To
The Members
Your Directors have pleasure in presenting the 44th Annual Report together with the
Audited Financial statements for the year ended 31st March, 2023.
Financial Results
The Financial Results for the year ended 31st March, 2023 are summarized below:
Particulars |
2022-23 |
2021-22 |
Income (Sales and other Income) |
17569.19 |
16414.31 |
Pro t before Depreciation, Interest & Taxes |
506.76 |
3208.11 |
Depreciation |
225.98 |
226.88 |
Interest |
570.36 |
126.19 |
Provision for bad & doubtful debts |
273.13 |
-- |
Taxation |
-- |
938.87 |
Deferred Taxation |
(116.23) |
(20.04) |
Total |
953.24 |
1271.90 |
Pro t after Tax |
(446.47) |
1936.21 |
Other Comprehensive Income |
(12.93) |
9.05 |
Total Comprehensive Income |
(459.40) |
1945.26 |
Share Capital (No. of shares) |
7773858 |
7773858 |
EPS (Rs.) |
(5.74) |
24.91 |
Dividend
Your Directors are pleased to recommend for your consideration a Dividend at 3.00 per
equity share of 10/- each for the year ended 31.03.2023, at par with the dividend declared
in the past few years, which entails an outlay of 233.22 lacs.
Transfer of Pro ts to Reserves
In view of the loss incurred by the Company during the year under review, no amounts
were transferred to Reserves. The Company has not transferred any amount to reserves from
out of the pro ts of the preceding year.
Transfer to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 and in
terms of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016, all shares on which dividend has not been claimed for seven
consecutive years shall be transferred to the Investor Education and Protection Fund
(IEPF). Accordingly, the Company has transferred 8,308 equity shares to the IEPF Authority
during the year ended 31st March, 2023. The shareholders are requested to visit the
website of the Company www.kakatiyacements.com and refer to the unpaid
dividents/iepf' section under the heading corporate info' to know the details of the
investors whose shares/unpaid dividend have been transferred to IEPF. In case the
shares/unpaid dividend of any shareholder have already been transferred to IEPF, then such
shareholder is requested to claim the same from IEPF by ling the requisite e-form IEPF-5
along with all the attachments on www.mca.gov.in and to forward the uploaded e-form IEPF-5
along with all its duly executed attachments to the Company for further processing.
According to Section 125 of the Companies Act, 2013 read with Investor Education and
Protection Fund (Awareness and Protection of Investors) Rules, 2001, the Company has
transferred unclaimed dividend amounting to 8,42,133 to IEPF during the year under review.
The said transfer was in respect of the unclaimed dividend for the nancial year 2014-2015.
Material Changes and Commitments
In terms of Section 134(3)(l) of the Companies Act, 2013, there are no material changes
and commitments a ecting the nancial position of the Company which have occurred between
the end of the nancial year of the Company to which the nancial statements relate and the
date of the Report.
Public Deposits
The Company has not accepted any deposits during the year under review and there were
no outstanding deposits as at the end of the year falling within the ambit of Section 73
of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
Signi cant and Material orders passed by the Regulators / Courts / Tribunals
There are no signi cant and material orders passed by the Regulators or Courts or
Tribunals in the year under review impacting the going concern' status and Company's
operations in future.
Directors
The tenure of Shri P Veeraiah, Managing Director of the Company expires on 30th
November, 2023 and the Board at its meeting held on 4th August, 2023, based on the
recommendation of the Nomination and Remuneration Committee, has decided to re-appoint
Shri P Veeraiah as the Managing Director of the Company for a period of ve years
w.e.f. 1st December, 2023, subject to the approval of the shareholders at the ensuing
Annual General Meeting. The Board also has recommended the payment of remuneration for a
period of three years, to the shareholders for their consideration and approval as an
Ordinary Resolution. Shri Vankineni Sivarama Krishna Murthy was co-opted as an Additional
Director under the Independent Director Category, based on the recommendation of the
Nomination and Remuneration Committee, by the Board of Directors at its meeting held on
4th August, 2023 for a period of 5 (Five) years. In accordance with the provisions of the
Companies Act, 2013 read with the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time),
the said appointment requires the approval of the Members by way of a Special Resolution.
The Company has received the requisite consent and other con rmations that the said
appointment would be in accordance with the provisions of Companies Act, 2013 and
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 from Shri Vankineni Sivarama Krishna Murthy. Your Board commends the
resolution as a Special Resolution.
In accordance with the provisions of the Companies Act, 2013, Smt. M Varalakshmi,
Director retires by rotation at the ensuing Annual General Meeting and being eligible, o
ers herself for re-appointment.
The brief pro le of the Directors' who are seeking appointment/re-appointment at the
ensuing Annual General Meeting is presented elsewhere in this Annual Report.
Shri K Venkat Rao (DIN:06566627), Non-Executive Independent Director has tendered his
resignation w.e.f. 1st June, 2023, due to personal reasons. He has also con rmed that
there are no other material reasons for his resignation as a Director of the Company. The
Board of Directors at their meeting held on 4th August, 2023 have noted the said
resignation and accepted the same. The Board also places on record its sincere
appreciation for the valuable services rendered and guidance given by Shri K Venkat Rao as
an Independent Director of the Company.
Dematerialisation
As on 31st March, 2023, 76,08,821 shares were dematerialised with National Securities
Depository Limited and Central Depository Services (India) Limited which constitutes
97.88% of the shares of the Company. The Company, therefore once again requests such of
the public shareholders who have not yet dematerialised their shares to initiate immediate
steps to complete the process of dematerialisation.
KYC Compliance by Shareholders holding shares in Physical Form
Securities and Exchange Board of India has made it mandatory for holders of physical
securities to furnish details of PAN, contact details (address with Pin Code, email
address, mobile number), bank account, updated specimen signature and nomination/ opt-out
of nomination.
Please note that in case of failure of the shareholders to get the above referred
details registered/updated with the RTA, the respective folio shall be frozen on 1st
October, 2023. The frozen folios will be referred by the Company/RTA to the administering
authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of
Money Laundering Act, 2002, if they continue to remain frozen as on 31st December, 2025.
Further, in respect of such folio(s) you will not be eligible to lodge grievance or avail
any services from Company or Registrar and receive dividend, till the above-mentioned
details are furnished. The SEBI circular and relevant forms (viz. ISR-1, ISR-2, ISR-3,
SH-13 and SH-14) can be downloaded from the Company's website
http://www.kakatiyacements.com/images/kyc%20formats.pdf or that of RTA website
https://xlsoftech.com.
Statement of Affairs of the Company
The Statement of a airs of the Company is presented as part of Management Discussion
and Analysis (MDA) Report forming part of this Report.
Performance of the Year under review
Several adverse factors viz., exorbitant cost of coal, non-renewal of Power Purchase
Agreement by TS Transco and the reduced area of sugarcane cultivation due to migration of
farmers to alternate crops fetching more remunerative prices like oil palm cultivation
have all played its role on the operations of the Company and the Company could not
achieve the expected capacity utilization. Despite the above factors, the Company achieved
better capacity utilization of the Sugar plant during the year .
The division-wise operational and nancial details of the performance are stated herein
below:-
Cement Division:
During the year under review, the Cement Division has produced 2,59,575 MT as against
2,69,940 MT in the year ago period thereby registering a decrease of about 4%.
The Cement Division has clocked a turnover of 104.98 crores in 2022-23 as against the
turnover of 109.84 crores recorded in the previous year and this works out to a decrease
of 4.42%.
The Cement Division has incurred loss before interest and tax (PBIT) of 10.04 crores in
the year under review as against pro t of 22.94 crores earned in the previous year.
Sugar Division:
The Sugar cane crushed in the Sugar Division in the year under review is 1,43,140 MT as
against 1,01,743 MT in the previous year thereby recording an increase of about 41%. The
Company could not procure the mandals and villages of its choice even in the year under
review. The Government Regulation restricting the sale of the sugar has also impacted the
quantum of sales during the year under review. The Sugar Division has clocked a turnover
of 50.62 crores in 2022-23 in comparison with 47.25 crores in the preceding year and
thereby registering an increase of about 7.13% over the year ago period. The Sugar
Division has recorded loss before interest and tax (PBIT) of 0.08 crores in the year under
review as against loss of 2.15 crores in the preceding year.
Power Division:
The Power Division has generated 1,61,54,956 kWh in 2022-23 as against 1,41,49,420 kWh
of power in the preceding year thereby recording an increase of about 14.17%. Members are
aware that the Company has not been able to generate power during o -season period in the
sugar division since the Government of Telangana has not been conceding to the request of
the power entities to generate power using coal as an alternative fuel to the bagasse. The
Power division has clocked a turnover of 10.70 crores in the year under review as against
the turnover of 16.57 crores made in the year-ago period and this works out to a decrease
of 35.43% over the previous year.
The Power Division made a Pro t before interest and tax (PBIT) of 10.20 crores as
against a pro t of 9.01 crores in the previous year.
Current Year Outlook: Cement Division:
Taking into account the market conditions and other factors, the Company has set a
target of its cement production at 2,75,000 MT for the current year.
Sugar Division:
The Sugar Division was impacted by various issues during the year under review. The
scarcity of water sources, and loss of productive areas in the zonal allocation made by
the Government in 2022 are some of the critical factors which continue to impact the
prospects of the Company. Despite the above constraints, your Company could improve signi
cantly the cane crushing during the nancial year ended 31st March, 2023. However,
migration of farmers to alternate crops fetching more remunerative prices and incentives
from both Central and State Governments for promoting oil palm cultivation have forced the
Company to downward revision of the target of cane crushing to 90,000 MT during the
current year.
Power Division:
The performance of power division is directly linked to the operational level of the
sugar division. A favorable government policy with regard to utilization of coal as an
alternative fuel to bagasse during o -season of the sugar division is yet to crystallize
since the government has not been permitting the power generating companies to utilize the
coal as an alternative fuel to bagasse. In view of this, the performance of the power
division will continue to be low and added to this factor, any serious impediments to the
sugar division will further impact the performance of the power division.
Insurance:
All the properties of the Company including its buildings, Plant and Machinery and
Stocks wherever required have been adequately insured.
Disclosures under the Companies Act, 2013 I) Annual Return:
The Annual Return as per provisions of Section 92 of the Companies Act, 2013 in Form
MGT-7 is available on the Company's website www.kakatiyacements.com in the Corporate
Info' section.
II) Board Meetings:
During the year under review, 4 (Four) Board Meetings were held. The details of the
Board Meetings and its composition along with the attendance of the Directors are
furnished elsewhere in the Corporate Governance Report.
III) Changes in Share Capital
There was no change in the Share Capital during the year under review.
IV) Changes in the nature of business, if any
There was no change in the nature of business of the Company during the year under
review.
V) Remuneration Policy:
The Company follows a policy on remuneration of Directors and Senior Management
personnel. The Policy is approved by the Nomination and Remuneration Committee and the
Board.
VI) Related Party Transactions
Particulars of contracts / arrangements entered into by the Company with Related
Parties referred to in Section 188 (1) of the Companies Act, 2013 for the year ended 31st
March, 2023 have been provided in Form No.AOC-2 pursuant to clause (b) of sub Section (3)
of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules,
2014 and the same are annexed to this Report (Annexure-1).
All the Related Party Transactions have been approved by the Audit Committee.
VII) Statement of particulars of Appointment and Remuneration of the Managerial
Personnel:
The statement of particulars of Appointment and Remuneration of Managerial Personnel as
per Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 for the year ending 31st March, 2023
is annexed to this Report (Annexure-2).
VIII) Key Managerial Personnel
The following have been designated as the Key Managerial Personnel of the Company
pursuant to Section 2(51) and 203 of the Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Shri P Veeraiah |
- Managing Director |
Dr. P. Anuradha |
- Chief Executive O cer |
Shri M Bhavani Dattu |
- Chief Financial O cer |
Shri V Sesha Sayee |
- Company Secretary |
IX) Registration of Independent Directors in Independent Directors Databank
All the Independent Directors of the Company have been registered and are members
Independent Directors Data Bank maintained by Indian Institute of Corporate A airs.
Renewal of Registration was sought for one year by the existing Independent Directors
except Smt. Hima Bindu Myneni, whose registration is valid up to 27.02.2026. All the
Independent Directors of the Company have been granted exemption from passing the online
pro ciency self-assessment test.
X) Statement of declaration of independence furnished by Independent Directors under
Section 149(7) of the Companies Act, 2013:
The Independent Directors have submitted the declaration of independence as required
pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria
of independence as provided in Section 149 (7) of the Companies Act, 2013 and Regulation
25(8) and 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
Independent Directors have also con rmed that they are not aware of any circumstances
or situations which exist or may be reasonably anticipated that could impair or impact
their ability to discharge their duty with an objective independent judgment and without
any external in uence.
XI) Con rmation by the Board
Further, the Board after taking these declarations / disclosures on record and
acknowledging the veracity of the same, concluded that the Independent Directors are
persons of integrity and possess the relevant experience to qualify as Independent
Directors of the Company and are independent of the management.
The Board opines that the Independent Directors of the Company strictly adhere to
corporate integrity, possess requisite expertise, experience, quali cations to discharge
the assigned duties and responsibilities as mandated by the Companies Act, 2013 and
Listing Regulations diligently.
XII) Committees of the Board and its Meetings:
Your Board has constituted various Committees of the Board as required under the
provisions of the Companies Act, 2013 and of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the
composition, scope and its meetings etc., are furnished in the Corporate Governance
Report.
Directors' Responsibility Statement:
Pursuant to the requirement under Section 134 (3) and 134 (5) of the Companies Act,
2013 with respect to the Director's Responsibility Statement, the Board of Directors of
the Company hereby con rm that: a. in the preparation of annual accounts for the year
ended 31st March, 2023, the applicable accounting standards have been followed and that
there were no material departures therefrom.
b. the Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of a airs of the Company as on 31stMarch, 2023 and of the loss of
the Company for that period. c. the Directors have taken proper and su cient care for
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities. d. the Directors have prepared the Annual
Accounts for the Financial Year ended 31st March, 2023 on a going concern' basis. e.
the Directors have laid down internal nancial controls to be followed by the Company and
that such internal nancial controls are adequate and were operating e ectively. f. the
Directors have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating e ectively.
Evaluation of the Board's Performance:
Evaluation of all Board members is done on an annual basis. The evaluation is done by
the Independent Directors with speci c focus on the performance of the Board and
individual Directors. The observations of the evaluation made in the previous year, if
any, will be considered. At the end of the current year, a comprehensive review will also
be done. The Board evaluation embraces several aspects such as development of suitable
strategies and business plans at an appropriate time and its e ectiveness, implementation
of robust policies, procedures, size and structure and expertise of the Board.
As regards evaluation of Managing Director/Whole time Directors, aspects such as
achievement of nancial / business targets prescribed by the Board, developing and
executing business plans, Operational Plans, Risk Management and nancial a airs of the
organization and Development of policies and strategic plans aligned with the vision and
mission of the Company were considered.
With regard to evaluation of Non-Executive Directors, aspects such as participation at
the Board / Committee Meetings, e ective deployment of knowledge and expertise,
independence of behavior and judgment were considered.
As regards evaluation of performance in respect of Committee Meetings, aspects such as
discharge of functions and duties as per scope of the Committee, processes and procedures
followed in discharging such functions were considered.
In respect of evaluation of the Chairperson, aspects such as managing relationship with
the members of the Board and Management, providing ease of raising of issues, positive
reception to the concerns by the members of the Board and promoting constructive debate
and e ective decision making at the Board were taken into account.
Further to comply with Regulation 25(4) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, Independent Directors have also evaluated the performance
of Non-independent Directors, Chairman and the Board as a whole at a separate meeting of
Independent Directors.
A brief note on performance of evaluation of independent directors has been
incorporated in the Corporate Governance Report.
Auditors:
Statutory Auditors:
M/s. M. Anandam & Co., Chartered Accountants, Secunderabad (FRN : 000125S) were
appointed as the Statutory Auditors of the Company for a period of 5 (Five) years by the
shareholders at the Annual General Meeting held on 8th September, 2022 and they hold o ce
up to the conclusion of the Annual General Meeting to be conducted in 2027. Accordingly,
they continue to be the Statutory Auditors of the Company.
Internal Auditors
Your Board, on the recommendation of the Audit Committee, has appointed M/s. Ramanatham
& Rao, Chartered Accountants, Secunderabad (FRN:002934S) as the Internal Auditors of
the Company for the year 2023-24.
As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and
Audit) Rules, 2014, cost records are required to be audited. Based on the recommendation
of Audit Committee, your Board has appointed M/s. Narasimha Murthy, Cost Accountants,
Hyderabad as Cost Auditors for the current year 2023-24 and necessary Resolution for rati
cation of their remuneration is placed before the Members at the ensuing Annual General
Meeting for their approval in terms of Rule 14 (a)(ii) of the Companies (Audit and
Auditors) Rules, 2014.
Secretarial Auditor
The Board has appointed Smt. Manjula Aleti, Company Secretary in whole-time Practice to
carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013
read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules,
2014 for the nancial year 2023-24.
The Secretarial Audit Report issued by Smt. Manjula Aleti, Practicing Company Secretary
in Form-MR 3 for the nancial year ended 31st March, 2023 is annexed to this Report
(Annexure -3).
The Certi cate of Non-Disquali cation of Directors' issued by Smt. Manjula Aleti,
Practicing Company Secretary under Schedule V(C)(10) (i) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 stating that none of the Directors of the
Company have been debarred or disquali ed from being appointed or continuing as Directors
of the Company by the SEBI/ Ministry of Corporate A airs or such statutory authority as on
31st March, 2023 is annexed to this Report (Annexure -4).
SEBI has made it mandatory on the part of the Listed Companies to secure an Annual
Secretarial Compliance Report from a Practicing Company Secretary on compliance of all
applicable SEBI Regulations and Circulars / guidelines issued there under. The Company has
obtained the Annual Secretarial Compliance Report from Smt. Manjula Aleti, Practicing
Company Secretary for the year ended 31st March, 2023 and the same is annexed to this
Report
(Annexure -5).
The Auditor's Report and the Secretarial Audit Report do not contain any quali cation,
reservation or adverse remark.
Compliance with Secretarial Standards
The Company has complied with the Secretarial Standards issued by the Institute of
Company Secretaries of India.
Reconciliation of Share Capital Audit
As required by the SEBI Listing Regulations, quarterly audit of the Company's share
capital is being carried out by an independent Practicing Company Secretary with a view to
reconcile the total share capital admitted with NSDL and CDSL and held in physical form,
with the issued and listed capital. The Practicing Company Secretary Certi cate in regard
to the same is submitted to BSE the NSE and is also placed before the Board of Directors.
Corporate Social Responsibility (CSR)
In compliance with the provisions of Section 134(3)(a) of the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility (CSR) Policy) Rules 2014, the Company
has constituted the CSR Committee comprising of Shri K Venkat Rao as Chairperson, Shri P
Veeraiah and Shri J S Rao as members. The Committee is responsible for formulating and
monitoring the CSR policy of the Company. The annual report on CSR activities forms part
of this Report (Annexure -6).
Corporate Governance
As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015, a detailed report on Corporate Governance
together with the certi cate from the Company's Auditors con rming compliance forms an
integral part of this Report.
Acquisition of shares by Managing Director
During the year under review, in the months of February, 2023 and March, 2023, Shri P.
Veeraiah, Managing Director has acquired 30,802 shares of the Company on various dates
through NSE and Company has complied with all provisions of law in this regard.
Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act,
2013.
There are no loans, guarantees or investments made or given under Section 186 of the
Companies Act, 2013.
Disclosure under Sexual Harassment of Women at workplace (Prevention, Prohibition &
Redressal) Act, 2013
The Company has put in place a Policy for Prevention of Sexual Harassment of Women at
workplace. Internal Complaints Committee (ICC) has been setup to address complaints
received regarding sexual harassment. All employees (permanent, contractual, temporary and
trainees) are covered under this policy.
No complaint of sexual harassment has been received during the year under review.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the
Companies (Accounts) Rules, 2014
a) Conservation of Energy: |
|
(i) the steps taken or impact on conservation of energy |
Nil |
(ii) the steps taken by the Company for utilizing alternate sources
of energy |
Nil |
(iii) the capital investment on energy conservation equipment |
Nil |
b) Technology Absorption: |
|
(i) the e orts made towards technology absorption |
Nil |
(ii) in case of imported technology (imported during the last three
years reckoned from the beginning of the nancial year) |
|
a) the details of technology imported |
Nil |
b) the year of import |
Nil |
c) whether the technology been fully absorbed |
Nil |
d) if not fully absorbed, areas where absorption has not taken
place and the reasons therefor |
Nil |
(iii) the capital investment on energy conservation equipment |
Nil |
(iv) the expenditure incurred on Research and Development |
Nil |
There is no separate Research and Development Wing as the scale of Company's operations
are relatively small. However, the Company has fairly good laboratory with adequate
testing facility to ensure quality of various inputs and also nished products. Besides the
Company continuously endeavours to improve production process and product quality and
encourages the technicians and workers to innovate.
c) Foreign Exchange earnings and outgo:
The Company has neither earned nor used any Foreign Exchange during the year under
review.
Vigil Mechanism and Whistle Blower Policy:
The whistle blower policy aims at conduct of the a airs in a fair and transparent
manner by adopting highest standards of professionalism, honesty, integrity and ethical
behavior. The policy on vigil mechanism and whistle blower policy may be accessed on the
Company's website : www.kakatiyacements.com under Corporate Info and Code of Conduct
section.
Environmental Protection:
The Company has been making endeavors to protect the environment from the evil e ects
of pollution from time to time. Planting of saplings and seedlings in and around the
factories and colonies is being done on a continuous basis so as to develop green belt
around the plant to improve the environment.
Management Discussion and Analysis (MDA) Report
a) Statement of Affairs of the Company
The Company has recorded Cement production of 2,59,575 MT as against 2,69,940 MT in the
preceding year, thereby recording a decrease of around 4%.
The Board has pleasure in informing the members that despite the serious impediments
encountered by the Sugar Division, it could record an increase of around 41% in its Sugar
Cane crushing in the year under review which stands at 1,43,140 MT as against 1,01,743 MT
in the preceding year. The Power Division has its own operational restraints. Members are
aware that the Company has not been able to generate power during o -season period in the
Sugar Division since the Government of Telangana has not been conceding to the request of
the power entities to generate power using coal as an alternative fuel to the bagasse.
During the year under review, the Company has clocked a turnover (excluding other
income) of 154.15 crores compared to 154.40 crores recorded in the year-ago period. The
segmental revenue has increased in Sugar Division and has decreased in Cement and Power
Divisions. b) Industry Structure and Development:
The Company has a well developed network of dealers for its Cement Division, located in
the states of Telangana and Andhra Pradesh and the Company therefore is in a reasonably
comfortable position in securing orders from its clients. It is heartening to note that
some of the dealers have been patronizing the Company since inception and the strong
bondage that is developed between the Company and dealers is one of the prominent features
of this mutually bene cial relationship. While the Company has a well established
structure and dealer network, the Company anticipates that it could have some impact on
its performance in the current year due to the variation in the prices of Coal and other
raw-materials of Cement Division. The Company shall endeavour its best to mitigate the xed
overheads to the possible extent, combat the critical challenges and move forward with a
committed sprit.
The sugar industry is essentially seasonal in its nature. The availability of cane,
good rainfall and proper irrigation facilities are primary issues that determine the
fortunes of the industry. The allocation of zonal area to the sugar units by the
department is also an important factor as allotment of villages having growth potential
for cultivation of cane will facilitate higher cane production leading to production of
higher volumes in the sugar industry. c) Opportunities and Threats:
The Company is desirous of reaping the bene ts of its well positioned dealer network
across the states of Telangana and Andhra Pradesh in respect of its cement plant and will
make every e ort to overcome the bottlenecks in achieving the targeted operations for the
current year.
The Government of Telangana has not been permitting power generators to use coal as an
alternative fuel during the o season of the sugar industry as a matter of policy which was
not the situation a many years ago.
Unless the Government revisits the entire issue keeping in view the interest of
entrepreneurs as well as all other stakeholders, it would be di cult for the power
generators to survive in the long run as sub-optimal generation of power will seriously
impact the viability of the industry.
In the sugar industry, fetching remunerative price for its product, adequate
availability of sugar cane with close proximity to the sugar plant and industry-friendly
governmental regulations are the key areas of concern.
The Company will make its best endeavors in resolving the complicated issues in the
sugar and power divisions through negotiations with governmental authorities and will also
liaison with the legal advisers in respect of pending litigations concerning the power
division.
However, the Company, with an ability, determination and grit acquired over the years,
is in a strong challenging model and combat the critical situations resulting from micro
and macro factors. d) Segment or product-wise performance:
Segment-wise and product-wise performance has been furnished elsewhere in this Report.
e) Medium and long term strategy
The range of market operations in respect of cement product is restricted to the States
of Telangana and Andhra Pradesh. The existing production capacity can be optimally
utilized in catering to the requirements of the two Telugu states. In the circumstances no
medium and long term strategy is being envisaged by the Company in the absence of any
immediate plans for expansion. f) Outlook:
Division-wise outlook has been furnished elsewhere in this Report. g) Risks and
concerns:
The Cement, Sugar and Power industries being core industries, there is no risk of
product obsolescence or steep fall in demand by way of product substitution or otherwise
and, therefore, your Directors do not foresee any major risks and concerns in the near
future except as discussed elsewhere in this Report.
The Company endeavors its best to e ect necessary changes, modi cations to the
machinery and equipment and also to carry out necessary maintenance works to position the
machinery in all the divisions in robust condition so as to keep the bottlenecks at bay.
h) Internal control systems and their adequacy:
As stated elsewhere in this Report, the Company has adequate internal control systems
and the Chief Financial O cer will monitor the Internal Audit Reports and brief the Audit
Committee in case any de ciency in the system is noticed and corrective measures are
adopted to strengthen the system. i) Financial Performance with respect to operational
performance:
This has been discussed elsewhere in this Report. j) Human Resource Development and
Industrial Relations:
The Company believes that the quality of its employees is the key to success and is
therefore committed to provide necessary human resource development and training
opportunities to equip employees with additional skills to enable them to adapt to
contemporary technological advancements. Industrial Relations during the year continued to
be cordial through e ective communication, meetings and negotiations with the work force
in an informal and congenial atmosphere.
The Company's strength consists of 495 permanent employees as on 31st March, 2023. k)
The details of signi cant changes (change of 25% or more) as compared to the preceding
year in key nancial ratios are provided herein below :-
Sl. No. |
Particulars |
Variation % |
Reasons |
1. |
Debtors Turnover Ratio |
* |
*Variation is below 25% and need not be reported |
2. |
Inventory Turnover Ratio |
* |
*Variation is below 25% and need not be reported |
3. |
Interest Coverage Ratio |
98.39 |
Loss during the year |
4. |
Net Pro t Margin ( % ) |
(123.10) |
Loss during the year |
5. |
Return on Net worth |
(123.76) |
Loss during the year |
6. |
Operating Pro t Margin (%) PBIT |
(92.71) |
Loss during the year |
Cautionary Statement
Statements in this "Management Discussion and Analysis" may be considered to
be "forward looking statements" within the meaning of applicable Securities Laws
or Regulations. Actual results could di er materially from those expressed or implied.
Important factors that could make a di erence to the Company's operations include
demand-supply conditions, nished goods prices, raw material availability and prices,
cyclical demand and pricing in the Company's markets, changes in Government Regulations,
tax regimes besides other factors such as litigations and labour negotiations and health
and safety related issues concerning all the stakeholders.
Acknowledgment
Your Directors take this opportunity to place on record their sincere thanks to the
Banks and various departments of the Central and State Governments of Telangana and Andhra
Pradesh for their support to the Industry.
Your Directors thank the entire network of dealers who have enabled the Company to
achieve the volumes and kept up the rapport and friendly association with the Company.
Your Directors record their appreciation for committed support to the Company by all the
employees at all levels throughout the year under reference.
Your Directors record their gratitude to all the Shareholders who have been reposing
con dence in the Company and its Management.
|
By Order of the Board |
|
for Kakatiya Cement Sugar & Industries Limited |
|
P Veeraiah |
Place : Hyderabad |
Chairman and Managing Director |
Date : 04.08.2023 |
DIN : 00276769 |
|