undefined share price Directors report


To

The Members

Your Directors have pleasure in presenting the 44th Annual Report together with the Audited Financial statements for the year ended 31st March, 2023.

Financial Results

The Financial Results for the year ended 31st March, 2023 are summarized below:

Particulars

2022-23 2021-22

Income (Sales and other Income)

17569.19 16414.31

Pro t before Depreciation, Interest & Taxes

506.76 3208.11

Depreciation

225.98 226.88

Interest

570.36 126.19

Provision for bad & doubtful debts

273.13 --

Taxation

-- 938.87

Deferred Taxation

(116.23) (20.04)

Total

953.24 1271.90

Pro t after Tax

(446.47) 1936.21

Other Comprehensive Income

(12.93) 9.05

Total Comprehensive Income

(459.40) 1945.26

Share Capital (No. of shares)

7773858 7773858

EPS (Rs.)

(5.74) 24.91

Dividend

Your Directors are pleased to recommend for your consideration a Dividend at 3.00 per equity share of 10/- each for the year ended 31.03.2023, at par with the dividend declared in the past few years, which entails an outlay of 233.22 lacs.

Transfer of Pro ts to Reserves

In view of the loss incurred by the Company during the year under review, no amounts were transferred to Reserves. The Company has not transferred any amount to reserves from out of the pro ts 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 8,308 equity shares to the IEPF Authority during the year ended 31st March, 2023. The shareholders are requested to visit the website of the Company www.kakatiyacements.com and refer to the ‘unpaid dividents/iepf section under the heading ‘corporate info to know the details of the investors whose shares/unpaid dividend have been transferred to IEPF. In case the shares/unpaid dividend of any shareholder have already been transferred to IEPF, then such shareholder is requested to claim the same from IEPF by ling the requisite e-form IEPF-5 along with all the attachments on www.mca.gov.in and to forward the uploaded e-form IEPF-5 along with all its duly executed attachments to the Company for further processing. 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 8,42,133 to IEPF during the year under review. The said transfer was in respect of the unclaimed dividend for the nancial year 2014-2015.

Material Changes and Commitments

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

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.

Signi cant and Material orders passed by the Regulators / Courts / Tribunals

There are no signi cant and material orders passed by the Regulators or Courts or Tribunals in the year under review impacting the ‘going concern status and Companys operations in future.

Directors

The tenure of Shri P Veeraiah, Managing Director of the Company expires on 30th November, 2023 and the Board at its meeting held on 4th August, 2023, based on the recommendation of the Nomination and Remuneration Committee, has decided to re-appoint Shri P Veeraiah as the Managing Director of the Company for a period of ve years

w.e.f. 1st December, 2023, subject to the approval of the shareholders at the ensuing Annual General Meeting. The Board also has recommended the payment of remuneration for a period of three years, to the shareholders for their consideration and approval as an Ordinary Resolution. Shri Vankineni Sivarama Krishna Murthy was co-opted as an Additional Director under the Independent Director Category, based on the recommendation of the Nomination and Remuneration Committee, by the Board of Directors at its meeting held on 4th August, 2023 for a period of 5 (Five) years. In accordance with the provisions of the Companies Act, 2013 read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time), the said appointment requires the approval of the Members by way of a Special Resolution. The Company has received the requisite consent and other con rmations that the said appointment would be in accordance with the provisions of Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Shri Vankineni Sivarama Krishna Murthy. Your Board commends the resolution as a Special Resolution.

In accordance with the provisions of the Companies Act, 2013, Smt. M Varalakshmi, Director retires by rotation at the ensuing Annual General Meeting and being eligible, o ers herself for re-appointment.

The brief pro le of the Directors who are seeking appointment/re-appointment at the ensuing Annual General Meeting is presented elsewhere in this Annual Report.

Shri K Venkat Rao (DIN:06566627), Non-Executive Independent Director has tendered his resignation w.e.f. 1st June, 2023, due to personal reasons. He has also con rmed that there are no other material reasons for his resignation as a Director of the Company. The Board of Directors at their meeting held on 4th August, 2023 have noted the said resignation and accepted the same. The Board also places on record its sincere appreciation for the valuable services rendered and guidance given by Shri K Venkat Rao as an Independent Director of the Company.

Dematerialisation

As on 31st March, 2023, 76,08,821 shares were dematerialised with National Securities Depository Limited and Central Depository Services (India) Limited which constitutes 97.88% 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.

KYC Compliance by Shareholders holding shares in Physical Form

Securities and Exchange Board of India has made it mandatory for holders of physical securities to furnish details of PAN, contact details (address with Pin Code, email address, mobile number), bank account, updated specimen signature and nomination/ opt-out of nomination.

Please note that in case of failure of the shareholders to get the above referred details registered/updated with the RTA, the respective folio shall be frozen on 1st October, 2023. The frozen folios will be referred by the Company/RTA to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, if they continue to remain frozen as on 31st December, 2025. Further, in respect of such folio(s) you will not be eligible to lodge grievance or avail any services from Company or Registrar and receive dividend, till the above-mentioned details are furnished. The SEBI circular and relevant forms (viz. ISR-1, ISR-2, ISR-3, SH-13 and SH-14) can be downloaded from the Companys website http://www.kakatiyacements.com/images/kyc%20formats.pdf or that of RTA website https://xlsoftech.com.

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

Several adverse factors viz., exorbitant cost of coal, non-renewal of Power Purchase Agreement by TS Transco and the reduced area of sugarcane cultivation due to migration of farmers to alternate crops fetching more remunerative prices like oil palm cultivation have all played its role on the operations of the Company and the Company could not achieve the expected capacity utilization. Despite the above factors, the Company achieved better capacity utilization of the Sugar plant during the year .

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

Cement Division:

During the year under review, the Cement Division has produced 2,59,575 MT as against 2,69,940 MT in the year ago period thereby registering a decrease of about 4%.

The Cement Division has clocked a turnover of 104.98 crores in 2022-23 as against the turnover of 109.84 crores recorded in the previous year and this works out to a decrease of 4.42%.

The Cement Division has incurred loss before interest and tax (PBIT) of 10.04 crores in the year under review as against pro t of 22.94 crores earned in the previous year.

Sugar Division:

The Sugar cane crushed in the Sugar Division in the year under review is 1,43,140 MT as against 1,01,743 MT in the previous year thereby recording an increase of about 41%. 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 50.62 crores in 2022-23 in comparison with 47.25 crores in the preceding year and thereby registering an increase of about 7.13% over the year ago period. The Sugar Division has recorded loss before interest and tax (PBIT) of 0.08 crores in the year under review as against loss of 2.15 crores in the preceding year.

Power Division:

The Power Division has generated 1,61,54,956 kWh in 2022-23 as against 1,41,49,420 kWh of power in the preceding year thereby recording an increase of about 14.17%. 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 10.70 crores in the year under review as against the turnover of 16.57 crores made in the year-ago period and this works out to a decrease of 35.43% over the previous year.

The Power Division made a Pro t before interest and tax (PBIT) of 10.20 crores as against a pro t of 9.01 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, and loss of productive areas in the zonal allocation made by the Government in 2022 are some of the critical factors which continue to impact the prospects of the Company. Despite the above constraints, your Company could improve signi cantly the cane crushing during the nancial year ended 31st March, 2023. However, migration of farmers to alternate crops fetching more remunerative prices and incentives from both Central and State Governments for promoting oil palm cultivation have forced the Company to downward revision of the target of cane crushing to 90,000 MT during 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 this, the performance of the power division will continue to be low and added to this factor, any serious impediments to the sugar division will further impact the performance of the power 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) Annual Return:

The Annual Return as per provisions of Section 92 of the Companies Act, 2013 in Form MGT-7 is available on the Companys website www.kakatiyacements.com in the ‘Corporate Info section.

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 was no change in the Share Capital during the year under review.

IV) Changes in the nature of business, if any

There was 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 ended 31st March, 2023 have been provided in Form No.AOC-2 pursuant to clause (b) of sub Section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same are annexed to this Report (Annexure-1).

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 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ending 31st March, 2023 is annexed to this Report (Annexure-2).

VIII) Key Managerial Personnel

The following have been designated as the Key Managerial Personnel of the Company pursuant to Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Shri P Veeraiah

- Managing Director

Dr. P. Anuradha

- Chief Executive O cer

Shri M Bhavani Dattu

- Chief Financial O cer

Shri V Sesha Sayee

- Company Secretary

IX) Registration of Independent Directors in Independent Directors Databank

All the Independent Directors of the Company have been registered and are members 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.

X) Statement of declaration of independence furnished by Independent Directors under Section 149(7) 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 (7) of the Companies Act, 2013 and Regulation 25(8) and 16(1)(b) of Securities and Exchange Board of India (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.

XI) 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, quali cations to discharge the assigned duties and responsibilities as mandated by the Companies Act, 2013 and Listing Regulations diligently.

XII) 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 Securities and Exchange Board of India (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) 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 that: a. in the preparation of annual accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed and that there were no material departures therefrom.

b. 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 31stMarch, 2023 and of the loss of the Company for that period. c. the Directors have taken proper and su cient 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. the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2023 on a ‘going concern basis. e. the Directors have laid down internal nancial controls to be followed by the Company and that such internal nancial controls are adequate and were operating e ectively. f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating e ectively.

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 speci c 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 e ectiveness, 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 nancial / business targets prescribed by the Board, developing and executing business plans, Operational Plans, Risk Management and nancial 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, e ective 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 e ective 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 of evaluation of independent directors has been incorporated in the Corporate Governance Report.

Auditors:

Statutory Auditors:

M/s. M. Anandam & Co., Chartered Accountants, Secunderabad (FRN : 000125S) were appointed as the Statutory Auditors of the Company for a period of 5 (Five) years by the shareholders at the Annual General Meeting held on 8th September, 2022 and they hold o ce up to the conclusion of the Annual General Meeting to be conducted in 2027. Accordingly, they continue to be the Statutory Auditors of the Company.

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 2023-24.

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, 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 2023-24 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 nancial year 2023-24.

The Secretarial Audit Report issued by Smt. Manjula Aleti, Practicing Company Secretary in Form-MR 3 for the nancial year ended 31st March, 2023 is annexed to this Report (Annexure -3).

The Certi cate of Non-Disquali cation of Directors 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 none of the Directors of the Company have been debarred or disquali ed from being appointed or continuing as Directors of the Company by the SEBI/ Ministry of Corporate A airs or such statutory authority as on 31st March, 2023 is annexed to this Report (Annexure -4).

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, 2023 and the same is annexed to this Report

(Annexure -5).

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

Compliance with Secretarial Standards

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India.

Reconciliation of Share Capital Audit

As required by the SEBI Listing Regulations, quarterly audit of the Companys share capital is being carried out by an independent Practicing Company Secretary with a view to reconcile the total share capital admitted with NSDL and CDSL and held in physical form, with the issued and listed capital. The Practicing Company Secretary Certi cate in regard to the same is submitted to BSE the NSE and is also placed before the Board of Directors.

Corporate Social Responsibility (CSR)

In compliance with the provisions of Section 134(3)(a) of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility (CSR) Policy) Rules 2014, the Company has constituted the 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 -6).

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 certi cate from the Companys Auditors con rming compliance forms an integral part of this Report.

Acquisition of shares by Managing Director

During the year under review, in the months of February, 2023 and March, 2023, Shri P. Veeraiah, Managing Director has acquired 30,802 shares of the Company on various dates through NSE and Company has complied with all provisions of law in this regard.

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 put 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 complaint 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 e orts made towards technology absorption

Nil

(ii) in case of imported technology (imported during the last three years reckoned from the beginning of the nancial 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 nished 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 under Corporate Info and Code of Conduct section.

Environmental Protection:

The Company has been making endeavors to protect the environment from the evil e ects 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 (MDA) Report

a) Statement of Affairs of the Company

The Company has recorded Cement production of 2,59,575 MT as against 2,69,940 MT in the preceding year, thereby recording a decrease of around 4%.

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 41% in its Sugar Cane crushing in the year under review which stands at 1,43,140 MT as against 1,01,743 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 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 154.15 crores compared to 154.40 crores recorded in the year-ago period. The segmental revenue has increased in Sugar Division and has decreased in Cement and Power Divisions. b) Industry Structure and Development:

The Company has a well developed network of dealers for its Cement Division, located in the states of Telangana and Andhra Pradesh 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 bene cial 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 due to the variation in the prices of Coal and other raw-materials of Cement Division. The Company shall endeavour its best to mitigate the xed 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 area 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 bene ts 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 a 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.

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 endeavors its best to e ect 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. h) Internal control systems and their adequacy:

As stated elsewhere in this Report, the Company has adequate internal control systems and the Chief Financial O cer 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 e ective communication, meetings and negotiations with the work force in an informal and congenial atmosphere.

The Companys strength consists of 495 permanent employees as on 31st March, 2023. k) The details of signi cant changes (change of 25% or more) as compared to the preceding year in key nancial 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 98.39 Loss during the year

4.

Net Pro t Margin ( % ) (123.10) Loss during the year

5.

Return on Net worth (123.76) Loss during the year

6.

Operating Pro t Margin (%) PBIT (92.71) Loss during the year

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 di er materially from those expressed or implied. Important factors that could make a di erence to the Companys operations include demand-supply conditions, nished 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 and various departments of the Central and State Governments of Telangana and Andhra Pradesh for their support to the Industry.

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

Your 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
P Veeraiah

Place : Hyderabad

Chairman and Managing Director

Date : 04.08.2023

DIN : 00276769