FOR THE YEAR ENDED 31ST MARCH, 2023
The Board presents its One Hundred and Fourth Annual Report together
with the Audited Statement of Accounts for the year ended 31st March, 2023.
FINANCIAL RESULTS (STANDALONE)
H/ Crores
Particulars |
31st March, 2023 |
31st March, 2022 |
Total Income |
3,603.93 |
3,577.71 |
Profit before Interest, Depreciation, Tax and other
Amortizations ("EBIDTA") |
371.22 |
586.80 |
Less: Depreciation and Amortization Expenses |
81.57 |
90.73 |
Finance Costs |
422.78 |
481.70 |
Profit/ (Loss) before Exceptional Items and Tax |
(133.13) |
14.37 |
Exceptional Items |
(173.07) |
(154.25) |
Profit/ (Loss) before Tax |
(306.20) |
(139.88) |
Tax Expenses |
190.53 |
9.87 |
Total Profit/ (Loss) for the year |
(115.67) |
(130.01) |
Other Comprehensive Income (net of tax expense) |
|
|
Re-measurement of Post-employment Benefit Obligations |
(1.43) |
4.55 |
Fair valuation of Equity Investments |
6.22 |
(3.58) |
Total Comprehensive Income/ (Loss) for the year |
(110.48) |
(129.04) |
GENERAL REVIEW OF COMPANY'S OPERATIONAL AND FINANCIAL PERFORMANCE
The year saw a steep rise in input costs for the Industry that resulted
in lower EBIDTA as compared to the previous year. During the second half of the financial
year, costs moderated and EBIDTA per quarter crossed H 100 crore plus mark. Finance Cost
continued to be elevated, Net worth improved with substantial portion of the Optionally
Convertible Reedemeble Preference Shares ("OCRPS") getting converted into
equity. Improved performance and moderating costs are likely to pave the way for
expeditious refinancing of the current debt which in turn will reduce finance cost going
forward.
Standalone Income, comprising Revenue from Operations and Other Income,
for the year was H 3,603.93 crore, 0.73 % higher compared to H 3,577.71 crore in 2022.
Standalone Loss before Tax for the year was H 306.20 crore, 118.90 %
higher compared to H 139.88 crore in 2022. Standalone Loss after Tax for the year was H
115.67 crore, 11.02 % lower compared to H 130.01 crore in 2022.
Cement production reduced by 5.26% from 7.42 million tonnes in 2022 to
7.03 million tonnes in 2023.
Cement Sales Volume reduced by 5.39% from 7.42 million tonnes in 2022
to 7.02 million tonnes in 2023.
No material changes or commitments have occurred between the end of the
financial year and the date of this Report, which affect the Financial Statements of the
Company with respect to the reporting year.
DIVIDEND
No dividend is proposed in view of the loss during the year and the
non-availability of any carry forward surplus.
The web-link for accessing the Company's Dividend Distribution
Policy is: https://www.kesocorp.com/DOCS/pdf/mgc/ dividend-distribution-policy-final.pdf
TRANSFER TO RESERVE
In view of the loss during the year, no amount is being transferred to
General Reserve.
INCREASE IN SHARE CAPITAL
During the year, the Company converted 5,19,626 partly paid Equity
Shares into fully paid Equity Shares pursuant to receipt of call money of the Rights Issue
made during the year 2021. Moreover, further 6,61,19,874 Equity Shares were issued and
allotted during the year @ H 65 per share, inclusive of a premium @ H 55 per share. These
were issued on preferential basis to identified entities, consisting primarily of
scheduled
banks upon conversion of 4,29,77,918 numbers Optionally Convertible
Redeemable Preference Shares of face value H 100 each originally issued as part of the
debt resolution plan in March 2021.
Both issues were listed on the Stock Exchanges and are eligible for
trading.
In addition, 90,00,000 unlisted 5% Non-Convertible Cumulative
Redeemable Preference Shares were issued and allotted to a promoter entity on private
placement basis. The required general body approval was duly obtained for such an issue.
Accordingly, the Company's paid- up Equity Share Capital as on 31st March, 2023 stood
enhanced to H 310.66 crores and Preference Share Capital stood at H 109.19 crores.
STATUS OF NON-CONVERTIBLE DEBENTURES
During the year Secured Non-Convertible Debentures aggregating to H 10
crore (Principal) were prepaid.
The face value of total Secured Listed Non-Convertible Debentures
outstanding as on 31st March, 2023 is H 1538.50 crores.
PUBLIC/ FIXED DEPOSITS
The Company accepted public fixed deposits (both from public and
members of the Company) during the year within the parameters set out in Chapter V of the
Companies Act, 2013. Deposits accepted are for a fixed term of three years only. No
deposit matured for re-payment during the year. The requisite details relating to
deposits, covered under Chapter V of the Act are as under: a) Accepted during the year: H
119.97 crores b) Remained unpaid or unclaimed as at the end of the year: NIL c) Whether
there has been any default in repayment of deposits or payment of interest thereon during
the year and if so, number of such cases and the total amount involved: NIL d) Premature
requests received and paid: H 24.56 crores The Company has not accepted any deposits which
are not in compliance with the requirements of Chapter V of the Act.
POSSIBLE DISPOSAL/ TRANSFER OF THE HINDUSTHAN HEAVY CHEMICALS LAND
Shareholders had assented to an enabling Resolution proposed under
Section 180 of the Companies Act, 2013 ("the Act") for disposal/ transfer of its
Hindusthan Heavy Chemicals land in the State of West Bengal. A final Resolution to this
effect is being proposed at the forthcoming Annual General Meeting for Shareholder
approval.
Efforts for disposal transfer within the extant legal framework are
under examination.
MANAGEMENT DISCUSSION & ANALYSIS, BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT AND CORPORATE GOVERNANCE
The Management Discussion & Analysis, Business Responsibility &
Sustainability Report and the Report on Corporate Governance are attached as Annexures I,
II & III respectively to this Report.
CREDIT RATING
Credit Rating related details are disclosed in the Report on Corporate
Governance Section.
RISK MANAGEMENT FRAMEWORK
The Company has in place a well-defined risk management framework
("the framework") together with a defined structure to manage and report risks.
The framework established across the Company and its wholly-owned Subsidiary is so
designed as to identify, assess and respond to risks and threats that affect the
realisation of business objectives.
The Risk Management Committee of the Board meets periodically to
oversee the functioning of the framework.
The approach of Risk Management is defined across the Company at
various levels with a periodical review to maintain its contemporariness so as to
effectively address the emerging challenges in a dynamic business environment.
SIGNIFICANT AND MATERIAL ORDERS
No significant or material orders were passed by Regulators or Courts
or Tribunals which impact or influence the Company's going concern status and/ or its
future operations.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The Company's Internal Financial Control Systems are commensurate
with its size, nature and complexity of business operations. Internal Audit, a key feature
of the Company's internal control system, is conducted by a dedicated team of
professionals. The Audit Committee of the Board monitors feedback by Internal Audit
periodically to ensure its smooth functioning and appropriate oversight of the control
systems instituted by the Company.
CORPORATE GOVERNANCE Number of Meetings of the Board
During the year, ten (10) Board Meetings were held. Meeting particulars
are disclosed in the Report on Corporate Governance section.
Policy on Director Appointment and Remuneration
The present Company Policy on Director Appointment and Remuneration,
including criteria for determining qualifications, positive attributes, independence and
other related matters as contemplated in Section 178(1) of the Companies Act, 2013
("the Act"), is available on the web-link
https://www.kesocorp.com/DOCS/pdf/mgc/nomination-and-remuneration-policy.pdf
It is affirmed that the remuneration paid to the Company Directors
during the year has been as per the terms set out in the Company's Nomination &
Remuneration Policy.
Declaration by Independent Directors
The Company has received the requisite declarations from each
Independent Director under Section 149(7) of the Act, affirming that each of them duly met
the criteria of independence as prescribed in Section 149(6) of the Act and Regulation 25
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
("LODR").
Board Evaluation
This year too the Board went through an elaborate process of evaluating
its own effectiveness, that of its Committees as also of individual Board Members. The
process included an appraisal of the functioning of the Chairman and the Whole-time
Director separately by Independent Directors at the annual Independent Directors Meeting.
Familiarisation programme for Independent Directors
There were no Directorial appointments during the year. The procedure
followed for familiarising Independent Directors with corporate operations appears in the
Report on Corporate Governance.
DIRECTORATE
Manjushree Khaitan (DIN: 00055898), Non-Executive Non Independent
Director and Chairman of the Board, retires by rotation at the forthcoming Annual General
Meeting and, being eligible, offers herself for re-appointment. Her brief particulars are
annexed to the Notice of Annual General Meeting.
KEY MANAGERIAL PERSONNEL
The following persons functioned as Key Managerial Personnel
("KMP") during the year:
P. Radhakrishnan |
Whole time Director & Chief Executive
Officer |
Suresh Sharma |
Chief Financial Officer (till 11th
April,2022) |
Rohit Shah |
Chief Financial Officer (effective 12th
April, 2022) |
Raghuram Nath |
Company Secretary (till 15th May, 2022) |
Gautam Ganguli |
Company Secretary (effective 13th May, 2022) |
COMMITTEES OF THE BOARD
As on 31st March, 2023, the Board had five Statutory Committees being
the Audit Committee, the Nomination and Remuneration Committee, the Stakeholder
Relationship Committee, the Risk Management Committee and the Corporate Social
Responsibility Committee.
During the year, all recommendations made by designated Committees were
noted and approved by the Board. There were no instances of any disagreement between any
of the Committees and the Board.
A detailed note on the composition of the Board and its Committees
appears in the Report on Corporate Governance.
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
No mandatory expenditure during the year on Corporate Social
Responsibility was envisaged as per Section 135 of the Act. Nonetheless, the Company has
never been found wanting in making dedicated spends that seek to desirably benefit those
living in the vicinity of its two cement plants. No exceptions were made this year either.
The Board's CSR Committee consisted of Manjushree Khaitan, Jikyeong Kang and P.
Radhakrishnan.
The Company's CSR Policy is available on the web link
www.kesocorp.com/DOCS/pdf/mgc/corporate-social-responsibility-policy.pdf. A Report on CSR
activities during the year is annexed to this Report and marked Annexure IV.
CONTRACTS/ ARRANGEMENTS MADE WITH RELATED PARTIES
The Board affirms that all related party transactions/ arrangements/
contracts entered into by the Company during the year were approved by the Audit Committee
and were at arm's length basis and in the ordinary course of business. No contract/
arrangement with any related party that could be considered material in accordance with
the Company Policy on "Materiality of Related Party Transactions" or which
required reporting in Form No. AOC-2 as per Section 134(3) (h) read with Section 188(1) of
the Act was entered into during the year.
There were no materially significant related party transactions entered
into by the Company that could have potential conflict with the interest of the Company at
large.
The Company's Related Party Transaction Policy appears on the web-
link www.kesocorp.com/DOCS/pdf/mgc/related-party-transactions-policy.pdf. Related party
transactions during the year as per the provisions of Indian Accounting Standard
("Ind AS") 24 have been disclosed in the Notes to the Financial Statements.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANY
Cygnet Industries Limited ("Cygnet") and Gondkhari Coal
Mining Limited ("Gondkhari"), continued as a Wholly Owned Subsidiary
("WOS") and Joint Venture Company respectively.
The Financial Statements of Cygnet as at 31st March, 2023 have been
consolidated with the Financial Statements of the Company. The Consolidated Financial
Statements forms part of this Annual Report.
The turnover of Cygnet for the year stood at H 244.30 Crore as against
H 71.85 crore during the previous year. The turnover improved considerably as the year
2021-22 was affected both by lockdowns and a prolonged suspension of work.
Several measures to restructure operations of Cygnet are being actioned
upon. Transparent paper operations will be further upgraded going forward. The marketing
activity too will come under more co-ordinated streamlining. Sourced from wood pulp,
transparent paper is bio-degradable and can therefore be a substitute for polythene film.
Gondkhari, the Special Purpose Vehicle ("SPV"), was
incorporated in 2009 as a Joint Venture between the Company and two other corporate
entities for developing and working a coal block in the State of Maharashtra. Gondkhari
forfeited its substructure once the Supreme Court de-allocated the coal block that was
originally allocated to it in 2014. As a result, the SPV became defunct leading to full
provision by the Company against its portion of investment in Gondkhari.
A Statement containing salient features of the financial statements of
Cygnet and Gondkhari in the statutory Form AOC-1 appears in Annexure V of this Annual
Report.
The financial statements of Cygnet, a Material Subsidiary, is available
on the website of the Company www.kesorcorp.com. The Policy on material subsidiaries is
also available on the Company's website www.kesocorp.com.
The Board has proposed a "Spin off" of the business
activities being undertaken by converting Cygnet from a WOS into a Standalone listed
Company. The Scheme of Arrangement to effecuate such "Spin off", contemplated
under section 230 - 232 of the Act, is pending with the Stock Exchange from their No
Objections.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Inter corporate financial exposures as at the end of the year appears
under Note No. 8 to the Financial Statements.
The Company has not given any loan and guarantee or made any investment
within the meaning of Section 186 of the Act during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has in place a Vigil Mechanism/ Whistle Blower Policy as
detailed in the Report on Corporate Governance. The Policy is available on the web-link
(www.kesocorp.com/DOCS/pdf/mgc/whistle-blower.pdf.)
REPORTING OF FRAUD BY THE AUDITORS
No fraud has been reported by the Auditors under Section 143(12) of the
Act. Therefore, no further disclosures are required under Section 134(3)(ca) of the Act.
STATUTORY AUDITORS
Shareholders at the Company's 103rd Annual General Meeting held on
17th June, 2022 appointed Walker Chandiok & Co LLP, Chartered Accountants, Auditors of
the Company for a period of five consecutive years from the conclusion of that Annual
General Meeting. The Auditor's Report forming part of this Annual Report is free from
any qualifications, reservations or disclaimers.
COST AUDITORS
Mani & Co., Cost Accountants, has been appointed by the Board to
conduct the audit of the Company's cost accounting records for the year at a
remuneration of H 5.47 lakh, excluding tax and reimbursement of out of pockets.
A Resolution to this effect is being proposed at the forthcoming Annual
General Meeting for ratification of their remuneration.
SECRETARIAL AUDITORS & SECRETARIAL STANDARDS
Ritu Bajaj, Practising Company Secretary was appointed as Secretarial
Auditor to conduct audit of the Company's secretarial records for the year. Her
Report is annexed to this Report and marked Annexure VI. The Report does not contain any
qualification, reservation or adverse remark.
The Secretarial Audit Report of the WOS is also annexed in Annexure VI.
The Company has complied with all applicable Secretarial Standards.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other particulars as
prescribed under the provisions of Section 197(12) of the Act read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out
in Annexure VII of this Report. No employee listed in the Annexure is related to any
Director.
However in line with the provisions of the second proviso to Section
136(1) of the Act and as per extant Ministry of Corporate Affairs Circulars, this Annual
Report is being sent to Members excluding the above information. Any Member interested in
obtaining this information, is welcome to request the Company through email at
corporate@kesoram.com for the statement.
POLICY ON SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
The Company has a laid down Policy on prevention, prohibition and
redressal of sexual harassment of women at the workplace in line with the provisions of
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013. The Policy is available on the weblink
www.kesocorp.com/DOCS/pdf/mgc/policy-on-prevention-of-sexual-harassment-at-workplace.pdf.
The requisite Internal Committee(s) in accordance with Company Policy are in place.
No complaint on any issue covered by the above law was received during
the year.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) the Act and, based upon representations from
the Management, the Directors, to the best of its knowledge and belief, states that: (a)
in the preparation of the Annual Accounts, applicable accounting standards has been
followed along with proper explanation relating to material departures; (b) such
accounting policies have been selected and applied consistently and such judgments and
estimates have been made that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year ended 31st
March, 2023 and of the profit/ (loss) of the Company for that period; (c) proper and
sufficient care was taken for the maintenance of adequate accounting records in accordance
with the provisions of this Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other. irregularities; (d) the Annual Accounts have
been prepared on a going concern basis; (e) internal financial controls have been laid
down to be followed by the Company and that such internal financial controls are adequate
and operating effectively; and
(f) proper systems have been devised to ensure compliance by the
Company with the provisions of applicable laws and that such systems were adequate and
working effectively.
CODE OF CONDUCT
The Company has a laid down Code of Business Conduct and Ethics for
Directors and Employees based on the principles of ethics, integrity and transparency.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Particulars relating to conservation of energy, technology absorption
and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read
with the relevant Rules appears in Annexure VIII to this Report.
MATERIAL CHANGES BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF
REPORT
There has been no material change that have occurred between the end of
the Financial Year and the date of this Report.
OPENING OF SUSPENSE ESCROW DEMAT ACCOUNT
In accordance with recent SEBI directions circular, a separate Suspense
Escrow Demat Account has been opened with a Depository Participant for crediting unclaimed
shares in dematerialised form lying in the Company's Demat Suspense Account at
present.
ANNUAL RETURN
The Company's Annual Return in Form MGT-7 can be viewed on the
Company website(www.kesocorp.com).
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company
during the year.
PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
There are no pending proceedings under the Insolvency and Bankruptcy
Code, 2016.
ONE-TIME SETTLEMENT WITH THE BANKS OR FINANCIAL INSTITUTIONS
No one-time settlement with Banks or Financial Institutions were
entered into during the year.
ANNEXURES FORMING PART OF THIS REPORT
Annexure |
Particulars |
I |
Management Discussion & Analysis |
II |
Business Responsibility and Sustainability
Report |
III |
Report on Corporate Governance |
IV |
Report on Corporate Social Responsibility
(CSR) activities |
V |
AOC 1 |
VI |
Secretarial Audit Report |
VII |
Disclosures pertaining to remuneration and
other particulars as prescribed under the |
|
provisions of Section 197 of the Companies
Act, 2013 |
VIII |
Conservation of energy, technology
absorption, foreign exchange earnings and outgo |
APPRECIATION
The Board takes this opportunity to express its deep sense of gratitude
to investors, lenders, Central and State Governments, the local authorities and all other
stakeholders for their consistent co-operation and support during the year.
It would further like to place on record its sincere appreciation of
the commitment, dedication and high engagement level of each of its employees. The year
was indeed a challenging one but employees were never found wanting to take these
challenges head on.
|