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Kakatiya Cement Sugar & Industries Ltd.

BSE: 500234 Sector: Industrials
NSE: KAKATCEM ISIN Code: INE437B01014
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OPEN 205.05
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VOLUME 897
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P/E 324.44
Mkt Cap.(Rs cr) 159
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OPEN 205.05
CLOSE 205.80
VOLUME 897
52-Week high 301.20
52-Week low 175.30
P/E 324.44
Mkt Cap.(Rs cr) 159
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kakatiya Cement Sugar & Industries Ltd. (KAKATCEM) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 43 Annual Report together with theAudited Financial statements for the year ended 31st March 2022.

Financial Results

The Financial Results for the year ended 31st March 2022 are summarized below:

(Rs in Lakhs)

Particulars 2021-22 2020-21
Income (Sales and other Income) 16414.31 13366.46
Pro t before Depreciation Interest & Taxes 3208.11 1934.01
Depreciation 226.88 252.45
Interest 126.19 225.12
Exceptional Items -- 545.83
(Provision for wheeling charges
Taxation 938.87 814.99
Deferred Taxation (20.04) (29.73)
TOTAL 1271.90 1808.66
Pro t after Tax 1936.21 125.35
Other Comprehensive Income 9.05 0.03
Total Comprehensive Income 1945.26 125.38
Share Capital (No. of shares) 7773858 7773858
EPS (Rs.) 24.91 1.61

Dividend

Your Directors are pleased to recommend for your consideration a Dividend at Rs 3.00per equity share of Rs 10/- each for the year ended 31.03.2022 at par with the dividenddeclared in the past few years and entails an outlay of Rs 233.22 lacs.

Transfer of Pro ts 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 Companies 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 shall be transferred to the Investor Education and Protection Fund(IEPF).

Accordingly the Company has transferred 12655 equity shares to the IEPF Authorityduring the year ended 31st March 2022. To claim the equity shares and dividend which weretransferred to the IEPF the shareholders are requested to visit the website of theCompany www.kakatiyacements.com to know the procedure to claim the shares anddividend transferred to IEPF.

According to Section 125 of the Companies Act 2013 read with Investor Education andProtection Fund (Awareness and Protection of Investors) Rules 2001 the Company hastransferred unclaimed dividend amounting to 856462 to IEPF during the year under review.The said transfer is in respect of the unclaimed dividend for the financial year2013-2014.

Material Changes and Commitments

In terms of Section 134(3)(i) 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 of the Report.

Covid -19

Consequent to lockdown declared by the state and central governments resulting from theglobal epidemic the Company had shut down its operations in April and May 2021 whichhad affected the operations of the Company marginally.

Considering the resurgence in the spread of Covid-19 virus in the world in the pastcouple of months your Company has been taking all preventive steps with regard to covidappropriate behavior and we expect no major changes in the economic activity as the nationis combating the pandemic challenge through preparedness on all fronts and also expeditingthe vaccination drive across the country for all age-groups of Citizens.

Public Deposits

The Company has not accepted any deposits during the year under review and there wereno outstanding deposits as at the end of the year falling within the ambit of Section 73of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

Signicant and Material orders passed by 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 theCompany's operations in future.

Appointment of Woman Independent Director

The Members are aware that at its meeting held on 16 June 2021 the Board had appointedSmt. Hima Bindu Myneni as Non-Executive Independent Woman Director for a period of Fiveyears and the same was approved by the Members at their Annual General Meeting held on 2September 2021.

Directors retiring by rotation

In accordance with the provisions of the Companies Act 2013 Shri J S Rao Directorretires by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment.

The brief pro le of Shri J S Rao Director who is seeking re-appointment at the ensuingAnnual General Meeting is presented elsewhere in this Annual Report.

Dematerialisation

As on 31st March 2022 7593729 shares were dematerialised with National SecuritiesDepository Limited and Central Depository Services (India) Limited which constitutes97.68% of the shares of the Company.

The Company therefore once again requests such of the public shareholders who have notyet dematerialised their shares to initiate immediate steps to complete the process ofdematerialisation.

Statement of Affairs of the Company

The Statement of a airs of the Company is presented as part of Management Discussionand Analysis (MDA) Report forming part of this Report.

PERFORMANCE OF THE YEAR UNDER REVIEW

Despite several adverse factors playing their role the Company could manage to deliverbetter performance in the year under review on account of higher volumes coupled withsuperior price realisations and cost effective measures in comparison with the precedingyear.

The division-wise operational and financial details of the performance are statedherein below:-

Cement Division:

During the year under review the Cement Division has produced 269940 MT as against247904 MT in the year ago period thereby registering an increase of about 8.90%.

The Cement Division has clocked a turnover of Rs 109.84 crores in 2021-22 as againstthe turnover of 103.51 crores recorded in the previous year and this works out to a riseof 6.12%.

The Cement Division has earned profit before interest and tax (PBIT) of 22.94 crores inthe year under review as against 27.34 crores earned in the previous year. This works outto a decrease of around 16% over the previous year.

Sugar Division:

The Sugar cane crushed in the Sugar Division in the year under review is 101743 MT asagainst 69235 MT in the previous year thereby recording an increase of 46.95%. TheCompany could not procure the mandals and villages of its choice even in the year underreview. The Government Regulation restricting the sale of the sugar has also impacted thequantum of sales during the year under review.

The Sugar Division has clocked a turnover of Rs 47.25 crores in 2021-22 in comparisonwith Rs20.21 crores in the preceding year and thereby registering an increase of 133.80%over the year ago period. The Sugar Division has recorded profit before interest and tax(PBIT) of Rs (2.15) crores in the year under review as against Rs (6.85) crores in thepreceding year.

Power Division:

The Power Division has generated 14149420 KWH in 2021-22 as against 11298040 KWHof power in the preceding year thereby recording an increase of 25.23 %. Members are awarethat the Company has not been able to generate power during o -season period in the SugarDivision since the Government of Telangana has not been conceding to the request of thepower entities to generate power using coal as an alternative fuel to the bagasse.

The Power Division has clocked a turnover of Rs 16.57 crores in the year under reviewas against the turnover of Rs 9.19 crores made in the year-ago period and this works outto an increase of 80.30% over the previous year.

The Power Division made a Pro t before interest and tax (PBIT) of Rs 9.01 crores asagainst a profit of Rs (9.13) crores in the previous year.

CURRENT YEAR OUTLOOK:

Cement Division:

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.

Sugar Division:

The Sugar 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 prospects of the Company. Despite the above constraints yourCompany

could improve significantly the cane crushing during the financial year ended 31stMarch 2022 and therefore con dent of attaining a target of 150000 MT for cane crushingfor the current year.

Power Division:

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 o -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 the improved performance of the SugarDivision in the year under review the Company is hopeful of attaining higher levels ofgeneration in its Power Division in the current year subject to any serious impedimentsoccurring in the Sugar Division.

Insurance:

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 Return as per provisions of Section 92(3) and Section 134(3)of the Companies Act 2013 and Rule 12 of Companies (Management and Administration) Rules2014 in form MGT-9 is enclosed to this Report (Annexure - 1). The same is posted onthe website of the Company at www.kakatiyacements.com.

II) Board Meetings:

During the year under review 4 (Four) Board Meetings were held. The details of theBoard Meetings and its composition along with the attendance of the Directors arefurnished elsewhere in the Corporate Governance Report.

III) Changes in Share Capital

There is no change in the Share Capital during the year under review.

IV) Changes in the nature of business if any

There is no change in the nature of business of the Company during the year underreview.

V) Remuneration Policy:

The Company follows a policy on remuneration of Directors and Senior Managementpersonnel. The Policy is approved by the Nomination and Remuneration Committee and theBoard.

VI) 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 2022 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 25 May 2021 and there-appointemnt has been approved by the members at their Annual General Meeting held on 2September 2021.

All the Related Party Transactions have been approved by the Audit Committee.

VII) Statement of particulars of Appointment and Remuneration of the ManagerialPersonnel:

The statement of particulars of Appointment and Remuneration of Managerial Personnel asper Section 197(12) of the Companies Act 2013 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 for the year ending31st March 2022 is annexed to this Report (Annexure-3).

VIII) Independent Directors Data Bank

All the Independent Directors of the Company have been registered and are members ofthe Independent Directors Data Bank maintained by Indian Institute of Corporate A airs.Renewal of Registration was sought for one year by the existing Independent Directorsexcept 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 passingthe online pro ciency self-assessment test.

IX) Statement of Declaration of Independence furnished by Independent Directors underSection 149(6) of the Companies Act 2013:

The Independent Directors have submitted the declaration of independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in Section 149(6) of the Companies Act 2013 and Regulation25(8) and 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

Independent Directors have also con rmed that they are not aware of any 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 in uence.

X) Con rmation by the Board

Further the Board after taking these declarations / disclosures on record andacknowledging the veracity of the same concluded that the Independent Directors arepersons of integrity and possess the relevant experience to qualify as IndependentDirectors of the Company and are independent of the management.

The Board opines that the Independent Directors of the Company strictly adhere tocorporate integrity possess requisite expertise experience qualifications to dischargethe assigned duties and responsibilities as mandated by the Companies Act 2013 andListing Regulations diligently.

XI) Committees of the Board and its Meetings:

Your Board has constituted various Committees of the Board as required under theprovisions of the Companies Act 2013 and of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The details of the composition scope and its meetingsetc. are furnished in the Corporate Governance 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 con rm:

a. That in the preparation of annual accounts for the year ended 31st March 2022 theapplicable accounting standards have been followed and that there were no materialdepartures there from.

b. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of a airs of the Company as on 31st March 2022 andof Pro t of the Company 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 the assets of the Company and for preventing and detecting fraud and otherirregularities.

d. That the Directors have prepared the Annual Accounts for the Financial Year ended31st March 2022 on a ‘going concern' basis.

e. That the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f. That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Evaluation of the Board's Performance:

Evaluation of all Board members is done on an annual basis. The evaluation is done bythe 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 considered. At the end of the current year a comprehensive review will alsobe done.

The Board evaluation embraces several aspects such as development of suitablestrategies and business plans at an appropriate time and its effectiveness implementationof robust policies procedures size and structure and expertise of the Board.

As regards evaluation of Managing Director/Whole time Directors aspects such asachievement of financial / business targets prescribed by the Board developing andexecuting business plans Operational Plans Risk Management and financial a airs of theorganization and Development of policies and strategic plans aligned with the vision andmission of the Company were considered.

With regard to evaluation of non-executive directors aspects such as participation atthe Board / Committee Meetings effective deployment of knowledge and expertiseindependence of behavior and judgment were considered.

As regards evaluation of performance in respect of Committee Meetings aspects such asdischarge of functions and duties as per scope of the Committee processes and proceduresfollowed in discharging such functions were considered.

In respect of evaluation of the Chairperson aspects such as managing relationship withthe members of the Board and Management providing ease of raising of issues positivereception to the concerns by the members of the Board and promoting constructive debateand effective decision making at the Board were taken into account.

Further to comply with Regulation 25(4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Independent Directors have also evaluated the performanceof Non-independent Directors Chairman and the Board as a whole at a separate meeting ofindependent directors.

A brief note on performance evaluation of Independent Directors has been incorporatedin the Corporate Governance Report.

Auditors:

Statutory Auditors:

M/s. Ramanatham & Rao Chartered Accountants Secunderabad (FRN : 002934S) wereappointed as the Statutory Auditors of the Company for a period of 5 (Five) years at theAnnual General Meeting held during 2017 and they hold officeup to the conclusion of theensuing Annual General Meeting. They have communicated their inability to continue as theStatutory Auditors of the Company.

Considering the same the Audit Committee has recommended the appointment of M/s.Anandam & Co. Chartered Accountants Secunderabad (FRN:000125S) as the StatutoryAuditors for a period of 5 (Five) years to hold office from the conclusion of the ensuing43 Annual General Meeting up to the conclusion of the 48 Annual General Meeting to be heldduring 2027. Your Company has received the consent and confirmation from M/s. Anandam& Co. that their appointment if made would be in accordance with the provisions ofthe Companies Act 2013.

Your Board recommends the appointment of M/s. Anandam & Co. Chartered AccountantsSecunderabad as the Statutory Auditors of the Company to the members for their approval.

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 ofthe Company for the year 2022-23.

Cost Auditors:

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 ofAudit Committee your Board has appointed M/s. Narasimha Murthy Cost AccountantsHyderabad as Cost Auditors for the current year 2022-23 and necessary Resolution for ratication of their remuneration is placed before the Members at the ensuing Annual GeneralMeeting for their approval in terms of Rule 14 (a) (ii) of the Companies (Audit andAuditors) Rules 2014.

Secretarial Auditor:

The Board has appointed Smt. Manjula Aleti Company Secretary in whole-time Practice tocarry out Secretarial Audit under the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules2014 for the financial year 2022-23.

The Secretarial Audit Report issued by Smt. Manjula Aleti Practicing Company Secretaryin Form-MR 3 for the nancial year ending 31st March 2022 is annexed to this Report (Annexure-4).

The certificate issued by Smt. Manjula Aleti Practicing Company Secretary underschedule V(C)(10) (i) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 stating that as on 31st March 2022 none of the directors of the Companyhas been debarred or disqualified from being appointed or continuing as Directors of theCompany by the SEBI/ Ministry of Corporate A airs or such statutory authority is annexedto this Report (Annexure -5).

SEBI has made it mandatory on the part of the Listed Companies to secure an AnnualSecretarial Compliance Report from a Practicing Company Secretary on compliance of allapplicable SEBI Regulations and Circulars/guidelines issued there under. The Company hasobtained the Annual Secretarial Compliance Report from Smt. Manjula Aleti practicingCompany Secretary for the year ended 31st March 2022 and the same is annexed to thisReport (Annexure -6).

The Auditor's Report and the Secretarial Audit Report do not contain any quali cationreservation or adverse remark.

Corporate Social Responsibility (CSR):

In compliance with Section 134(3)(a) of the Companies Act 2013 read with the CompaniesCorporate Social Responsibility (CSR) policy Rules 2014 (as amended) the Company hasestablished CSR Committee comprising of Shri K Venkat Rao as Chairperson Shri P Veeraiahand Shri J S Rao as members. The Committee is responsible for formulating and monitoringthe CSR policy of the Company.

The annual report on CSR activities forms part of this Report (Annexure -7).

Corporate Governance

As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a detailed report on Corporate Governancetogether with the certificate from the Company's Auditors confirming compliance forms anintegral part of this Report.

Particulars of Loans Guarantees or Investments under Section 186 of the Companies Act2013.

There are no loans guarantees or investments made or given under Section 186 of theCompanies Act 2013.

Disclosure under Sexual Harassment of Women at workplace (Prevention Prohibition &Redressal) Act 2013

The Company has in place a Policy for prevention of sexual 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.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgopursuant to the provisions of Section 134(3)(m) of the Companies Act 2013 read with theCompanies (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 efforts made towards technology absorption Nil
(ii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial 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 finished 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 underreview.

Vigil Mechanism and Whistle Blower Policy:

The whistle blower policy aims at conduct of the a airs in a fair and transparentmanner by adopting highest standards of professionalism honesty integrity and ethicalbehavior. The policy on vigil mechanism and whistle blower policy may be accessed on theCompany's website : www.kakatiyacements.com.

Environmental Protection:

The Company has been making endeavors to protect the environment from the evil effectsof pollution from time to time.

Planting of saplings and seedlings in and around the factories and colonies is beingdone on a continuous basis so as to develop green belt around the plant to improve theenvironment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

a) Statement of Affairs of the Company

Members are aware that operations of the Cement Plant were shutdown in April and May2021 due to partial lock down in the wake of second wave of covid-19 pandemic therebyimpacting the cement output for April and May 2021 marginally. The Company has recordedCement production of 269940 MT as against 247904 MT in the preceding year thusregistering an increase of around 9%.

The Board has pleasure in informing the members that despite the serious impedimentsencountered by the Sugar Division it could record an increase of around 47% in its SugarCane crushing in the year under review which stands at 101743 MT as against 69235 MT inthe preceding year.

The Power Division has its own operational restraints. Members are aware that theCompany has not been able to generate power during o -season period in the Sugar Divisionsince the Government of Telangana has not been conceding to the request of the powerproducing 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 otherincome) of 154.40 crores compared to 122.80 crores recorded in the year-ago period. Thesegmental revenue has increased in all the three divisions of the Company viz. CementSugar and Power.

b) Industry Structure and Development:

The Company has a well developed net work of dealers located in the states of Telanganaand Andhra Pradesh for its Cement Division and the Company therefore is in a reasonablycomfortable position in securing orders from its clients. It is heartening to note thatsome of the dealers have been patronizing the Company since inception and the strongbondage that is developed between the Company and dealers is one of the prominent featuresof this mutually beneficial relationship.

While the Company has a well established structure and dealer network the Companyanticipates that it could have some impact on its performance in the current year becauseof covid-19 global epidemic. The Company shall endeavour its best to mitigate the fixedoverheads to the possible extent combat the critical challenges and move forward with acommitted sprit.

The sugar industry is essentially seasonal in its nature. The availability of canegood rainfall and proper irrigation facilities are primary issues that determine thefortunes of the industry. The allocation of zonal areas to the sugar units by thedepartment is also an important factor as allotment of villages having growth potentialfor cultivation of cane will facilitate higher cane production leading to production ofhigher volumes in the sugar industry.

c) Opportunities and Threats:

The Company is desirous of reaping the benefits of its well positioned dealer networkacross the states of Telangana and Andhra Pradesh in respect of its cement plant and willmake every e ort to overcome the bottlenecks in achieving the targeted operations for thecurrent year.

The Government of Telangana has not been permitting power generators to use coal as analternative fuel during the o season of the sugar industry as a matter of policy which wasnot the situation many years ago.

Unless the Government revisits the entire issue keeping in view the interest ofentrepreneurs as well as all other stakeholders it would be di cult for the powergenerators to survive in the long run as sub-optimal generation of power will seriouslyimpact the viability of the industry.

In the sugar industry fetching remunerative price for its product adequateavailability of sugar cane with close proximity to the sugar plant and industry-friendlygovernmental regulations are the key areas of concern.

The Company will make its best endeavors in resolving the complicated issues in theSugar and Power Divisions through negotiations with governmental authorities and will alsoliaison with the legal advisers in respect of pending litigations concerning the PowerDivision.

While all the issues raised are specific to our Company the Company recognizes that weare living in an economic environment marked by great uncertainty bu eted by the repeatedwaves of Corona infection and its spill over effect on downstream sectors.

However the Company with an ability determination and grit acquired over the yearsis in a strong challenging model and combat the critical situations resulting from microand 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 statesof Telangana and Andhra Pradesh. The existing production capacity can be optimallyutilized in catering to the requirements of the two Telugu states. In the circumstances nomedium and long term strategy is being envisaged by the Company in the absence of anyimmediate 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 ofproduct obsolescence or steep fall in demand by way of product substitution or otherwiseand therefore your Directors do not foresee any major risks and concerns in the nearfuture except as discussed elsewhere in this Report.

The Company endeavours its best to effect necessary changes modi cations to themachinery and equipment and also to carry out necessary maintenance works to position themachinery in all the divisions in robust condition so as to keep the bottlenecks at bay.

Consequent to resurgence of covid-19 global epidemic across the world the Companyshall put in its best by adopting measures that ensure safety and health of workers. Allsuitable measures and steps that are within the control of the management shall be takento counter the challenges posed by the global epidemic.

h) Internal control systems and their adequacy:

As stated elsewhere in this Report the Company has adequate internal control systemsand the Chief Financial Officer will monitor the Internal audit Reports and brief theAudit Committee in case any de ciency in the system is noticed and corrective measures areadopted 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 istherefore committed to provide necessary human resource development and trainingopportunities to equip employees with additional skills to enable them to adapt tocontemporary technological advancements.

Industrial Relations during the year continued to be cordial through effectivecommunication meetings and negotiations with the work force in an informal and congenialatmosphere.

The Company's strength consists of 481 permanent employees as on 31st March 2022.

k) The details of significant changes (change of 25% or more) as compared to thepreceding year in key financial 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 368.28 Increase in Pro ts
4. Net Pro t Margin ( % ) 164.49 Increase in Pro ts
5. Return on Net worth (%) 232.56 Increase in Pro ts
6. Operating Pro t Margin (%) PBIT 108.77 Increase in Pro ts

Cautionary Statement

Statements in this "Management Discussion and Analysis" may be considered tobe "forward looking statements" within the meaning of applicable securities Lawsor Regulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the Company's operations includedemand-supply conditions finished goods prices raw material availability and pricescyclical demand and pricing in the Company's markets changes in Government Regulationstax regimes besides other factors such as litigations and labour negotiations and healthand safety related issues concerning all the stakeholders.

Acknowledgment

Your Directors take this opportunity to place on record their sincere thanks to theBanks the Transco Authorities of Telangana and Andhra Pradesh States and to variousdepartments of the Central and State Governments of Telangana and Andhra Pradesh for 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 all the Shareholders who have been reposing condence in the Company and its Management.

By Order of the Board
for Kakatiya Cement Sugar & Industries Limited
Place : Hyderabad P Veeraiah
Date : May 25 2022 Chairman and Managing Director
DIN : 00276769

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