Kakatiya Cement Sugar & Industries Ltd Directors Report.

To

The Members

Your Directors have pleasure in presenting the 43 Annual Report together with the Audited 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 3.00 per equity share of Rs 10/- each for the year ended 31.03.2022 at par with the dividend declared 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 current years profits. In the preceding year as well, no sum was transferred to reserves from out of 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 in terms of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all shares on which dividend has not been claimed for seven consecutive years shall be transferred to the Investor Education and Protection Fund (IEPF).

Accordingly, the Company has transferred 12,655 equity shares to the IEPF Authority during the year ended 31st March, 2022. To claim the equity shares and dividend which were transferred to the IEPF, the shareholders are requested to visit the website of the Company www.kakatiyacements.com to know the procedure to claim the shares and dividend transferred to IEPF.

According to Section 125 of the Companies Act, 2013 read with Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, the Company has transferred unclaimed dividend amounting to 8,56,462 to IEPF during the year under review. The said transfer is in respect of the unclaimed dividend for the financial year 2013-2014.

Material Changes and Commitments

In terms of Section 134(3)(i), of the Companies Act, 2013, there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report.

Covid -19

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

Considering the resurgence in the spread of Covid-19 virus in the world in the past couple of months, your Company has been taking all preventive steps with regard to covid appropriate behavior and we expect no major changes in the economic activity as the nation is combating the pandemic challenge through preparedness on all fronts and also expediting the 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 were no outstanding deposits as at the end of the year falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

Signicant and Material orders passed by the Regulators / Courts / Tribunals

There are no significant and material orders passed by the Regulators or courts or tribunals in the year under review impacting the ‘going concern status and the Companys operations in future.

Appointment of Woman Independent Director

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

Directors retiring by rotation

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

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

Dematerialisation

As on 31st March, 2022, 75,93,729 shares were dematerialised with National Securities Depository Limited and Central Depository Services (India) Limited which constitutes 97.68% of the shares of the Company.

The Company, therefore once again requests such of the public shareholders who have not yet dematerialised their shares to initiate immediate steps to complete the process of dematerialisation.

Statement of Affairs of the Company

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

PERFORMANCE OF THE YEAR UNDER REVIEW

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

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

Cement Division:

During the year under review, the Cement Division has produced 2,69,940 MT as against 2,47,904 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 against the turnover of 103.51 crores recorded in the previous year and this works out to a rise of 6.12%.

The Cement Division has earned profit before interest and tax (PBIT) of 22.94 crores in the year under review as against 27.34 crores earned in the previous year. This works out to 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 1,01,743 MT as against 69,235 MT in the previous year thereby recording an increase of 46.95%. The Company could not procure the mandals and villages of its choice even in the year under review. The Government Regulation restricting the sale of the sugar has also impacted the quantum of sales during the year under review.

The Sugar Division has clocked a turnover of Rs 47.25 crores in 2021-22 in comparison with 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 the preceding year.

Power Division:

The Power Division has generated 1,41,49,420 KWH in 2021-22 as against 1,12,98,040 KWH of power in the preceding year thereby recording an increase of 25.23 %. Members are aware that the Company has not been able to generate power during o -season period in the Sugar Division since the Government of Telangana has not been conceding to the request of the power entities to generate power using coal as an alternative fuel to the bagasse.

The Power Division has clocked a turnover of Rs 16.57 crores in the year under review as against the turnover of Rs 9.19 crores made in the year-ago period and this works out to 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 as against 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 a target of its cement production at 2,75,000 MT for the current year.

Sugar Division:

The Sugar Division was impacted by various issues during the year under review. The scarcity of water sources, loss of productive areas in the zonal allocation made by the Government in 2017 and poor cane development are some of the critical factors which continue to impact the prospects of the Company. Despite the above constraints, your Company

could improve significantly the cane crushing during the financial year ended 31st March, 2022 and therefore con dent of attaining a target of 1,50,000 MT for cane crushing for the current year.

Power Division:

The performance of Power Division is directly linked to the operational level of the sugar division. A favorable government policy with regard to utilization of coal as an alternative fuel to bagasse during o -season of the sugar division is yet to crystallize since the government has not been permitting the power generating companies to utilize the coal as an alternative fuel to bagasse. In view of the improved performance of the Sugar Division in the year under review, the Company is hopeful of attaining higher levels of generation in its Power Division in the current year subject to any serious impediments occurring in the Sugar Division.

Insurance:

All the properties of the Company including its Buildings, Plant and Machinery and Stocks wherever required have been adequately insured.

Disclosures under the Companies Act, 2013

I) 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) Rules, 2014 in form MGT-9 is enclosed to this Report (Annexure - 1). The same is posted on the 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 the Board Meetings and its composition along with the attendance of the Directors are furnished elsewhere in the Corporate Governance Report.

III) Changes in Share Capital

There 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 under review.

V) Remuneration Policy:

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

VI) Related Party Transactions

Particulars of contracts / arrangements entered into by the Company with Related Parties referred to in Section 188 (1) of the Companies Act, 2013 for the year ending 31st March, 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 the same are annexed to this Report (Annexure-2).

Your directors inform you that Dr. P Anuradha, Chief Executive Officer has been re-appointed for a further period of three years effective from 25 May, 2021 and the re-appointemnt has been approved by the members at their Annual General Meeting held on 2 September, 2021.

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

VII) Statement of particulars of Appointment and Remuneration of the Managerial Personnel:

The statement of particulars of Appointment and Remuneration of Managerial Personnel as per Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ending 31st 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 of the Independent Directors Data Bank maintained by Indian Institute of Corporate A airs. Renewal of Registration was sought for one year by the existing Independent Directors except Smt. Hima Bindu Myneni, whose registration is valid up to 27.02.2026.

All the Independent Directors of the Company have been granted exemption from passing the online pro ciency self-assessment test.

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

The Independent Directors have submitted the declaration of independence as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 25(8) and 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Independent Directors have also con rmed that they are not aware of any circumstances or situations which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duty with an objective independent judgment and without any external in uence.

X) Con rmation by the Board

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

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

XI) Committees of the Board and its Meetings:

Your Board has constituted various Committees of the Board as required under the provisions of the Companies Act, 2013 and of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the composition, scope and its meetings etc. are furnished in the Corporate Governance Report.

Directors Responsibility Statement:

Pursuant to the requirement under Section 134 (3) (c) and 134 (5) of the Companies Act, 2013 with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby con rm:

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

b. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a airs of the Company as on 31st March, 2022 and of Pro t of the Company for that period.

c. That the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. That the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2022 on a ‘going concern basis.

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

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

Evaluation of the Boards Performance:

Evaluation of all Board members is done on an annual basis. The evaluation is done by the Independent Directors with specific focus on the performance of the Board and individual Directors. The observations of the evaluation made in the previous year, if any, will be considered. At the end of the current year, a comprehensive review will also be done.

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

As regards evaluation of Managing Director/Whole time Directors, aspects such as achievement of financial / business targets prescribed by the Board, developing and executing business plans, Operational Plans, Risk Management and financial a airs of the organization and Development of policies and strategic plans aligned with the vision and mission of the Company were considered.

With regard to evaluation of non-executive directors, aspects such as participation at the Board / Committee Meetings, effective deployment of knowledge and expertise, independence of behavior and judgment were considered.

As regards evaluation of performance in respect of Committee Meetings, aspects such as discharge of functions and duties as per scope of the Committee, processes and procedures followed in discharging such functions were considered.

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

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

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

Auditors:

Statutory Auditors:

M/s. Ramanatham & Rao, Chartered Accountants, Secunderabad (FRN : 002934S) were appointed as the Statutory Auditors of the Company for a period of 5 (Five) years at the Annual General Meeting held during 2017 and they hold officeup to the conclusion of the ensuing Annual General Meeting. They have communicated their inability to continue as the Statutory 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 Statutory Auditors for a period of 5 (Five) years, to hold office from the conclusion of the ensuing 43 Annual General Meeting up to the conclusion of the 48 Annual General Meeting to be held during 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 of the Companies Act, 2013.

Your Board recommends the appointment of M/s. Anandam & Co. Chartered Accountants, Secunderabad 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 of the Company for the year 2022-23.

Cost Auditors:

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, Cost records are required to be audited. Based on the recommendation of Audit Committee, your Board has appointed M/s. Narasimha Murthy, Cost Accountants, Hyderabad as Cost Auditors for the current year 2022-23 and necessary Resolution for rati cation of their remuneration is placed before the Members at the ensuing Annual General Meeting for their approval in terms of Rule 14 (a) (ii) of the Companies (Audit and Auditors) Rules, 2014.

Secretarial Auditor:

The Board has appointed Smt. Manjula Aleti, Company Secretary in whole-time Practice to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014 for the financial year 2022-23.

The Secretarial Audit Report issued by Smt. Manjula Aleti, Practicing Company Secretary in 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 under schedule 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 Company has been debarred or disqualified from being appointed or continuing as Directors of the Company by the SEBI/ Ministry of Corporate A airs or such statutory authority is annexed to this Report (Annexure -5).

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

The Auditors Report and the Secretarial Audit Report do not contain any quali cation, reservation or adverse remark.

Corporate Social Responsibility (CSR):

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

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

Corporate Governance

As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a detailed report on Corporate Governance together with the certificate from the Companys Auditors confirming compliance forms an integral part of this Report.

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013.

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

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

The Company has in place a Policy for prevention of sexual harassment of women at workplace. Internal complaints Committee (ICC) has been setup to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

No compliant of sexual harassment has been received during the year under review.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014

a) Conservation of Energy:

(i) the steps taken or impact on conservation of energy Nil
(ii) the steps taken by the Company for utilizing alternate sources of energy Nil
(iii) the capital investment on energy conservation equipment Nil

b) Technology Absorption:

(i) the 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 Companys 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 under review.

Vigil Mechanism and Whistle Blower Policy:

The whistle blower policy aims at conduct of the a airs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The policy on vigil mechanism and whistle blower policy may be accessed on the Companys website : www.kakatiyacements.com.

Environmental Protection:

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

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

a) Statement of Affairs of the Company

Members are aware that operations of the Cement Plant were shutdown in April and May 2021 due to partial lock down in the wake of second wave of covid-19 pandemic thereby impacting the cement output for April and May, 2021 marginally. The Company has recorded Cement production of 2,69,940 MT as against 2,47,904 MT in the preceding year, thus registering an increase of around 9%.

The Board has pleasure in informing the members that despite the serious impediments encountered by the Sugar Division, it could record an increase of around 47% in its Sugar Cane crushing in the year under review which stands at 1,01,743 MT as against 69,235 MT in the preceding year.

The Power Division has its own operational restraints. Members are aware that the Company has not been able to generate power during o -season period in the Sugar Division since the Government of Telangana has not been conceding to the request of the power producing entities to generate power using coal as an alternative fuel to the bagasse.

During the year under review, the Company has clocked a turnover (excluding other income) of 154.40 crores compared to 122.80 crores recorded in the year-ago period. The segmental revenue has increased in all the three divisions of the Company viz. Cement, Sugar and Power.

b) Industry Structure and Development:

The Company has a well developed net work of dealers located in the states of Telangana and Andhra Pradesh for its Cement Division and the Company therefore is in a reasonably comfortable position in securing orders from its clients. It is heartening to note that some of the dealers have been patronizing the Company since inception and the strong bondage that is developed between the Company and dealers is one of the prominent features of this mutually beneficial relationship.

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

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

c) Opportunities and Threats:

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

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

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

In the sugar industry, fetching remunerative price for its product, adequate availability of sugar cane with close proximity to the sugar plant and industry-friendly governmental regulations are the key areas of concern.

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

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

However, the Company, with an ability, determination and grit acquired over the years, is in a strong challenging model and combat the critical situations resulting from micro and macro factors.

d) Segment or product-wise performance:

Segment-wise and product-wise performance has been furnished elsewhere in this Report.

e) Medium and long term strategy

The range of market operations in respect of cement product is restricted to the states of Telangana and Andhra Pradesh. The existing production capacity can be optimally utilized in catering to the requirements of the two Telugu states. In the circumstances no medium and long term strategy is being envisaged by the Company in the absence of any immediate plans for expansion.

f) Outlook:

Division-wise outlook has been furnished elsewhere in this Report.

g) Risks and concerns:

The Cement, Sugar and Power industries being core industries, there is no risk of product obsolescence or steep fall in demand by way of product substitution or otherwise and, therefore, your Directors do not foresee any major risks and concerns in the near future except as discussed elsewhere in this Report.

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

Consequent to resurgence of covid-19 global epidemic across the world, the Company shall put in its best by adopting measures that ensure safety and health of workers. All suitable measures and steps that are within the control of the management shall be taken to 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 systems and the Chief Financial Officer will monitor the Internal audit Reports and brief the Audit Committee in case any de ciency in the system is noticed and corrective measures are adopted to strengthen the system.

i) Financial Performance with respect to operational performance:

This has been discussed elsewhere in this Report.

j) Human Resource Development and Industrial Relations:

The Company believes that the quality of its employees is the key to success and is therefore committed to provide necessary human resource development and training opportunities to equip employees with additional skills to enable them to adapt to contemporary technological advancements.

Industrial Relations during the year continued to be cordial through effective communication, meetings and negotiations with the work force in an informal and congenial atmosphere.

The Companys 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 the preceding 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 to be "forward looking statements" within the meaning of applicable securities Laws or Regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include demand-supply conditions, finished goods prices, raw material availability and prices, cyclical demand and pricing in the Companys markets, changes in Government Regulations, tax regimes besides other factors such as litigations and labour negotiations and health and safety related issues concerning all the stakeholders.

Acknowledgment

Your Directors take this opportunity to place on record their sincere thanks to the Banks, the Transco Authorities of Telangana and Andhra Pradesh States and to various departments of the Central and State Governments of Telangana and Andhra Pradesh for their support to the Industry.

The Directors thank the entire network of dealers who have enabled the Company to achieve the volumes and kept up the rapport and friendly association with the Company.

The Directors record their appreciation for committed support to the Company by all the employees at all levels throughout the year under reference.

The Directors record their gratitude to all the Shareholders who have been reposing con dence in the Company and its Management.

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