies Act 1956.
The Board recommends their reappointment as Auditors of the company to
hold office till the conclu- sion of the next Annual General Meeting.
Cost Auditors:
Pursuant to the directives from the Central Government and provisions
of Section 233B of the Companies Act 1956, M/s Narasimhamurthy & Co.
Cost Accountants, Hyderabad have been appointed, as Cost Auditors of
the company subject to the approval of the Central Government for the
ensuring year to conduct the cost audit of the cement units of the
company.
International Financial Reporting Standards (IFRS):
The application of international Financing Reporting Standards (IFRS)
in the preparation of annual accounts of companies to ensure common
report- ing formats globally has been engaging the atten- tion of the
Government of India. A detailed time table has been drawn up in
consultation with the various interests, for the companies to make
their Financial Statements IFRS-compliant.
Under the above timeframe, your company will come under Phase-Ill,
namely, "Listed companies which have a net worth of Rs. 500 crores or
less will convert their opening Balance Sheet as at 1st April, 2014, if
the financial year commences on or after 1st April, 2014, whichever is
later, in compliance with the noti- fied accounting standards which are
convergent with IFRS".
The company is taking earnest steps to comply with the time table and
has plans to take on hand, preliminary steps in time to be ready for
the conver- gence without any difficulty.
Human Resources:
Industrial Relations in the company, across all its units, have
remained cordial throughout the year. The employees have always been a
pillar of strength to the company. Your Directors appreciate the
signifi- cant contribution made by the employees to the oper- ations of
your company during the year.
The information required on particulars of employees as per Sec. 217
(2A) of the Companies Act 1956, read with Companies, (Particulars of
Employees) Rules, 1975 forms part of this report.
Subsidiary company:
The Company has received exemption from the Government of India vide
letter of the Ministry of Corporate Affairs vide letter No.
47/209/2010-CL- III under Section 212 (8) of the Companies Act, 1956
from publishing the Balance Sheet and other statements as per Section
212 of the said Act of its subsidiary company, M/s KCP Vietnam
Industries Ltd. Vietnam for the financial year 2009-10. However, a
statement giving certain information as required in the said exemption
letter is placed along with the Consolidated Accounts.
The company will provide to any shareholder, on request and without any
cost, the Balance Sheet and other particulars and statements of
accounts of the subsidiary company, M/s KCP Vietnam Industries Ltd.
Vietnam as per Section 212 of the Companies Act, 1956.
Consolidated Financial Statements:
As required by Accounting Standard - 21 and Listing Agreement with
exchanges, the audited consolidated financial statements of the Company
and its subsid- iary are attached which also includes the companys
share in the Joint Venture Fives-cail KCP Ltd.
Conservation of Energy, Technology absorption, Foreign Exchange Earning
and Outgo:
The Particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 are attached as Annexure
"1" to this report.
Cautionary Statement:
Statements in the "Management Discussion and Analysis" describing the
Companys objectives, expectations or predictions are as perceived cur-
rently. Actual results may differ materially from those expressed in
the statement. Important factors that could influence the Companys
operations include domestic supply and demand conditions affecting
selling prices of finished goods, input prices, changes in government
regulations, tax laws, economic devel- opments within the country and
other factors such as litigation and industrial relations.
Safety and Pollution Control:
The various units of the company are fully compliant with pollution
control measures as directed by the statutory authorities and had the
necessary approv- als from them. In particular, the new Cement Plant
coming up at Mukthyala has also obtained approval relating to Pollution
Control.
Adequacy of Internal control systems:
Your Directors place considerable emphasis on the internal control
systems prevalent in the company and its working which is constantly
reviewed and management information statements and information
generated for analysis and action.
These systems are supplemented and supported with the appointment of
external professional firms of Chartered Accountants, namely M/s R G N
Price & Co, Chennai and M/s M Bhaskara Rao & Co, Hyderabad. They
undertake regular and periodical audits of the financial aspects
besides the perfor- mance and adherence to internal controls,
prescribed manuals and regulatory orders relating to tracking of
transactions, selective audit of authorization and sanctions of
expenditure such as purchases within the units, stocking of materials,
maintenance of stock records etc. They regularly visit the factories
and audit the self-regulatory norms prescribed and follow up of
recorded suggestions to enhance compliance etc. Detailed reports are
presented by both the firms to the Audit Committee at regular
intervals, interact with its members on their audit and the reports and
analyse risks and their management.
Risk Management System:
Your company which is operating in various business segments and in
different cities and countries is aware of the necessity to take steps
to recognize, analyse and mitigate risks, potential and apparent. A
compre- hensive Risk Policy is in place and every Unit includ- ing the
Corporate Office has a Risk Management Committee to constantly study
the prevalence of risks and suggest steps to mitigate the same.
Mitigation includes timely recognition of the risks and action taken to
eliminate, minimize their effect or provide for compensatory mechanisms
to supplement any finan- cial losses likely to be caused thereby.
Corporate Governance:
The Company has fully complied with the manda- tory provisions of
Corporate Governance as pre- scribed under the Listing Agreement with
the Stock Exchanges. It keeps track of changes in this regard and is
constantly taking steps to fall in line to comply with such new
provisions as and when they are pro- mulgated or announced by the
authorities from time to time.
A separate detailed Report on matters governing Corporate Governance is
annexed as part of this Annual Report together with the report of the
Auditors on its compliance.
Particulars of Employees:
The information required under Section 217(2A) of the Act and the Rules
made thereunder, is provided in an Annexure forming part of this
Report. In terms of Section 219(1 )(b)(iv) of the Act, the Report and
Accounts are being sent to the shareholders excluding the aforesaid
Annexure. Any Shareholder interested in obtaining a copy of the same
may write to the Company Secretary.
Acknowledgements:
Your Directors wish to thank the Central and State Governments,
Financial Institutions, Banks, Government authorities, customers,
vendors and shareholders for their continued co-operation and support
extended. We wish to whole heartedly thank our employees for their
sincere and devoted contribu- tion to the companys continued good
performance.
Ladies and gentlemen, your involvement as share- holders is deeply
valued. Your Directors look forward to your continuing support in all
their endeavours.
For and on behalf the Board
Place: Chennai
Date: 28th, May, 2010
(V. L. DUTT)
Chairman and Managing Director
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