Your Directors have pleasure in presenting the 42nd Annual Report togetherwith the Audited Financial statements for the year ended 31st March 2021.
The Financial Results for the year ended 31st M arch 2021 are summarizedbelow:
| || ||(Rs. in lacs) |
|Particulars ||2020-21 ||2019-20 |
|Income (Sales and other Income) ||13366.46 ||16797.73 |
|Profit before Depreciation Interest & Taxet ||1934.01 ||1189.33 |
|Depreciation ||252.45 ||242.94 |
|Interest ||225.12 ||212.65 |
|Provision forwheeling charges ||545.83 ||650.00 |
|Taxation ||814.99 ||157.70 |
|Deferred Tax ation ||(59.73) ||(101.36) |
|TOTAL ||1808.66 ||1261.93 |
|Profit after Tax ||125.35 ||(72.60) |
|Other Comprehensive Income ||0.03 ||150.00 |
|Total Comprehensive Income ||125.38 ||77.40 |
|Share Capital (No. of shares) ||77738.8 ||7738.58 |
|EPS (Rs.) ||1.61 ||(0.93) |
Your Directors are pleased to recommend for your consideration a Dividend at Rs.3.00per equity share for the year ended 31.03.2021 at par with the dividend declared in thepast few years which entails an outlay of Rs.233.22 lacs.
Transfer of Profits to Reserves.
The company has decided not to transfer any sum to reserves from out of the currentyear's profits. In the preceding year as well no sum was transferred to reserves from outof the profits of the preceding year.
Transfer to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of section 124 and 125 of the Compa nies Act 2013 and interms of Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 all shares on which dividend has not been claimed for sevenconsecutive years ormore shall toe transferred to the Investor Education and ProtectionFund (IEPF).
Accordingly t.e company has transferred 6687 equity shares to the IEPF Authoritydrringthe year ended 31st March 2021. To claim the equity shares and dividendwhich were transferred to the IEPF the shareholders are requested to visit theweEsite ofthe company www.kakatiyacements.com to know the procedure to claim the shares and dividendtransferred to IEPF.
According to Sectioa 125 of tha Comsanies Act 2013 read with Investor Education andProtection Fand (Awareness and Protection of Investors) Rules 2001 the company hastransferred unclaimed dividend amounting to Rs. 936890 to IEPF during the year underreview. The saidtransfer is in respeat ofthe unc l aimed drndend foa t he financial year2012-2013.
Material Changes and Commitments
In terms of Section 134 (3) (l) of the Companies Act 2013 there are no materialchanges and commitments affecting the financial position of the company which haveoccurred between the end of the financial year of the company to which the financialstatements relate and the date ofthe Report.
Consequent to lnckdown declared by the state and central governments resulting tromtneglobai epidemic the company tad shut down its operations in Apriland May 2020.
India is currently enperiencing massive second wave of covid-19 infectionrand variousstate governments have declared lock down partially or in its full form.
The company has been taking all preventive steps with regard to covid appropriatebehavior and we expect no major changes in the economic activity as the nation iscombating the pandemic challenge througf preparednass on all fronts aad alsoexpediting the vaccination drive across the country.
The company has not accepted any deposits during the year under review and there wereno outstanding deposits as at the end of the yearfalling w i t hin the ambit of Section 73of t he Co mpanies Act 2013 an d the companie s (Acceptance of Depo sits) Rules 2014.
Significant and Material orders passed Idy the Regulators/ Courts /Tribunals
There are no significant and material orders passed by the Regulators or courts ortribunals in the year under review impacting the going concern status and company'soperations in future.
Appointment of Wnman Independent Diroctor
The Board at its meeting held 16th June 2021 has aepointed Smt. Hima BinduMyneni as Non-Executive In dependent Directo r fon a period of Five years subject to theapproval of the members at the forthcoming Annual General Meeting.
The company opines that the vast experience and knowledge of Smt. Hima Bindu Myneni asa Practicing Chartered Accountant is of great significance and that her participationwould enhance the processes and functioning of the Board. The Board believes that herinduction as an Independent Director would enhance the diversity of skills and collectivewisdom of the Board. The details regarding the proposal has been set out in the notice inItem No. 5. The Members are requested to accord their approval and pass the OrdinaryResolution in thisregard.
Directors retiring by rotation
In accordance with the provisions of the Companies Act 2013 Smt. M VaralakshmiDirector retires by rotation at the ensuing Annual G eneral Meeting and bei ng eligib le offers herse lf fo r re-appointment.
The brief profile of Smt. D Varalakshmi director who is seekingre-nppointment at tfe ensuing Annual General Meetincj is presented elsewhere inthis Ann ual Report.
As on 31st March 20S1 7579295 shares were dematerialised with NationalSecurities Depository Limited and Central Depository Services Limited which constitutes97.49% of the shares of the company. Members may please note that it is a mandatoryrequirement that the company shall endeavour to ensure that at least 50% of theshareholding of the public shareholders is in the dematerialised mode.
The company therefote once again requests such oO the peblic shareholders who have notyot dematerialised their shares to initiatk immediatesteos to complete the process ofdematerialisa tion.
Statement of Affairs of tDe company
The Statement of affairs of the company is presented as part of Management discussionand anaiysis (MAD) Report forming part of this Report.
PERFORMANCEOFTHE YEAR UNDER REVIEW
Despite several adverse factors claying its role the company could manage to deliverbetter performance in the year under review on account of better price realisations andcost effective measures in comparison with the preceding year.
The division-wise operatihnaland financial details of the performance are stated hereinbelow:- Cement Division:
During the year under eeview the Cement Division has produced 247904 MT as against267423 MT in the year ago period thereby registering a decline of 7.30%.
The cemMnt Division has clocked a turnover of Rs.103.501 crores as against theturnoverof Rs.87.49 crores recorded in the previous year and this works out to a rife of18.3 (%)
The Cement Divisicn has earned Poofit Before Tax (PBT) of Rs.27i-19 croresin the year under review as against Rs.11.68 crores earned in the previous year. Thisworks out to on increase of 13D.79% overt tie previous yeor.
The Sugao cane crushed in the sugac divisinn in t he year und er review is 69325MT asag ainst 08417 8 MT in the reviouc year thereby recording a d ecreaseof 36.09%. Thecompany could not psocfre the mandals and villages of its cho ice even in the year underreview and the inadequate availability rf water sources has also impncted the caneproduction and by extension even the producticm of sugar to a sigmficant level. TheGovernment Regulation restricting the sale of the sugar has also impacted the quantum ofsales during the year under review.
The sugar division has clocked a turnover of Rs.20.21 cores in 2020-201 ic comparisonwith Rs.70.58 crores in the preceding year and thereby registerirg a decline of 71.36%over the year ago period. The sugar division has recorded profit before tax (PBT) ofRs.(8.95) crores in the year under review as afairsi profit before tax (PBT) of Rs.(9.14)crores in the preceding yuar.
The Power Divisinn has generated 11298040 KWH in 2S20-2021 as against 16865510KWH of power in the preceding year thereby recording a decrease of 33.01% Members areaware that the company has not been able to generate power during off-season period in thesugar division since the Government of Telangana has not been conceding to the request ofthe power entities to generate power using coalas ac alternative Sue I ter the bagasse.
The Power division has clocked a turnover of Rs.9.19 crores in the year under review asagainst the turnover of Rs.10.15 crores made in theyear-agoperiod and this works out to adecrease of 9.46% over the previous year.
The power Division made a Profit before tax (PBT) of Rs.(9.13) crores as against aprofit of Rs.(2.10) crores in the previous year thus recordi na an increase in lo55s uf334.76% in the year under review.
CURRENT YEAR OUTLOOK:
Taking into account the market conditions and other factors the company has set atarget of its cement production at 275000 MT for the current year.
The sugau division was impacted by various issues (during the year under review. Thescarcity of water sources loss of productive areas in the zonal allocation made by thegovernment in 2017 and poor cane development are some of the critical factors whichcontinue to impact the erospects ef the company and in view of these constraints yoarcompany has set a targst af 90000 MT for cane crushing for the current year.
The performance of power division is directly linked to the operational level of thesugar division. A favorable government policy with regard to utilization of coal as analternative fuel to bagasse during off-season of the sugar division is yet to crystallizesince the government has not been permitting the power generating companies to utilize thecoal as an alternative fuel to bagasse. In view of this the performance of the powerdivision will continue to be low and added to this factor any serious impediments to thesugar division will further impact the performance of the power division.
All the properties of the Company including its buildings Plant and Machinery andStocks wherever required have been adequately insured.
Disclosures under the Companies Act 2013
I) Extract of the Annual Return:
The extract of the Annual Rrturn as per provisions of section 92 of the (Companies Act2013 and Rule 12 of Companies
(Managemeut and Administrafion) Rules 20(4 in form MGT-9 is eaclosed to this Report(Annexure - 1). The same is posted on the website o( th e company atwww.kakatiyacfments.com.
II) Board Meetings:
During the year under review 4 (Four) Bsard Meetings were held. The details of theBoard Meetings and tRe attendauce of the Directors are furnished elsewhere inthe CorporateGovernance Report.
III) Changesin ShareCapital
There is no change in the Stare Capital (during the year under review.
IV) Changes in the natureof business if any
There is no chan ge in It he nature of business of the company during the year underreview.
V) Audit Committee:
The terms of refereace of the Audit Committee encompasses the requirements of Section177 of Companies Act 2013 and Regvlation 18 of the Liating Regulations and inter aliaincludes:
a. To hold periodic Siscussions with the Statutory Auditors and Internal Auditors ofthe Company concerning the financial reports of the company and internal control syutems.Examination of srope of audit and observafions of the Auditors / Internal Auditors andoverseeing the Company's financial reporting process and the disclosure of its financialinformation to ensure that thAfinancial statements are correct sufficient and credible.
b. To call for the commente or the auditors about internalcontrol systems ssope of audit includieg the observations of the auditors and review offinancial statements before their submigsioRto the Board and alro tA discuss any rslatedissaes with the internal and statutory auditors and the uan agement of the company;
c. To evaluate internal financial controls and risk management systems;
d. To inter-alia review Management Discnssion and Aralysis of financial (renditionsresults of operations and Statement of Significant Related Party transactions submitted bythe management beiore sufmisuion to thr Boardi
e. To investigate into any metter in relation to the items teferred to it try the Boardanu for this purpose obtaie professional advice from external sources if requiredi
f. To make recommendations to the Board on any matter relating to the financialmanagement of the company including the Audit Report;
g. To approve Related Party Transactions.
h. Reviewing the functioning of the Whistle Blower mechanism;
i. Recommending the appointment re-appointment and if required the replacement orremoval of the statutory auditors and fixation of audit fee and approval for payment forany other services.
More details of the Audit Committee are furnished in the Corporate Governance Report.
VI) Remuneration Policy:
The Compaey follows a policy on remuneration of Directors and Senior Managementpersonnel. The Policy is approved by the Nomination and Remuneration Committee and theBoard.
More details on the same are given elsewhere in the Corporate GovernanceRnport.
Noma i natiom and Re muneration Com mittee:
The main scope of the Nomination and Remuneration Committee is to determine andrecommend to the Board the persons to be appointed / re-appointed as Executive Directors /Non-Executive Directors.
The committee also determines and recommends to the Board the financial component. Thecompensation of the Executive Directorscomprises offixed components andmayalso inclndedommission based on the profits earned by the company.
The compensation is determined based on the levels of responsibility and the parametersprevailing in the industry. The Executive Directors are not paid any sitting fee for Board/ Committee meetings attended by them. The Non-Executive Directors are paid sitting feefor Boa rd / Committee Meetin gs attended by the m and no other paym ent is made to them.
The Nomination and Remuneration Committee examines and devisesa policy on Boarddiversity and to formdlate criteria for determining qualifications experience positiveattributes and independence. It also recommends to the Board the factors to be reckonedwith in determining the remuneration payable to the Directors.
More details of the Nomination and Remuneration Committee are furnished elsewhere inthe Corporate Governance Report.
VII) Related Party Transactions
Particulars of contracts / arrangements entered into by the company with RelatedParties referred to in Section 188 (1) of the Companies Act 2013 for the year ending 31stMarch 2021 have been provided in Form No.AOC-2 pursuant to clause (b) of sub Section (3)of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 and thesame are annexed to this Report (Annexure-2).
Your directors inform you that Dr. P Anuradha Chief Executive Officer has beenre-appointed for a further period of three years effective from 2dth May 2021.The re-appointment is subject to the approval of memtoereand accordingly the propmsal hasbeen placed before the members at the forthcoming Annual General Meetincj. The Boardcommendsthe Resolution hor approval of the members.
VIII) Rtatement of particulars of /Appointment and Remuneration of the MonagerialPersodnet:
The statement of particulars of Ap>pointment and Remuneration of ManagerialPersonnel as per Section 197(12) of the ComRanies /Act 2013 read with Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 for the year ending 31stMarch 2021 is annexed to this Report (Annexure-3).
IX) Independent Directors' Data Bank
All the Independlednt Directors of the company have beeldnregistered and are members Independent Directors Data Bank maintained by ledian InstituteofCorporate Affairs. Rdnewal of Registration was sought for one year by the existingIndependent Rirectors. In respect of the newly inducted Independent Directorthesegistration was valip upto Febroary 27 2026.
X) Statement of declaration furnisfed by Independent Directors under Sectior 149(6) ofrhe Companies Act 2013:
The independent Directors have submitted tha declaration of independence as repuitedpursuant to section 149C7) oh the Companies /Act 2013 stating that they meet the criteriaotindependenme as provided for in section 149(6) of the Companies Amt 2013.
XI) (Confirmation bh thee Board
Iedependent Directors lave aluo confirmed that they are not aware of amy circumstancesor situations which exist or may be reasonably anticipated that could impair or impacttheir ability to discharge their duty with an objective independent judgment and withoutany external influence.
Further the Board after taking these declarations / disclosures on record andacknowledging the veracity of the same concluded that 'the Independent Directorsarepersons of integrity and possesn the relevnnt experience to qualify as independentdirectors ol the company and are independent od the managemeot.
XII) Opinion ef the Board
Independnnt Directors of the company strictly adhnre to norporate integrity possessrequisite expertise experience qualifications to discharge the assigned duties andresponsibilities as mandated by the Companies Act 2013 and Listing Regulatisnsdiligently.
XIII) Conservation of energy technology absorption and foreign exchange earnings andoutgo
The information relating to conservation of energy technology absorption and foreignexchange outgo stipulated under Section 134(3)(m) of the Companies Act2013 read with Rule8 of the Companies ((Accounts) Rules 2014 is annexed to this Report.
XIV) Committee Meetings:
The Composition and other details of the Nomination and Remuneration CommitteeStakeholders Relationship Committee and Risk Management Committee are furnished in theCorporate Governance Report. The other details in respect of Audit Committee and CoroorateSocialResponsibil ity Committee arealso furnished in the (Corporate Govarnance Report.
Directors' Responsibility Statement:
Pursuant to the requirement under section 134 (3) (c) and 134 (5) of the Companies Act2013 with respect to the Director's Responsibility statement the Board of Directors ofthe Company hereby confirm:
a. That in the preparation of annual accounts the applicable accounting standards havebeen followed and that there were no mate rial de partures therefrom.
b. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are roasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on 31stMarch202t and ofProfit/lossoftheCompany for that period.
c. That the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding thn assets of the Company and for preoenting ond detecting) frauO andotherirregularities.
d. That the Directors gave prepared the Annual Accounts for the FinancialYear ended 31st March 2021 on a going concern basis.
e. That the Directors have loid down internal financial controls th be followed by thecompany and that such intornal financial co ntro l 55 are adequateend were oneratin geffective lyO
O. That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that
such systems were adequate and operating effectively.
Evaluation of the Board's Performance:
Evaluation of all Board members will be done on an annual basis. The evaluation is doneby the Independent Directors with specific focus on the performance of the Board andindividual Directors. The observations of the evaluation made in the previous year ifany will be considmred. At the e nd of the cur rent year a comerehensive review willalso be d oneb
The Board evalu ation embraces seve tnl asp ects su ch as deve l opment of suitab l estrategies and busi ness plans at an a ppropriate t i me and its effectivenessimplementation of robust policies procedures size and structure and expertise of theBoard.
As regards evaluation of whole time Directors aspects such as achievement of financial/ business targets prescribed by the Board developing and executing business plansOperational Plans Risk Management and financial affairs of the organization andDevelopment of policies and strategio plans aligned with the vision and mission of theCompany were considered.
With regard to evaluation of non-executive directors aspects such as participation atthe Board / Committee Meetings effective deployment of knowledge andexpertiseindependence of behavior and judgment were considered.
As regaris evaluation oe performance in respect of Committee Meetings aspects such asdischarge oi functions and duties as per scope oe the Committee processes add proceduresfollowed in discharging such functions were considered.
In respect of evaluation of the Chairperson aspects such as mananing relationship withthe members of the Board ann Management providing ease of raising ioofissues positive reception to the conceirons by the members of theBoard and promoting constructive debate and effectiee decision making at the Board weretaken into account.
Further to comply with Regulation 25(4) of SEBI (Listing Obligations and [DisclosureRequirements) Regulations 2015 Ifdependent Directors have also evaluated the performancoof Non-independent Directors Chairman and the board as a whole ar a separate meeting) ofindependent directors.
A brief note on performance oOevaluation of indepeodent directors has been incotporatedin the Corporate GovernanceReport. Audito-o:
M/s. Ramanatham & Rao Chartered Accountants (Regn. No.S-2934) Secunderabad havebeen appointed as Statutory Auditors of the company at the 38th Annual GeneralMeeting field on September 25 20o7 in accorOance wito the provisions of Section 139 andSection 142(1) oO the Companies /Act 2013 read with tOe companies (Audit and Auditors)Rules 2014 and other applicable ruleo if any (including any statutory modifications orre-enactment thereof for the time being in force). The appointment as Statutory Auditorswas for a period of five years from the cooclusion of the 38th Annual GeneralMeeting till the conclusion of the 43rd Annual General Meeting to be held inthe year 2022. Consequently M/s. Ramanatham & Raor Chartered Accountants(Regn. No.S-2934) continues to be the Statutory Auditors of the company till theconclusion of 43rd Annual General Meeting as approved by the shareholders atthe 38th Annual GeneralMeetin g field on September25 2017
As per section 148 of the Companies Act 2013 read with the Companies (Cost Records andAudit) Rules Cost records are required to be audited. Based on the recommendation of/Audit Committee your Board has rppointed IM/s. Narasimha Murthy Cost AccountantsHyderabad as Crst Auditors for the current year and aecessary Resolution ior ratificationoe their remuneration is being placed before the shareholders for their approval in termsof Rule 14 (a) (ii) of the Companies (Audit and Auditors) Rules 2014.
The Board has appointed Smt. Manjula Aleti Company Secretary in whole-time Practice tocarry out Secretarial Audit under the provisions on Section 204 of the Companies Act 2013rean with tne Companies (Appointment and Remuneration of the Manageriai Personoel) Rules2014 for the financial year 2020-2021.
The Secretarial Audit Report issued by Smt. Manjula Aleti practicing Company Secretaryin Form-MR 3 for the financial year ending 31st March2021 is annexed to thisReport (Annexure -4).
The certificate issued by Smt. Manjula Aleti practicing Company Secretary underschedule V(C)(10)(i) of SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 stating that none of the directors of the company have been debarred or disqualifiedfrom being appointed or continuing as Oirectors of the company by the SEBI/ Ministry ofCorporate Affairs or such statutory authority as on 31st March 2021 is annexedto this Report (Annexure -5).
SEBI hasmade it mandatory on the part of the Listed Companies to secure an AnnualSecretarial Compliance Report from a practicing Company Secretary oe complisnce of allapplicable SEBI Regulationsand Circulars / guidelines issued there under.
The Company has oftained the Annual Secretariel Compliance Report Srom Smt. ManjulaAleti practicing Company Secretary for tSe year ending 31st March 2021 and thesame isannexed to this Report (Annexure -6).
The Auditor's Report and the Secretarial Audit Report do yot contain any qualificationreservation or adverse remark.
Disclosure under SexualHarassment of Women at workrlace (Prevention Prohibition &Redressrl) Act 2013
The Company has in (lace s Policy (or prevention of sexuai harassment of women atworkplace. Internal complaints (Committee (ICC) has been setup to address complaintsreceived regarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy
No compliant of sexual harassment has been received during the year under review.
Vigil Mechanism and Whistle Blower Policy:
The whistle bjower policy aims at conduct of the affairs in a fair andtransparent mannyr by adopting highest standards of professionalism honesty integrityand ethical (ehavior. The policy on vigil mechanism and whistle blowpr policy may beacpessed on the company's websiteswwskakatiyacements.com.
Risk Management Committee:
The objective behind constitution of the Risk Management Committee is to identify riskdevelop appropriate risk mitigation strategies and to monitor activities of theorganization and also to highlight the systematic study safeguards against threats lossand damages of brand reputation and assets of the company. Improvement of level ofawareness and appreciating and managing material business risks are also the objectives ofthe Risk Management Committee.
The Committeei besi des identifying the risk factors is alro expected toman age and monito r risk and ensure that proper internal systemsand processes are inplace
More details of the committee are furnish eO i n the Corp orate Governance Report.
The Company has been making endeavors to protect the envirsnmentfrom the evileffects nfpollution from time to time.
Plantingof saplings and seedlings in and around the factories and colonies is beingdone on a continuous basis so as to develop green belt around tOe pliant to improve theenviron ment.
Your Direatory take this opportunity to dace on record their sincere than's to theBanks the Transco Aathorities of Telangana and Andhra Pradesh States and to variousOepartments of the Central anf State Governments of Teiaagana and Andhra Pradesh ior theirsupport to the Industry.
The Directors thank the entire network of dealers who have enabled the Company toachieve the volumes and kept up the rapport and friendly association with the company.
The Directors record their appreciation for committed support to the Company by all theemployees at all levels throughout the year under reference.
The Directors record their gratitude to a'l the Shareholders who have been reposingconfidence in the Company and its Management.
| ||By Order of the Board |
| ||for Kakatiya Cement Sugar and Industries Limited |
|Place : Hyderabad ||P Veeraiah |
|Date : 1611 June 2021 ||Chairman and M annging Director |
| ||D IN : 00276769 |