jaiprakash associates ltd Management discussions

Forming part of the Report of Directors for the year ended March 31, 2023

ECONOMIC OVERVIEW GLOBAL ECONOMY

As per the ‘GLOBAL ECONOMIC PROSPECTS,

a flagship report of THE WORLD BANK GROUP, published in June 2023, the global economy remains in a precarious state amid the protracted effects of the overlapping negative shocks of the pandemic, the Russian Federations invasion of Ukraine, and the sharp tightening of monetary policy to contain high inflation. Global growth is projected to slow significantly in the second half of this year, with weakness continuing in 2024. Inflation pressures persist, and tight monetary policy is expected to weigh substantially on activity. Recent banking sector stress in advanced economies will also likely dampen activity through more restrictive credit conditions. The possibility of more widespread bank turmoil and tighter monetary policy could result in even weaker global growth. Rising borrowing costs in advanced economies could lead to financial dislocations in the more vulnerable emerging market and developing economies (EMDEs). In low-income countries, in particular, fiscal positions are increasingly precarious.

Comprehensive policy action is needed at the global and national levels to foster macroeconomic and financial stability.

Among many EMDEs, and especially in low-income countries, bolstering fiscal sustainability will require generating higher revenues, making spending more efficient,and improving debt management practices. Continued international cooperation is also necessary to tackle climate change, support populations affected by crises and hunger, and provide debt relief where needed. In the longer term, reversing a projected decline in EMDE potential growth will require reforms to bolster physical and human capital and labour-supply growth.

Global Outlook. After growing 3.1 percent last year, the global economy is set to slow substantially in 2023, to 2.1 percent, amid continued monetary policy tightening to rein in high inflation, before a tepid recovery in 2024, to 2.4 percent. Tight global financial conditions and subdued external demand are expected to weigh on growth across emerging market and developing economies (EMDEs). Global growth could be weaker than anticipated in the event of more widespread banking sector stress, or if more persistent inflation pressures prompt tighter-than-expected monetary policy. Weak growth prospects and heightened risks in the near term compound a long-term slowdown in potential growth, which has been exacerbated by the overlapping shocks of the pandemic, the Russian Federations invasion of Ukraine, and the sharp tightening of global financial conditions. Global cooperation is necessary to accelerate the clean energy transition, mitigate climate change, and provide debt relief for the rising number of countries experiencing debt distress. At the national level, it is imperative to implement credible policies to contain inflation and ensure macroeconomic and financial stability, as well as undertake reforms to set the foundations for a robust, sustainable, and inclusive development path.

INDIAN ECONOMY

As per ‘India Brand Equity Foundation (a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India), 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 2019-20, 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 Khar if sowing, agriculture is also picking up momentum. 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.

RECENT DEVELOPMENTS & YOUR COMPANYS PERCEPTION ABOUT FUTURE GROWTH:

Your Company, following its motto of "Growth with humane face", has always taken every step to fight against the Covid

19 pandemic and its adverse effect on the Company and its stakeholders and has always been at forefront to save its employees, their families as well as all concerned stakeholders. Your Directors, while continuing to take business forward, had always strongly believed that ‘Bad times will end & Good times will come back, The Business of the world as well as your Company will grow with the times to come; We, together as a team, will do everything for that cherished goal of increasing shareholders value and net worth. Such belief and hard work would definitely generate the desired results.

Your Directors hope that Government would always give reasonable encouragement to the industry especially for the infrastructure sector. Your Company continually endeavours to grow due to its presence basically in the infra-structure sector, which is the backbone of countrys overall growth & development. Your Company always attempts to join the stream with vigour and positivity. Your Company is endeavouring to enhance its operations by cost reduction programs. Your management expects reasonably good growth in shareholders value in the years ahead.

COMPANYS BUSINESS

The Companys business (directly or through subsidiary companies) can broadly be classified in the following sectors:

1. Engineering & Construction

2. Manufacture & Marketing of Cement (including through subsidiaries)

3. Energy (Power & Transmission) (through Associate Companies)

4. Expressways (through subsidiaries)

5. Real Estate (including through subsidiary)

6. Hospitality, and

7. Sports.

INDUSTRY STRUCTURE AND DEVELOPMENTS RELATING TO COMPANYS LINES OF BUSINESS

1. ENGINEERING & CONSTRUCTION

As per ‘India Brand Equity Foundation (a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India), The engineering sector is the largest of the industrial sectors in India. It accounts for 27% of the total factories in the industrial sector and represents 63% of the overall foreign collaborations. Demand for engineering sector services is being driven by capacity expansion in industries like infrastructure, electricity, mining, oil and gas, refinery, steel, automobiles, and consumer durables. India has a competitive advantage in terms of manufacturing costs, market knowledge, technology, and innovation in various engineering sub-sectors. Indias engineering sector has witnessed a remarkable growth over the last few years, driven by increased investment in infrastructure and industrial production. The engineering sector, being closely associated with the manufacturing and infrastructure sectors, is of huge strategic importance to Indias economy.

The development of the engineering sector of the economy is also significantly aided by the policies and initiatives of the

Indian government. The engineering industry has been de-licensed and allows 100% foreign direct investment (FDI). Additionally, it has grown to be the biggest contributor to the nations overall merchandise exports.

The Indian engineering sector is of strategic importance to the economy owing to its intense integration with other industry segments. The sector has been de-licensed and enjoys 100% FDI. With the aim to boost the manufacturing sector, the government has relaxed the excise duties on factory gate tax, capital goods, consumer durables and vehicles.

Infrastructure sector is a key driver for the Indian economy.

Indias high growth imperative in 2023 and beyond will significantly be driven by major strides in key sectors with infrastructure development being a critical force aiding the progress.

Infrastructure is a key enabler in helping India become a US $26 trillion economy. Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increase efficiency and costs. Prime Minister Mr. Narendra Modi also recently reiterated that infrastructure is a crucial pillar to ensure good governance across sectors.

The governments focus on building infrastructure of the future has been evident given the slew of initiatives launched recently. The US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, has been a forerunner to bring about systemic and effective reforms in the sector, and has already shown a significant headway.

Infrastructure support to nations manufacturers also remains one of the top agendas as it will significantly transform goods and exports movement making freight delivery effective and economical.

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for Indias economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness.

Government Initiatives

The Government of India is expected to invest highly in the infrastructure sector, mainly highways, renewable energy and urban transport. The Government of India is taking every possible initiative to boost the infrastructure sector.

CHALLENGES AND OUTLOOK

The E&C activities require a large work force at one place which is presently not possible due to Government directives. Thus the E&C business of the company has also experienced a negative impact in its work progress & resultant Revenue generation & cash flow.

However, your Company is continuing to look forward for participation in the tenders for a number of large hydro-electric projects. The Company also expects a healthy order books of construction contracts and road projects.

In the current macro-economic environment, to achieve this objective, there is need to address sector-specific issues over the medium to long-term horizon in India.

While your Company is an acknowledged leader in the field of multipurpose river valley and hydro-power projects and has in-house capability for undertaking challenging assignments anywhere in the world on EPC (Engineering, Procurement and Construction) contract basis, it is facing increasing competition from new entrants in the packaged contract sector for the past few years, which is expected to increase due to possible reduction of opportunities in the immediate future, till the economy moves to a fast growth rate.

2. CEMENT

As per ‘India Brand Equity Foundation, India is the second largest producer of cement in the world. It accounts for more than 8% of the global installed capacity. India has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it. Furthermore, on the back of rising rural housing demand, the consumption of cement in India has been growing consistently as it is one of the cheapest products to buy in terms of Rs./kg. Strong expansion of the industrial sector, which has fully recovered from the COVID-19 pandemic shock, is one of the main demand drivers for the cement industry. As a result, there is a strong potential for an increase in the long-term demand for the cement industry. Some of the recent initiatives, such as the development of 98 smart cities, are expected to significantly boost the sector.

Your management is of the view that when the economic growth picks up, the cement demand is expected to sustain growth. The key drivers of this demand shall be the continued expansion in infrastructure, real estate and industrial sectors.

3. POWER

As per ‘India Brand Equity Foundation, Power is among the most critical components of infrastructure, crucial for the economic growth and welfare of nations. The existence and development of adequate power infrastructure is essential for sustained growth of the Indian economy. The fundamental principle of Indias power industry has been to provide universal access to affordable power in a sustainable way. The

Ministry of Power has made significant efforts over the past few years to turn the country from one with a power shortage to one with a surplus by establishing a single national grid, fortifying the distribution network, and achieving universal household electrification.

Indias power sector is one of the most diversified in the world

Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power, to viable non-conventional sources such as wind, solar, agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.

Considering the huge potential in the Energy sector, your Company through its associate companies is making efforts to make the breakthrough.

4. ROADS/ EXPRESSWAYS

As per ‘India Brand Equity Foundation, India has the second-largest road network in the world, spanning a total of 6.3 million kilometers (kms). This road network transports 64.5% of all goods in the country and 90% of Indias total passenger traffic uses road network to commute. Road transportation has gradually increased over the years with improvement in connectivity between cities, towns and villages in the country. In India, sale of automobiles and movement of freight by roads is growing at a rapid rate.

Highway construction in India increased at 17.00% CAGR between FY16-FY21. Despite pandemic and lockdown, India has constructed 10,457 km of highways in FY22. Under the Union Budget 2023-24, the Government of India has allocated Rs. 2.7 lakh crore (US$ 33 billion) to the Ministry of Road Transport and Highways. In FY23 (until December), the Ministry of Road Transport and Highways constructed national highways extending 6,318 kms.

Your Company having a vast experience & resources and depending upon the opportunities that may arise due to proactive actions of the Government, would endeavour to enhance its operations further in Roads & Expressways appropriately, directly in the Company or through its subsidiaries, subject to overcoming working capital constraints

5. REAL ESTATE

As per ‘India Brand Equity Foundation, The real estate sector is one of the most globally recognized sectors. It comprises of four sub-sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for

Indias growing needs.

Indias real estate sector saw over 1,700 acres of land deals in top eight cities in the first nine months of FY22. Foreign investments in the commercial real estate sector were at US$ 10.3 billion from 2017-2021. As of February 2022, Developers expect demand for office spaces in SEZs to shoot up after the replacement of the existing SEZs act.

Around 40 million square feet were delivered in India in 2021. It is expected that the country will have a 40% market share in the next 2-3 years. India is expected to deliver 46 million square feet in 2022.

According to Savills India, real estate demand for data centres is expected to increase by 15-18 million sq. ft. by 2025. According to the Economic Times Housing Finance Summit, about three houses are built per 1,000 people per year compared with the required construction rate of five houses per 1,000 population. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the countrys urban population.

FUTURE OUTLOOK IN REAL ESTATE

Your Company is a major real estate developer in the NCR region with large land bank and offering in various segments including Golf centric homes etc. and is endeavours to complete all pending demands in housing sector within real estate market. With rapid urbanization and improving connectivity in the region, your Company is making all efforts for improvement & growth in this business stream.

6. HOSPITALITY

As per ‘India Brand Equity Foundation, With a total area of 3,287,263 sq. km extending from the snow-covered Himalayan heights to the tropical rain forests of the south, India has a rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. This provides a significant opportunity to fully exploit the potential of the tourism sector.

India being one the most popular travel destinations across the globe has resulted in the Indian tourism and hospitality industry to emerge as one of the key drivers of growth among the services sector in India. Tourism industry in India has significant potential considering that Tourism is an important source of foreign exchange in India similar to many other countries. The foreign exchange earnings from 2016 to 2019 grew at a CAGR of 7% but dipped in 2020 due to the COVID-19 pandemic. It is widely acknowledged that the tourist and hospitality sector, which encompasses travel and hospitality services like hotels and restaurants, is a development agent, a catalyst for socioeconomic growth, and a significant source of exchange gains in many countries. Indias rich and exquisite history, culture, and diversity is showcased through tourism while also providing significant economic benefits. consistent efforts of the central and the state governments has helped the tourism industry to recover from the covid-19 pandemic shock and operate at the pre pandemic level. According to WTTC, India is ranked 10th among 185 countries in terms of travel & tourisms total contribution to GDP in 2019. During 2019, contribution of travel & tourism to GDP was 6.8% of the total economy, Rs. 1,368,100 crore (US$ 194.30 billion). In 2020, the Indian tourism sector accounted for 39 million jobs, which was 8% of the total employment in the country. In 2021, the travel & tourism industrys contribution to the GDP was US$ 178 billion; this is expected to reach US$ 512 billion by 2028. In India, the industrys direct contribution to the GDP is expected to record an annual growth rate of 7-9% between 2019 and 2030. In 2020, the travel & tourism industrys contribution to the GDP was US$ 121.9 billion.

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports. The Indian hotel market including domestic, inbound and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travelers and sustained efforts of travel agents to boost the market.

By 2028, international tourist arrivals are expected to reach 30.5 billion and generate revenue over US$ 59 billion. However, domestic tourists are expected to drive the growth, post pandemic. International hotel chains are increasing their presence in the country, and it will account for around 47% share in the tourism and hospitality sector of India by 2020 and 50% by 2022. As per the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in February 2023 were 865,779 with a positive growth rate of 259.4% as compared to 240,896 in February 2022.

FTAs during the period January-February 2023 were 1,733,939 as compared to 442,442 in January-February, 2022.

The percentage share of Foreign Tourist Arrivals in India during February 2023 among the top 15 source countries was highest from Bangladesh (20.3%) followed by the USA (16.4%), UK

(11.1%), Canada (5.8%), Australia (3.7%), Malaysia (3.0%), Sri Lanka (2.8%), Russian Federation (2.7%), Germany (2.5%), France (2.4%), Nepal (1.9%), Thailand (1.7%), Singapore (1.5%), Italy (1.2%) and Japan (1.2%).

FUTURE OUTLOOK IN HOSPITALITY

Your Company has a huge brand name in hospitality sector by the name of ‘JAYPEE HOTELS which has been built up by committed efforts over decades. It owns five prestigious luxury hotels in the five star category, finest Championship Golf

Course, Integrated Sports Complex which are strategically located to service the needs of discerning business and leisure travellers. At present the hotels of your Company were badly affected due to Covid-19. However, ultimately, with growth in national and international tourism and business & personal needs of customers, especially in rich and middle class segments, your Company is poised for rapid growth in this sector.

7. SPORTS

Over the last few decades, there has been a sudden drift in sports, and Indian sports has found its path beyond cricket. The sports economy has accelerated and seen an upsurge over the years. Industrialization has highly benefited the Indian sports industry as well. In developing countries like India, the government has shifted its focus towards the growth of industries and one amongst them is sports industry and it has massive growth potential in the country.

The sports sector is one of the most prominent industries worldwide in terms of creating job opportunities and generates huge revenue. It is propelled by enormous consumer demand and is a million dollar industry. The sports industry has evolved overtime and contributes to the development of the nation. Since a long time now, there have been drastic changes in the Indian sports culture. Whereas earlier, India had a non-sporting culture but cricket was an exception and the only major sport that thwarted the growth of the sports industry. The Indian sports culture has moved beyond the game of cricket within these past few years which resulted in the growth of viewers, participation, changed the outlook towards fitness, and ameliorated the economic condition of the country. The rising disposable incomes has also fueled the surge in demand for sports goods and services. The Indian sports industry has the potential to reach the $10 billion mark in the next 5 years. Besides cricket, there are other games that are also played exclusively in India and now over 15 domestic leagues are held in the country that include wrestling, football, kabaddi, boxing, badminton, etc. The sports industry has also seen a tremendous hike in business. The inception of leagues in India has transformed and revolutionized the Indian sports industry. Leagues have empowered the sports industry and provided major support for its upliftment. The onset of leagues turned fruitful for the country and has equally benefited the sportsmen and their game. Apart from this, it also turned miraculous for the rise in economic gains and revenue. The most prominent and renowned Indian Premier League is estimated at $5.3 billion and other leagues besides IPL have also enhanced the Indian sports Industry and contributed their shares from $1.3 billion to $2.7 billion. All these small yet effective initiatives at different levels have accelerated the sports economy in the past few decades. In the last approximately 12 years, India has hosted many international sports events. Since the time, Delhi hosted the Commonwealth Games in October 2010, there is more awareness in Indian public about sports. The major events hosted by India since 2010, are Commonwealth Games (October 2010), ICC Cricket World Cup (February 2011), First South Asian Winter Games (January 2011), Womens Cricket World Cup (February 2013), The Asian Athletics Championships (July 2013), World Chess Championship (November 2013), Thomas & Uber Cup, being the international tournament of badminton championships for men and women respectively (May 2014), South Asian Games (February 2016), ICC World Twenty-20 cricket (March 2016), Asian Wrestling Championships (May 2017), Asian Athletics Championships (July 2017), FIBA Womens Basketball Asia Cup tournament (July 2017), AIBA Womens World Boxing Championships (November 2018).

The sports market is one of the most complex and diverse markets in which the government, federations and private sector are inter-twined and all of them play an important role. Considering the interest of Government as well as Indian public in sports and most of the population of India being in lower brackets of age groups, the future of sports will always be lucrative and bright in India. Your Company is making efforts to materialize the opportunities as and when available.

FINANCIAL PERFORMANCE VIS-A-VIS OPERATIONAL PERFORMANCE

The key indicators of the financial performance of the Company for the Financial Year 2022-23 were as under:

ITEM	FY 2022-23	FY 2021-22
	(Rs.Cr.)	(Rs.Cr.)
1 Total Revenue	4162.49	3364.22
2 Total Expenses excluding	3534.54	3120.41
Finance Cost & Depreciation
3 EBIDTA (Earnings before	627.95	243.81
Interest, Depreciation & Tax)
4 Finance Costs	885.91	840.24
5 Depreciation and Amortisation Expense	235.25	254.05
6 Profit/ Loss before Exceptional items (3-4-5)	(493.21)	(850.48)
7 Add Exceptional Items [Gain (+)/ Loss(-) ]	(215.04)	(18.06)
8 Profit/ Loss from Continuing Operations Before Tax (6-7)	(708.25)	(868.54)
9 Tax Expense	12.63	15.24
10 Profit/ Loss from Continuing	(720.88)	(883.78)
Operations After Tax
11 Profit/ Loss from Discontinued	(441.36)	(348.10)
Operations After Tax
12 Profit/ Loss for the year	(1162.24)	(1231.88)
after Tax
13 Other Comprehensive Income	4.22	1.70

 

ITEM	FY 2022-23	FY 2021-22
	(Rs.Cr.)	(Rs.Cr.)
14 Total Comprehensive Income (10+12)	(1158.02)	(1230.18)
15 Basic EPS (per share of Rs.2/-) (in Rs.)	(4.73)	(5.02)
16 Diluted EPS (per share of Rs.2/-) (in Rs.)	(4.73)	(5.02)

SEGMENT WISE PERFORMANCE & REVIEW OF OPERATIONS

The segment-wise performance is as under:

SEGMENT REVENUE	FY 2022-23	FY 2021-22
	Rs. Cr.	Rs. Cr.
a Cement	0.03	11.24
b Construction	2662.60	2438.93
c Hotels/ Hospitality	353.26	189.52
d Real Estate	842.57	286.98
e Power	-	-
f Others	58.14	38.94
g Unallocated	42.06	7.61
Total	3958.66	2973.22
Less : Inter-segment Revenue	3.98	5.81
Total Sales/ income from	3954.68	2967.41
operations
Add :Other Income	207.81	396.81
Total Revenues	4162.49	3364.22

 

SEGMENT RESULTS	FY 2022-23	FY 2021-22
	Rs. Cr	Rs. Cr
(PROFIT FROM
CONTINUING OPERATIONS BEFORE TAX)
a Cement	(7.47)	(5.76)
b Construction	99.65	131.76
c Hotels/ Hospitality	78.59	12.94
d Real Estate	91.89	(149.19)
e Power	-	-
f Investments	28.19	40.82
g Others	(12.60)	(13.49)
h Unallocated	114.45	(27.32)
Total	392.70	(10.24)
Less : Finance Costs	885.91	840.24
Add : Exceptional items	(215.04)	(18.06)
Profit from continuing	(708.25)	(868.54)
operations before Tax

KEY FINANCIAL RATIOS

[As per Regulation 34(3) & Schedule V (B)(1)(i) & (j) of SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015]:

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financialratios explanations: along with detailed

Particulars	As on 31.03.2022	As on 31.03.2023	Change %	Explanation
(i) Debtors Turnover (times)	0.99	1.04	5%	-
(ii) Inventory Turnover (times)	0.70	0.68	-3%	-
(iii) Interest Coverage Ratio (times)	0.05	0.11	120%	Interest coverage Ratio has increased due to less loss before interest in FY 2022-23 as compared to FY 2021-2022.
(iv) Current Ratio (times)	1.08	1.09	1%	-
(v) Debt Equity Ratio (times)	3.24	4.04	25%	Debt Equity Ratio has increased due to non repayment of debt due & non service of accrued interest thereon and loss incurred during the year.
(vi) Operating Profit Margin (%)	-16.67	-5.09	69%	Operating Profit Margin has increased mainly on account of Less loss from operation during FY 2022-23 as compared to FY 2021-22.
(vii) Net Profit Margin (%)	-26.61	-25.53	4%	-
(viii) Return on Net Worth (%)	-19.28	-22.22	-15%	-

1. Debtors Turnover has been calculated on Average current Trade Receivables.

2. Inventory Turnover has been calculated on Average Inventory excluding Inventory classified as held for sale

3. Return on Net worth is computed on Net Profit after Tax divided by Equity less Intangible Assets as at end of the financial year.

4. Comparable equivalent ratios: The Company is into multi segment business and as such no comparable equivalent ratios are available.

JAYPEE IN ENGINEERING & CONSTRUCTION

This year also, the Engineering & Construction Division of the Company continued to perform well. The Company has been qualified for a number of new Projects and some new works have been awarded, as reported in the Directors Report. While the Company is facing the pressures of Indian economy as well as global conditions coupled with liquidity crunch and weak demands, the Company also remains confident about Indias strong fundamentals as well as Companys own strength, expertise and experience in the infra-structure sector, which is the backbone of Indias growth potential. As a multi-disciplinary infrastructure player, Jaiprakash Associates Limited (JAL) is geared up to participate in the infrastructure development of the country. Its leadership as an EPC player, a Cement producer, a Power Producer (through associate companies), an Expressway developer (directly or through subsidiaries), a premium Township developer and a niche in Hospitality business is well established. With increased focus on EPC business, it shall reap rich dividends from forthcoming infrastructure boom and create substantial value for all its stakeholders.

JAYPEE IN CEMENT

The Shareholders are aware that as on 31st March 2017, your Company, along with its subsidiaries/associates, was the third largest cement producer in the country with 32.85 MTPA (Million Tonne Per Annum) operative capacity (including 4.00 MTPA under installation). On 29th June 2017, your Company hived off certain operating cement plants having aggregate capacity of 12.20 MTPA spread over the States of Uttar Pradesh, Himachal Pradesh, Uttrakhand and also of 5 MTPA in Andhra Pradesh owned by JCCL, its wholly-owned subsidiary. At present, the Group (including Jaiprakash Power Ventures Limited [JPVL], an associate company) has an installed capacity of 10.55 MTPA, the details of which are given in para 6.2.1 of the Directors Report.

Proposed Sale of Cement Business to Dalmia Cement (Bharat) Limited

The Board in its meeting held on 12th December, 2022 decided to divest its Cement Business / assets ( including stake sale in the shares of Joint Venture/ subsidiary Company BJCL) situated in the States of Uttar Pradesh, Madhya Pradesh and Chhatisgarh, having aggregate cement capacity of 7.4 Mn TPA, Clinker Capacity of 6.7 Mn TPA, (including Cement Capacity of 2.2 Mn TPA & Clinker Capacity of 1.1 Mn TPA of the Joint Venture company whose 74% equity stake is held by the Company) and Thermal Power Plants of aggregate capacity of 280 MW, including proposed spinoff of 180 MW Thermal Power Plant into a Special Purpose Vehicle of the Company (whose 57% equity stake will be held by Dalmia Cement

(Bharat) Limited), Companys certain land parcels situated at Sadwa & Chunar (Uttar Pradesh), at an approximate Enterprise Value of Rs. 5,586 Crores (Rupees Five thousand five hundred & eighty six Crores only), on slump sale subject to mutually agreed adjustments, liabilities, and other terms and conditions.

JAYPEE IN POWER/ENERGY

Jaiprakash Power Ventures Limited (JPVL) (an Associate Company which was subsidiary till 17th February 2017) is Hydro Power producer having a plant capacity of 400 MW and also a Thermal Power producer having a plant capacity of 1,820 MW. JPVL currently has one operative hydro power plant and two operative thermal power plants, namely: (a) 400 MW Jaypee Vishnuprayag hydro power plant in Uttarakhand; (b) 500 MW Jaypee Bina thermal power plant in Village Sirchopi, Sagar, Madhya Pradesh; and (c) 1320 MW Jaypee Nigrie super thermal power plant (STPP) in Nigrie, Singrauli, Madhya Pradesh.

JPVL also has various subsidiaries and joint ventures through which it implements various hydro power projects and thermal power projects. JPVL is also developing hydro power projects comprising 2700 MW of Jaypee Arunachal Power Limited (JAPL) and 450 MW of Jaypee Meghalaya Power Limited (JMPL).

JAYPEE IN ROADS/EXPRESSWAYS

Jaypee Infratech Limited (JIL), a subsidiary of JAL had successfully executed the Yamuna Expressway project, in August, 2012, a 165 kilometres access controlled 6 lane super expressway along the Yamuna river connecting Noida and Agra on Build-Own-Transfer basis. The project envisages ribbon development along the expressway at 5 locations aggregating 25 million square meters of land for residential/ industrial/ institutional purposes and has triggered multidimensional, socio-economic development in Western U.P. besides strengthening the Groups presence in real estate segment in this decade. However, pursuant to Order of Honble Supreme Court dated 24th March 2021, JIL may not remain with your Company. Himalyan Expressway Limited (HEL), a subsidiary of JAL, had successfully implemented Zirakpur-Parwanoo Expressway Project in the States of Punjab, Haryana and Himachal Pradesh in April, 2012. The project consists of 17.39 Km of widening of existing two-lane carriageway to four-lane and 10.14 Km of new four-lane bypass.

JAYPEE IN REAL ESTATE

Jaypee Greens, the real estate division of the Jaypee Group has been creating lifestyle experiences from building premium golf-centric residences to large format townships since its inception in the year 2000.

Amidst economic challenges and a dismal real estate environment, the group has followed a well-balanced strategic approach and has completed many units for possession in various projects across its different townships, details of which are given in para no. 7.4 of the Directors Report. Construction work is continuing at progressive pace, and the pace of delivery is expected to increase further.

JAYPEE IN HOSPITALITY

The Companys Hotels Division owns and operates across

India, five Hotels in 5 Star Category at Delhi (Jaypee Siddharth

& Jaypee Vasant Continental), Greater Noida (Jaypee Greens Golf & Spa Resort), Agra (Jaypee Palace Hotel & Convention Centre) and Mussoorie (Jaypee Residency Manor) as well as 18-Hole Championship Golf Course and Atlantic-The Club at Jaypee Integrated Sports Complex.

Jaypee Greens Golf & Spa Resort, a prestigious presentation by Jaypee Hotels in the luxury segment, offers state of art rooms and world renowned ‘Six Senses Spa overlooking the Championship 18 hole Greg Norman Golf Course at Jaypee Greens, Greater Noida, U.P. It has emerged as a preferred choice of upmarket business travellers. The Company has

Indias first Greg Norman Signature Golf Course at Jaypee Greens, Greater Noida. It is the finest 18 hole Championship

Golf Course. In the close proximity to the Golf Course is Atlantic-The Club, an integrated sports complex that offers World Class sporting events & tournament facilities, rooms & conference facilities.

Jaypee Hotels & Resorts is a resilient group with agility to maximize business opportunities through consistent measures. Jaypee Hotels & Resorts became an environmentally oriented organization by the implementation of various energy saving initiatives. These initiatives succeeded in reducing energy unit consumption year-on-year at every unit.

The Company emphasized on multi-pronged campaign to increase the brands visibility and help it reach out to a wider audience across the world.

The business of the group hotels was promoted by consolidating inventory, targeting the growing wedding market in India and creating milestones with regard to service standards as well as other offerings across the portfolio.

JAYPEE IN SPORTS

The erstwhile Jaypee Sports International Limited (JSIL), a wholly owned subsidiary of the Company, was merged into your Company on 16th October 2015 (w.e.f. the Appointed Date of 1st April 2014) and is now known as Jaypee International Sports, a division of Jaiprakash Associates Limited. The core activities of this division (earlier JSIL) are sports inter-alia Motor Race Track, suitable for Holding Formula One race and setting up a Cricket stadium of International Standard to accommodate above 1,00,000 spectators and others.

It owns a Motor Race Track known as Buddh International Circuit (BIC). It hosted three Indian Grand Prix (called as Formula One race) held in October, 2011, October, 2012 & October, 2013, successfully. The success of the event was acknowledged by winning of many awards and accolades.

It is also a one stop destination for promotional events by automobile manufacturers, exhibitions, shooting of movies, concerts, product launches and other promotional entertainment activities. M/s. ALA Architects were appointed to design the cricket stadium and the construction is likely to be completed soon. Meanwhile friendly matches are being conducted from time to time to check the quality of the pitch. Some corporate T20 matches are also being played since 2015.

OUTLOOK

The Company has an established growth record as a leading infrastructure Company with decisive competitive advantages. We believe that the next decade in India belongs to infrastructure sector. While even the smallest constituents of infrastructure sector will immensely benefit from it, Jaiprakash Associates Limited expects to reap benefits from the ensuing growth phase of Infrastructure. Its future outlook appears bright. It is based on the above facts that the Companys outlook appears positive and given the favourable conditions, the Company shall attempt to grow at a higher and in also most of the industry sub-verticals it operates in.

OPPORTUNITIES & THREATS 1. Engineering & Construction Industry:

In view of more and more competition in construction industry, the opportunities for securing cash contracts needs continuous innovation in its various core functions. PSUs dealing with development of power projects have also shown increasing inclination towards EPC contracts, since this mode not only results in speedy implementation of projects, but it also reduces Owners direct responsibility in certain key areas such as better coordination amongst various disciplines, project design and engineering, etc.

The Company is a leader in the field of EPC Contracting.

Company has performed in consortium with large foreign based companies and can thus easily get a JV/Consortium partner, where necessary. Companies with proven track record and established credentials have an edge over others for securing large contracts on EPC, BOOT and BOO basis and the Company enjoys this status. Though increased competition from the new entrants in the field sometimes appears a threat to the business prospects large established companies, yet the established companies (like JAL) need not have any fear in this regard due to in-house competence gained by implementing large projects not only within the stipulated time frame but also in cost effective manner. Timely completion of projects coupled with high quality and in-house design capability shall remain the most important requirements of major and high value projects, which shall keep the scale tilted in favour of the established players (like JAL).

The Company has emerged as a "Significant Infrastructure Company" with diversification in Real Estate, Expressways and Hospitality business. The Company is, therefore, poised to seize every opportunity to expand the existing line of business or enter into new related line of businesses. The Company is well equipped to handle threats of competition and challenges which might emanate from the Companys ongoing execution of Projects on Mountainous Regions and in difficult terrains especially in Himalayas.

2. Cement:

The demand conditions for the cement industry are expected to be robust. Factors such as increased fiscal space with the government for capital and infrastructure spending, rising rural incomes, and the continuation of the governments flagship affordable housing scheme will drive demand. This, however, is unlikely to have an immediate impact on housing demand. Overall, the outlook for cement remains mostly favourable. The key risk in the industry is maintaining market position in a highly volatile, uncertain, complex and ambiguous environment. Securing key inputs to remain cost-competitive and ensure sustainable supply is also a big challenge. Another major risk is protecting the environment to continuously focus on sustainability.

3. Energy:

The necessity for addition of power generation capacity of the country and the various incentives provided by the Government of India for private sector participation in development of power will be key to the development of Power projects on Build, Own, Operate (BOO) basis.

However lack of fuel security adequate supply of both gas and coal is a serious threat to operations of thermal plants. Price and quality of imported coal could be a threat to fuel security. The price volatility of imported coal coupled with the foreign exchange uncertainty creates a threat to the overall pricing of coal, especially given the high price of imported coal compared to domestic.

4. Hotels/Hospitality:

India is a large market for Travel & Tourism. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country. India is also gradually becoming a destination of choice for medical of tourism, with the availability of high quality healthcare.

However the hospitality industry is prone to the impact of changes in global and domestic economies, local market conditions, international or local demand for hotel rooms and associated services, competition in the industry and other social factors. In addition to economic risks, your Company faces risks from the socio-political environment nationally and internationally. It is affected by events like, occurrence of infectious diseases, extreme weather conditions and natural calamities. These may affect travel and business activity considerably.

5. General:

The Indian Economy is expected to grow in the medium term. The growth is envisaged to be driven by investments in infrastructure including Roads, Ports, Power Sector etc. Besides, housing sector in the urban and semi-urban areas is poised for growth. Increasing economic activity and population is expected to increase both, per capita and aggregate, cement and power consumption, besides housing & hospitality needs. These factors are expected to positively impact the prospects of demand for Companys products.

The Company has emerged as a significant Infrastructure Company with diversificationin Real Estate, Expressways and Hospitality business. The Company is poised to seize every opportunity to expand the existing line of business or enter into new related line of businesses. The Company is well equipped to handle threats of competition and challenges which might emanate from Cement Industry or the Companys ongoing execution of Projects on Mountainous Regions and at difficult terrains.

RISKS & CONCERNS

With the fairly diversified nature of Jaypees business, the and concerns vary from one business to other. With Companys span of businesses falling under core infrastructure domain, the continuing infrastructure development phase of India provides considerable cushion. The divisions cross leverage strengths to each other and help mitigate major risks at Company level.

1. Cement Division:

Cement industry being highly energy-intensive, any possible rise in energy cost might affect Companys business adversely. Pet Coke is used in combination with imported coal to reduce fuel cost. Other proactive steps towards reducing power consumption have also been taken which help the Company counter this threat effectively. The cement industry is cyclical in nature and also witnesses seasonal reduction in consumption during monsoon season. The Company carefully evaluates the regional mismatches and deploys capacities to minimise from the cyclical risks.

2. The Engineering & Construction Division:

Hydro-Power Projects are invariably located in mountainous regions and have to face the direct challenges from nature, such as fury of flood, rock fall triggered by snowfall/rains and unexpected geological surprises. The Company has to work in difficult terrains such as the river bed for dams, water conductor systems including tunnels, underground power houses and other components which pose a serious challenge because so much depends upon the quality of rock/geology encountered during construction. These risk areas and concerns will definitely draw upon the in-depth experience and expertise of established player in the field, like JAL, but the end product

(generated power) will more than compensate for the hazards/ risks involved. In an expanding economy each one of the fields of business of the Company is bound to experience prosperity. The Company provides Performance Guarantees depending upon the Terms and Conditions, as stipulated by the Clients in their Contracts, which is now up to 3% of the Contract Price and is in line with the recent guidelines, issued by the Govt. of India during pandemic.

The high value BOOT/BOO projects also require project financing at a very high scale. Since melt down in the economy which surfaced earlier in November, 2008 and now in 2020, certain problems started pertaining to availability of funding for large projects, however, the Company is confident of coming out of this set back at the national level with flying colours.

3. Hotels/Hospitality:

The COVID-19 pandemic triggered economic challenges that affected discretionary spending and travel, including supply chain disruptions and increased inflation. Inflationary concerns have been counteracting the lodging industrys recovery from the COVID-19 pandemic and may affect consumer sentiment and decrease demand for travel. However during 2022, we have continued to experience improvements. While there can be no assurances that we will not experience further fluctuations in hotel revenues or earnings at our hotels due to inflation and other macroeconomic factors, we expect to continue to recover through 2023 based on current demand trends.

4. Cyclical and Political Condition affecting businesses: The Cement Industry is cyclical in nature and consumption level of cement reduces during monsoon seasons. However, the level of spending on housing sector is dependent on the growth of economy, which is predominantly dependent on agriculture since India is an agricultural centric economy. Cement Industry has maintained a good growth rate during last few years.

Engineering & Construction growth in infrastructure sector is dependent on political stability. There has been emphasis on development of Infrastructure and Housing by the present government after experiencing slow-down in the past.

5. Customers of Engineering & Construction Division:

A significant portion of the Companys revenues of Engineering

& Construction Division comes from a limited number of customers. It relies heavily on Central and State Governments and public sector undertakings which mainly execute large infrastructure projects.

6. Contract Payment Risk:

In view of the fact that JAL typically takes up large size construction contracts, with sizes over Rs.500 crores, which require large scale mobilization of man power, machinery and material, therefore, timely receipt of payments from the client is critical. Generally, the contract terms involve payment of advance for mobilization while the balance amount is linked to the physical progress of the project. JAL restricts its interest to those projects, which have the budgetary outlay/ sources of finances tied up (i.e. financial closure achieved), thus, minimizing the risk of delays in payment.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company is an ISO certified company possessing latest ISO certificates for its various units such as Hotels,

Cement plants, Engineering & Construction Real Estate Division (related to Environment Management System, Quality Management System, Food Safety Management System, Tenders and Contract Management, etc.) which are duly accredited by international bodies. Your Company has developed very efficient communication systems between the Projects and the Head Office, which is the key to its high performance levels. This is of utmost assistance in ordering materials, spares and meeting other requirements, pertaining to finalisation of construction drawings, project monitoring and control. These aspects, along with the Management Information Systems, are the areas on which your Company is continuously trying to scale new peaks.

The Company has an internal control system commensurate with its size and nature of business. The system focuses on optimum utilisation of resources and adequate protection of Companys assets. It monitors and ensures efficient communication between the Projects and the Head Office; efficiently manages the information system and reviews the IT systems; ensures accurate & timely recording of transactions; stringently checks the compliance with prevalent statutes, listing agreement provisions, management policies & procedures in addition to securing adherence to applicable accounting standards and policies.

The internal control system provides for adherence to approved procedures, policies, guidelines and authorization. In order to ensure that all checks and balances are in place and all the internal control systems and procedures are in order, regular and exhaustive internal audit is conducted by the qualified

Chartered Accountants. Internal audit reports & presentations are reviewed by the Audit Committee on a quarterly basis.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS

The core of achieving business excellence lies in a committed, talented and focussed workforce. Under the exemplary leadership of its Founder Chairman, the Company has created a highly motivated pool of professionals and skilled workforce that share a passion and vision of the Company. The resultant power of HR pool gets reflected in the phenomenal growth of the Company in the recent past. The Company adopts latest techniques in evaluating the potential and training needs of the employees at all levels.

Designing of tailor-made training programmes that fill knowledge/skill gap and imparting in-house training in addition to utilising external programmes are significant functions of

Department of the Company.

As at 31st March 2023, the Company had a total workforce of approximately 8047 persons, including managers, staff and regular/casual workers.

Industrial relations in the organization continued to be cordial and progressive.

Your Company has been proactive in development of Human Resources and latest techniques are being adopted in evaluating the potential, assessing training and retraining requirements and arranging the same. Leadership by example, consistent policies in Human Resource and their participation in management has ensured unique bonding of entire work force across all facets of company operation and management.

ENVIRONMENTAL MATTERS, HEALTH AND SAFETY AND CORPORATE SOCIAL RESPONSIBILITY

The initiatives taken by the Company from an environmental, social and governance perspective, towards adoption of responsible business practices, in the areas of Environmental Management and Corporate Social Responsibility more specifically in the sphere of Education and Healthcare have been described in detail in the Business Responsibility and Sustainability Report forming part of this Annual Report. DISCLOSURE OF ACCOUNTING TREATMENT:

The Company has, in the preparation of its financial statements, followed the treatment as prescribed under the applicable Accounting Standards (i.e. IND AS) in line with the provisions of the Companies Act, 2013. If and when a treatment different from that prescribed in an Accounting Standard would be followed, the fact would be disclosed in the financial statements, together with the managements explanation as to why it believes such alternative treatment is more representative of the true and fair view of the underlying business transaction.

FORWARD LOOKING/ CAUTIONARY STATEMENT

Certain statements in the Management Discussion & Analysis Report detailing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. These statements being based on certain assumptions and expectation of future event, actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting domestic demand supply conditions, finished goods prices, changes in Government Regulations and Tax regime, etc. The Company assumes no responsibility to publically amend, modify or revise any forward looking statements on the basis of subsequent developments, information or events.

	MANOJ GAUR
Place: Anoopshahr	Executive Chairman and CEO
Date : 27th May, 2023	DIN:00008480