Mar 31, 2023
Your Directors are pleased to present the 83rd Annual Report along with the Audited Financial Statements of the Company for the Financial Year ended 31st March 2023.
FINANCIAL RESULTS |
''in Crore |
|
Particulars |
2022-23 |
2021-22 |
Sales & Other Income |
6,133.28 |
5,108.03 |
Profit before Interest, Depreciation & Tax (EBIDTA) |
766.50 |
868.52 |
Profit before Depreciation & Tax (PBDT) |
675.00 |
772.21 |
Profit after Tax (PAT) |
330.23 |
417.56 |
Yours Directors are pleased to recommend a Dividend of '' 3.75 per Equity Share (75%) on the Equity Share Capital of '' 58.85 Crore for the Financial Year ended 31st March 2023. Total Dividend outgo will be '' 44.13 Crore. The Dividend is subject to the approval of the Members at the ensuing Annual General Meeting (AGM) and also subject to deduction of tax at source, as may be applicable. The Dividend pay-out is in accordance with the Dividend Distribution Policy of the Company.
The amount available for appropriation including Surplus for the Year stood at '' 1,658.70 Crore. The Directors propose this to be appropriated as under:
''in Crore |
||
Particulars |
2022-23 |
2021-22 |
Dividend |
58.84 |
44.13 |
Surplus carried to Balance Sheet |
1,599.86 |
1,328.47 |
Total |
1,658.70 |
1,372.60 |
India became the fastest-growing major economy at ~ 7% in FY 22-23, despite the three shocks of COVID-19, Russian-Ukraine conflict and the Central Banks across economies led by Federal Reserve responding with synchronised policy rate hikes to curb inflation, leading to appreciation of US Dollar and the widening of the Current Account Deficits in net importing economies. Increased investment in infrastructure sector provides a critical push to the potential growth of the economy. The outlay for capital expenditure in FY 2022-23 was increased sharply by 35.4% from '' 5.5 Lakh Crore in the previous year (2021-22) to '' 7.5 Lakh Crore, of which approximately 67% has been spent from April to December 2022 as per the Economic Survey 2022-23.
During the FY 2022-23, the Cement Industry grew by 9%. The growth was higher in the first quarter on a lower base of the previous year due to pandemic-related issues. Cement growth in the second quarter moderated after the base of the same quarter in the previous year corrected. In the third quarter, demand was good after a slowdown in October 2022 due to festivals. In the fourth quarter, demand tapered off resulting in a low single-digit growth.
In FY 2022-23, your Company achieved a growth of 9% in its cement production and 12% in its cement sales. The combined growth of cement and clinker stood at 7%. The Company improved its Cement capacity utilisation to 80% in FY 2022-23 from 74% in FY 2021-22, while Company achieved 89% capacity utilisation in the last quarter of FY 2022-23. The Grinding Units at Surat, Kalol, Jharli and Cuttack have also shown remarkable resilience in bouncing back to normal. At Udaipur Cement Works Limited, a subsidiary of the Company, Cement production rose by about 13%.
The Company has witnessed a sharp rise in fuel prices (Petcoke and coal), diesel prices and other input costs which have significantly impacted the profitability. This has increased our freight cost both for outward materials as well as for inputs. As there is considerable overhang of the cement supplies over the demand, we found it hard to pass on the increase in inputs costs to the customers. To reduce the surging cost impact on margins, the Company has been assiduously working on adopting innovative solutions such as waste heat recovery, solar or renewable energy and improving its operational efficiencies at all levels and maximizing its realisation per tonne by optimising the product mix, introduction of new brands and augmenting the distribution network and optimising its distribution cost. The Company could maintain its Net realization despite price corrections being seen in major markets.
The Company has always followed the philosophy of sustainable growth. Share of renewable energy at 47% in our total energy basket is amongst the best in the industry and we have set a target of achieving above 87% share in total energy consumption by FY 2024-25. Similarly, we are continuously working to increase the use of Alternative Fuels and Raw Materials (AFR); reduce water consumption; and reduce carbon emissions. It may be noted that through various measures taken in this regard, the Company has been able to reduce CO emissions. In Scope I, we have been able to reduce CO2 emission to 554 kg per ton of cement equivalent in FY 2022-23 from 558 kg per ton of cement equivalent in FY 2021-22. Similarly in Scope II, we have been able to reduce CO2 emission to 45 kg per ton of cement equivalent in FY 2022-23 from 64 kg per ton of cement equivalent in FY 2021-22.
Our specific water consumption is also one of the lowest in the industry and we aim to become 5 times water positive by the FY 2024 -25.
These measures towards sustainable operations shall stand in good stead in time to come and help the Company to raise finances at a lower cost for its future growth plans and ambitions.
The Company registered an EBIDTA of '' 766.50 Crore as against '' 868.52 Crore in the previous Financial Year, while the Net Profit is at '' 330.23 Crore as against '' 417.56 Crore in the previous Financial Year.
At JK Lakshmi Cement Limited, sustainability has always been at its core of business strategy and operations. The company has always believed in being "Lean and Green". This approach has helped us to reduce our specific energy consumption in our product manufacturing. On the other hand, this has helped us to reach renewable energy usage percentage to around 47%. The Company has consistently strived to reduce dependence on conventional fuel for heat requirement in our processes and this has helped us in achieving the Thermal Substitution Rate (TSR) level to 4.11%. In order to give impetus to our Sustainability agenda, the Company has taken a significant step in promoting LNG trucks in our logistic operations which has helped to reduce CO2 emission by 51.96 MT in just five months, which is a benchmark step for greener future and sustainable development. Your Company is also approximately 4 times water positive.
To further push our sustainability agenda, the Company has voluntarily taken the memberships of various global agencies like UNGC, SBTi, RE100, EP100 and GCCA-India. These agencies drive global sustainability agenda and help companies to achieve their sustainable goals.
As a responsible entity, the Company has always taken steps for community developments through its various CSR initiatives and the social performance improvement covers its entire value chain which has been the commitment of the Company.
The Company has continuously been focussing for last several years on reducing its debt and has now become a Net Debt Free Company as of 31st March 2023. The Treasury Corpus of the Company as of 31st March 2023, now exceed its Total Borrowings as on that date.
Efficient Debt Management and improvement in various Operating parameters has enabled the Company to maintain its Long-term Credit Rating from CRISIL and CARE at AA (Double A) with a Stable Outlook. The Company continues to enjoy the highest possible rating of A1 (A One Plus) from
both CRISIL and CARE for its Short-term borrowings.
KEY HIGHLIGHTS: FINANCIAL YEAR 2022-23
During the Financial Year 2022-23, the Company has achieved several new landmarks, few of which are given hereunder: -
1. Turnover crossed '' 6,000 Crore.
- Turnover at '' 6,071 Crore increased by 20% during FY 2022-23.
- Sales Volume increased by 7%.
- All Grinding Units achieved record Production and Dispatches.
- Reduced Borrowings by '' 175 Crore.
- Increased Liquidity.
- Improved Leveraging and Other Financial Ratios.
- Reduction in Interest Costs.
3. Reduction in Interest Cost by 5 %
- Interest Cost reduced from '' 96 Crore to '' 92 Crore.
- Prepayment of Loans.
- Efficient Working Capital Management.
- Reduced Borrowings for Working Capital.
- Commissioned a 7 MW Solar Power Plant at Sirohi, Rajasthan.
- Another 7 MW Solar Power Plant planned in the coming year.
- Commissioned the first of its kind a Floating Solar Power Plant of 1 MW at UCWL.
- Implemented OTM system for Efficient Logistics Management.
- First Cement Company to deploy LNG trucks to reduce CO2 emissions.
- Deployed Bulk Containers for dispatches.
- Reduction of CO2 emission across Plants.
- Share of Renewable Energy increased to 47% (consolidated).
- Increased use of AFR.
- Reduced Water consumption.
- Increased share of premium products.
- Leveraged Digital media and increased Customer connectivity across segments.
- Increased Product positioning and Market share in key markets.
- Rapid digitalization across functions.
- Optimization of Systems and Processes.
- Plant Efficiency improvement.
- Efficient Capital Working Management.
9. Focus on Value Added Products (VAP)
- VAP recorded 28% growth in Turnover to '' 478 Crore.
- Increased Market Share.
- Focus of Market Penetration.
Your Company has been bestowed with prestigious awards on both national as well as international level. Some of the accolades and awards received during the year are as follows:
⢠"Brand of the year 2022" Award.
⢠Rajasthan - "Best Employer Brand Awards 2022", awarded at World HRD Congress.
⢠3rd Fastest Growing Cement Company in the Large Category at the 6th Indian Cement Review Awards 2023.
⢠"Golden Peacock Business Excellence Award for the year 2023".
PROGRESS OF THE PROJECTS AND EXPANSIONS
Udaipur Cement Works Ltd; the Expansion Project is progressing satisfactorily and is expected to be commissioned in 2024.
The Company has in place a strong Internal Financial Control System, Policies and Procedures which ensures accuracy and completeness of Accounting Records and helps also in timely preparation of the reliable Financial Statements. These Internal Financial Control Systems are designed for safeguarding the assets of the Company and for the prevention and detection of errors & frauds commensurate with the size, nature and complexities of the Operations of the Company. These Policies and Procedures were found by the Statutory Auditors of the Company to be adequate for smooth, orderly & efficient conduct of the business of the Company.
The Company has in place specific Standard Operating Practices (SOPs) for its various functions. These SOPs are periodically reviewed by the External and Internal Auditors of the Company and exceptions are reported for corrective actions.
The Internal Financial Control Systems are regularly reviewed to ensure their effectiveness, taking into account the essential
components of Internal Financial Controls as stated in the Guidance Note on the Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on such assessments carried out by the Management, no reportable material weaknesses in the adequacy in the System of Operations of Internal Financial Controls were observed during the year.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is a socially responsible corporate citizen which truly believes that business priorities co-exist with commitment for inclusive development. Since its inception and well before the Corporate Social Responsibility (CSR) law come into existence, serving the Society towards improving the quality of life of the communities at large has been a priority and commitment for the Company. The concept of socially responsible business is deeply ingrained in our corporate DNA right from the inception and we have been pioneering and delivering multiple need based and high impact CSR projects for needy and vulnerable communities & families living around our business operations. The Company''s CSR vision clearly states to strengthen community relationship and to bring sustainable change in the quality of life of neighbourhood community through innovative solutions in Education, Health, Water & Sanitation, Skills Development, Livelihood Promotion and Rural Development.
CSR is the continuing commitment by the Company to behave ethically and contribute to economic development, while improving the quality of life of the work force, their families as well as of the local community and society at large. The Company has adopted life cycle approach and had designed & delivered various CSR projects for all age groups -pregnant mothers, infants, children, youth, adults and old age people. Through its various need based and high impact CSR projects, the Company has been able to directly impact and bring positive changes in the lives of more than 1.80 lakh people spread across its business operations.
During the reporting period, the Company designed and implemented community need based CSR projects and targeted marginalised & vulnerable families with an aim to improve their lives through projects like JK Lakshmi Aarogya, Vidya, Aajivika, Swajal & Swachhta, Gramin Vikas, Kaushal Prashikshan, etc. These projects have been aligned and contributed to various Sustainable Development Goals 2030. Some of the key initiatives during the reporting period were launch of JK Lakshmi Vidya Scholarship on "Vidyasaarathi Portal" in partnership with NSDL & TISS, organising career counselling program for the students of standard X to XII in Government Senior Secondary Schools, job linked skill development training for school & college dropouts, launch of mobile veterinary unit for livestock improvement and setting up skill training centre in partnership with District Child Welfare Office, Jhajjar, Haryana among others. To give big impetus to skilling & livelihoods, the Company started
setting up of skill development centre at its plant in Pindwara, Sirohi, Rajasthan.
The Company demonstrated its commitment towards CSR and implemented several "Ongoing Projects" in thrust areas of Health, Water & Sanitation, Education, Skilling & Livelihood and Rural development. Under Project Aarogya, medical camps were organized, reproductive and child health services were delivered at the doorsteps to reduce maternal and infant''s mortality among tribal communities, while at few locations, food kits were provided to Multi-Drug Resistant -TB patients from poor families to improve their nutritional status for speedy recovery. Company undertook activities for holistic development of adolescents under Project Vidya (Education) and also organized bridge and remedial classes for out-of-school and school drop-out children for their mainstreaming into government schools, supported government schools for improvement in physical & classroom infrastructure and facilities, provided various types of support to students and continued our support to school''s working for Special children and their families. Students were provided scholarships to support their school, college and technical education like ITI, Polytechnic, Nursing and B. Ed. Under Project Aajivika, the Company undertook multiple on-farm and off-farm activities including small enterprise development, skill trainings and vocational trainings to support youth and families to ensure sustainable income. The Company has undertaken several activities for empowering women especially tribal women in the areas of education and for income generation through providing them trainings on various trades & skills like Madhubani painting, food processing, computer, stitching, beautician, etc. Under JK Lakshmi Gramin Vikas Project, the Company supported infrastructure development in the nearby communities. Under JK Lakshmi Swajal & Swachhta project, the Company''s initiatives include setting up water facilities for domestic use, repair of anicut for watershed development, pond deepening, setting up of water huts, provision of water tanks and recharging of water bodies, fogging, door to door garbage management among others. These initiatives in the CSR benefited number of disadvantaged, vulnerable and economically marginalized communities like Scheduled Castes and Scheduled Tribes, Below Poverty Line families, small and marginal farmers, landless groups, women-headed families, special children, person suffering with chronic diseases like MDR-TB and youth with no skills for either employability or resources for small business. The Company also strategically endeavoured towards facilitating "last-mile-connectivity" for the poor to access various State and Central Govt. Schemes aimed at poverty alleviation.
One of the breakthrough achievements during the reporting period has been increased coverage and outreach which has impacted thousands of families in the villages around the
Company''s plants. Company''s CSR initiatives have been able to bring qualitative changes in the lives of the communities around its plant locations. One of the key impacts has been empowerment of women due to improvement in their income resulting into their higher familial and societal status.
Your Company is also promoting employee engagement in various CSR projects to create socially responsible behaviour among its employees. Number of employees were provided appreciation certificates for their contribution to CSR activities around various plant locations.
The Company received number of accolades and awards for its meaningful and life-changing CSR initiatives during the year. Company''s Durg unit received "Golden Peacock Award 2022 for CSR Excellence" in Cement Sector and Jharli unit received "Indian CSR Award for Best Women Employment Initiative of the Year (Corporate)".
The Company has requisite Corporate Social Responsibility Policy in accordance with the provisions of the Companies Act, 2013 (Act) and Rules made thereunder, as amended. The CSR Policy along with brief description of CSR projects is disclosed on the website of the Company at www.jklakshmicement.com.
The Annual Report on the CSR activities undertaken by the Company during the Financial Year under review, in the prescribed format, is annexed to this Report as Annexure ''A''.
During the Financial Year ended 31st March 2023, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
Form AOC-2 containing the details of the material Related Party Transactions entered into during the Financial Year 2022-23 as per the Related Party Transactions Policy (RPT Policy) is attached as Annexure ''B'' to this Report and forms part of it. The RPT Policy is available on the website of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
The particulars of loans given, guarantees or securities provided, and investments made as required under Section 186 of the Act are given in the Notes to Financial Statements.
The details as required under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure ''C'' and forms part of it.
(a) Statutory Auditors
In accordance with the provisions of the Act and Rules
made there under, M/s S.S. Kothari Mehta & Company, Chartered Accountants, were re-appointed as Statutory Auditors of the Company for their second term of five consecutive years from the conclusion of the 80th AGM held on 28th August 2020 until the conclusion of the 85th AGM to be held in the year 2025.
The observations of the Auditors in their Report on Accounts and the Financial Statements, read with the relevant notes are self-explanatory. The Auditors'' Report does not contain any qualification, reservation, adverse remark or disclaimer. Further, no fraud has been reported by the Auditors to the Audit Committee or the Board.
Pursuant to the provisions of Section 204 of the Act, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the Financial Year 2022-23.
The Report given by him for the said Financial Year in the prescribed format is annexed to this Report as Annexure ''D''. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
M/s R.J. Goel & Co., Cost Accountants, conducted the Audit of cost records of the Company for the Financial Year 2021-22 and as required, Cost Audit Report was duly fled with the Ministry of Corporate Affairs, Government of India. The Company has duly maintained requisite Cost Accounts and Records pursuant to Section 148(1) of the Act.
The Audit of the cost records of the Company for the Financial Year 2022-23 is being conducted by the said firm and the Report will be duly filed.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of your Company for the Financial Year 2022-23 have been prepared in accordance with the Act read with the Rules made thereunder and applicable Indian Accounting Standards. The audited consolidated financial statements together with Auditors'' Report form part of the Annual Report.
In compliance with Section 129(3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associate included in the consolidated financial statements is presented in a separate section in the Annual Report. Please refer AOC-1 annexed to the financial statements in the Annual Report.
Pursuant to the provisions of Section 136 of the Act, the financial statements, the consolidated financial statements
along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.
During the Financial Year under review, no Company has become or ceased to be your Company''s subsidiary or joint venture or associate.
Pursuant to the approval of Members by means of a Special Resolution passed at the AGM held on 4th September 2014, the Company has continued to accept deposits from the public, in accordance with the provisions of the Act and the Rules made thereunder.
The particulars in respect of the deposits covered under Chapter V of the said Act, for the Financial Year ended 31st March 2023 are as under:-
(a) Accepted during the year: '' 20.94 Crore;
(b) Remained unclaimed as at the end of the year: '' 0.42 Crore;
(c) Default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year: Nil;
(d) Details of deposits which are not in compliance with the requirements of Chapter V of the said Act: Nil.
Disclosure of the ratio of the remuneration of each Director to the median employee''s remuneration and other requisite details pursuant to Section 197(12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure ''E''.Further, particulars of employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of Section 136 of the Act, the Annual Report including Accounts for the Financial Year 2022-23, is being sent to all the Members of the Company and others entitled there to, excluding the said Particulars of employees. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company upto the ensuing AGM. Any Member interested in obtaining such particulars may write to the Company Secretary.
The Annual Return as required under Section 92 and Section 134 of the Act read with Rules made thereunder is available on the website of the Company at https://www.jklakshmicement.com/annual-return/
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to Section 152 of the Act, Shri Bharat Hari Singhania (DIN: 00041156) retires by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. The Board recommends his re-appointment.
The Members at the AGM held on 17th August 2022 had approved appointment of Shri Sadhu Ram Bansal (DIN: 06471984) as an Independent Director for a term of three consecutive years w.e.f. 1st July 2022 and Shri Arun Kumar Shukla (DIN: 09604989) as President & Director of the Company for a term of three years w.e.f. 1st August 2022 and he was appointed by the Board of Directors as Key Managerial Person from the said date. Further, during the year under review, Dr. K.N. Memani (DIN: 00020696), Independent Director, resigned from the Board of Directors of the Company w.e.f. 26th April 2022, due to personal reason including health; Dr. Shailendra Chouksey (DIN: 00040282) and Shri Sushil Kumar Wali (DIN: 00044890) ceased to be Directors of the Company w.e.f. 1st August 2022 after expiry of their term of office as Whole-time Directors on 31st July 2022 and Shri B.V Bhargava (DIN : 00001823) ceased to be a Director of the Company w.e.f. 31st August 2022 on completion of his second term as an Independent Director on 30th August 2022.
The Board has also taken on record the declarations and confirmations received from all the Independent Directors of the Company regarding their independence pursuant to Section 149 of the Act and Regulation 16 of the Listing Regulations.
Shri Amit Chaurasia, appointed as the Company Secretary, a whole time Key Managerial Person, of the Company w.e.f. 1st September 2022, in place of Shri Brijesh Kumar Daga, Sr. Vice President & Secretary of the Company who ceased to be the Company Secretary with effect from the said date.
There were no other changes in the Directors/Key Managerial Personnel of the Company during the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the Financial Year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations. Further, no application was made or no proceeding was pending as at the end of the year under the Insolvency and Bankruptcy Code, 2016.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.
CHANGE IN THE NATURE OF BUSINESS
During the Financial Year under review, there was no change in the nature of business of the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the
Business Responsibility and Sustainability Report of the Company for the Financial Year 2022-23 in the prescribed format, giving an overview of the initiatives taken by the Company for Environmental, Social and Governance perspective and disclosures regarding the performance of the Company against nine principles of the ''National Guidelines on Responsible Business Conduct'', is given in a separate section of the Annual Report and forms a part of it.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to the Listing Regulations, Management Discussion and Analysis and Corporate Governance Report along with Statutory Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made part of this Report as Annexure ''F'' & ''G'' respectively.
The Corporate Governance Report which forms part of this Report, inter alia, covers the following:
(a) Particulars of the four Board Meetings held during the Financial Year under review;
(b) Salient features of the Nomination and Remuneration Policy;
(c) The manner in which formal annual evaluation of the performance of the Board of Directors, of its Committees and of individual Directors has been made;
(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism;
(e) Details regarding Risk Management Committee;
(f) Dividend Distribution Policy;
(g) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
COMPLIANCE OF SECRETARIAL STANDARDS
Based on the Secretarial Audit Report of the Secretarial Auditor, the Company has duly complied with the applicable Secretarial Standards on Meetings of Board of Directors and General Meetings issued by the Institute of Company Secretaries of India.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Act, your Directors state that:-
(a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) such accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the Financial Year and of the profit and loss of the Company for that period;
(c) Proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The annual accounts have been prepared on a going concern basis;
(e) The internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) The proper systems to ensure compliance with the provisions of all applicable laws have been devised and
that such systems are adequate and operating effectively.
Your Directors wish to place on record and acknowledge their appreciation for the continued support and valuable cooperation received from the Financial Institutions, Banks, Government Authorities, Dealers, Suppliers, Business Associates and Company''s valued Customers and the esteemed Members for the faith they continue to repose in the Company.
Your Directors also record their appreciation for the dedication and hard work put in by "Team-JK Lakshmi", which has enabled the Company to continue its growth journey in these challenging times.
Mar 31, 2022
The Directors have the pleasure in presenting the 82nd Annual Report along with the Audited Financial Statements of the Company for the Financial Year ended 31sMarch 2022.
'' in Crore |
||
Particulars |
2021-22 |
2020-21 |
Sales & Other Income |
5,108.03 |
4,459.18 |
Profit before Interest, Depreciation |
868.52 |
864.22 |
& Tax (EBIDTA) |
||
Profit before Depreciation & |
772.21 |
721.70 |
Tax (PBDT) |
||
Profit after Tax (PAT) |
417.56 |
366.24 |
Yours Directors are pleased to recommend a Dividend of '' 5 per Equity Share (100%) for the Financial Year ended 31st March 2022 for approval of the Members at the ensuing Annual General Meeting (AGM). Total Dividend outgo will be '' 58.85 Crore. The Dividend pay-out is in accordance with the Dividend Distribution Policy of the Company.
The amount available for appropriation including Surplus for the Year and the Transfer from Debenture Redemption Reserves, stood at '' 1,372.60 Crore. The Directors propose this to be appropriated as under:
'' in Crore |
||
Particulars |
2021-22 |
2020-21 |
Dividend for 2020-21 |
44.13 |
- |
Surplus carried to Balance Sheet |
1,328.47 |
917.54 |
Total |
1,372.60 |
917.54 |
Financial Year 2021-22 witnessed two waves of Covid-19 pandemic, one in the beginning of the financial year and another towards the end. Unfortunately, during the first wave in May-June 2021 there was an unprecedented toll on human lives though disruption in the economic activities was contained to minimum. The Government and Administration across the Country have acted with remarkable agility in handling the crisis.
Despite the setback from Covid, the Company achieved a growth of 4% in its cement production and 5% in its cement sales during FY 2021-22.The combined growth of cement and clinker stood at 7%. The Company''s Production and Sales growth could have been higher, but for Cement Transporters'' Strike in Chhattisgarh which impacted our
Production and Despatches for over a month. The Company improved its Cement capacity utilisation to 74% in FY 202122 from 71% in FY 2020-21, while Company achieved 91% capacity utilisation in the last quarter of FY 2021-22.The Grinding Units at Surat, Kalol, Jharli and Cuttack have also shown remarkable resilience in bouncing back to normal. At Udaipur Cement Works Limited, a subsidiary of the Company, Cement production rose by about 15%.
Unprecedented mounting inflation has been rampant world over and the margins are under pressure. The Indian economy is also suffering high inflation. The Company has witnessed a sharp rise in fuel prices (Petcoke and Coal), diesel prices and other input costs which have significantly impacted the profitability. This has increased our freight cost both for outward materials as well as for inputs. As there is considerable overhang of the cement supplies over the demand, we found it hard to pass on the increase in inputs costs to the customers. To reduce the surging cost impact on margins, the Company has been assiduously working on adopting innovative solutions and improving its operational efficiencies at all levels and maximizing its realisation per tonne by optimising the product mix, introduction of new brands and augmenting the distribution network and optimising its distribution cost. The Company could maintain its Net realization despite price corrections being seen in major markets.
The Company has always kept its employees and their wellbeing as top-most priority; hence along with work, Company ensured that all employees and their family members get fully vaccinated as soon as possible. All required precautions were taken not just in sales offices/HO but also in all the plants, where we have complete workforce along with our employees. The Company also invested in improving the transport yards across all plants to give a hygienic environment to our drivers/helpers.
The Company has always followed the philosophy of sustainable growth. Share of renewable energy at ~30% in our total energy basket is amongst the best in the industry and we have set a target of achieving above 80% share in total energy consumption by FY 2030. Similarly, we are continuously working to increase the use of Alternative Fuels and Raw Materials (AFR); reduce water consumption; and reduce carbon emissions. It may be noted that through various measures taken in this regard, the Company has been able to reduce CO2 emissions by ~19 Million MT since 1990 and Certified Emission Reduction Potential (CERP) of the various measures undertaken by the Company
The Directors have the pleasure in presenting the 82nd Annual Report along with the Audited Financial Statements of the Company for the Financial Year ended 31sMarch 2022.
'' in Crore |
||
Particulars |
2021-22 |
2020-21 |
Sales & Other Income |
5,108.03 |
4,459.18 |
Profit before Interest, Depreciation |
868.52 |
864.22 |
& Tax (EBIDTA) |
||
Profit before Depreciation & |
772.21 |
721.70 |
Tax (PBDT) |
||
Profit after Tax (PAT) |
417.56 |
366.24 |
Yours Directors are pleased to recommend a Dividend of '' 5 per Equity Share (100%) for the Financial Year ended 31st March 2022 for approval of the Members at the ensuing Annual General Meeting (AGM). Total Dividend outgo will be '' 58.85 Crore. The Dividend pay-out is in accordance with the Dividend Distribution Policy of the Company.
The amount available for appropriation including Surplus for the Year and the Transfer from Debenture Redemption Reserves, stood at '' 1,372.60 Crore. The Directors propose this to be appropriated as under:
'' in Crore |
||
Particulars |
2021-22 |
2020-21 |
Dividend for 2020-21 |
44.13 |
- |
Surplus carried to Balance Sheet |
1,328.47 |
917.54 |
Total |
1,372.60 |
917.54 |
Financial Year 2021-22 witnessed two waves of Covid-19 pandemic, one in the beginning of the financial year and another towards the end. Unfortunately, during the first wave in May-June 2021 there was an unprecedented toll on human lives though disruption in the economic activities was contained to minimum. The Government and Administration across the Country have acted with remarkable agility in handling the crisis.
Despite the setback from Covid, the Company achieved a growth of 4% in its cement production and 5% in its cement sales during FY 2021-22.The combined growth of cement and clinker stood at 7%. The Company''s Production and Sales growth could have been higher, but for Cement Transporters'' Strike in Chhattisgarh which impacted our
Production and Despatches for over a month. The Company improved its Cement capacity utilisation to 74% in FY 202122 from 71% in FY 2020-21, while Company achieved 91% capacity utilisation in the last quarter of FY 2021-22.The Grinding Units at Surat, Kalol, Jharli and Cuttack have also shown remarkable resilience in bouncing back to normal. At Udaipur Cement Works Limited, a subsidiary of the Company, Cement production rose by about 15%.
Unprecedented mounting inflation has been rampant world over and the margins are under pressure. The Indian economy is also suffering high inflation. The Company has witnessed a sharp rise in fuel prices (Petcoke and Coal), diesel prices and other input costs which have significantly impacted the profitability. This has increased our freight cost both for outward materials as well as for inputs. As there is considerable overhang of the cement supplies over the demand, we found it hard to pass on the increase in inputs costs to the customers. To reduce the surging cost impact on margins, the Company has been assiduously working on adopting innovative solutions and improving its operational efficiencies at all levels and maximizing its realisation per tonne by optimising the product mix, introduction of new brands and augmenting the distribution network and optimising its distribution cost. The Company could maintain its Net realization despite price corrections being seen in major markets.
The Company has always kept its employees and their wellbeing as top-most priority; hence along with work, Company ensured that all employees and their family members get fully vaccinated as soon as possible. All required precautions were taken not just in sales offices/HO but also in all the plants, where we have complete workforce along with our employees. The Company also invested in improving the transport yards across all plants to give a hygienic environment to our drivers/helpers.
The Company has always followed the philosophy of sustainable growth. Share of renewable energy at ~30% in our total energy basket is amongst the best in the industry and we have set a target of achieving above 80% share in total energy consumption by FY 2030. Similarly, we are continuously working to increase the use of Alternative Fuels and Raw Materials (AFR); reduce water consumption; and reduce carbon emissions. It may be noted that through various measures taken in this regard, the Company has been able to reduce CO2 emissions by ~19 Million MT since 1990 and Certified Emission Reduction Potential (CERP) of the various measures undertaken by the Company
stands at more than 2 Lakh MT of CO2 reduction per year. On water front our specific water consumption is also one of the lowest in the industry and we aim to become 5 times water positive by the year 2025.
These measures towards sustainable operations shall stand in good stead in time to come and help the Company to raise finances at a lower cost for its future growth plans and ambitions.
The Company registered an EBIDTA of '' 868.52 Crore as against '' 864.22 Crore in the previous Financial Year, while the Net Profit topped '' 417.56 Crore as against '' 366.24 Crore in the previous Financial Year.
DE-LEVERAGING AND INTEREST REDUCTION
The Company has continuously been reducing its Debt for the last 3-4 years and has been able to bring down its Debt from over '' 2,000 Crore in March 2018 to '' 963 Crore as of 31st March 2022. Net Debt has been down from '' 1,568 Crore in March 2018 to a negligible level of only '' 13 Crore as of 31st March 2022. Correspondingly, the Debt Equity and Net Debt Equity have come down to 0.39 and 0.03 respectively as of 31st March 2022.
As a result of Deleveraging, efficient Working Capital and prudent Financial Management, the Interest Cost of the Company got reduced by 32% from '' 143 Crore to '' 96 Crore.
Based on the substantial improvement in the Company''s Consolidated Financial Leveraging together with strong Operational performance and Robust Volume Growth, the Rating Agencies - CRISIL and CARE have upgraded Company''s Rating to AA from AA- during the year. The Company continues to enjoy highest possible Rating of A1 both from CRISIL and CARE for its Short-Term Borrowings.
KEY HIGHLIGHTS1. Turnover crossed '' 5,000 Crore
- Turnover at '' 5,108 Crore increased by 15% during Financial Year 2021-22.
- Sales Volume increased by 7%.
- All Grinding Units achieved record Production and Dispatches.
2. Operating Profit increased marginally despite Covid challenges and higher fuel cost
- Capacity Utilization increased to 74%.
- Aggressive Cost reduction in Fixed Cost.
- All round improvement in Operational Efficiencies across Integrated Plants and Grinding Units.
- Prudent and Efficient fuel sourcing.
3. Efficient Working Capital Management
- Reduction in Cash to Cash Cycle.
- Reduction in Receivables by 37%.
- Increased Liquidity.
4. Reduction in Debt
- Reduced Borrowings by ''162 Crore.
- Increased Liquidity.
- Improved Leveraging and Other Financial Ratios.
5. Reduction in Interest Cost by 32%
- Interest Cost reduced from '' 143 Crore to '' 96 Crore.
- Prepayment of Loans.
- Efficient Working Capital Management.
- Reduced Borrowings for Working Capital.
6. Upgradation of Credit Rating - Long Term Rating improved to AA from AA-
- Reduced Financial Leverage.
- Increase in Treasury Corpus.
- Prepayment of Loans.
- Improved Operating Efficiencies.
7. Brand Building
- Increased share of premium products.
- Leveraged Digital media and increased Customer connectivity across segments.
- Increased Product positioning and Market share in key markets.
8. Digitalization
- Rapid digitalization across functions.
- Optimization of Systems and Processes.
- Plant Efficiency improvement.
- Efficient Capital Working Management.
9. Focus on Value Added Products (VAP)
- VAP recorded 22% growth in Turnover to '' 370 Crore.
- Increased Market Share.
- Focus of Market Penetration.
10. Increased ESG Culture
- Reduction of CO2 emission across Plants.
- Share of Renewable Energy increased to over 35% (consolidated).
- Increased use of AFR.
- Reduced Water consumption.
JK Lakshmi Cement Ltd. has been bestowed with some of the most prestigious awards on both at national, as well as international level:
⢠Our Vice Chairman & Managing Director, Smt. Vinita Singhania has been conferred with Ladies FICCI FLO awards of excellence 2022 for excellence in Entrepreneurship and Best Family Business award led by Women by Money Control Pro (Network 18).
⢠During FY 2022, JK Lakshmi Cement Limited - Jhajjar Unit received the Environment Excellence award instituted by "FAME" (Foundation for Accelerated Mass Empowerment).
⢠JK Lakshmi Cement Limited - Sirohi plant received Excellence award for co-processing of waste in cement plant from Icon SWM-CE.
⢠JK Lakshmi Cement Limited - Durg Unit was declared as a winner for outstanding achievement in promotion of healthcare award conferred by Green Tech Foundation.
⢠Our Platinum Heavy Duty brand has been awarded as Asia''s most promising brand by the Economic Times.
PROGRESS OF THE PROJECTS AND EXPANSIONS
During Financial Year 2021-22, the Company successfully commissioned Waste Heat Recovery Project with an annual capacity of 10 MW in Jaykaypuram, Sirohi.
Udaipur Cement Works Ltd; the Expansion Project is progressing satisfactorily and is expected to be completed by March 2024.
The Internal Financial Control systems are required for increase in transparency and accountability in an organization''s process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness.
The Company has in place a strong Internal Financial Control System, Policies & Procedures which ensures accuracy & completeness of Accounting Records and helps also in timely preparation of the reliable Financial Statements. These Internal Financial Control Systems are designed for safeguarding the assets of the Company and for the prevention and detection of errors & frauds commensurate with the size, nature & complexities of the Operations of the Company. These Policies and Procedures were found by the Statutory Auditors of the Company to be adequate for smooth, orderly & efficient conduct of the business of the Company.
The Company has in place specific Standard Operating Practices (SOPs) for its various functions. These SOPs are periodically reviewed by the External & Internal Auditors of the Company and exceptions are reported for corrective actions.
The Internal Financial Control Systems are regularly reviewed to ensure their effectiveness, taking into account the essential components of Internal Financial Controls as stated in the Guidance Note on the Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on such assessments carried out by the Management, no reportable material weaknesses in the adequacy in the System of Operations of Internal Financial Controls were observed during the year.
CORPORATE SOCIAL RESPONSIBILITY
Since its inception and well before the Corporate Social Responsibility (CSR) Law had come into existence, serving the society towards improving the quality of life of the communities at large has been a priority and commitment for your Company. The concept of socially responsible business is deeply ingrained into our corporate DNA right from the initial years and till date we have pioneered and delivered several CSR projects for needy and vulnerable communities & families. The Company''s CSR vision clearly states to strengthen community relationship and to bring sustainable change in the quality of life of neighbourhood community through innovative solutions in Education, Health, Water & Sanitation, Skills Development, Livelihood Promotion and Rural Development.
CSR is the continuing commitment by the Company to behave ethically and contribute to economic development, while improving the quality of life of the work force, their families as well as of the local community and society at large. As the beginning of Financial Year saw deadly outbreak of COVID-19 Delta variant, the Company responded to the unprecedented oxygen crisis by setting up Oxygen plant at Govt. Community Health Centre, Pindwara in Sirohi district of Rajasthan. Oxygen concentrators and cylinders, examination gloves, thermometers, oximeters, vaporizers and surgical masks were provided to district health departments and other agencies. The team supported vaccination drive across locations through creating awareness and mobilising people to the vaccination centres.
Surge in Delta and Omicron variants of Covid-19 Pandemic during the year and government enforced restrictions on meetings, gatherings and mobility had critically impacted implementation schedule of various CSR projects. Education and skilling projects had been the worst casualties. Closure of government schools for the extended period had caused non-implementation of planned education activities.
Despite these field level challenges, the Company demonstrated its commitment towards CSR and implemented several "Ongoing" and "Other than Ongoing Projects" in thrust areas of Health, Water & Sanitation, Education, Skilling & Livelihood and Rural development. Under Project Aarogya, medical camps were organized. Medical services at the doorstep were provided to reduce maternal and infant''s mortality, while at few locations, food kits were provided to Multi-Drug Resistant -TB patients from poor families to improve their nutritional status for speedy recovery. Under Project Vidya (Education), we organized bridge and remedial classes for out-of-school and school drop-out children for their mainstreaming into government schools, supported government schools for improvement in physical & classroom infrastructure and facilities, provided various types of support to students and continued our support to school''s working for Special children and their families. Students were provided scholarships to support their school, college and technical education like ITI, Polytechnic, Nursing and B.Ed at a time when Pandemic had hit their family''s income. Under Education, the Company also initiated innovative "Navodaya Coaching" with focus on preparing the students from rural families to get admission in "Jawahar Navodaya Schools". Under Project Aajivika (Livelihood), the Company undertook multiple on-farm and off-farm activities including small enterprise development and skill trainings to support youth and families to ensure sustainable income. With an aim to provide youth timely and cost-effective Information, books, space for group learning and data connectivity to access online portal-based tutorials, a skill development cum job readiness center was set up at Jaykaypuram Unit. Under Project Swajal (Water), the Company partnered with Panchayat under "PM- Jal Jeevan Mission" to provide tap water to families. Under JK Lakshmi Gramin Vikas Project, the Company supported infrastructure development in the nearby community. Other initiatives include setting up water facilities for domestic use, plantation and recharging of water bodies, among others. These initiatives in the CSR benefited number of disadvantaged, vulnerable and economically marginalized communities like Scheduled Castes and Scheduled Tribes, Below Poverty Line families, small and marginal farmers, landless groups, women-headed families, special children, person suffering with chronic diseases like MDR-TB and youth with no skills for either employability or resources for small business. The Company also strategically endeavoured towards facilitating "last-mile-connectivity" for the poor to access various State and Central Govt. Schemes aimed at poverty alleviation.
Company''s CSR initiatives have been able to bring qualitative changes in the lives of the communities around its plant locations. One of the key impact has been empowerment of women due to improvement in their income resulting into their higher familial and societal status.
The Company received number of accolades & awards for its meaningful and life-changing CSR initiatives during the year. JK Lakshmi Cement, Sirohi Unit received "Outstanding Performance in CSR Excellence Trophy-2021" by The Employers Association of Rajasthan. Durg Unit received "Outstanding Achievement in promotion of Health care CSR Award 2021". The award was conferred by Greentech Foundation, New Delhi.
The Company has requisite Corporate Social Responsibility Policy in accordance with the provisions of the Companies Act, 2013 (Act) and Rules made there under, as amended. The CSR Policy is disclosed on the website of the Company at www.jklakshmicement.com
The Annual Report on the CSR activities undertaken by the Company during the Financial Year under review, in the prescribed format, is annexed to this Report as Annexure ''A''.
During the Financial Year ended 31st March 2022, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
Form AOC-2 containing the details of the material Related Party Transactions entered into during the Financial Year 2021-22 as per the Related Party Transactions Policy is attached as Annexure ''B'' to this Report and forms a part of it. The Related Party Transaction Policy as amended and approved by the Board is available on the website of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
The particulars of loans given, guarantees or securities provided and investments made as required under Section 186 of the Act are given in the Notes to Financial Statements.
The details as required under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure ''C'' and forms part of it.
AUDITORS(a) Statutory Auditors
In accordance with the provisions of the Act and Rules made there under, M/s S.S. Kothari Mehta & Company, Chartered Accountants, were reappointed as Statutory Auditors of the Company for their second term of five consecutive years from the conclusion of the 80 th AGM held on 28*1 August 2020 until the conclusion of the 85 th AGM to be held in the year 2025.
The observations of the Auditors in their Report on Accounts and the Financial Statements, read with the relevant notes are self-explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the Financial Year 2021-22.
The Report given by him for the said Financial Year in the prescribed format is annexed to this Report as Annexure ''D''. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.
(c) Cost Auditors and Cost Audit Report
M/s R.J. Goel & Co., Cost Accountants, conducted the Audit of cost records of the Company for the Financial Year ended 31st March 2021 and as required, Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Company has duly maintained requisite Cost Accounts and Records pursuant to Section 148(1) of the Act.
The Audit of the cost records of the Company for the Financial Year ended 31st March 2022 is being conducted by the said firm and the Report will be duly filed.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of your Company for the Financial Year 2021-22 have been prepared in accordance with the Act read with the Rules made thereunder and applicable Indian Accounting Standards. The audited consolidated financial statements together with Auditors'' Report form part of the Annual Report.
In compliance with Section 129(3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associate included in the consolidated financial statements is presented in a separate section in the Annual Report. Please refer AOC-1 annexed to the financial statements in the Annual Report.
Pursuant to the provisions of Section 136 of the Act, the financial statements, consolidated financial statements along with relevant documents of the Company and separate audited accounts in respect of subsidiaries are available on the website of the Company.
During the Financial Year under review, no Company has become or ceased to be your Company''s subsidiary or joint venture or associate.
Pursuant to the approval of Members by means of a Special Resolution passed at the AGM held on 4 th September 2014, the Company has continued to accept deposits from the public, in accordance with the provisions of the Act and the Rules made thereunder.
The particulars in respect of the deposits covered under Chapter V of the said Act, for the Financial Year ended 31st March 2022 are: (a) Accepted during the year - '' 25.17 Crore; (b) Remained unclaimed as at the end of the year -'' 0.90 Crore; (c) Default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year - Nil and (d) Details of deposits which are not in compliance with the requirements of Chapter V of the said Act- Nil.
Disclosure of the ratio of the remuneration of each director to the median employee''s remuneration and other requisite details pursuant to Section 197(12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure ''E''.
Further, particulars of employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of Section 136 of the Act, the Report and Accounts are being sent to all the Members of the Company and others entitled thereto, excluding the said Particulars of employees. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company upto the ensuing AGM. Any Member interested in obtaining such particulars may write to the Company Secretary.
The Annual Return as required under Section 92 and Section 134 of the Act read with Rules made thereunder is available on the website of the Company at https://bit.ly/3RcPmEM
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to Section 152 of the Act, Dr. Raghupati Singhania (DIN: 00036129) retires by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. The Board recommends his re-appointment.
As the Members are aware, second Term of office of Shri B.V. Bhargava (DIN: 00001823), as Independent Director, shall determine on 30 th August 2022 and he would cease to be a Director of the Company. Shri B.V. Bhargava is also member of Audit Committee and Nomination and Remuneration Committee (NRC). Dr. Kashi Nath Memani (DIN: 00020696), Independent Director, has resigned from the Board of Directors of the Company w.e.f. 26th April 2022,
due to personal reasons including health. The Board places on record its deep appreciation of valuable services rendered by them during their tenure as Independent Directors of the Company.
Based on the recommendation of NRC, the Board has appointed Shri Sadhu Ram Bansal (DIN: 06471984) as Additional Director in the category of Independent Director on the Board of Directors of the Company, for a term of three consecutive years w.e.f. 151 July 2022. Shri Bansal shall hold office up to the date of the ensuing AGM. The Company has received requisite Notice under Section 160 of the Act from a Member proposing name of Shri Bansal and declaration from Shri Bansal regarding his independence pursuant to Section 149 of the Act and Regulation 16 of the Listing Regulations. As Independent Director, Shri Sadhu Ram Bansal shall not be liable to retire by rotation. In the opinion of the Board, he possesses requisite expertise, integrity, proficiency and experience. Relevant details are given in the Annexure to the Notice of the AGM. The Board recommends his appointment at the ensuing AGM.
The Members at the AGM held on 31st August 2019, had approved re-appointment of Dr. Shailendra Chouksey (DIN: 00040282) and Shri Sushil Kumar Wali (DIN: 00044890), as Whole-time Directors of the Company for a period of three years w.e.f. 1st August 2019 till 31st July 2022. Accordingly, they shall cease to be Directors w.e.f. 1st August 2022. The Board places on record its deep appreciation of the valuable services rendered by them as Whole-time Directors of the Company.
Based on the recommendation of NRC, the Board has appointed Shri Arun Kumar Shukla (DIN: 09604989) as Additional Director of the Company w.e.f. 1st August 2022 and he shall hold office as Director up to the date of the ensuing AGM. The Board also appointed him as President & Director for a term of three years commencing 1st August 2022, subject to requisite approval of Members of the Company at the ensuing AGM. The Company has received requisite Notice under Section 160 of the Act from a Member proposing his name for appointment as Director at the ensuing AGM. Relevant details are given in the Annexure to the Notice of the AGM. The Board recommends his appointment at the ensuing AGM.
The Board has also taken on record the declarations and confirmations received from all the Independent Directors of the Company regarding their independence pursuant to Section 149 of the Act and Regulation 16 of the Listing Regulations.
The Members at the AGM held on 26 th August 2021 had approved re-appointment of Ambassador Bhaswati Mukherjee (DIN: 07173244) as Independent Director for second term of five consecutive years w.e.f. 28 th March 2022. The Members also approved continuation of
Shri Bharat Hari Singhania (DIN: 00041156), Chairman of the Company, as Non-executive Director, liable to retire by rotation w.e.f. 1st October 2021. Pursuant to Article 113 of the Articles of Association of the Company, the Board of Directors has decided that Smt. Vinita Singhania (DIN: 00042983), Vice Chairman & Managing Director of the Company shall henceforth be a Director not liable to retire by rotation.
There were no other changes in the Directors/Key Managerial Personnel of the Company during the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the Financial Year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
During the Financial Year under review, there was no change in the nature of business of the Company.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report of the Company for the Financial Year 2021-22 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms a part of it.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to the Listing Regulations, a Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report as Annexure -''F'' & ''G''.
The Corporate Governance Report which forms part of this Report inter-alia covers the following:
(a) Particulars of the four Board Meetings held during the Financial Year under review;
(b) Salient features of the Nomination and Remuneration Policy;
(c) The manner in which formal annual evaluation of the performance of the Board of Directors, of its Committees and of individual Directors has been made;
(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism;
(e) Details regarding Risk Management Committee;
(f) Dividend Distribution Policy;
(g) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013;
COMPLIANCE OF SECRETARIAL STANDARDS
Based on the Secretarial Audit Report of the Secretarial Auditor, the Company has duly complied with the applicable Secretarial Standards on Meetings of Board of Directors and General Meetings issued by the Institute of Company Secretaries of India.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Act, your Directors state that:-
(a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) such accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit and loss of the Company for that period;
(c) Proper and sufficient care have been taken for the maintenance of adequate accounting records in
accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The annual accounts have been prepared on a going concern basis;
(e) The internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) The proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.
Your Directors wish to place on record and acknowledge their appreciation for the continued support and valuable co-operation received from the Financial Institutions, Banks, Government Authorities, Dealers, Suppliers, Business Associates and Company''s valued Customers and the esteemed Members for the faith they continue to repose in the Company.
Your Directors also record their appreciation for the dedication and hard work put in by "Team-JK Lakshmi", which has enabled the Company to continue its growth journey in these challenging times.
Mar 31, 2018
DIRECTORS'' REPORT
Dear Shareholders,
The Directors are pleased to present the 78 th Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March 2018.
FINANCIAL RESULTS
Rs, in Crore
2017-18 |
2016-17 |
|
Sales & Other Income |
3582.29 |
3329.93 |
Profit before Interest & Depreciation |
479.46 |
435.22 |
Profit before Depreciation |
281.98 |
246.57 |
Profit / (Loss)after Tax |
83.96 |
82.00 |
Transfer to Debenture |
||
Redemption Reserve |
- |
35.00 |
Surplus brought forward |
199.63 |
156.17 |
Amount available for appropriation |
95.382 |
203.17 |
Appropriations |
||
- Dividend paid during the year |
||
(Pertaining to Previous Year) |
10.63 |
3.54 |
Surplus carried to Balance Sheet |
272.96 |
199.63 |
283.59 |
203.17 |
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs, 0.75 per Equity Share of Rs, 5 each (15%) for the Financial Year ended 31st March 2018. The Dividend outgo subject to approval at the ensuing Annual General Meeting will be Rs, 8.83 Crore (inclusive of Dividend Distribution Tax of Rs, 1.81Crore).
PERFORMANCE
The Company has its manufacturing plants located in two distinctive markets namely East, comprising the states of Chhattisgarh, Odisha, Eastern & Central MP and Vidarbha region in Maharashtra; and North West, that mainly comprises Rajasthan, Gujarat, Haryana, Delhi, Punjab, Western UP Western MP and some parts of Maharashtra bordering Gujarat. Even though the Financial Year 2017-18 has been a relatively tough year for the Cement Industry on the whole and your Company was no exception; yet cement being a regional commodity the performance of the Company operating in multiple markets must be viewed with respect to the performance of the industry in those markets.
In East where the Company has entered in FY 2016. In the last Financial Year represented first full year of stabilized performance in these markets. The installed capacity of its Durg Plant for clinker and cement was increased by 22% and 39% respectively mainly due to in-house innovations and optimization of plant operating parameters without incurring any major capital investments. This capacity creation also got reflected in higher production and higher sales.
In terms of capacity utilization, growth in sales, and operational efficiencies, Durg plant is now amongst the best plant. With commissioning of Waste Heat Recovery Boiler of
7.50 MW capacity and expected commissioning of captive power plant of 20 MW capacity in Financial Year 2018-19; the power cost per MT of cement shall drastically be reduced and would make Durg plant amongst the most efficient plants in the cement industry. All these initiatives related to power shall lead to substantial savings when fully operationalized and stabilized.
Coming to the North - West part of the operations; where the Company''s manufacturing plants are in operation for quite some time; the focus in Financial Year 2017-18 had been on consolidation, both in terms of improving the efficiencies in manufacturing operations and in distribution. On power and fuel consumption from the Sirohi plant of the Company is one amongst the best in the industry and its associated grinding units at Kalol and Jharli too are leaders in power efficiency. The recently commissioned cement grinding unit at Surat is now fully stabilized and is continuously setting up new benchmarks on operational parameters. The Grinding units at Surat and Jharli are also producing Solar Power at much lower cost to partly meet their own consumption needs by utilizing the available space to install solar panels.
The demand situation in Northern & Western parts of India has rather been subdued in the concluded Financial Year as compared to a relatively better growth seen in Eastern & Central parts of India. As a consequence of this the production of clinker and cement sales have seen a marginal increase 3% and 6% respectively.
The Company has recently taken various initiatives to improvise its distribution partly aided by implementation of GST, such as increase in direct dispatches, enhancing the dispatches from Grinding Units, optimization of dumps which will result in lower logistic cost and thereby increasing the profitability margin of Company.
The Company''s EBIDTA stood at Rs, 479.46 Crore, which compares favorably with the EBIDTA of Rs, 435.22 in the previous Financial Year. Company''s net profit stood at Rs, 83.96 Crore as against a Profit of Rs, 82.00 Crore in the previous fiscal. PROGRESS OF THE PROJECTS & EXPANSIONS The Company is well on its way to complete all major growth related capital investments, as planned, by end of the Financial Year 2018-19. The 1.35 Million Tonnes per annum grinding unit at Surat, Gujarat had been commissioned and is now fully stabilized. The work on Company''s Grinding Unit project in Orissa with an annual capacity of 0.8 Million Tonne is progressing satisfactorily and is expected to be completed by fourth Quarter of Financial Year 2018-19.
7.50 MW Waste Heat Recovery Project at Durg has been successfully commissioned in November 2017 and is generating power at rated capacity. The Company has already enhanced its Cement Capacity at Durg Plant from 1.80 Million Tonnes to 2.70 Million Tonnes and Clinker Capacity from 1.49 Million Tonnes to 1.95 Million Tonnes at a nominal Capital expenditure of '' 50 Crore only.
Udaipur Cement Works Limited (UCWL), Company''s Subsidiary had successfully started commercial production and with this commissioning, the Company''s overall operating capacity including that of UCWL stands increased to 12.5 Million Tonnes as on 31stMarch 2018.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to Section 152 of the Companies Act, 2013, Dr. Shailendra Chouksey retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment. The Board recommends his reappointment.
All the Independent Directors of the Company have given requisite declarations confirming that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015.
There has been no change in the Directors and Key Managerial Personnel of the Company in terms of the provisions of the Companies Act 2013, during the year under review.
CONSERVATION OF ENERGY ETC.
The details as required under Section 134(3)(m) read with the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure ''B'' and forms part of it.
CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements of your Company for the Financial Year 2017-18 have been prepared in accordance with the Companies Act, 2013 ("Act") read with the Rules made there under and applicable Indian Accounting Standards. The Audited consolidated financial statements together with Auditors'' Report form part of the Annual Report.
In compliance with Section 129(3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associate included in the consolidated financial statements is presented in a separate section in the Annual Report. Please refer AOC-1 annexed to the financial statements in the Annual Report.
Pursuant to the provisions of Section 136 of the Act, the financial statements and consolidated financial statements along with relevant documents of the Company and separate audited accounts in respect of subsidiaries are available on the website of the Company.
During the Financial Year under review, no company has become or ceased to be your Company''s subsidiary or joint venture or associate.
DEPOSITS
Pursuant to the approval of members by means of a Special Resolution passed at the Annual General Meeting held on 4*1 September 2014, the Company has continued to accept deposits from the public, in accordance with the provisions of the Companies Act, 2013 (Act) and the Rules made there under.
The Particulars in respect of the deposits covered under Chapter V of the said Act, for the Financial Year ended 31st March 2018 are: (a) Accepted during the year - Rs, 24.63 Crore; (b) Remained unclaimed as at the end of the year -Rs, 0.22 Crore; (c) Default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year - Nil and (d) Details of deposits which are not in compliance with the requirements of Chapter V of the said Act- Nil.
AUDITORS (a) Statutory Auditors and their Report
M/s S.S. Kothari Mehta & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office from the conclusion of the 77 th Annual General Meeting (AGM) held on 7 th September 2017 until the conclusion of the 80 th AGM to be held in the year 2020, subject to ratification by the Members at every subsequent AGM to be held during their said term in accordance with the provisions of the Companies Act, 2013. However, pursuant to the Companies (Amendment) Act, 2017, the requirement of ratification of appointment of the Auditors on yearly basis has been dispensed with. The observations of the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes are self-explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the Financial Year 2017-18. The Report given by him for the said Financial Year in the prescribed format is annexed to this Report as Annexure ''C''. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
(c) Cost Auditor and Cost Audit Report
M/s R.J. Goel & Co., Cost Accountants, conducted the Audit of cost records of the Company for the Financial Year ended 31st March 2017 and as required, Cost Audit Report was duly filed with Ministry of Corporate Affairs, Government of India.
The Audit of the Cost Accounts of the Company for the Financial Year ended 31st March 2018 is being conducted by the said firm and the Report will be duly filed.
CORPORATE SOCIAL RESPONSIBILITY
The Company is in the forefront of fostering a socially responsible corporate climate. Towards this end, a number of initiatives have been taken to improve the quality of living standards of the communities and people residing around the Company''s plants.
Company''s focus areas include ''protection of environment and conservation of natural resources, health care, education, skill development, water and sanitation, plantation and Green Cover Rehabilitation and rural development among others. Please also see details given in Principle 4 to the Company''s Sustainability & Business Responsibility Report for the Financial Year 2017-18.
The Company has a requisite CSR Policy in accordance with the provisions of the Companies Act 2013 and rules made there under. The contents of the CSR Policy are disclosed on the website of the Company.
The Annual Report on the CSR activities undertaken by the Company during the Financial Year under review, in the prescribed format, is annexed to this Report as Annexure ''D.'' PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each director to the median employee''s remuneration and other requisite details pursuant to Section 197(12) of the Companies Act, 2013 (Act) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is annexed to this Report as Annexure ''E''. Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of Section 136 of the said Act, the Report and Accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company up to the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS During the Financial Year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of business.
SUSTAINABILITY & BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Sustainability & Business Responsibility Report of the Company for the Financial Year 2017-18 ended 31st March 2018 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms a part of it.
The Company''s first Sustainability Report covering financial years 2014-16 based on the Global Reporting Initiatives, G4 framework, including all aspects of our sustainability activities is available on the Company''s Website at www.jklakshmicement. com/ www.jklakshmisustainability.com.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report. The Corporate Governance Report also covers the following:
(a) Particulars of the four Board Meetings held during the Financial Year under review.
(b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, criteria for determining qualifications, positive attributes, independence of a director, etc.
(c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
(e) Details regarding Risk Management.
(f) Dividend Distribution Policy.
COMPLIANCE OF SECRETARIAL STANDARDS
Based on the Secretarial Audit Report of the Secretarial Auditor, the Company has duly complied with the applicable Secretarial Standards on Meetings of Board of Directors and General Meetings.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:-
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENTS
Your Directors wish to place on record and acknowledge their appreciation for the continued support and valuable co-operation received from the Financial Institutions, Banks, Government Authorities, Dealers, Suppliers, Business Associates and Company''s valued Customers and the esteemed Shareholders for the faith they continue to repose in the Company.
The Directors also express their gratitude to the "Team JK Lakshmi" for their significant efforts and collective contribution to enable the Company maintain steady progress.
On behalf of the Board of Directors
Vinita Singhania
Vice Chairman & Managing Director
place: New Delhi Dr. Shailendra Chouksey
Date: 16 May 2018 Whole-time Director
Mar 31, 2017
Dear Members,
The Directors are pleased to present the 77th Annual Report together with the Audited Financial Statements of the Company for the financial year ended 31st March 2017. FINANCIAL RESULTS
Rs, in Crore
2016-17 |
2015-16 |
|
Sales & Other Income |
3329.93 |
2987.95 |
Profit before Interest & Depreciation |
435.22 |
320.62 |
Profit before Depreciation |
246.57 |
123.93 |
Profit / (Loss)after Tax |
82.00 |
(6.56) |
Transfer to / from Debenture |
||
Redemption Reserve (Net) |
35.00 |
(1.91) |
Surplus brought forward |
156.17 |
189.14 |
Amount available for appropriation |
203.17 |
184.49 |
Appropriations |
||
- Dividend paid during the year |
||
(Pertaining to Previous Year) |
3.54 |
28.32 |
Surplus carried to Balance sheet |
199.63 |
156.17 |
203.17 |
184.49 |
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs, 0.75 per Equity Share of Rs, 5 each (15%) for the financial year ended 31st March 2017. The Dividend outgo subject to approval at the ensuing Annual General Meeting will be Rs, 10.62 Crores (inclusive of Dividend Distribution Tax of Rs, 1.80 Crores). PERFORMANCE
The performance of the Company during the financial year 2016-17 has been fairly satisfactory as it has achieved a growth of 9% both in production and sales, which compares favorably with the industry''s overall nil growth during the year. However, the capacity utilization was lower at 79%. The Company''s production at Durg plant has satisfactorily scaled up and registered a growth of 45%, even though the market grew only by 4% to 5% in the Eastern States.
The Company has further enhanced its capabilities and optimized its efficiencies during the year, and, therefore continued to remain in the league of one of the least cost producers of cement in the country. These improved efficiencies helped the Company to offset the impact of the rising cost of inputs. The second half of the year saw a steep increase in costs, especially in the cost of fuel. Hike in the cost of pet-coke, in turn affected the cost of both fuel and power.
Low demand in our marketing areas, especially in the Northern and Gujarat market led to downward pressure as well as volatility of the prices, which prevailed for most part of the year. The first quarter witnessed healthy prices, which saw an expected downturn in the second quarter, due to the monsoons. During the third quarter, the prices normally pick up, but, this year post demonetization in the month of November, there was a steep fall in the demand leading to a severe fall in the prices.
The Eastern markets has seen its price declining in last 2 years by as much as Rs, 50-60 a bag in some of the markets despite demand registering better growth than other markets mainly as a response to entry of new players including ourselves in the Eastern markets.
An improvement in the demand was witnessed in most of our markets from middle of February 2017 leading to some improvement in the pricing. These improvements; however were not adequate enough to compensate the increase in the cost of input especially cost of fuel.
The Company''s EBIDTA stood at Rs, 435.22 Crores, which compares favorably with the EBIDTA of Rs, 320.62 Crores in the previous year. Company''s net profit stood at Rs, 82.00 Crores as against a Loss of Rs, 6.56 Crores in the previous fiscal.
PROGRESS OF THE PROJECTS & EXPANSIONS The Split Grinding Unit at Surat was commissioned in October 2016 thereby adding a capacity of 1.35 million MT. At the Durg Cement Plant, which was commissioned in March 2015, balancing and up-gradation of both the Cement Mills has been completed, taking the cement grinding capacity to 2.7 million MT. As a result, the Company''s cement capacity has gone up by 26% from 8.65 million MT in the beginning of the year to 10.9 million MT by the end of the fiscal year 2017. Work on Waste Heat Recovery project at Durg is in full swing and is expected to be commissioned in the 3rd Quarter of 2017.
Commissioning of Pyro Section at Udaipur Cement Works Ltd, Company''s subsidiary, along with the 6 Kms long overland Belt Conveyor has been completed and trial commissioning of the Cement Mill has started. With this the integrated capacity of UCWL stands at 1.6 million MT.
With this commissioning, Company''s overall capacity including that of its subsidiary stands increased to 12.5 million MT from 9.4 million MT as on 31st March 2017.
CONSERVATION OF ENERGY, ETC.
The details as required under Section 134(3)(m) read with the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure ''B'' and forms part of it.
CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements of your Company for the Financial Year 2016-17 have been prepared in accordance with the Companies Act, 2013 (âActâ) read with the Rules made there under and applicable Accounting Standards. The Audited consolidated financial statements together with Auditors'' Report form part of the Annual Report.
In compliance with Section 129(3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associate included in the consolidated financial statements is presented in a separate section in the Annual Report. Please refer AOC-1 annexed to the financial statements in the Annual Report.
Pursuant to the provisions of Section 136 of the Act, the financial statements, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.
During the financial year 2016-17, Hansdeep Industries & Trading Company Ltd., Company''s wholly owned subsidiary has acquired entire Equity Shareholding of Ram Kanta Properties Pvt. Ltd., whereby the latter has become a step-down subsidiary of the Company. No other company has become or ceased to be your Company''s subsidiary or joint venture or associate during the said financial year.
DEPOSITS
Pursuant to the approval of members by means of a Special Resolution at the Annual General Meeting held on 4th September 2014, the Company has continued to accept deposits from the public, in accordance with the provisions of the Companies Act, 2013 (Act) and the Rules made there under. The Particulars in respect of the deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2017 are: (a) Accepted during the year - Rs, 13.33 Crores;
(b) Remained unclaimed as at the end of the year - Rs, 0.21 Crores; (c) Default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year - Nil and (d) Details of deposits which are not in compliance with the requirements of Chapter V of the said Act-Nil.
AUDITORS
(a) Statutory Auditors and their Report
M/s Lodha & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company for a term of three consecutive years to hold the office from conclusion of the 74th Annual General Meeting (AGM) held in the year 2014 till the conclusion of its 77th AGM to be held in the year 2017, being the maximum permissible term. Accordingly, pursuant to Section 139
(2) of the Companies Act 2013, they will not be eligible for re-appointment as the Auditors of the Company at the ensuing AGM.
The Board of Directors places on record its appreciation of the valuable services rendered by M/s Lodha & Co., as the Statutory Auditors of the Company. The observations of the Auditors in their report on Accounts and the financial statements, read with the relevant notes are self-explanatory.
Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of M/s. S.S. Kothari Mehta & Company, Chartered Accountants (Firm Registration Number: 000756N) as the Statutory Auditors of the Company for a period of three years commencing from the conclusion of 77th AGM till the conclusion of 80th AGM pursuant to Section 139 of the Companies Act, 2013. Requisite Resolution regarding their appointment is included in the Notice of ensuing AGM for approval by the Members.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2016-17. The Report given by him for the said financial year in the prescribed format is annexed to this Report as Annexure ''C''. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
(c) Cost Auditor and Cost Audit Report
M/s R.J. Goel & Co., Cost Accountants, Delhi, conducted the Audit of cost records of the Company for the financial year ended 31st March 2016 and as required, Cost Audit Report was duly filed with Ministry of Corporate Affairs, Government of India.
The Audit of the Cost Accounts of the Company for the financial year ended 31st March 2017 is being conducted by the said firm and the Report will be filed. CORPORATE SOCIAL RESPONSIBILITY Serving the society towards improving the quality of life of the community at large has always been a priority of the Company. The concept of Corporate Social Responsibility (CSR) has been textured into our corporate DNA right from the initial years of the Company and till date we have pioneered various CSR initiatives.
The Company works towards overall development and welfare of the society by focusing on areas such as Health, Sanitation, Education, Skill Development and Livelihood Interventions to name a few. The Company has undertaken a plethora of activities for empowering women especially tribal women in the areas of Adult Literacy, formation of Self- Help Groups for income generation by imparting them trainings on various trades.
The Company has a requisite CSR Policy in accordance with the provisions of the Companies Act 2013 and rules made there under. The contents of the CSR Policy are disclosed on the website of the Company.
The Annual Report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format, is annexed to this Report as Annexure ''D.'' PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each director to the median employee''s remuneration and other requisite details pursuant to Section 197(12) of the Companies Act, 2013 (Act) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is annexed to this Report as Annexure ''E''. Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of Section 136 of the said Act, the Report and Accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company up to the ensuing AGM. Any member interested in obtaining such particulars may write to the Company Secretary.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
CCI''s order on complaint filed by Director, Supplies & Disposals, State of Haryana, in 2013
On the basis of a complaint filed in 2013 by the Director, Supplies & Disposals, State of Haryana, the Competition Commission of India (CCI), vide its order dated 19th January, 2017 imposed penalty on seven cement manufacturers including our Company. The Penalty amounted to '' 6.55 Crores for the Company.
The Company has filed an appeal before the Competition Apellate Tribunal (COMPAT) against the CCI Order and a stay has been granted. The penalty amount has been shown as contingent liability in the Notes to the Accounts.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of business.
SUSTAINABILITY & BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015, the Sustainability & Business Responsibility Report of the Company for the Financial Year 2016-17 ended 31st March 2017 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms a part of it.
The Company''s first Sustainability Report covering financial years 2014-15 & 2015- 16 based on the Global Reporting Initiatives, G4 framework, including all aspects of our sustainability activities is also being published. The said Report will be put on the Company''s website at www.jklakshmicement.com.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report. The Corporate Governance Report also covers the following:
(a) Particulars of the four Board Meetings held during the financial year under review.
(b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.
(c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
(e) Details regarding Risk Management.
(f) Dividend Distribution Policy.
DIRECTORSâ RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:-
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) The proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the continued Support and cooperation received from Government Authorities, various Financial Institutions/Banks, and Business Associates. Your Directors also thank the Suppliers, Dealers, our valued customers and the esteemed Shareholders for their trust and patronage.
Your Directors also record their appreciation for the dedication and hard work put in by âTeam-JK Lakshmiâ, which has enabled the Company to continue its growth journey in these challenging times.
On behalf of the Board of Directors
Place: New Delhi Bharat Hari Singhania
Date: 17th May, 2017 Chairman & Managing Director
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting the 76th Annual Report
together with the Audited financial statements of the Company for the
financial year ended 31st March 2016.
FINANCIAL RESULTS
Rs. in Crore
2015-16 2014-15
Sales & Other Income 2999.63 2596.69
Profit before Interest & 330.41 377.66
Depreciation
Profit before Depreciation 138.11 286.92
Profit after Tax 6.28 95.60
Transfer from Debenture 1.91 7.19
Redemption Reserve (Net)
Surplus brought forward 179.81 130.46
Amount available for 188.00 233.25
appropriation
Appropriations
- Dividend 3.54 28.32
(incl. tax on Dividend)
- General Reserve - 25.12
Surplus carried to Balance 184.46 179.81
Sheet
188.00 233.25
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 0.25 per
Equity Share of Rs. 5 each (5%) for the year ended 31st March 2016. The
Dividend outgo would amount to Rs. 3.54 crores (inclusive of Dividend
Distribution Tax of Rs. 0.60 crores). The Dividend subject to approval
at the AGM on 7th September 2016 will be paid to those Shareholders
whose names are borne on the Register of Members of the Company as on
the date of book closure for the AGM.
PERFORMANCE
The Company''s performance during the Financial Year 2015-16 has been
satisfactory in terms of better capacity utilization at 82% as against
the Industry average of 66%.
The Company has been able to increase its Production and Sales by 26%
and 23% respectively. The Company continues to be one of the least cost
producers and has laid great emphasis on cost optimization at all
levels. Its fuel consumption was at 76 Kg/Tonne in FY 2015-16 as
against 81 Kg/Tonne in the previous FY 2014-15.
The Durg Plant has performed satisfactorily in the very first full year
of its operations and achieved 104% capacity utilization in the last
quarter of FY 2015-16. Company has become a third largest player in
Chhattisgarh market in a short span of time.
During the year, the Company witnessed a sharp fall in the cement
prices in most of its markets. Consequently, its sales realisation too
registered a steep decline. As a result, despite a good volume growth
of 23%, turnover of the Company rose by only 16% from Rs. 2596.69 Crore
to Rs. 2999.63 Crore. The Company''s Operating Profit was lower at Rs.
330.41 Crore as against Rs. 377.66 Crore in the previous year. Besides
substantially lower prices, the Company''s profitability got impacted
due to the additional burden of interest and depreciation relating to
commissioning of the first phase of the integrated Greenfield Cement
plant at Durg. After recognizing Deferred Tax Assets, the Company''s Net
Profit stood at Rs. 6.28 Crore as against Rs. 95.60 Crore achieved in
FY 2014-15.
PROGRESS OF THE PROJECTS & EXPANSIONS
Durg plant, commissioned last year, has been fully operational. Work of
split grinding unit at Surat got completed in March 2016 and trials are
going on. This will add 1.35 million tonnes to the total capacity of
your Company. Work at Orissa Grinding Unit is also progressing
gradually. Project related to setting up clinkerization facility at the
Company''s Subsidiary, Udaipur Cement Works Ltd. (UCWL) is expected to
be completed by Q4 of FY 2016-17. Company''s total capacity which stood
at 8.6 million tonnes as at end of March 2016 is expected to grow to
about 11 million tonnes besides 1.6 million tonnes of UCWL by March
2017.
INDUSTRY SCENARIO
The Cement Industry, currently having a capacity of more than 400
million tonnes per annum is gradually moving towards consolidation. The
leading 4 players on all India basis as well as on regional basis
account for about 50% of the total capacity as also the market share.
Cement business being capital intensive with longer gestation period
and investment cycles, consolidation helps the industry to meet
Nation''s emerging needs in orderly fashion and in time.
We expect that the new capacity additions shall be considerably lower,
may be, less than 5% per annum, over the next few years thereby
narrowing the existing large supply-demand imbalance.
OPPORTUNITIES
In the year 2015, India for the first time in its recent history,
surpassed China to emerge as top FDI destination in the world. It
attracted more than 40 Billion US $ of investment during April to
December 2015. With the Indian economy growing at current pace and with
other favorable micro indicators such as inflation, budget & trade
deficit, exchange & interest rates, growth of non-food credit etc.,
there are huge expectations of significant turn-around in the industry
fortunes in FY 2016-17.
The Prime Minister in the recent past has laid considerable emphasis on
the schemes and policies such as ''Smart Cities'', ''Swacch Bharat'',
''AMRUT'' and most ambitiously ''Housing for All by 2022''. These schemes
when fully implemented are expected to revive the cement consumption
all over the country. Further, increase of 46% in the budget
allocations for infrastructure segment in the Union Budget for FY 17
and the emphasis being laid by the present Government on the Highway
Projects and Concrete Roads Construction augurs well for cement
consumption in all 4 key segments viz. Housing, Infrastructure,
Commercial Real Estate and Industry, on a sustainable basis.
These initiatives will help to absorb the excess capacity to the extent
of 40 to 50% in certain regions and above 25% for the country on the
whole.
The last quarter of FY 2015-16 has seen some upsurge in cement demand
in certain pockets of the country with corresponding improvement in
prices and margins. With the expectations of overall GDP growth of
above 7.5%, the Industry is hopeful of seeing at least 8% growth in
cement demand in the FY 2016- 17 with a possible 2% upside on account
of the policies and schemes announced by the Government.
THREATS & CHALLENGES
The continued imbalance in the cement demand and supply has led to
considerably lower sales realization. Fresh increase in the cost by way
of mandatory contribution of 30% of royalty on limestone to District
Mineral Foundation (DMF) and the rising cost of power, has resulted in
substantial shrinking of EBITDA margins. The capital cost of the new
capacities additions, is also expected to go up due to higher cost of
acquisition of new mining leases and land. With current capital cost of
approx. Rs. 750 Crores required to create a fresh 1 million tonne per
annum cement capacity, the industry needs considerably higher EBITDA
margins for a sustained growth of the industry.
STRATEGIC IMPERATIVES & OUTLOOK
With the industry experiencing a certain structural changes in terms of
consolidation, cost economics, demand patterns and increasing barriers
for new capacity additions, etc., the strategy can no longer be
singularly focused on investing to create more capacities for growth.
It is imperative for the Company to adopt a short term, a medium term
and a long term vision to remain relevant and competitive in the
industry.
The Company having already made substantial investments in building
capacities, the immediate short term focus now shall be on meaningful
absorption of such capacities and further improving all round
operational efficiencies. With the expected improvement in the cement
prices, it is hoped that the Company will achieve better operating
margins and profitability on a sustainable basis over the next few
years.
In the medium term, the Company shall strive to consolidate on market
share and to further raise brand positioning through introduction of
premium and differentiated value added products, among others.
Our premium Cement Brand Pro , which was introduced in October 2014
in existing market, has been well accepted and achieved stable and
sustainable volumes. Another premium Cement brand, namely, "Platinum"
was launched in the East last year which has also evoked satisfactory
response.
Keeping in mind changing construction practices, efforts are being made
to create more value added products and services which can increase the
pace of construction and improve the quality of construction.
Your directors are fairly optimistic about the future of the industry
in general and the Company in particular. The cement demand is highly
dependent on private consumption. The success of ''Make in India'',
''Skill India'', ''Stand up India'' is likely to be largely driven by
private investments and entrepreneurship. India due to its vast pool of
young population is in unique position to harvest much talked about
demographic dividend. On the whole, with the silver linings already on
the horizon, the hopes of a brighter future are far stronger than the
gloom at the dawn.
HUMAN RESOURCES
Our sustained focus and best-of-the class HR practices have
strengthened a culture, where commitment towards results are very high.
The contributions of our human capital during the year were amply
demonstrated through numerous efficiency parameters and effective
outcomes besides continued accomplishments in soft metrics such as
motivation, satisfaction and engagement scores. Notable achievements
were made in capacity utilization and cost optimization. Stabilisation
of the Company''s Greenfield cement plant at Durg in a record time as
compared to industry standards is a manifestation of our people''s high
level of ownership and personal motivation at work.
In the area of marketing excellence, against an industry average growth
of 2% in our existing market, the Company grew by 5% in cement sales
for the year under report. Our in-house R&D has helped to achieve edge
in market through initiation, development and production of premium
cement and value added products. Our empowered human capital has played
a significant role in all above achievements. Utilizing the in-house
talents, nurturing and developing expertise over the years through
sustained processes and systems with emphasis on learning, development,
competency assessments, improvement projects, cross- functional teams,
coaching and other HR interventions have proven to be real
differentiators.
NEW MARKETS
It is a matter of great pleasure that the planned strategy of your
Company to enter into Eastern Market at a premium positioning has
worked well and within a year, it has reached to top 3 positions in
terms of volumes in the home market. A very strong dealer network has
been developed and the same is expanding. It is heartening that the
Company in its very first year of operations has bagged the "Most
Trusted Brand Award" from Hon''ble Chief Minister of Chattishgarh.
INTERNAL CONTROL SYSTEM
The Company has in place a robust Internal Control System under which
its Independent Internal Audit Department carries out extensive audit
covering all significant areas of Company''s operations throughout the
year. The Company has also appointed External Auditors to carry out
Internal Audit for its key locations and marketing offices. The
Internal Auditors regularly review the adequacy and effectiveness of
Company''s Internal Control Systems. Reports of the Internal Auditors
are placed before the Audit Committee on Quarterly basis for review.
The Audit Committee also monitors the implementation of the
recommendations of the Auditors on Systems improvement as well as
Process improvement.
The Company also has a robust Budgetary Control System & MIS System
under which actual operational performance are mapped against the
Budget and the variance are analyzed to take corrective actions.
Further, an enterprise wide Legal Compliance Monitoring Software Tool
has been implemented to monitor and ensure timely compliances of all
applicable statutory requirements.
INTERNAL FINANCIAL CONTROLS
The Company has established adequate Internal Financial Controls
commensurate with its size, scale and complexity of its operations.
These are designed to ensure adherence to the Company''s policies,
safeguarding of its assets and prevention & detection of frauds &
errors, accuracy & completeness of financial records and timely
preparation of reliable financial information.
The Controls & Systems of the Company have over the years have been
further strengthened with the Implementation of ERP (SAP) which
connects all the plants as well as offices & Marketing offices to
ensure seamless data and information flow. The Company has also
implemented Standard Operating Procedures (SOPs) for its various areas
of operations.
With a view to ensure that such Controls & Systems are reinforced on an
on-going basis, compliances thereto including SOPs are regularly
monitored and also periodically reviewed by the Internal Auditors and
exceptions reported.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2016 in the prescribed
form MGT -9 is attached as Annexure ''A'' to this Report and forms part
of it.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
The particulars of loans, guarantees or securities and investments
covered under the provisions of Section 186 of the Companies Act, 2013
are given in the financial statements.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2016, all the contracts or
arrangements or transactions entered into by the Company with the
Related Parties were in the ordinary course of business and on arms''
length basis and were in compliance with the applicable provisions of
the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015.
Further, the Company has not entered into any contract or arrangement
or transaction with the Related Parties which could be considered
material in accordance with the Policy of the Company on materiality of
Related Party Transactions. In view of the above, disclosure in form
AOC-2 is not applicable.
The Related Party Transaction Policy approved by the Board is available
on the website of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Dr. Raghupati Singhania retires by rotation and being eligible offers
himself for re-appointment at the ensuing AGM.
The Board of Directors of the Company has re-appointed
Shri Bharat Hari Singhania and Smt. Vinita Singhania as Managing
Directors, for a term of 5 years each w.e.f. 1st October 2016 and 1st
August 2016, respectively. The Board has also re-appointed Dr.
Shailendra Chouksey and Shri Sushil Kumar Wali as Whole-time Directors
of the Company, for a term of 3 years each w.e.f. 1st August 2016.
These are subject to requisite approval of members of the Company at
the ensuing AGM. The Board recommends their re-appointments.
There has been no change in the Key Managerial Personnel of the
Company, during the year under review.
All the Independent Directors of the Company have given requisite
declarations that they meet the criteria of independence as provided in
Section 149(6) of the Companies Act, 2013 and also Regulation 16 of
SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
CONSERVATION OF ENERGY ETC.
The details as required under Section 134(3)(m) read with the Companies
(Accounts) Rules, 2014 is annexed to this Report as Annexure ''B'' and
forms part of it.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared by the Company
in accordance with the applicable Accounting Standards. The Audited
consolidated financial statements together with Auditors'' Report form
part of the Annual Report.
A report on the performance and financial position of each of the
subsidiaries and associates included in the consolidated financial
statements is presented in a separate section in this Annual Report.
Please refer AOC-1 annexed to the financial statements in the Annual
Report.
Pursuant to the provisions of Section 136 of the Act, the financial
statements, consolidated financial statements alongwith relevant
documents and separate audited accounts in respect of subsidiaries are
available on the website of the Company.
During the financial year under review, no company has become or ceased
to be your Company''s subsidiary or joint venture or associate.
DEPOSITS
Pursuant to the approval of members by means of a Special Resolution at
the Annual General Meeting held on 4th September 2014, the Company has
continued to accept deposits from the public, in accordance with the
provisions of the Companies Act, 2013 (Act) and the Rules made
thereunder.
The Particulars in respect of the deposits covered under Chapter V of
the said Act, for the financial year ended 31st March 2016 are- (a)
Accepted during the year- Rs. 4.59 crores; (b) Remained unclaimed as at
the end of the year- Rs. 0.18 crores; (c) Default in repayment of
deposits or payment of interest thereon at the beginning of the year
and at the end of the year- NIL and (d) Details of deposits which are
not in compliance with the requirements of Chapter V of the said Act-
NIL.
AUDITORS
(a) Statutory Auditors and their Report
M/s Lodha & Co., Chartered Accountants, have been appointed as Auditors
of the Company to hold the office from the conclusion of the 74th
Annual General Meeting held on 4th September 2014 until the conclusion
of the 77th Annual General Meeting to be held in the Year 2017, subject
to ratification of their appointment by the members at the respective
AGMs to be held in the years 2015 and 2016. Accordingly, being
eligible, matter relating to the appointment of the Auditors will be
placed for ratification by members at the forthcoming Annual General
Meeting. The observations of the Auditors in their report on Accounts
and the financial statements, read with the relevant notes are self
explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013,
the Board of Directors appointed Shri Namo Narain Agarwal, Company
Secretary in Practice as Secretarial Auditor to carry out Secretarial
Audit of the Company for the financial year 2015-16. The Report given
by him for the said financial year in the prescribed format is annexed
to this Report as Annexure ''C''. The Secretarial Audit Report does not
contain any qualification, reservation or adverse remark.
(c) Cost Auditor and Cost Audit Report
The Cost Audit for the financial year ended 31st March 2015 was
conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as
required Cost Audit Report was duly filed with Ministry of Corporate
Affairs, Government of India. The Audit of the cost accounts of the
Company for the financial year ended 31st March 2016, is being
conducted by the said Firm and their Report will also be filed.
CORPORATE SOCIAL RESPONSIBILITY
Your Company strongly believes in the process of giving back to the
society. Since inception the Company has taken this as a moral
responsibility to build a better society by focusing on areas such as
Health, Sanitation, Education, Skill Development, Livelihood
Interventions, to name a few.
The Company has undertaken lots of activities for empowering women
especially tribal women in the areas of Adult Literacy, Formation of
Self Help Groups for income generation through providing them trainings
on various trades. During the Financial Year, the Company has also
focused on activities related to Swachh Bharat Mission by constructing
IHHLs in the villages, providing Sanitary Napkins especially to
adolescent girls by installing Napkin making machines near our Plant
locations.
The Company has requisite Corporate Social Responsibility (CSR) Policy
in accordance with the provisions of the Companies Act 2013 and rules
made thereunder. The contents of the CSR Policy are disclosed on the
website of the Company.
The annual report on the CSR activities undertaken by the Company
during the financial year under review, in the prescribed format is
annexed to this Report as Annexure ''D''.
PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each director to the
median employee''s remuneration and other requisite details pursuant to
Section 197(12) of the Companies Act, 2013 (Act) read with Rule 5 (1)
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended, is annexed to this Report as Annexure ''E''.
Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the
above Rules, form part of this Report. However, in terms of provisions
of Section 136 of the said Act, the Report and Accounts are being sent
to all the members of the Company and others entitled thereto,
excluding the said particulars of employees. Any member interested in
obtaining such particulars may write to the Company Secretary. The said
information is available for inspection at the Registered Office of the
Company during working hours.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS
During the financial year under review, there were no significant and
material orders passed by the Regulators or Courts or Tribunals which
would impact the going concern status of the Company and its future
operations.
CORPORATE GOVERNANCE - including details pertaining to Board Meetings,
Nomination and Remuneration Policy, Performance Evaluation, Risk
Management, Audit Committee and Vigil Mechanism.
Your Company reaffirms its commitment to the highest standards of
corporate governance practices. Pursuant to Regulation 34 of SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015, a
Management Discussion and Analysis, Corporate Governance Report and
Auditors Certificate regarding compliance of conditions of Corporate
Governance are made a part of this Report. The Corporate Governance
Report also covers the following:
(a) Particulars of the four Board Meetings held during the financial
year under review.
(b) Policy on Nomination and Remuneration of Directors, Key Managerial
Personnel and Senior Management including, inter alia, the criteria for
performance evaluation of Directors.
(c) The manner in which formal annual evaluation has been made by the
Board of its own performance and that of its Committees and individual
Directors.
(d) The details with respect to composition of Audit Committee and
establishment of Vigil Mechanism.
(e) Details regarding Risk Management.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors state that:-
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(b) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit and loss of the Company for
that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have
been laid down and that such internal financial controls are adequate
and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all
applicable laws have been devised and that such systems were adequate
and operating effectively.
ACKNOWLEDGEMENTS
Your Directors wish to thank and acknowledge the Financial
Institutions, Banks, Government authorities, Shareholders, suppliers,
dealers, business associates and the Company''s esteemed customers for
their continued trust and support.
Your Directors also wish to place on record their appreciation of the
contribution made by the Company''s employees at all levels but for
whose hard work, solidarity and support the Company''s consistent growth
would not have been possible.
On behalf of the Board of Directors
New Delhi Bharat Hari Singhania
Date: 11th July 2016 Chairman & Managing Director
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting the 73rd Annual Report
together with the Audited Accounts of the Company for the year ended
31st March 2013.
FINANCIAL RESULTS
Rs. in Crore
2012-13 2011-12
Sales & Other Income 2355.70 1985.03
Profit before Interest & 484.16 399.13
Depreciation
Profit before Depreciation 400.62 311.71
Profit after Tax 175.74 108.78
Surplus brought forward 102.00 95.71
Amount available for 277.74 204.49
appropriation
Appropriations
- Dividend- (incl. tax 34.28 27.49
on Dividend)
- General Reserve 120.00 75.00
- Capital Redemption 2.34 -
Reserve
- Debenture Redemption 10.30 -
Reserve
- Surplus carried to 110.82 102.00
Balance Sheet
277.74 204.49
Financial year 2012-13 has been a year of satisfactory performance,
amidst lack lustre growth of cement industry during last three years in
succession. Company registered a volume growth of 8% over the previous
year as against industry''s growth of about 5.5%. Company''s capacity
utilization at 94% on its enhanced capacity of 53 lac MT compares
favourably with that of industry''s 74%.
The Company continues to make steady progress in its efficiency
parameters. This has enabled the Company to be one of the least cost
producers amongst its peers in the Indian Cement Industry.
Company''s sales realization aided by improvement in the cement prices
in some of our markets as also due to Company''s efforts towards the
market optimization, both segmentwise and geographywise, has shown
satisfactory improvement. Company''s ex-factory realization would have
been better but for the brunt of considerable increase in the freight
costs consequent to increase in the diesel prices.
BUY BACK
The Buy-Back Offer announced by the Company on 7th February 2012 was
closed on 6th February 2013. Pursuant to the said Buy-Back, the Company
bought back and extinguished 46.89 Lac Equity Shares of Rs. 5 each at
an average price of Rs. 64.99 per Equity Share aggregating to Rs. 30.47
crore. Consequent to the Buy-Back, the paid-up Equity Share Capital of
the Company has reduced from Rs. 61.18 crore as on 31st March, 2012 to
Rs. 58.84 crore as on 31st March 2013.
DIVIDEND
The Directors are pleased to recommend a dividend of Rs. 2.50 per
Equity Share of Rs. 5 each (50%) for the year ended 31st March 2013.
The Dividend outgo would amount to Rs. 34.28 crore (inclusive of
Dividend Distribution Tax of Rs. 5 crore). The Dividend subject to
approval at the AGM on 2nd August 2013, will be paid to those members
whose names appear on the Register of Members as on the date of book
closure for the AGM.
DIRECTORS
Your Directors express their profound grief and sorrow on the sad
demise of Shri Hari Shankarji Singhania on 22nd February 2013. Shri
Singhania joined the Board of Directors of the Company in the year
1951. He became Chairman of the Board in the year 1975 and continued
ever since. Shri Hari Shankar ji who joined J.K. Organisation at the
young age of 18 years learned the ropes of business under his
illustrious father late Lala Lakshmipatji. Shri Singhania held several
positions before assuming the Chairmanship of various JK Group of
Companies. Shri Singhania contributed immensely not only in the growth
of your Company but also in the growth of industrialization and
economic development of India. In recognition, he received numerous
prestigious National & International awards. Your Directors pay their
respectful homage and tribute to this extraordinary human being, a
great leader, an iconic industrialist and a leading statesman.
The Board of Directors at their meeting held on 29th May 2013,
appointed Shri Bharat Hari Singhania as the Chairman & Managing
Director and Smt Vinita Singhania as Vice Chairman & Managing Director
of the Board of Directors of the Company.
Shri N.G. Khaitan, Shri S.K. Wali and Shri B.V. Bhargava, retire by
rotation at the ensuing Annual General Meeting of the Company and being
eligible, have offered themselves for re-appointment. The Board commend
their reappointment.
INDUSTRY SCENARIO
The quick estimates released by the Central Statistics Office under the
Ministry of Statistics & Programme Implementation show cumulative
growth in industrial production of a meager 1% in FY 13 over FY 12.
Within the indices for industrial production, while the mining showed a
negative growth of 2.5%, the growth in manufacturing & electricity was
1.2% and 4% respectively. A deeper analysis of data reveals that most
of the growth in manufacturing has come from consumer non- durables
like apparels, textiles, footwear etc. Other sectors in manufacturing
like consumer non- durables and capital goods have either recorded a
marginal growth or negative growth during FY 13 over FY 12.
Similarly, lower growth has plagued the Indian Cement industry for the
successive third year, with a growth of only 5.5% during FY 12-13.
Against a demand growth of 13 million tonnes, capacity additions were
in the order of 17 million tonnes. Drop in cement demand was caused by
general economic slowdown, under performance of Infrastructure and
industrial projects, high inflation and high interest rates. The
shortage of construction materials like bricks, sand etc., also
impacted the cement demand growth in certain pockets of North India.
EXPANSIONS
The Company continues to believe in the inherent strength of the Indian
economy, notwithstanding the recent drop in cement demand. The cement
industry''s future would remain bright. Your Company, therefore, has
been pursuing its growth plans through its various expansion projects.
During the year, the Company has completed the augmentation of Kiln
Capacities resulting in increase in its clinker manufacturing capacity
from 39.60 lac tonnes to 42.90 lac tonnes p.a. at its mother plant at
Jaykaypuram.
The Company is also pursuing to set up a Split Location Grinding Unit
at Surat.
Your Directors in their last report had informed the Members that the
Company''s 27 Lac Tonnes Greenfield Project at Durg, has been making
satisfactory progress and is likely to become operational by the end of
the year 2013. However, progress of work was affected due to the
unfortunate incident of arson by a section of villagers from nearby the
project site pressing certain unjustified demands. The fire has inter
alia damaged certain section of equipments, plant and machinery.
Fortunately, there has been no casualty of human life during this
untoward incident. Project completion therefore would be somewhat
delayed. The extent of delay would, however, depend on the delivery of
the replaced equipments. The plant being fully insured, the insurance
agencies are presently in the process of evaluating the losses. After a
period of temporary suspension of about 3-4 weeks, construction work at
the plant has since restarted and is progressing well.
The erection work at Company''s Aerated Autoclaved Concrete (AAC) Blocks
Project at Jharli, Haryana with a capacity of 400M3 per day, has been
completed in the month of March 2013. The Project is expected to render
stabilized production by end of June 2013. The Project due to its
technological and locational advantages, would enable the Company to
have a larger customer base in the NCR region.
The Company has stepped up revival of Udaipur Cement Works Ltd. (UCWL).
The Cement Grinding section of UCWL is likely to be commissioned in the
current financial year.
EYE ON THE MARKET
The Company was able to sustain its growth momentum amidst a difficult
marketing scenario by focusing strongly on a strategy of intensive
rural marketing penetration coupled with an integrated programme of
micro marketing across its key markets. This enabled the Company to
achieve a sales growth of 8% in the face of lower industry growth of
all India level and a growth of below 4% in our marketing zone.
Focused campaigns for deep rural penetration in key markets like
Rajasthan and Haryana were carried out during the year with excellent
results. The Company''s new grinding unit at Jhajjar in Haryana was
launched successfully in April''12 and is almost operating now at full
capacity. The Company which was earlier operating only in select
pockets of Haryana is now operating almost right across the State and
the sales in the State has increased considerably. The kind of quantum
growth achieved in a short time in a new market like Haryana post the
launch of the grinding unit, gives us tremendous confidence to move
into new markets.
The Company''s reliance on its network of highly loyal and exclusive
dealers has also enabled it to operate effectively in an increasingly
competitive environment created by the entry of new brands. The
Company''s dealer network grew by over 15% during the year of which an
overwhelming majority of dealers have been more than two decades with
the Company. The Company also focuses strongly on developing an
exclusive network and this strategy has greatly helped during the
periods of intense competition.
The Company placed high degree of importance to various CRM activities
and loyalty programmes for its channel partners. Various interactive
events were held with the channel partners and their families on a
calendarized basis right through the year where the top management
participated and interacted with the various business partners on a
sustained basis. Such interactions not only help to further strengthen
the bonds between the Company and its business partners but also enable
the senior management to directly listen to the Voice of the Customer.
The Company maintained its high brand visibility during the year
through a well planned strategy of being present in high impact
programmes. Apart from these topline measures, there has also been
great deal of emphasis on carrying out micro marketing activities at
ground level in every district.
INCREASING THE PRODUCT BASKET
The Company is continuously increasing its basket of offerings to its
customers of value added products, the latest being AAC Blocks with the
brand name "JK SMART BLOX".
The AAC blocks, though relatively new in the country, are being
extensively used in the developed countries and are a preferred
alternative to the traditional red clay bricks (made by using top layer
of precious agriculture land). These AAC blocks are light in weight and
offer high thermal insulation. With these inherent characteristics,
this product will offer recurring life long savings in the power
consumption besides savings in construction time and labour cost.
The Company also expanded its RMC presence in its home market of
Rajasthan by adding 2 more plants in Rajasthan. These plants
incidentally are the first such units set up by the organized sector in
the two tier cities. The Company''s ability to offer a range of value
added products (besides Cement) further consolidates its brand presence
in various markets.
INTERNAL CONTROL SYSTEM
The Company has an independent Internal Audit Department to carry out
extensive audits throughout the year covering all areas of Company''s
significant operations. Besides such in-house strength, Company has
also appointed external auditors for auditing its various outstation
operations. The Audit Committee regularly reviews adequacy and
effectiveness of the Company''s internal control environment and
monitors implementation of audit recommendations.
The Company has further strengthened the internal controls through SAP
ERP systems connecting all plants, sales offices and head office
enabling seamless data and information flow. The Company also has
robust Budgetary Control System and Management Information System
(MIS).
HUMAN RESOURCES
In line with Company''s philosophy of "Where Caring Partners the
Growth", management of Human Resources has always been on the top
priority in order to meet key objectives. Besides several HR practices
for developing leadership and talent pipeline, executive coaching,
training and development, employee engagement initiatives in place
already, some new programmes like We - Care (Cementing Aspirations For
Receptive Exchange), MET (My Exclusive Time), etc. were undertaken
successfully. This year''s focus on Next HR Practices is firmly embedded
in the HR Architecture which is aligned more towards ''holistic''
approach. During the year under report, the Company showcased its Best
HR Practices in several forums and were highly appreciated.
Over the past several years the Company''s unrelenting focus on human
resources has been demonstrated through consistent and significant
improvement in several HR domains including employee retention level,
employee satisfaction/engagement level, individual and team performance
and maturing of various HR processes and system which has also
contributed in unique ways towards better business performance. The
result of consistent commitment to human capital was aptly demonstrated
in the Employee Engagement Survey (2013) with external agency M/s TNS
India Pvt. Ltd. which was conducted with 94% of MCS participation and
TRI*M Index of 91 (85 in 2011).
In the context of external recognition, the Company was bestowed upon
with several reputed awards for its achievement including "India''s Best
Companies To Work For 2012" (amongst Top 50 Companies in India, 2nd
Position in Leadership Development and 5th position in Manufacturing
and Production Industry) from Great Place to Work Institute India and
The Economic Times, "NIPM National Award For Best HR Practices 2012"
from National Institute of Personnel Management, Strong Commitment
towards HR Excellence 2012 from Confederation of Indian Industry, etc.
The successful HR Practices and outcomes during the year were result of
the Company''s long standing value for human beings, their growth,
development and well being in the long run with care, compassion and a
stimulating environment to continue to grow and excel. This journey of
striving for excellence continues with focus on continual growth of the
Company through active engagement of its human capital.
FINANCIAL MANAGEMENT
Good revenue growth and strong financials, enhanced profit and strong
balance sheet are the highlights of the Company''s performance during
2012-13.
The consistent excellent operational performance has enabled the
Company to show good Financial Results year after year. This has
resulted in the Company having a very strong Balance Sheet with
adequate cushions to withstand any challenges which the Industry may
face. Efficient management of the financial resources has resulted in
the Company achieving low gearing and strong key financial
fundamentals. The liquidity position of the Company continues to be
strong, enabling it to retain the highest possible Short Term Rating of
A1 (A One Plus) for its Commercial Paper Programme. Its inherent
strength in the Balance Sheet together with its other strong operating
parameters has enabled the Company to maintain its Long Term Rating of
AA- (Double A Minus). With these strong Ratings, the Company continues
to borrow Short Term Funds at the most competitive rates.
The Company continues to judicially deploy its surplus resources in the
market in tax-efficient instruments of various Mutual Funds and PSUs.
As a result, the Company is able to generate high post-tax returns on
its surplus funds.
The Assets Turnover Ratio of the Company has consistently been going up
with capacity additions through marginal low cost investments in its
Clinker & Grinding Capacities as is depicted herein below:
Liquidity & Gearing
For funding the Company''s growth plans of doubling the Capacity from 5
million tonnes to 10 million tonnes over the next two years, the
Company is deploying a blend of Rupee/ ECB funding alongwith internal
accruals without diluting the equity with an eye on the overall Debt
Equity Ratio of the Company. This shall enable the Company to enhance
the overall returns to the Stakeholders in the long run.
OUTLOOK & STRATEGIC IMPERATIVES
Housing, commercial real estate and infrastructure sectors account for
about 95% of the cement consumed in the country. Various studies
suggest that approx. 250 million people in the country are homeless and
about 80% of rural population does not have a permanent shelter. In
case of infrastructure sector, which includes roads, irrigation, water
supply, power etc., the gap between the requirements and availability
is a well known fact. Your Directors are confident of the long term
sustainability of the demand for cement.
Last 3 years'' trend in demand growth of the industry has been lower
than expectations and below the GDP growth at national level. However,
at micro level, there have been huge variations in growth rates between
the states. The silver lining is that the States which have been
lagging in the past are now working hard to successfully catch up with
the rest of the country. A deeper analysis of each year reveals
different reasons of lower than expected growth, with slackened pace of
infrastructure development being a common factor in these years. Real
estate construction to some extent has been impacted due to high rate
of inflation leading to credit squeeze & higher interest rates and non
availability of labour in many parts of the country.
There are indicators which suggest the possibility of demand bouncing
back in the financial year 2013-14. Growing realization among the
policy makers to remove the policy bottlenecks in land acquisition
could be the most important factor. Providing adequate support for the
growth of infrastructure and other construction related sectors
including adequate resource allocation to key infrastructure
development projects like Dedicated Freight Corridor (DFC), expediting
the tendering process in highway projects, extending JNURM (Jawahar Lal
Nehru Urban Renewal Mission) scope to more cities, incentives for
construction of affordable housing, lowering of interest rates, etc.
would go a long way. In addition, there is positive forecast for a
normal monsoon, in terms of expectation of amount of rain, the onset
time and uniformity of the spread through the country. A good monsoon
should bring down the food inflation and increase in rural incomes
resulting in enhanced construction activity and higher cement demand.
Many government funded projects generally take off during the election
year resulting in boosting construction activity and cement demand.
This year, some major states in north and central India are likely to
go for elections towards the end of the year followed by general
elections in 2014. Therefore it is hoped that the cement demand may
bounce back and be on strong growth trajectory.
On supply side, the pace of capacity additions have slowed down during
the last year due to delays in implementation of new projects and
brownfield expansions. Though, at approx. 360 million tonnes p.a.
capacity, the industry still has about 25 - 30% surplus capacity, it is
expected that either the surplus to remain at same level or the gap
between demand and supply gradually reduce to desired levels in the
next 3 - 4 years time. Improvement in utilization rates will help the
industry to manage fixed cost better and have better gross margins.
To sum up, it is hoped that the Company shall achieve higher volumes
during the year. There are chances of cement demand bouncing back,
thereby correction in the prices, which had gone down considerably in
the last quarter of FY 13. Further, with the expectation of costs
remaining under control on account of efficient operations, we are
hopeful of good financials.
SUBSIDIARY COMPANY
The Annual Accounts of the wholly-owned Subsidiary, Hansdeep Industries
& Trading Company Limited, have been consolidated and the Statement
pursuant to Section 212 of the Companies Act, 1956 read with General
Circular No. 51/12/2007-CL-III dated 8th February 2011 of the Ministry
of Corporate Affairs, containing the details of the Company''s
Subsidiary is attached.
In terms of the said Circular dated 8th February 2011, copies of the
Balance Sheet, Statement of Profit and Loss, Reports of the Board and
the Auditors of the aforesaid Subsidiary, have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
subsidiary company and the related detailed information shall be made
available to the Shareholders of the Company and that of the
Subsidiary, seeking such information at any point of time.
The annual accounts of the subsidiary company are also available for
inspection by any Shareholder at the Head Office of the Company and
that of its Subsidiary.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Auditors of the Company,
retire and are eligible for re-appointment. The observations of the
Auditors in their Report on Accounts read with the relevant notes are
self-explanatory.
COST AUDIT
The Cost Audit for the financial year ended 31st March 2012 was
conducted by M/s. R.J. Goel & Co., Cost Accountants, Delhi and as
required, Cost Audit Report was duly filed with Ministry of Corporate
Affairs, Government of India.
The Audit of the Cost Accounts of the Company for the financial year
ended 31st March 2013 Is being conducted by the said firm and the
Report will also be filed.
CORPORATE GOVERNANCE
The Company believes in maintaining the highest standards of Corporate
Governance. Pursuant to Clause 49 of the Listing Agreement with the
Stock Exchanges, Corporate Governance Report and Auditors'' Certificate
regarding due compliance of the conditions of Corporate Governance are
made a part of this Annual Report.
CONSERVATION OF ENERGY ETC.
Pursuant to 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, particulars of energy conservation, technology
absorption, foreign exchange earnings and outgo are annexed and forms
part of the Annual Report.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules, 1975 regarding employees is given in Annexure B to the
Directors'' Report. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act 1956, the Annual Report is being
sent to all the members of the Company excluding the aforesaid
information. Any member interested in obtaining such particulars may
write to the Secretary at the Company''s New Delhi Office.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, the Directors state that:
- in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
- the accounting policies have been selected and applied consistently
and judgements and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the Profit or Loss of the Company for
that period;
- proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
- the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from the financial
institutions, banks, various Central and State government agencies,
shareholders, suppliers, dealers and in particular the valued
customers.
Your Directors also record their appreciation for the dedication and
passion of "Team-JK Lakshmi" which has enabled the Company to remain at
the forefront of the Industry.
On behalf of the Board of Directors
New Delhi (Bharat Hari Singhania)
Date: 29th May, 2013 Chairman & Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the 72nd Annual Report
together with the Audited Accounts of the Company for the year ended
31st March 2012.
FINANCIAL RESULTS
Rs in Crore
2011-12 2010-11
Sales & Other Income 1985.03 1524.31
Profit before Interest & 391.37 223.88
Depreciation
Profit before Depreciation 311.71 163.40
Profit after Tax 108.78 59.13
Surplus brought forward 95.71 104.35
Amount available for 204.49 163.48
appropriation
Appropriations
- Dividend - (incl. tax on 27.49 17.77
Dividend)
- General Reserve 75.00 50.00
- Surplus carried to Balance 102.00 95.71
Sheet
204.49 163.48
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs 2/- per Equity
Share of Rs 5 each (40%) for the year ended 31st March 2012. The
Dividend outgo would amount to Rs 27.49 crore (inclusive of Dividend
Distribution Tax of Rs 3.84 crore). The Dividend subject to approval at
the AGM on 4th August 2012, will be paid to those Shareholders whose
names appear in the Register of Members as on the date of book closure
for the AGM.
OPERATIONS
Your Company has registered an all-round improvement in its performance
over the previous year 2010-11. Gross sales turnover at Rs 1922 crore
was higher by 29% compared to Rs 1491 crore in the previous year. PBIDT
at Rs 392 crore, is 76% higher than Rs 223 crore in the previous year,
which demonstrates Company's robust performance. The growth in
Company's volume by 14% is much better than the industry's growth of
about 7%. We are happy that the Company achieved 100% capacity
utilisation vis-a-vis industry's average of 75%.
During the year, the Company further improved its operating
efficiencies. There was reduction in consumption of both power and fuel
per unit of production. In addition, the Company improved usage of
alternate fuel of bio-mass from 2% to 6%. These improvements have
enabled the Company to also reduce the carbon footprint.
EXPANSIONS
Company's various initiatives towards increasing its overall cement
production capacity and undertaking value added products, as under, are
making satisfactory progress:
- The 0.55 Million Tonnes grinding unit in Haryana with an investment
of over Rs 100 crore has commenced commercial production in April 2012.
This has raised the Company's production capacity from 4.7 Million
Tonnes p.a. to 5.3 Million Tonnes p.a.
- Augmenting the existing capacity of the Company's clinkerisation at
Jaykaypuram by additional 0.33 Million Tonnes p.a. from the existing
3.96 Million Tonnes p.a. to 4.29 Million Tonnes p.a. at a much lower
capital cost. The additional clinker would enable the Company to
further enhance cement production capacity by about 0.5 Million Tonnes
p.a.
- The 2.7 Million Tonnes Greenfield Project at Durg, in Chattisgarh
with a capital outlay of Rs 1250 crore is making satisfactory progress.
It is likely to go in operation by the end of the year 2013. Besides
clinkerisation facility at Durg, the Project will have two additional
split location grinding units in different states of Eastern India.
This will enable the Company to substantially cover Eastern Indian
markets.
- On commencement of the above Projects Company's cement capacity
will increase to about 8.5 Million Tonnes.
As reported earlier, the Company as a part of its growth plans, has
also undertaken revival of Udaipur Cement Works Ltd. having an
installed capacity of 1.2 Million Tonnes p.a. in Udaipur, Rajasthan.
This will further increase Company's overall presence in the Cement
Industry.
As a part of Company's overall strategy to increase its footprint into
value added products, the Company is setting up an Aerated Autoclaved
Concrete (AAC) Blocks Project at Haryana, which is likely to be
commissioned by March, 2013. This product would help the Building
Industry to save on labour cost, reduce time as well as bring down the
overall cost.
The Company continues to consolidate its presence in RMC segment and
has added two more RMC Plants during the year. Plans are afoot to
further expand RMC capacity in the coming financial year, thus, taking
the total number of RMC Plants to about fourteen with capacity of 7 lac
Cu.Mtr/annum.
OUTLOOK
The fiscal 2011-12 saw an improvement in the growth of cement
consumption to 6.9% as against 5% growth witnessed in the year 2010-11.
The second half of FY 11-12 was particularly better when the demand
grew by 9%.
Indian Cement Industry continues to face the challenge of excess
capacity build up which has resulted in low capacity utilization of
about 75%. Consequently, the prices are generally under pressure. The
bigger challenge, however, remains from the continuous rise in the
costs, particularly those of fuel and freight costs which are largely
dependent on the petroleum prices being continuously on the rise.
Government's increased impetus on urban as well as rural infrastructure
development, housing and an enhanced capital allocation towards
infrastructure in the 12th - Five Year Plan, will be the major growth
drivers. Higher allocation by the Govt. of India for infrastructure
projects by over 25% in the Budget Proposal of FY 13, gives a
confidence that the cement demand would get back to higher growth rates
in the coming years. Further, part rationalisaton of the duty structure
in the Budget would also help the Cement Industry to partly mitigate
the high tax burden on this core industry.
BUY-BACK OF SHARES
The Board of Directors at their meeting held on 7th February 2012,
approved Buy-Back of its fully paid up Equity Shares of Rs 5 each
("Buy-Back"), with a view to enhance overall Shareholders' value. The
Buy-Back offer has been made for acquisition of Shares upto Rs 97.50
crore i.e., 9.96% of the aggregate of the total paid-up equity capital
and free reserves of the Company as on March 31, 2011, at a price not
exceeding Rs 70 per share. The Buy-back is being made out of the Free
Reserves and/or the Securities Premium Account of the Company, from the
open market through Stock Exchange(s) in India. The Buy- Back opened
w.e.f. 26th March 2012 and the Company has bought back 40,78,019 Equity
Shares as on 16th May 2012. Consequently, the Paid-up Equity Capital of
the Company stands reduced from Rs 61.18 crore to Rs 59.14 crore
(11,82,80,905 Equity Shares of Rs 5 each), as on the date of this
Report.
DIRECTORS
Dr. Ajay Dua ceased to be a Director on the Board of Directors of the
Company w.e.f. 30th September 2011. The Board of Directors places on
record its sincere appreciation of the valuable contributions made by
Dr. Ajay Dua during his tenure of office.
The Board has appointed Shri Ravi Jhunjhunwala as Additional Director
of the Company, w.e.f. 26th March 2012. He is an independent Director
and shall hold office upto the date of the ensuing Annual General
Meeting (AGM). The Company has received requisite Notice from a Member
under Section 257 of the Companies Act 1956 proposing the name of Shri
Ravi Jhunjhunwala for appointment as Director liable to retire by
rotation at the AGM. The Board of Directors commends his appointment as
aforesaid.
Dr. Raghupati Singhania, Shri Kashi Nath Memani and Shri Pradeep
Dinodia retire by rotation at the forthcoming Annual General Meeting of
the Company and being eligible, offer themselves for re-appointment.
SUBSIDIARY COMPANY
The Annual Accounts of the wholly-owned Subsidiary, Hansdeep Industries
& Trading Company Limited, have been consolidated and the Statement
pursuant to Section 212 of the Companies Act 1956 read with General
Circular No. 51/12/2007-CL-III dated 8th February 2011 of the Ministry
of Corporate Affairs, containing the details of the Company's
Subsidiary is attached.
In terms of the said Circular dated 8th February 2011, copies of the
Balance Sheet, Profit & Loss Account, Reports of the Board and the
Auditors of the aforesaid Subsidiary, have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
Subsidiary Company and the related detailed information shall be made
available to the Shareholders of the Company and that of the Subsidiary
seeking such information at any point of time. The annual accounts of
the Subsidiary Company are also available for inspection by any
Shareholder at the Head Office of the Company and that of its
Subsidiary.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Auditors of the Company,
retire and are eligible for re-appointment. The observations of the
Auditors in their Report on Accounts read with the relevant notes are
self-explanatory.
COST AUDIT
M/s. R. J. Goel & Co., Cost Accountants, New Delhi have been appointed
as Cost Auditors of the Company for the Financial Year 2012-13
commencing 1st April 2012, subject to approval of the Central
Government. Audit of the Cost Accounts of the Company relating to
'Cement' for the year ended 31st March 2012, will be conducted by the
Cost Auditors and Cost Audit Report will be submitted to the Ministry
of Corporate Affairs, Government of India within the prescribed time.
The Cost Audit Report for the financial year ended 31st March 2011 was
filed by the Cost Auditors with the Ministry of Corporate Affairs,
Government of India on 12th September 2011 (Due date 30th Sept 2011).
CORPORATE GOVERNANCE
The Company believes in maintaining the highest standards of Corporate
Governance. Pursuant to Clause 49 of the Listing Agreement with the
Stock Exchanges, Management Discussion and Analysis, Corporate
Governance Report and Auditors' Certificate regarding due compliance of
the conditions of Corporate Governance are made a part of this Annual
Report.
CONSERVATION OF ENERGY ETC.
Pursuant to 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, particulars of energy conservation, technology
absorption, foreign exchange earnings and outgo are annexed and forms
part of the Annual Report.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules, 1975 regarding employees is given in Annexure B to the
Directors' Report. However, as per the provisions of Section 219(1
)(b)(iv) of the Companies Act 1956, the Annual Report is being sent to
all shareholders of the Company excluding the aforesaid information.
Any shareholder interested in obtaining such particulars may write to
the Secretary at the Company's New Delhi Office.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, the Directors state that:
- in the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
- the accounting policies have been selected and applied consistently
and judgements and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the Profit or Loss of the Company for
that period;
- proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
- the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors thank all the Shareholders, Customers, Dealers,
Suppliers and Business Associates for their continued support and faith
in the Company and the Financial Institutions, Banks and Government
Authorities for the assistance and co-operation extended by them.
Your Directors also wish to place on record their appreciation of the
contribution made by the Company's employees at all levels but for
whose hard work, solidarity and support the Company's consistent growth
would not have been possible.
On behalf of the Board of Directors
HARI SHANKAR SINGHANIA
Chairman
New Delhi
Date : 16th May 2012
Mar 31, 2011
The Directors have pleasure in presenting the 71st Annual Report
together with the Audited Accounts of the Company for the year ended
31st March 2011.
FINANCIAL RESULTS
Rs. in Crores
2010-11
Sales & Other Income 1518.99
Profit before Interest & Depreciation 214.34
Profit before Depreciation 163.40
Profit after Tax 59.13
Surplus brought forward 104.35
Amount available for appropriation 163.48
Appropriations
- Dividend 17.77
(incl. tax on Dividend)
- General Reserve 50.00
- Surplus carried to Balance Sheet 95.71
163.48
DIVIDEND
Your Directors are pleased to recommend a dividend of 25% per Equity
Share on the Equity Share Capital of Rs. 61.18 crore (12,23,58,924
fully paid Equity Shares of Rs. 5 each). The Dividend outgo would
amount to Rs. 17.77 crore (inclusive of dividend distribution tax of
Rs. 2.48 crore).
OPERATIONS
The year 2010-11 was a challenging year for the Cement Industry.
Substantial capacity build up in the previous 2-3 years combined with
further addition of nearly 30 million tonnes during the financial year
created a situation of sizeable surplus, especially in the Companys
operating zone. Most of our markets experienced considerable price
pressures, whereas cost of inputs particularly that of fuel increased
substantially. As a result, the Companys performance was adversely
affected. During the year 2010-11, the Company recorded a sales
turnover of Rs. 1488 crore and an Operating Profit of Rs. 214.34 crore.
EXPANSIONS
Your Directors are pleased to report that, the expansion work
undertaken by the Company for setting up 18 MW Captive Power Plant and
12 MW Green Power Project, through Waste Heat Recovery, have been
successfully completed. With this the Companys power capacity has
risen by 30 MW to 66 MW. Additionally, the Company has entered into a
long term agreement on Private Partnership basis for supply of 21 MW
power at rate substantially lower than that of the State Grid. This
would raise the Companys total Captive Power availability to 87MW,
full benefits of which would be available from Financial Year 2012
onwards.
Work on the Companys Split Location Grinding unit of 5.5 lac tonnes at
Jhajjar (Haryana) is also under way and the project is expected to be
completed by March 2012.
The Companys Greenfield project of setting up a 2.7 million tonnes
Cement Plant at Durg in Chattisgarh at an estimated project cost of Rs.
1250 crore is progressing smoothly. Most of the necessary land has been
acquired. The Project is expected to be operative by March 2013. With
this, the Companys total installed capacity will go upto about 8
million tonnes p.a.
In line with the Companys growth plans, steps are being taken for
revival of Udaipur Cement Works Ltd. (UCWL) which has an installed
capacity of 1.2 million tonnes of cement per annum near Udaipur.
It is heartening that the Companys RMC business has grown 20% during
the Financial Year 2010-11. The Company has drawn plans to expand its
RMC business further.
The Company also jointly with other Group companies proposes to set up
a mega thermal power plant of 660 MW in Madhya Pradesh at a total
project cost of Rs. 3300 crore through a SPV.
OUTLOOK
During the financial year 2010-11 new capacities of about 30 million
tonnes were added in the industry. These capacities are likely to put
pressure on the prices in the short term. It is expected that the
demand which was very low in the financial year 2010-11 would improve
in the current year when some of the surplus would be absorbed. The
long term outlook for the industry continues to remain positive as
India progresses to achieve stronger economic position in the world
scenario. The government has indicated its commitment for achieving a
sustained GDP growth of 8% to 9% which would call for sustained double
digit growth in cement consumption.
The bigger challenge, is the soaring costs, especially the cost of fuel
and petroleum prices, which has a bearing on the cost of production,
cost of power as well as on the logistic costs. It is hoped that the
Government would recognise these challenges faced by the Industry and
would help by ensuring adequate linkages for coal suppliers &
rationalising the tax structure.
DIRECTORS
Shri Raj Kumar Bansal has been nominated by IDBI on the Board w.e.f.
15th November 2010 in place of its earlier
Nominee Director, Shri Pradip Roy. The Board of Directors place on
record its sincere appreciation of the valuable services rendered by
Shri Pradip Roy during his tenure of office.
Shri Hari Shankar Singhania, Shri B.V. Bhargava and Shri Shailendra
Chouksey, retire by rotation at the forthcoming Annual General Meeting
of the Company and being eligible, have offered themselves for
re-appointment.
SUBSIDIARY COMPANY
The Annual Accounts of the wholly-owned Subsidiary, Hansdeep Industries
& Trading Company Limited, have been consolidated and the Statement
pursuant to Section 212 of the Companies Act 1956 read with General
Circular No. 51/12/2007-CL-III dated 8th February 2011 of the Ministry
of Corporate Affairs, containing the details of the Companys
Subsidiary is attached.
In terms of the said Circular dated 8th February 2011, copies of the
Balance Sheet, Profit & Loss Account, Reports of the Board and the
Auditors of the aforesaid Subsidiary, have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
Subsidiary Company and the related detailed information shall be made
available to the Shareholders of the Company and that of the Subsidiary
seeking such information at any point of time. The annual accounts of
the Subsidiary Company are also available for inspection by any
Shareholder at the Head Office of the Company and that of its
Subsidiary.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Auditors of the Company,
retire and are eligible for re-appointment. The Auditors have
confirmed that they hold a valid certificate issued by the ÃPeer Review
Board of Institute of Chartered Accountants of India (ICAI). The
observations of
the Auditors in their Report on Accounts read with the relevant notes
are self-explanatory.
COST AUDIT
M/s. R. J. Goel & Co., Cost Accountants, New Delhi have been appointed
as Cost Auditors of the Company for the Financial Year 2011-12
commencing 1st April 2011 subject to approval of the Central
Government. Audit of the Cost Accounts of the Company relating to
ÃCement for the year ended 31st March 2011 will be conducted by the
Cost Auditors and Cost Audit Report will be submitted to the Ministry
of Corporate Affairs, Government of India within the prescribed time.
The Cost Audit Report for the financial year ended 31st March 2010 was
filed by the Cost Auditor with the Ministry of Corporate Affairs,
Government of India on 26.08.2010 (Due date 30.09.2010).
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to good Corporate Governance
practices and endeavors continuously to maintain highest standards of
corporate values and ethics. Pursuant to Clause 49 of the Listing
Agreement, Management Discussion and Analysis, Corporate Governance
Report and Auditors Certificate confirming compliance of the
conditions of Corporate Governance form a part of this Annual Report.
CONSERVATION OF ENERGY ETC.
Pursuant to 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, particulars of energy conservation, technology
absorption, foreign exchange earnings and outgo are annexed and forms
part of the Annual Report.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules 1975 as amended, regarding employees is given in Annexure B to
the Directors Report. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act 1956, the Annual Report is being
sent to all shareholders of the Company excluding the aforesaid
information. Any Shareholder interested in obtaining such particulars
may write to the Secretary at the Companys New Delhi address.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act
1956 and based on the confirmations received from the concerned
officers, the Directors state that:
- in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the financial statement;
- the accounting policies have been selected and applied consistently
and judgements and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the Profit or Loss of the Company for
the financial year ended 31st March 2011;
- proper and sufficient care has been taken for maintenance of adequate
accounting records in accordance with the provisions of the said Act
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
- the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors wish to place on record and acknowledge their
appreciation for the continued support and valuable co-operation
received from the Financial Institutions, Banks, Government
Authorities, dealers, suppliers, business associates and Companys
valued customers and the esteemed Shareholders for the faith they
continue to repose in the Company.
The Directors also express their gratitude to the Ãteam- JK Lakshmi
for their significant efforts and collective contribution to enable the
Company maintain steady progress.
On behalf of the Board of Directors
HARI SHANKAR SINGHANIA
Chairman
New Delhi
Date: 25th May 2011
Mar 31, 2010
The Directors have pleasure in presenting the 70th Annual Report
together with the Audited Accounts of the Company for the year ended
31st March 2010.
The Company is observing this year as the Birth Centenary Year to pay
humble respects to late Lala Lakshmipat Singhania (1910-1976), who had
been a great Visionary and Key Architect of JK Organisation. He
believed in the philosophy of inclusive growth encompassing all
sections of the Society. The CompanyÃs best ever all round performance
this year is a befitting tribute to the great Founder.
FINANCIAL RESULTS
Rs. in Crore
2009-10 2008-09
Sales & Other Income 1653.36 1410.19
Profit before Interest &
Depreciation 433.92 316.70
Profit before Depreciation 410.90 295.79
Profit after Tax 241.13 178.59
Surplus brought forward 102.07 77.11
Amount available for 343.20 255.70
appropriation
Appropriations
- Debenture Redemption
Reserve 28.07 -
- Dividend 35.78 28.63
(incl. tax on Dividend)
Interim @20% - 14.31
Proposed
final @30% - 21.47
Total @50% - 35.78
- General Reserve 175.00 125.00
- Surplus carried to
Balance Sheet 104.35 102.07
343.20 255.70
SUB-DIVISION OF SHARES
As approved by the Shareholders at their meeting held on 5th December
2009, the face value of the Equity Shares of the Company has been
reduced from Rs. 10/- to Rs. 5/- each w.e.f. 18th December 2009. The
present share capital of the Company, therefore comprises of
12,23,58,924 fully paid Equity Shares of Rs. 5 each amounting to Rs.
61.18 Crore.
DIVIDEND
During the year 2009-10, the Company paid an interim dividend of Rs. 2
per Equity Share of Rs. 10 each (20%) in November 2009. Your Directors
are pleased to recommend a final dividend of Rs. 1.50 per Equity Share
of Rs. 5 each (30%) on the Equity Share Capital of Rs. 61.18 crore,
thus making a total dividend of 50% for the year 2009-10. The Dividend
outgo for the current fiscal would amount to Rs. 35.78 crore (inclusive
of dividend distribution tax of Rs. 5.20 crore) as against Rs. 28.63
crore of the previous year.
OPERATIONS
During the year 2009-10, the Company has achieved a sales turnover of
Rs. 1644 crore, against Rs. 1404 crore in the previous year, an
increase of 17%.
The CompanyÃs Production and Sales have recorded a significant growth
of 14% over the previous year. This compares well with the 10% growth
recorded by the cement industry in the country as also CompanyÃs own
growth of 11% in the previous year. Capacity utilization was also
higher at 96% compared to industryÃs 85%. Your Company has consciously
been following a policy of steady growth in production for last several
years. It is heartening to see that the Company has been able to grow
at a CAGR rate of 11.7% over last four years as compared to industryÃs
8.9%.
The Company continued its on-going effort to increase all-round
efficiency and reduce cost. The Company was able to reduce its fuel
consumption to 85 Kg/MT from 89 Kg/MT and power from 80 Kwh/MT to 79
Kwh/MT during the year.
The CompanyÃs Split Grinding Unit of 5.5 lac MT set up and commissioned
at Kalol in Gujarat, had its first full year working this year. It is a
matter of great satisfaction that this Grinding Unit achieved 101%
capacity utilization. This helped the Company in not only
rationalizing its logistic cost but also increased its reach and
proximity to the markets.
It is heartening that the Company could achieve highest ever Operating
Profit (PBIDT) at Rs. 434 crore as compared to Rs. 317 crore in the
previous year, a growth of 37%.
EXPANSIONS
Your Directors are happy to report that during the year, steady
progress has been made in all the on-going expansion and other projects
to enhance the cement production capabilities. The current year of FY
2010-11 would witness completion of several projects in hand with
aggregate capital expenditure of Rs. 271 crore. Clinker capacity will
go up by 0.3 Million MT, power capacity by 30 MW Ã 12 MW Waste Heat
Recovery and 18 MW of Thermal, thus raising the total power capacity to
66 MW. The Company has also been able to tie up additional power of 21
MW at rates substantially below the JVVNL rates. This alongwith
enhanced captive power capacity will help the Company generate
additional revenues.
The Company has undertaken execution of yet another Split Grinding unit
of 0.55 Million MT in the State of Haryana which is expected to get
operational by December 2011. This will raise the CompanyÃs existing
cement production capacity from 4.70 Million MT to 5.30 Million MT per
annum.
As reported last year, the Company is actively pursuing new Greenfield
Cement Plant at Durg in the State of Chattisgarh, with an annual
capacity 2.7 Million MT. All important statutory clearances have been
obtained and land acquisition is nearing completion. The total capital
expenditure for this project is expected to be about Rs. 1200 crore.
With the completion of Durg Plant, your Company would attain a total
cement capacity of 8 Million MT and will make the Company
multi-locational operating in different regions.
Possibility of further expansion is being explored in other locations
to enable the Company to make stronger footprint in the cement
industry.
OUTLOOK
The growth in the cement consumption during FY 2009-10 is an ample
testimony to revival of the Indian economy despite the global economic
slow down. The cement consumption grew at 10.2% thereby reaching a
double digit mark after a gap of three years. The portends for
continuous growth in demand are good as not only the Central Government
but different State Governments are laying greater thrust on
infrastructure projects, road networking and housing facilities,
especially the affordable housing for the masses. Cement Industry has
taken proactive measures for expanding the capacities to meet the
emerging situation. During the three year period, FY 2007-08 to 2009-10
the industry has already added nearly 80 Million MT capacity of which
about 35 Million MT was added in the previous financial year of 2009-10
alone. Most of the companies have drawn plans for further capacity
expansion.
The medium to long term outlook of cement industry is promising as it
is bound to grow with a healthy correlation to the economic growth of
the country. With Indian economy poised to grow at 8-8.5% or above, the
cement consumption is likely to remain on a double digit track growth
for some years to come. However, with the capacity
creation materializing in bunches, the risk of over capacity looms
large on the sector having possible adverse impact on the capacity
utilization and prices in the immediate next 2-3 years. The industry
additionally will have to grapple with the issue arising out of
increase in the cost of inputs, especially the cost of fuel and energy
which have been rising unabated for last few months. The other major
challenges which the industry would face relate to the logistics for
movement of these increasing quantities, especially by rail which has
unfortunately not kept pace of growth in its network in line with the
growing industrial requirements.
DIRECTORS
Shri Pradip Roy has been nominated by IDBI on the Board w.e.f. 6th June
2009 in place of its earlier Nominee Director, Ms. Amita Narain. The
Board of Directors place on record its sincere appreciation of the
valuable services rendered by Ms. Amita Narain during her tenure of
office.
Shri N.G. Khaitan, Dr. Raghupati Singhania and Shri S.K. Wali, retire
by rotation at the forthcoming Annual General Meeting of the Company
and being eligible, offer themselves for re-appointment.
SUBSIDIARY COMPANY
Requisite particulars of Hansdeep Industries and Trading Company
Limited, a wholly-owned subsidiary of the Company, pursuant to Section
212 of the Companies Act 1956 are appended.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Auditors of the Company,
retire and are eligible for re-appointment. The Auditors have
confirmed that they have undergone the peer review process of the
Institute of Chartered Accountants of India (ICAI) and hold a valid
certificate issued by the ÃPeer Review Boardà of ICAI. The observations
of the Auditors in their Report on Accounts read with the relevant notes
are self-explanatory.
COST AUDIT
Audit of the Cost Accounts of the Company relating to ÃCementà for the
year ended 31st March 2010 will be conducted by the Cost Auditors and
Cost Audit Report will be submitted to the Ministry of Company Affairs,
Government of India.
CORPORATE GOVERNANCE
Your Company endeavors to have the highest standards of Corporate
Governance in its operations. In line with the CompanyÃs strong
commitment to Corporate Governance and with a view to achieve still
higher levels in governance, a Corporate Governance Committee of
Directors has been constituted during the year. Pursuant to Clause 49
of the Listing Agreement with the Stock Exchanges, Management
Discussion and Analysis, Corporate Governance Report and AuditorsÃ
Certificate regarding compliance of the conditions of Corporate
Governance are made a part of this Annual Report.
CONSERVATION OF ENERGY ETC.
Pursuant to 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, particulars of energy conservation, technology
absorption, foreign exchange earnings and outgo are annexed and forms
part of the Annual Report.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules 1975 regarding employees is given in Annexure B to the DirectorsÃ
Report. However, as per the provisions of Section 219(1)(b)(iv) of
the Companies Act 1956, the Annual Report is being sent to all
shareholders of the Company excluding the aforesaid information. Any
shareholder interested in obtaining such particulars may write to the
Secretary at the CompanyÃs New Delhi Office.
DIRECTORSÃ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act
1956 and based on the confirmations received from the concerned
officers, the Directors state that:
- in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the financial statement;
- the accounting policies have been selected and applied consistently
and judgements and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the Profit & Loss of the Company for
the financial year ended 31st March 2010;
- proper and sufficient care has been taken for maintenance of adequate
accounting records in accordance with the provisions of the said Act
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
- the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors wish to thank and acknowledge the Financial
Institutions, Banks, Government authorities, dealers, suppliers,
business associates and the CompanyÃs valued customers for their
assistance and cooperation and the esteemed Shareholders for their
continued trust and support.
The Directors also wish to acknowledge the committed and dedicated team
of JK Lakshmi whose unstinted hard work, efforts and ideas have taken
the Company on a path of steady growth and development.
On behalf of the Board of Directors
HARI SHANKAR SINGHANIA
Chairman
New Delhi
Date : 18th May, 2010
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