Barak Valley Management Discussions


The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 percent in 2023 with advanced economy growth falling below 1 percent. Global headline inflation in the baseline is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly. Inflations return to target is unlikely before 2025 in most cases.

(Source: IMF- World Economic Outlook, April 2023)

Regional Growth % over the year

Regional Growth % 2022 2021
World Output 3.60 6.10
Advanced Economies 3.30 5.20
Developing and Emerging 3.80 6.80


Strong economic growth in the first quarter of FY 2022-23 helped India overcome the UK to become the fifth-largest economy after it recovered from repeated waves of COVID-19 pandemic shock. Real GDP in the first quarter of 2022-23 is currently about 4% higher than its corresponding 201920, indicating a strong start for Indias recovery from the pandemic. Given the release of pent-up demand and the widespread vaccination coverage, the contact-intensive services sector will probably be the main driver of development in 2022-2023. Rising employment and substantially increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

Future capital spending of the government in the economy is expected to be supported by factors such as tax buoyancy, the streamlined tax system with low rates, a thorough assessment and rationalisation of the tariff structure, and the digitization of tax filing. In the medium run, increased capital spending on infrastructure and asset-building projects is set to increase growth multipliers, and with the revival in monsoon and the Kharif sowing, agriculture is also picking up momentum. The contact-based services sector has largely demonstrated promise to boost growth by unleashing the pent- up demand over the period of April-September 2022. The sectors success is being captured by a number of HFIs (High-Frequency Indicators) that are performing well, indicating the beginnings of a comeback.

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

Y-o-Y Growth of Indian Economy

Indias nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 232.15 trillion (US$ 3.12 trillion) in FY22. With more than 100 unicorns valued at US$ 332.7 billion, India has the third-largest unicorn base in the world. The government is also focusing on renewable sources to generate energy and is planning to achieve 40% of its energy from non-fossil sources by 2030.

According to the McKinsey Global Institute, India needs to boost its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030 in order to increase productivity and economic growth. The net employment rate needs to grow by 1.5% per annum from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030. Indias current account deficit (CAD), primarily driven by an increase in the trade deficit, stood at 2.1% of GDP in the first quarter of FY 2022-23.

Exports fared remarkably well during the pandemic and aided recovery when all other growth engines were losing steam in terms of their contribution to GDP. Going forward, the contribution of merchandise exports may waver as several of Indias trade partners witness an economic slowdown. According to Mr. Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Indian exports are expected to reach US$ 1 trillion by 2030.

(Source: India Brand Equity Foundation)


India is the second largest cement producer in the world and accounted for over 7% of the global installed capacity. Of the total capacity, 98% lies with the private sector and the rest with public sector. The top 20 companies account for around 70% of the total cement production in India. As India has a high quantity and quality of limestone deposits through-out the country, the cement industry promises huge potential for growth.

Indias cement production has increased at a CAGR of 5.65% between FY16-22, driven by demands in roads, urban infrastructure and commercial real estate. The consumption of cement in India has grown at a CAGR of 5.68% from FY16 to FY22.

At present, the Installed capacity of cement in India is 500 MTPA with production of 298 MTPA.The Cement sector has received good investments and support from the Government in the recent past.

FDI inflows in the industry, related to the manufacturing of cement and gypsum products, reached US$ 5.48 billion between April 2000-June 2022.

PE/VC investments in real estate and infrastructure stood at US$ 338 million and US$ 795 million respectively in September 2022.

As per the Union Budget 2022-23, there was a higher allocation for infrastructure to the tune of US$ 26.74 billion in roads and US$ 18.84 billion in railways is likely to boost demand for cement.

Under the housing for all segment, 8 million households will be identified according Rs. 48,000 crore (US$ 6.44 billion) set aside for PM Awas Yojana.

The government approved an outlay of Rs. 199,107 crore (US$ 26.74 billion) for the Ministry of Road Transport and Highways, and this step is likely to boost the demand for cement.

Several government schemes such as MGNREGA, PM Garib Kalyan Rozgar Abhiyan and state-level schemes such as Matir Srisht (West Bengal) and public work schemes (Jharkhand) have aided demand

In October 2021, Prime Minister, Mr. Narendra Modi, launched the PM Gati Shakti - National Master Plan (NMP) for multimodal connectivity. Gati Shakti will bring synergy to create a world-class, seamless multimodal transport network in India. This will boost the demand for cement in the future.

Growth in Infrastructure and real estate sector, post-COVID-19 pandemic, is likely to augment the demand for cement in 2022. The industry is likely to add an ~8 MTPA capacity in cement production.

As per DGCIS, Indias export of Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cements stood at US$ 118.15 million in FY21. India exported cement to countries such as Sri Lanka, Nepal, the US, the UAE and Bangladesh.

The Government of India is strongly focused on infrastructure development to boost economic growth and is aiming for 100 smart cities. The Government also intends to expand the capacity of railways and the facilities for handling and storage to ease the transportation of cement and reduce transportation cost. These measures would lead to an increased construction activity, thereby boosting cement demand.

The future outlook of the cement sector looks on track with pandemic easing out.

In the next 10 years, India could become the main exporter of clinker and gray cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well armed to face stiff competition from cement plants in the interior of the country. Indias cement production capacity is expected to reach 550 MT by 2025. The cement demand in India is estimated to touch 419.92 MT by FY 2027 driven by the expanding demand of different sectors, i.e., housing, commercial construction, and industrial construction.


For North East Region, The installed Capacity of cement for the year 2022-23 was 18.59 MTPA whereas the Demand stood at 10.13 MTPA. The Demand of Cement is likely to grow 8-10% in the North East Region during next 4 to 5 years whereas Capacity is also likely to grow at the same rate in next 4 to 5 years.

Opportunities and Threats, Risks and Concerns

Overall despite the challenges being faced, the cement industry is here to grow with the growth story of the nation remaining intact. With the rise of income of the middle class, launch of various housing schemes by the government, easier home loans availability & infrastructure push by the government, the sun looks brighter for the industry & just like any other industry, the cement industry is also reinventing & innovating itself with newer technologies & processes to ride alongside the positive outlook of the nation.


Risk Management

Your Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business. The Board of Directors of the Company is kept informed about the risk management of the Company. The Audit Committee of Board, keeps an eye on execution of the risk management plan of the Company and advises the management on strengthening mitigating measures wherever required. The actual identification, assessment and mitigation of risks are however done by key executives of the Company in a systematic manner through regular meetings and dialogue and engagement/ consultation with relevant stakeholders. The risks are prioritized according to significance and likelihood. Risks having high likelihood and high significance are classified as key risk.

The Key Risks identified by the Company and their mitigation are as under:

• Economic Environment and Market Demand Risk: Maintaining market position in a highly volatile, uncertain, complex and ambiguous environment, especially given the demand contraction caused by COVID-19 pandemic.

Mitigation: The positive macro-economic environment, government support and our own capex plans will help us address Indias growing cement demand.

• Resource Availability and Price Risk: The rise in input costs increased the overall cost of production and its necessary to secure key inputs to remain cost-competitive and ensure sustainable supply.

Mitigation: Exploring new contracts to secure competitive supply sources, wherever possible and investing in Infrastructure to ensure seamless availability of resources.

• Legal and Compliance Risk: The countrys regulatory framework is ever-evolving and the risk of non-compliance and penalties can lead to reputational and financial consequences, while compliance too comes at the cost for innovation, alternatives, transformation and upgradation, among others.

Mitigation: A comprehensive risk based compliance programme, involving inclusive training and adherence to the Code of Conduct, is thus institutionalized by your Company.

• Climate and Sustainability Risk: Environment protection is of paramount importance, considering the energy-intensity of the sector.

Mitigation: Various initiatives are being undertaken to arrest the adverse impact caused by our production activities, such as installation of bag filters to reduce dust pollution, extensive plantation and creation of green belts to de-risk and protect the environment.

• Financial Risk:

i) Investment Risk: If the plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

ii) Discount Rate Risk: Reduction in discount rate in subsequent valuations can increase the plans liability.

iii) Life Expectancy:The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

iv) Salary growth risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability. Any variation in salary increase rate assumption in future valuations will also increase the liability.

Mitigation: The companys objective when managing capital are to:

• Safeguard their ability to continue as a going concern of the company, so that they can provide returns for shareholders and benefits for other stakeholders

• Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividend to shareholders, return capital to shareholders or issue new shares.


The cement industry is forecast to grow at a compound annual growth rate (CAGR) of 3.4% during the 2022-2030 period, driven by increasing construction activity and rapid urbanization in developing countries. The Asia-Pacific region is expected to remain the largest market for cement, accounting for more than 60% of global demand.



The following are the highlights of the performance of the Company (Standalone):

(Rs. in Lacs)

Particulars 2022-23 2021-22
Net Sales 17,446.27 17,272.83
Profit/(Loss) after Tax 580.12 (427.30)
Net Worth 9,329.82 8,760.39
Borrowings(Long Term) 2,794.87 4,484.07
Earning Per Share 2.62 (1.93)
Production(MT) 2,58,762.00 2,49,736.00
Dispatches(MT) 2,57,253.70 2,50,553.70

During the year under report, your Company has earned a profit of Rs. 508.12 Lacs in comparison to net loss of Rs. (427.30) Lacs in the previous year.


Your Company has a diversified customer base in Mizoram, Barak Valley Region and Tripura consisting of potential customers, contractors, builders, institutions, Government Agencies. Your Companys brand "Valley Strong" is a brand of trust and reliance for the people of North East since inception and therefore the entire production of the Company is sold in North East Region. During the year the Gross Revenue from operations were Rs. 17446.27 Lacs in comparison of previous year Rs. 17272.83 Lacs.Your Company had also incurred Rs. 280.55 Lacs in the year 2022-23 as compared to Rs. 126.32 Lacs in the year 2021-22 on the Advertisement, Publicity & Sales Promotion expenses.


(a) Raw Material

(i) Lime Stone :

During the year, the Company has consumed 244706.38 MT of Limestone as compared to 213817.39 MT of Limestone during last year. The Company had incurred Rs.1085.24 per MT an average acquisition cost of Limestone as compared to Rs. 1111.60 per MT in last year.

(ii) Fly Ash:

During the year, the Company has consumed 59138.42 MT of Fly ash against 43975.26 MT during last year. The average acquisition cost per MT of Fly ash has been Rs. 2193.56 per MT in current year as compared to Rs. 2174.72 per MT in the last year. The total cost of fly ash consumed in the year 2022-23 is Rs.1297.23 lacs as compared to 2021-22 was Rs. 956.33 Lacs.

(iii) Gypsum:

During the year 2022-23, the Company has consumed Rs. 27.44 Lacs of Gypsum as compared to Rs.50.62 Lacs of Gypsum during last year.

(b) Salaries, Wages and Labor Cost

In current year 2022-23, the Company has incurred Rs. 1516.09 Lacs on salaries, wages and labour cost as against Rs. 1507.41 Lacs in 2021-22.

(c) Transportation Cost

The Company has dispatched 257253.70 MT of cement in the Year 2022-23 as compared to 250553.70 MT of cement in the previous financial year. Due to this, the overall transportation cost had decreased to Rs. 1110.08 Lacs as compared to Rs. 1171.45 Lacs in the last year.

(d) Financial Costs

During the year the Company had incurred Rs. 869.22 Lacs in Interest & Financial Costs as compared to Rs. 924.05 Lacs in the previous year 2021-22.


The Company adheres to the prescribed Accounting Standards for the purpose of preparation of Financial Statements. The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 under the provisions of the Act and subsequent amendments thereof.

The financial statements are prepared on a going concern basis and are presented in Indian Rupees and all values are rounded off to the nearest million except when otherwise indicated. The financial statements have been prepared under the historical cost basis except for derivative financial instruments and certain other financial assets and liabilities that have been measured at fair value.


The Company has discussed the performance of following segments:

Name of Segment 2022-23 2021-22
Segment Revenue (Rs. in Lacs) Segment Operating Profit(Before Depreciation, Interest and Tax) (Rs. in Lacs) Segment Revenue (Rs. in Lacs) Segment Operating Profit (Before Depreciation, Interest and Tax) (Rs. in Lacs)
Cement 17,446.27 1,664.18 17,272.83 1,563.68
Unallocated/Others 811.27 66.10 297.52 59.98
Total 18,257.54 1,730.29 17,570.35 1,623.65

During the year, the revenue from Cement division have increased as compared to the previous year.


The Company believes that a strong internal control framework is an important pillar of Corporate Governance. It has established internal control mechanisms commensurate with the size and complexity of its business. A strong Internal Control framework is established through right tone at the top for good corporate governance which serves as a foundation for excellence and the same is embedded in operations through its policies and procedures.

The Company has laid down Internal Financial Controls as detailed in the Companies Act, 2013 and has covered all major processes commensurate with the size of business operations. These have been established at the entity & process levels and are designed to ensure compliance to internal control requirements, regulatory compliance and appropriate recording & reporting of financial & operational information. The Company has reviewed and sustained internal financial controls by adopting a systematic approach to evaluate, control design and operating effectiveness. BVCL has deployed a vigorous Internal Controls and Audit Mechanism to facilitate an accurate and fair presentation of its financial results. This process not just ensures adherence to regulatory standards and meets statutory compliance requirements, but also confirms that our reporting is complete, reliable and understandable. In addition, there is a specific impetus on safeguarding investor interests with deployment of the highest levels of governance and regular communication with them.

Further, Internal Audit Function is looked by Internal Audit department which reports to the Audit Committee of the Board. Internal Audit function works independently and evaluates the efficacy and adequacy of internal control system, its compliance with operating system and policies of the company and accounting procedure at all location, i.e. plant, marketing office & depots. Based on the input of internal audit report, designated process owner takes corrective actions in their respective area thereby strengthening controls and checks. In case any significant observations are noticed same is brought to the knowledge of members of audit committee for corrective actions.


The role of Human Resources has evolved in recent years. Today, it operates in complete partnership with senior leadership and business functions translating strategic priorities into action. The end result: to develop and sustain a culture where every employee is respected and valued for their good work.

The Company believes that the quality of the employees is the key to its success and is committed to equip them with skills, enabling them to seamlessly evolve with ongoing technological advancements. During the year, the Company organised training programmes in different areas such as technical skills, behavioural skills, business excellence, general management, advanced management, leadership skills, customer orientation, safety, values and code of conduct.

The Company provides a culture of freedom for the employees where an employee is able to speak his / her mind for the organizational improvements. The Leaders conduct meetings to provide a platform to the team where they can share their concern and get solutions.

Your Company provides regular skill and personnel development trainings to enhance productivity. This also includes creating the first line of leaders, internal job posting, and high level of promotions, ensuring low attrition rates. Your Company emphasizes on good governance and has in place the whistle blower and anti-sexual harassment policies. The arrangement creates an amicable growth scenario for both the employees and organizational goals. The Companys number of employees as at March 31,2023 on consolidated basis stood at 280 (Previous Year 276)


Particulars March 31, 2023 March 31, 2022 % change in Financial Ratios
Debtor Turnover Ratio 13.86 12.93 7.17%
Inventory Turnover Ratio 6.12 9.72 (37.07%)
Interest Coverage Ratio 1.96 1.72 14%
Current Ratio 1.04 1.08 (3.73%)
Debt Equity Ratio 0.71 0.93 (23.16%)
Operating Profit Margin (%) 9.78% 9.21% 6.17%
Net Profit Margin (%) 3.30% (2.44)% (235.11%)
Return on Net Worth (%) 6.41% (4.76)% (234.74%)

The reasons for significant changes (i.e. change of 25% or More) in above key financial ratios are as follows:

Inventory Turnover Ratio

High Variation is due to pile up of inventories at year end due to seasonal issues.

Net Profit Margin (%)

Exceptional losses incurred during the last year.

Return on Net Worth (%)

Exceptional losses incurred during the last year.


Statements in the Management Discussion and Analysis Report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Kamakhya Chamaria Mahendra Kumar Agarwal
(Vice Chairman & Managing Director) (Director)
DIN :00612581 DIN:00044343
Add: 48/72, West Punjabi Bagh Add: 77 BE Block, Sector-1, Bidhan Nagar,
Delhi-110026 North 24 Paraganas, West Bengal-700064
Place: New Delhi
Date: 11.08.2023