Placement Document Not for Circulation and Strictly Confidential Serial Number: [●]
J. K. Cement Limited (Originally incorporated on November 24, 1994 as J. K. Cement Limited, under the Companies Act, 1956. See “General Information” on page 176. Our Company received the certificate for commencement of business dated December 30, 1994 from the then Registrar of Companies, Kanpur, Uttar Pradesh. The CIN of our Company is L17229UP1994PLC017199.) Registered and Corporate Office: Kamla Tower, Kanpur, Uttar Pradesh 208 001, India; Tel: +91-512-2371 478-81; Fax: +91-512-2332 665/239 9854; Website: http://www.jkcement.com; Contact Person: Shambhu Singh, Assistant Vice President (Legal) & Company Secretary and Compliance Officer; E-mail:
[email protected] J. K. Cement Limited (the “Company”) is issuing up to 73,41,001 equity shares of face value of ₹ 10 each (the “Equity Shares” or “Shares”) at a price of ₹ 695.80 per Equity Share, including a premium of ₹ 685.80 per Equity Share, aggregating up to ₹ 510.79 crore (the “Issue”). For further details, see “Summary of the Issue” on page 29. ISSUE IN RELIANCE UPON CHAPTER VI OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018 (THE “SEBI ICDR REGULATIONS”) AND SECTION 42 OF THE COMPANIES ACT, 2013, AS AMENDED, READ WITH RULE 14 OF COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER THIS ISSUE AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING MADE TO QIBs (AS DEFINED IN “CERTAIN DEFINITIONS AND ABBREVIATIONS”) IN RELIANCE UPON CHAPTER VI OF THE SEBI ICDR REGULATIONS AND SECTION 42 OF THE COMPANIES ACT, 2013, AS AMENDED, READ WITH RULE 14 OF COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER. THIS PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND NO OFFER IS BEING MADE THROUGH THIS PLACEMENT DOCUMENT TO THE PUBLIC OR ANY OTHER CATEGORIES OF INVESTORS. THIS PLACEMENT DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO THE PUBLIC, OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR OUTSIDE INDIA, OTHER THAN TO QIBs. Invitations, offers and sales of Equity Shares shall be made only pursuant to and in accordance with the PPD cum Application Form, together with the Placement Document and the Confirmation of Allocation Note. For further information, see “Issue Procedure” on page 140. The distribution of this Placement Document or the disclosure of its contents without the prior consent of our Company to any person, other than QIBs, and persons retained by QIBs to advise them with respect to their purchase of the Equity Shares, is unauthorised and prohibited. Each prospective investor, by accepting delivery of this Placement Document, agrees to observe the foregoing restrictions and not to make copies of this Placement Document or any documents referred to in this Placement Document. A copy of the Preliminary Placement Document (which includes disclosures prescribed under Form PAS-4 (as defined hereinafter)) has been delivered to BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE” and, together with BSE, the “Stock Exchanges”). A copy of this Placement Document (which includes disclosures prescribed under Form PAS-4) has also been delivered to the Stock Exchanges. Our Company shall also make the requisite filings with the Registrar of Companies, Uttar Pradesh & Uttarakhand at Kanpur (“RoC”) within the stipulated period as required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014. This Placement Document has not been reviewed by the Securities and Exchange Board of India (“SEBI”), the Stock Exchanges, the RoC or any other regulatory or listing authority. The Equity Shares offered in the Issue have not been recommended or approved by SEBI, nor does SEBI guarantee the accuracy or adequacy of this Placement Document. This Placement Document has not been and will not be registered as a prospectus with any Registrar of Companies in India and will not be circulated or distributed to the public in India or any other jurisdiction and will not constitute a public offer in India or any other jurisdiction. The placement of Equity Shares proposed to be made pursuant to this Placement Document is meant solely for QIBs on a private placement basis and is not an offer to the public or to any other class of investors. INVESTMENTS IN EQUITY SHARES INVOLVE A HIGH DEGREE OF RISK, AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THIS ISSUE UNLESS THEY ARE PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO READ “RISK FACTORS” ON PAGE 52 CAREFULLY BEFORE TAKING AN INVESTMENT DECISION RELATED TO THIS ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS ABOUT THE CONSEQUENCES OF ITS INVESTMENT IN THE EQUITY SHARES BEING ISSUED PURSUANT TO THIS PLACEMENT DOCUMENT. The information on our Company’s website, http://www.jkcement.com/, or any website directly or indirectly linked to our website or on the websites of the BRLM or its affiliates, does not constitute or form part of this Placement Document. Prospective investors should not rely on the information contained in, or available through such websites. Our outstanding Equity Shares are listed on the Stock Exchanges. The closing price of the outstanding Equity Shares on BSE and NSE on December 21, 2018 was ₹ 749.95 and ₹ 747.70 per Equity Share, respectively. In-principle approvals under Regulation 28(1) of the SEBI Listing Regulations for listing of the Equity Shares have been received from BSE and NSE on December 24, 2018. Applications shall be made for the listing of the Equity Shares offered through the Preliminary Placement Document on the Stock Exchanges. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed, or reports contained herein. Admission of the Equity Shares to trading on the Stock Exchanges should not be taken as an indication of the merits of our Company or the Equity Shares. YOU MAY NOT AND ARE NOT AUTHORIZED TO (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE THIS PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER; OR (3) RELEASE ANY PUBLIC ADVERTISEMENTS OR UTILISE ANY MEDIA, MARKETING OR DISTRIBUTION CHANNELS OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT THE ISSUE. ANY DISTRIBUTION OR REPRODUCTION OF THIS PLACEMENT DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN A VIOLATION OF THE SEBI ICDR REGULATIONS OR OTHER APPLICABLE LAWS OF INDIA AND OTHER JURISDICTIONS. THIS PLACEMENT DOCUMENT HAS BEEN PREPARED BY OUR COMPANY SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH THE PROPOSED ISSUE. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the “U.S. Securities Act”) or any state securities laws of the United States and, unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales are made. For further information, see the sections “Selling Restrictions” and “Transfer Restrictions” beginning on pages 150 and 156, respectively. This Placement Document is dated December 28, 2018.
BOOK RUNNING LEAD MANAGER
EDELWEISS FINANCIAL SERVICES LIMITED
TABLE OF CONTENTS NOTICE TO INVESTORS .................................................................................................................................................. 3 REPRESENTATIONS BY INVESTORS ............................................................................................................................ 5 OFFSHORE DERIVATIVE INSTRUMENTS .................................................................................................................. 10 DISCLAIMER CLAUSE OF THE STOCK EXCHANGES .............................................................................................. 11 PRESENTATION OF FINANCIAL AND OTHER INFORMATION .............................................................................. 12 INDUSTRY AND MARKET DATA ................................................................................................................................. 14 FORWARD-LOOKING STATEMENTS .......................................................................................................................... 15 ENFORCEMENT OF CIVIL LIABILITIES ..................................................................................................................... 17 EXCHANGE RATES ......................................................................................................................................................... 18 CERTAIN DEFINITIONS AND ABBREVIATIONS ....................................................................................................... 19 SUMMARY OF OUR BUSINESS .................................................................................................................................... 24 SUMMARY OF THE ISSUE ............................................................................................................................................. 29 SELECTED FINANCIAL INFORMATION ..................................................................................................................... 31 RISK FACTORS ................................................................................................................................................................ 52 USE OF PROCEEDS ......................................................................................................................................................... 70 CAPITALISATION ........................................................................................................................................................... 72 CAPITAL STRUCTURE ................................................................................................................................................... 73 MARKET PRICE INFORMATION AND OTHER INFORMATION CONCERNING THE EQUITY SHARES .......... 75 DIVIDENDS ...................................................................................................................................................................... 77 RELATED PARTY TRANSACTIONS ............................................................................................................................. 78 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ................................................................................................................................................................... 79 INDUSTRY OVERVIEW ................................................................................................................................................ 104 OUR BUSINESS .............................................................................................................................................................. 112 BOARD OF DIRECTORS AND SENIOR MANAGEMENT......................................................................................... 123 PRINCIPAL SHAREHOLDERS ..................................................................................................................................... 134 ISSUE PROCEDURE ...................................................................................................................................................... 140 PLACEMENT .................................................................................................................................................................. 149 SELLING RESTRICTIONS............................................................................................................................................. 150 TRANSFER RESTRICTIONS ......................................................................................................................................... 156 THE SECURITIES MARKET OF INDIA ....................................................................................................................... 158 DESCRIPTION OF THE SHARES ................................................................................................................................. 161 STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE APPLICABLE LAWS IN INDIA ............................................................................. 164 LEGAL PROCEEDINGS ................................................................................................................................................. 166 OUR STATUTORY AUDITORS .................................................................................................................................... 175 GENERAL INFORMATION ........................................................................................................................................... 176 FINANCIAL STATEMENTS .......................................................................................................................................... 177 DECLARATION .............................................................................................................................................................. 178 APPLICATION FORM………………………………………………………………………………………………..…180
NOTICE TO INVESTORS Our Company has furnished and accepts full responsibility for the information contained in this Placement Document and to the best of our knowledge and belief, having made all reasonable enquiries, we confirm that this Placement Document contains all information with respect to our Company and the Equity Shares, which is material in the context of this Issue. The statements contained in this Placement Document relating to our Company and the Equity Shares are, in all material respects, true and accurate and not misleading, the opinions and intentions expressed in this Placement Document with regard to our Company and the Equity Shares are honestly held, have been reached after considering all relevant circumstances, are based on reasonable assumptions and information presently available to us. There are no other facts in relation to our Company and the Equity Shares, the omission of which would, in the context of the Issue, make any statement in this Placement Document misleading in any material respect. Further, all reasonable enquiries have been made by us to ascertain such facts and to verify the accuracy of all such information and statements. The BRLM has not separately verified all the information contained in this Placement Document (financial, legal or otherwise). Accordingly, neither the BRLM nor any of its members, employees, counsel, officers, directors, representatives, agents or affiliates make any express or implied representation, warranty or undertaking, and no responsibility or liability is accepted, by the BRLM or by any of its members, employees, counsel, officers, directors, representatives, agents or affiliates, as to the accuracy or completeness of the information contained in this Placement Document or any other information supplied in connection with the issue of Equity Shares or their distribution. Each person receiving this Placement Document acknowledges that such person has neither relied on the BRLM nor on any person affiliated with the BRLM in connection with its investigation of the accuracy of such information or representation, or its investment decision, and each such person must rely on its own examination of our Company and the merits and risks involved in investing in the Equity Shares issued pursuant to the Issue. Prospective investors should not construe the contents of this Placement Document as legal, tax, accounting or investment advice. No person is authorised to give any information or to make any representation not contained in this Placement Document and any information or representation not so contained must not be relied upon as having been authorised by or on behalf of our Company, the BRLM. The delivery of this Placement Document at any time does not imply that the information contained in it is correct as at any time subsequent to its date. The Equity Shares have not been approved, disapproved or recommended by any regulatory authority in any jurisdiction including SEBI, the United States Securities and Exchange Commission, any other federal or state authorities in the United States or the securities authority of any non-United States jurisdiction or any other United States or non-United States regulatory authority. No authority has passed on or endorsed the merits of this Issue or the accuracy or adequacy of this Placement Document. Any representation to the contrary may be a criminal offence in certain jurisdictions. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S. Securities Act”), or any state securities laws of the United States and unless so registered may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered, sold and delivered outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act (“Regulation S”) and in compliance with the applicable laws of the jurisdictions where those offers and sales are made. For a description of these and certain further restrictions on offers, sales and transfers of the Equity Shares and distribution of this Placement Document, see “Selling Restrictions” and “Transfer Restrictions” on pages 150 and 156, respectively. Purchasers of the Equity Shares will be deemed to make the representations, warranties, acknowledgments and agreements set forth in the sections “Representations by Investors” on page 5. Distribution of this Placement Document to any person other than the offeree specified by the BRLM or its representatives, and those persons, if any, retained to advise such offeree with respect thereto, is unauthorized and any disclosure of its contents, without the prior written consent of our Company, is prohibited. Any reproduction or distribution of this Placement Document, in whole or in part, and any disclosure of its contents to any other person is prohibited. This Placement Document does not constitute, and may not be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. In particular, no action has been taken by our Company, the BRLM which would permit an issue of the Equity Shares or distribution of this Placement Document in any jurisdiction, other than India, where action for that purpose is required. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and neither this Placement Document nor any other Issue-related materials in connection with the Equity Shares may be
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distributed or published in or from any country or jurisdiction, except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. The information contained in this Placement Document has been provided by our Company and other sources identified herein. Distribution of this Placement Document to any person other than the investors specified by the BRLM or its representatives, and those persons, if any, retained to advise such investor with respect thereto, is unauthorised, and any disclosure of its contents, without prior written consent of our Company, is prohibited. Any reproduction or distribution of this Placement Document, in whole or in part, and any disclosure of its contents to any other person is prohibited. In making an investment decision, prospective investors must rely on their own examination of our Company and the terms of this Issue, including the merits and risks involved. Investors should not construe the contents of this Placement Document as legal, tax, accounting or investment advice. Investors should consult their own counsel and advisors as to business, investment, legal, tax, accounting and related matters concerning this Issue. In addition, neither our Company, nor the BRLM is making any representation to any investor, purchaser, offeree or subscriber of the Equity Shares in relation to this Issue regarding the legality of an investment in the Equity Shares in this Issue by such investor, subscriber, offeree or purchaser under applicable legal, investment or similar laws or regulations. Each such investor, subscriber, offeree or purchaser of the Equity Shares in this Issue is deemed to have acknowledged, represented and agreed that it is eligible to invest in India and in our Company under Indian law, including Chapter VI of the SEBI ICDR Regulations and Section 42 of the Companies Act, 2013 and the rules made thereunder and is not prohibited by SEBI or any other statutory, regulatory or judicial authority in India or any other jurisdiction from buying, selling or dealing in securities including the Equity Shares, or otherwise accessing the capital markets in India. This Placement Document contains summaries of the terms of certain documents, which summaries are qualified in their entirety by the terms and conditions of such documents. The information on our Company’s website, http://www.jkcement.com/, or any website directly or indirectly linked to our website or on the websites of the BRLM or its affiliates, does not constitute or form part of this Placement Document. Prospective investors should not rely on the information contained in, or available through such websites. Notice to investors in certain other jurisdictions: For information for investors in certain other jurisdictions, see “Selling Restrictions” and “Transfer Restrictions” on pages 150 and 156, respectively.
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REPRESENTATIONS BY INVESTORS All references to “you” or “your” in this section are to prospective investors in the Issue. By Bidding for and subscribing to any of the Equity Shares under the Issue, you are deemed to have represented, warranted, acknowledged and agreed to our Company and the BRLM, as follows:
your decision to subscribe to the Equity Shares to be issued pursuant to the Issue has not been made based on any information relating to our Company which is not set forth in this Placement Document;
you (i) are a QIB (as defined hereinafter) and not excluded pursuant to Regulation 179(2)(b) of the SEBI ICDR Regulations, (ii) have a valid and existing registration under applicable laws and regulations of India, (iii) undertake to acquire, hold, manage or dispose of any Equity Shares that are Allotted to you in accordance with Chapter VI of the SEBI ICDR Regulations, and (iv) undertake to comply with the SEBI ICDR Regulations, the Companies Act (as defined hereinafter) and all other applicable laws, including in respect of reporting requirements, if any, in connection with the Issue or otherwise accessing the capital markets;
that you are eligible to invest in India under applicable law, including the FEMA 20, and have not been prohibited by the SEBI or any other regulatory authority, statutory authority or otherwise, from buying, selling or dealing in securities;
you will make all necessary filings with appropriate regulatory authorities, including the RBI, as required pursuant to applicable laws;
if you are Allotted Equity Shares pursuant to the Issue, you shall not, for a period of one year from the date of Allotment (as defined hereinafter), sell the Equity Shares so acquired, except on the Stock Exchanges;
you are aware that the Equity Shares have not been and will not be registered through a prospectus under the Companies Act, the SEBI ICDR Regulations or under any other law in force in India. This Placement Document has not been reviewed or affirmed by RBI, SEBI, the Stock Exchanges, the RoC or any other regulatory or listing authority and is intended only for use by QIBs and that the Placement Document has not been and will not be registered as a prospectus under the Companies Act. This Placement Document has been filed with the Stock Exchanges and has been displayed on the websites of our Company and the Stock Exchanges;
you are permitted to subscribe to and acquire, the Equity Shares under the laws of all relevant jurisdictions, which are applicable to you and that you have fully observed such laws and have all necessary capacity and have obtained all necessary consents governmental or otherwise and authorisations as may be required, to enable you to commit to this participation in the Issue and to perform your obligations in relation thereto (including, without limitation, in the case of any person on whose behalf you are acting, all necessary consents and authorizations to agree to the terms set out or referred to in this Placement Document) and complied with all the necessary formalities and that you will honour such obligations;
none of our Company, the BRLM or any of their respective shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates are making any recommendations to you, or advising you regarding the suitability of any transactions you may enter into in connection with the Issue, and that your participation in the Issue is on the basis that you are not and will not, upto the Allotment of the Equity Shares, be a client of the BRLM and that the BRLM has no duties or responsibilities to you for providing the protection afforded to their clients or customers or for providing advice in relation to the Issue and are in no way acting in a fiduciary capacity;
you confirm that, either: (i) you have not participated in or attended any investor meetings or presentations by us or our agents (“Company Presentations”) with regard to us or this Issue; or (ii) if you have participated in or attended any Company Presentations: (a) you understand and acknowledge that the BRLM may not have knowledge of the statements that we or its agents may have made at such Company Presentations and are therefore unable to determine whether the information provided to you at such Company Presentations may have included any material misstatements or omissions, and, accordingly you acknowledge that the BRLM has advised you not to rely in any way on any information that was provided to you at such Company Presentations, and (b) confirm that you have not been provided any material information or price sensitive information relating to our Company and the Issue that was not publicly available;
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you have made, or are deemed to have made, as applicable, the representations, warranties, acknowledgements and undertakings set forth in “Selling Restrictions” and “Transfer Restrictions” on pages 150 and 156, respectively;
you are aware and understand that the Equity Shares are being offered only to QIBs and are not being offered to the public or any other category of investors other than QIBs and the Allotment of the same shall be on a discretionary basis, at the discretion of our Company in consultation with the BRLM;
you have been provided a serially numbered copy of this Placement Document and have read this Placement Document in its entirety, and, in particular “Risk Factors” on page 52;
all statements other than statements of historical fact included in this Placement Document, including those regarding our financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to our Company’s business), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our Company’s present and future business strategies and environment in which our Company will operate in the future. You should not place undue reliance on forwardlooking statements, which speak only as of the date of this Placement Document. None of our Company, the BRLM or any of their respective shareholders, directors, officers, employees, counsel, representatives, agents or affiliates assumes any responsibility to update any of the forward-looking statements contained in this Placement Document;
that in making your investment decision, (i) you have relied on your own examination of our Company and the terms of the Issue, including the merits and risks involved, (ii) you have made and will continue to make your own assessment of our Company, the Equity Shares and the terms of the Issue, on such information as is publicly available, (iii) you have relied upon your own investigations and resources in deciding to invest in the Equity Shares, (iv) you have consulted your own independent advisors (including tax advisors) or otherwise have satisfied yourself concerning, without limitation, the effects of local laws and taxation matters, (v) you have relied solely on the information contained in this Placement Document and no other disclosure or representation by our Company or any other party and (vi) you have received all information that you believe is necessary or appropriate in order to make an investment decision in respect of our Company and the Equity Shares;
neither the BRLM, nor any of its shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates have provided you with any tax advice or otherwise made any representations regarding the tax consequences of the Equity Shares (including, but not limited to, the Issue and the use of the proceeds from the Equity Shares). You will obtain your own independent tax advice from a reputable service provider and will not rely on the BRLM or any of its shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates when evaluating the tax consequences in relation to purchase, ownership and disposal of the Equity Shares (including, but not limited to, the Issue and the use of its proceeds). You waive and agree not to assert any claim against the BRLM or any of its shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates with respect to the tax aspects of the Equity Shares or as a result of any tax audits by tax authorities, wherever situated;
you are a sophisticated investor and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Equity Shares. You and any accounts for which you are subscribing the Equity Shares (i) are each able to bear the economic risk of the investment in the Equity Shares, (ii) will not look to our Company, the BRLM, or any of their respective shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates for all or part of any such loss or losses that may be suffered, including losses arising out of non-performance by our Company of any of its respective obligations or any breach of any representations and warranties by our Company, whether to you or otherwise, (iii) are able to sustain a complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the investment in the Equity Shares, and (v) have no reason to anticipate any change in your circumstances or any accounts for which you are subscribing, financial or otherwise, which may cause or require any sale or distribution by you or them of all or any part of the Equity Shares;
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that where you are acquiring the Equity Shares for one or more managed accounts, you represent and warrant that you are authorized in writing, by each such managed account to acquire the Equity Shares for each such managed account and to make (and you hereby make) the representations, warranties, acknowledgements and undertakings herein for and on behalf of each such managed account, reading the reference to “you” to include such accounts;
You are not a ‘Promoter’ (as defined under the SEBI ICDR Regulations) of our Company or any of its affiliates and are not a person related to the Promoters, either directly or indirectly, and your Bid does not directly or indirectly represent the ‘Promoter’, or ‘Promoter Group’, (as defined under the SEBI ICDR Regulations) of our Company or persons related to the Promoters;
You have no rights under a shareholders’ agreement or voting agreement with the Promoters or Promoter Group, no veto rights or right to appoint any nominee director on the Board other than the rights acquired, if any, in the capacity of a lender not holding any Equity Shares, which shall not be deemed to be a person related to the Promoters;
you will have no right to withdraw or revise your Bid after the Bid Closing Date;
you are eligible to Bid and hold the Equity Shares Allotted to you pursuant to this Issue, together with any Equity Shares held by you prior to the Issue. You further confirm that your Equity Shareholding, upon the issue of the Equity Shares, shall not exceed the level permissible as per any applicable law;
the Bid submitted by you would not eventually result in triggering an open offer under the Takeover Regulations;
your aggregate holding together with other QIBs in the Issue that belong to the same group or are under common control as you, the Allotment under this Issue to you shall not exceed 50% of the Issue. For the purposes of this representation: a.
QIBs belonging to the “same group” shall mean entities where (a) any of them controls, directly or indirectly, through its subsidiary or holding company, not less than 15% of the voting rights in the other; or (b) any of them, directly or indirectly, by itself, or in combination with other persons, exercise control over the others; or (c) there is a common director, excluding nominee and independent directors, amongst a QIB, its subsidiary or holding company and any other QIB; and
b.
‘control’ shall have the same meaning as is assigned to it by clause (e) of sub-regulation 1 of regulation 2 of the Takeover Regulations;
you are aware that the pre and post-Issue shareholding pattern of our Company will be filed by our Company with the Stock Exchanges, and that if you are Allotted more than 5% of the Equity Shares in this Issue, our Company shall be required to disclose your name and the number of Equity Shares Allotted to you to the Stock Exchanges and the Stock Exchanges will make the same available on their website and you consent to such disclosure being made by us;
you are aware that our Company shall make necessary filings with the RoC pursuant to the Allotment (which shall include certain details of the allottees) and if the Allotment of Equity Shares in the Issue results in you being one of the top 10 shareholders of our Company, we shall also be required to disclose your name and shareholding details to the RoC within 15 days of Allotment, and you consent to such disclosure being made by us;
you are aware that if our Company decides to allocate Equity Shares to you in the Issue, your name and your post-Issue shareholding (assuming full subscription in the Issue) will be included as a “proposed allottee” in the Issue in this Placement Document;
you are aware that (i) applications for in-principle approval, in terms of Regulation 28 of the SEBI Listing Regulations, for listing and admission of the Equity Shares and for trading on the Stock Exchanges, were made and approval has been received from each of the Stock Exchanges, and (ii) the application for the final listing and trading approval for the Equity Shares pursuant to the Issue will be made only after Allotment. There can be no assurance that the final approvals for listing and trading of the Equity Shares will be obtained in time or at -7-
all. Our Company would not be responsible for any delay or non-receipt of such final approvals or any loss arising from such delay or non-receipt;
you shall not undertake any trade in the Equity Shares credited to your Beneficiary Account until such time that the final listing and trading approvals for the Equity Shares under this Issue are granted by the Stock Exchanges;
you are aware and understand that the BRLM will have entered into a Placement Agreement with our Company whereby the BRLM has, subject to the satisfaction of certain conditions set out therein, undertaken to use reasonable endeavours to seek to procure subscription for the Equity Shares on the terms and conditions set forth therein;
the contents of this Placement Document are exclusively the responsibility of our Company and neither the BRLM nor any person acting on its behalf or any of its counsel, advisors to the Issue has or shall have any liability for any information, representation or statement contained in this Placement Document or any information previously published by or on behalf of our Company and will not be liable for your decision to participate in the Issue based on any information, representation or statement contained in this Placement Document or otherwise;
the only information you are entitled to rely on, and on which you have relied in committing yourself to acquire the Equity Shares is contained in this Placement Document, such information being all that you deem necessary to make an investment decision in respect of the Equity Shares and that you have neither received nor relied on any other information given or representations, warranties or statements made by or on behalf of the BRLM (including any view, statement, opinion or representation expressed in any research published or distributed by the BRLM or any of its affiliates or any view, statement, opinion or representation expressed by any staff (including research staff) of any of the BRLM or its affiliates) or our Company or any of their respective shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates and neither the BRLM nor our Company nor any of their respective shareholders, directors, officers, employees, counsels, advisors, representatives, agents or affiliates will be liable for your decision to accept an invitation to participate in the Issue based on any other information, representation, warranty, statement or opinion that you may have obtained or received;
you agree to indemnify and hold our Company, the BRLM and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements and undertakings in this section and the sections titled “Selling Restrictions” and “Transfer Restrictions” on pages 150 and 156, respectively. You agree that the indemnity set forth in this paragraph shall survive the resale of the Equity Shares Allotted under this Issue by or on behalf of the managed accounts;
you understand that neither the BRLM and nor its affiliates have any obligation to purchase or acquire all or any part of the Equity Shares purchased by you in the Issue or to support any losses, directly or indirectly sustained or incurred by you for any reason whatsoever in connection with the Issue, including non-performance by our Company of any of our respective obligations or any breach of any representations or warranties by our Company, whether to you or otherwise;
any dispute arising in connection with the Issue will be governed and construed in accordance with the laws of the Republic of India, and the courts in Mumbai, India shall have the exclusive jurisdiction to settle any disputes which may arise out of or in connection with the Preliminary Placement Document and this Placement Document;
you are seeking to purchase the Equity Shares for your own investment and not with a view of sale or distribution. In particular, you acknowledge that (i) an investment in the Equity Shares involves a high degree of risk and that the Equity Shares are, therefore, a speculative investment, (ii) you have sufficient knowledge, sophistication and experience in financial and business matters so as to be capable of evaluating the merits and risk of the purchase of the Equity Shares, and (iii) you are experienced in investing in private placement transactions of securities of companies in a similar stage of development and in similar jurisdictions and have such knowledge and experience in financial, business and investment matters that you are capable of evaluating the merits and risks of your investment in the Equity Shares;
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that each of the representations, warranties, acknowledgements and agreements set out above shall continue to be true and accurate at all times up to and including the Allotment of the Equity Shares in the Issue;
You are aware that additional requirements would be applicable if you are in jurisdictions other than India, as set forth under sections “Selling Restrictions” and “Transfer Restrictions” of Placement Document and you are entitled to acquire the Equity Shares under the laws of all relevant jurisdictions and that you have all necessary capacity and have obtained all necessary consents and authorities to enable you to commit to this participation in this Issue and to perform your obligations in relation thereto (including, without limitation, in the case of any person on whose behalf you are acting, all necessary consents and authorities to agree to the terms set out or referred to in this Placement Document) and will honour such obligations;
You are not acquiring or subscribing for the Equity Shares as a result of any “directed selling efforts” (as defined in Regulation S) and you understand and agree that offers and sales are being made only outside the United States in offshore transactions in reliance on Regulation S; and
you understand that the Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States, and unless so registered may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any applicable U.S. state securities laws, and that the Equity Shares are only being offered, sold and delivered outside the United States in offshore transactions in reliance on Regulation S of the U.S. Securities Act and in compliance with the applicable laws of each jurisdiction where those offers and sales are made.
Our Company, the BRLM, and their respective affiliates and others, will rely on the truth and accuracy of the foregoing representations, warranties, acknowledgments and undertakings, which are given to the BRLM, on its own behalf and on behalf of our Company and are irrevocable.
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OFFSHORE DERIVATIVE INSTRUMENTS Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of Regulation 22 of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, as amended (“SEBI FPI Regulations”), Eligible FPIs may issue, subscribe or otherwise deal in offshore derivative instruments (as defined under the SEBI FPI Regulations as any instrument, by whatever name called, which is issued overseas by an Eligible FPI against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its underlying, and all such offshore derivative instruments are referred to herein as “P-Notes”), for which they may receive compensation from the purchasers of such instruments. Further, in accordance with the SEBI circular (bearing reference number CIR/IMD/FIIC/ 20 /2014) dated November 24, 2014, Eligible FPIs shall issue P-Notes to only those subscribers which meet the eligibility criteria as laid down in Regulation 4 of the SEBI FPI Regulations and which do not have any opaque structure(s), as defined under the SEBI FPI Regulations. P-Notes may be issued only in favour of those entities which are regulated by any appropriate foreign regulatory authorities in the countries of their incorporation or establishment subject to compliance with ‘know your client’ requirements. An Eligible FPI shall also ensure no further issue or transfer is made of any offshore derivative instruments issued by or on behalf of it to any person other than a person regulated by an appropriate foreign regulatory authority. P-Notes have not been and are not being offered or sold pursuant to the Preliminary Placement Document and this Placement Document. This Placement Document does not contain any information concerning P-Notes, including, without limitation, any information regarding any risk factors relating thereto. Any P-Notes that may be issued are not securities of our Company and do not constitute any obligation of, claims on or interests in our Company. Our Company has not participated in any offer of any P-Notes, or in the establishment of the terms of any P-Notes, or in the preparation of any disclosure related to any P-Notes. Any P-Notes that may be offered are issued by, and are the sole obligations of, third parties that are unrelated to us. Our Company does not make any recommendation as to any investment in P-Notes and does not accept any responsibility whatsoever in connection with the P-Notes. Any P-Notes that may be issued are not securities of the BRLM and do not constitute any obligations or claims on the BRLM. Affiliates of the BRLM which are Eligible FPIs may purchase, to the extent permissible under law, the Equity Shares in the Issue, and may issue P-Notes in respect thereof. Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate disclosures as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes. Neither SEBI nor any other regulatory authority has reviewed or approved any P-Notes, or any disclosure related thereto. Prospective investors are urged to consult with their own financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes, including whether P-Notes are issued in compliance with applicable laws and regulations.
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DISCLAIMER CLAUSE OF THE STOCK EXCHANGES As required, a copy of this Placement Document has been submitted to the Stock Exchanges. The Stock Exchanges do not in any manner: 1.
warrant, certify or endorse the correctness or completeness of the contents of this Placement Document;
2.
warrant that the Equity Shares issued pursuant to this Issue will be listed or will continue to be listed on the Stock Exchanges; or
3.
take any responsibility for the financial or other soundness of our Company, our Promoters, our management or any scheme or project of our Company;
and it should not for any reason be deemed or construed to mean that this Placement Document has been cleared or approved by the Stock Exchanges. Every person who desires to apply for or otherwise acquire any Equity Shares may do so pursuant to an independent inquiry, investigation and analysis and shall not have any claim against the Stock Exchanges whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION In this Placement Document, unless the context otherwise indicates or implies, (a) references to “you,” “offeree,” “purchaser,” “subscriber,” “recipient,” “investors” and “potential investor” are to the prospective investors in this Issue, (b) references to “our Company”, “the Company”, or the “Issuer” are to J. K. Cement Limited, and (c) references to “we”, “us” or “our” are to J. K. Cement Limited, its Subsidiaries, its Joint Venture (together referred to as the “Group”), on a consolidated basis. References in this Placement Document to “India” are to the Republic of India and its territories and possessions and the “Government” or the “Central Government” or the “State Government” are to the Government of India, Central or State, as applicable. All references herein to the “U.S.” or the “United States” are to the United States of America and its territories and possessions. All references herein to the “U.A.E.” are to the United Arab Emirates and its territories and possessions. Page Numbers Unless otherwise stated, all references to page numbers in this Placement Document are to page numbers of this Placement Document. Currency of Presentation All references to ‘Rupee(s)’ or ‘Rs.’ or ‘₹’ or ‘INR’ are to Indian Rupees, the legal currency of the Republic of India. All references to ‘US$’ or ‘U.S. Dollars’ or ‘USD’ are to United States Dollars, the legal currency of the United States of America. All references to ‘AED’ or ‘Emirati dirham’ are to United Arab Emirates dirham, the legal currency of the United Arab Emirates. Financial Data The audited consolidated financial statements of our Group as of and for the fiscal years ended (i) March 31, 2017 and March 31, 2018 prepared under Ind AS; and (ii) March 31, 2016 prepared under the Indian GAAP. The audited consolidated financial statements of our Group as of and for the fiscal year ended March 31, 2017 also includes comparative for the fiscal year ended March 31, 2016 prepared under the Ind AS. Unless stated or the context requires otherwise, financial information included in this Placement Document is derived from the sources stated above. Additionally, the Audited Standalone Financial Statements of our Company as of and for the fiscal years ended (i) March 31, 2017 and March 31, 2018 prepared under Ind AS; and (ii) March 31, 2016 prepared under the Indian GAAP, have also been included in the section titled “Financial Statements”, on page 177. The audited standalone financial statements of our Company as of and for the fiscal year ended March 31, 2017 also includes comparative for the fiscal year ended March 31, 2016 prepared under the Ind AS. Further, statement of standalone unaudited financial results for the six-month ended September 30, 2018, prepared pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, read with SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016 and subjected to limited review, has also been included in this Placement Document. Our Company’s fiscal year commences on April 1 of each year and ends on March 31 of the next year. Accordingly, all references to a particular fiscal year (referred to herein as ‘Fiscal’, ‘Fiscal Year’ or ‘FY’) are to the 12-month period ended March 31 of that particular year, unless otherwise specified. In terms of a notification released by the MCA, our Group commenced preparing their respective financial statements in accordance with ‘Indian Accounting Standards’ or ‘Ind AS’ with effect from April 1, 2016 (transition date being April 1, 2015). Ind AS differs from accounting principles with which prospective investors may be familiar in other countries, including IFRS and US GAAP and the reconciliation of the financial information to other accounting principles has not been provided. No attempt has been made to explain those differences or quantify their impact on the financial data included in this Placement Document and investors should consult their own advisors regarding such differences and their impact on our Company’s financial data. The degree to which the financial information included in this Placement Document will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and practices, Ind AS, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with Ind AS, the Companies Act, the SEBI ICDR Regulations and practices on the financial disclosures presented in this Placement Document should accordingly be limited.
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Figures in this Placement Document have been presented in crores or in whole numbers where the numbers have been too small to present in crore unless stated otherwise. One crore represents 10,000,000. Certain figures contained in this Placement Document, including financial information, have been subject to rounding adjustments. Any discrepancies in any table between the totals and the sum of the amounts listed are due to rounding off. All figures in decimals have been rounded off to the second decimal. In certain instances, (i) the sum or percentage change of such numbers may not conform exactly to the total figure given, and (ii) the sum of the figures in a column or row in certain tables may not conform exactly to the total figure given for that column or row. Unless otherwise specified, all financial numbers in parenthesis represent negative figures. Certain Corrections in the Preliminary Placement Document Please note that in the Preliminary Placement Document, due to an inadvertent error, the accounting policies for the audited standalone financial statements and the audited consolidated financial statements for the Fiscal Year 2018 (appearing as Note 1) were not included in the “Financial Statements” section of the Preliminary Placement Document. These have now been included in the Placement Document. For further details see “Financial Statements – Notes to the financial statements for the year ended 31st March, 2018” on page F-158 and “Financial Statements – Notes to the consolidated financial statements for the year ended 31st March, 2018” on page F-205. Further, in the Independent Auditor’s Report dated May 12, 2018 on the consolidated financial statements for the year ended March 31, 2018, disclosed in the “Financial Statements” on page F-187 of the Preliminary Placement Document, under paragraph (a) of the Emphasis of Matter, the reference to note 36(A)(65) should have been “36(A)(5)” and, under paragraph (b) of the Emphasis of Matter, the reference was to “standalone Ind AS financial statements” should have been “consolidated Ind AS financial statements”. This has been corrected in the “Financial Statements” on page F-198 of the Placement Document. Expansion Data The expansion plan included in “Use of Proceeds” on page 70 is based on the report titled “Techno-Economic Feasibility Report for brownfield expansion of Mangrol & Nimbahera integrated units and green-field split grinding units” dated March 2018, prepared by Holtec Consulting Private Limited.
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INDUSTRY AND MARKET DATA The industry and market data set forth in this Placement Document have been obtained or derived from publicly available information as well as industry publications and sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we have no reason to believe that industry data used in this Placement Document is not reliable, it has not been independently verified by us, none of our Directors and the BRLM, or any of their affiliates or advisors make any representation as to its accuracy or completeness. The data used in these sources may have been reclassified by us for the purposes of presentation. Data from these sources may also not be comparable. The extent to which industry and market data set forth in this Placement Document is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in which we conduct our business, and methodologies and assumptions may vary widely among different industry sources. Accordingly, no investment decision should be made solely on the basis of such information. Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various factors, including those disclosed in “Risk Factors” on page 52. This Placement Document contains certain industry and market data and statements concerning our industry obtained from CRISIL report titled: ‘CRISIL Research on Cement – Annual Review’ (published in March 2018) which is subject to the following disclaimer: “CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this report (Report) based on the Information obtained by CRISIL from sources which it considers reliable (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any entity covered in the Report and no part of this Report should be construed as an expert advice or investment advice or any form of investment banking within the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to the subscribers / users / transmitters/ distributors of this Report. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary permission and/or registration to carry out its business activities in this regard. J. K. Cement Limited will be responsible for ensuring compliances and consequences of non-compliances for use of the Report or part thereof outside India. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and Infrastructure Solutions Ltd (CRIS), which may, in their regular operations, obtain information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be published/reproduced in any form without CRISIL’s prior written approval.” This Placement Document also includes certain industry and market data and statements concerning our industry obtained from the report titled “Survey of Cement Industry & Directory, 2017” prepared by Labour & Industrial Chronicle.
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FORWARD-LOOKING STATEMENTS This Placement Document contains certain ‘forward-looking statements’ which are not statements of historical fact. These forward-looking statements generally can be identified by words or phrases such as ‘aim’, ‘anticipate’, ‘believe’, ‘goal’, ‘expect’, ‘estimate’, ‘intend’, ‘objective’, ‘plan’, ‘project’, ‘should’, ‘will’, ‘will continue’, ‘seek to’, ‘will pursue’ or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. However, these are not the exclusive means of identifying forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties associated with the expectations with respect to, but not limited to, regulatory changes pertaining to the industry in which our Company has businesses and our ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general economic and political conditions in India and globally which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in laws, regulations and taxes and changes in competition in our industry. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following:
Our business is dependent upon our ability to mine sufficient limestone for our operations.
The operations of our Company are subject to manufacturing risk and may be disrupted by failure in the facilities.
We are subject to risks associated with our expansion strategy, which is to be funded partially out of the Net Proceeds.
We may be unable to sustain our growth and margins in the white cement segment.
We are dependent upon the continued supply of power and fuel, the supply and cost of which can be subject to significant variation due to factors outside our control.
We are dependent on third party distributors, with whom we don’t have binding term agreements
Disruptions in transportation of raw materials and finished products could affect our business.
Construction activity, whether residential or non-residential, is influenced by many factors, and any reduction in the activity in one or both markets could have a material adverse effect on us.
We engage in a highly competitive business and any failure to effectively compete could have a material adverse effect on us.
We may be unable to respond to technological advances and emerging industry standards in relation to the products we manufacture.
For a further discussion of factors that could cause our actual results to differ from our expectations, see ‘Risk Factors’, ‘Our Business’ and ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ on pages 52, 112 and 79, respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses could materially differ from those that have been estimated. We cannot assure investors that the expectations reflected in these forward-looking statements will prove to be correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements and not to regard such statements as a guarantee of future performance. Forward-looking statements reflect our views as of the date of this Placement Document and are not a guarantee of future performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on the currently available information. Although we believe the assumptions upon which these forward-looking statements are - 15 -
based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. Neither our Company, Directors, the BRLM nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. If any of these risks and uncertainties materialise, or if any of our Company’s underlying assumptions prove to be incorrect, the actual results of operations, cash flows or financial condition of our Company could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-looking statements attributable to our Company are expressly qualified in their entirety by reference to these cautionary statements.
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ENFORCEMENT OF CIVIL LIABILITIES We are a limited liability company incorporated under the laws of India. Most of our Directors and Key Managerial Personnel named herein are residents of India. A majority of our assets are located in India. As a result, it may be difficult for the investors to affect service of process upon our Company or such persons outside India or to enforce judgments obtained against such parties outside India. India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. Recognition and enforcement of foreign judgments and execution of a foreign judgment is provided for under Sections 13 and 44A respectively, of the Code of Civil Procedure, 1908, as amended (“Civil Procedure Code”) on a statutory basis. Section 13 of the Civil Procedure Code provides that a foreign judgment shall be conclusive regarding any matter directly adjudicated upon by the same parties or parties litigating under the same title, except: (i) where the judgment has not been pronounced by a court of competent jurisdiction; (ii) where the judgment has not been given on the merits of the case; (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases in which such law is applicable; (iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud; or (vi) where the judgment sustains a claim founded on a breach of any law in force in India. Under Section 14 of the Civil Procedure Code, a court in India shall, upon the production of any document purporting to be a certified copy of a foreign judgment, presume that the judgment was pronounced by a court of competent jurisdiction, unless the contrary appears on record; but such presumption may be displaced by proving want of jurisdiction. A foreign judgment which is conclusive under Section 13 of the Civil Procedure Code can be enforced in India (i) by instituting execution proceedings; or (ii) by instituting a suit on such judgment. Foreign judgments may be enforced by proceedings in execution in certain cases. Section 44A of the Civil Procedure Code provides that where a foreign judgment has been rendered by a superior court within the meaning of that section in any country or territory outside India which the Government has by notification declared to be in a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Procedure Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalties and does not include arbitration awards. Furthermore, the execution of the foreign decree under Section 44A of the Civil Procedure Code is also subject to the exceptions under Section 13 of the Civil Procedure Code, as mentioned above. Each of the United Kingdom, Singapore and Hong Kong, amongst others, have been declared by the Government of India to be a reciprocating territory for the purposes of Section 44A of the Civil Procedure Code but the United States has not been so declared. A judgment of a court in a jurisdiction which is not a reciprocating territory may be enforced only by a fresh suit upon the judgment and not by proceedings in execution. The suit must be filed in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with public policy. Further, any judgment or award denominated in a foreign currency would be converted into Rupees on the date of such judgment or award and not on the date of payment. A party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to repatriate outside India any amount recovered pursuant to the execution of such a judgement.
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EXCHANGE RATES Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the conversion into U.S. Dollars of any cash dividends paid in Rupees on the Equity Shares. The exchange rate between the Rupee and the U.S. Dollar has been volatile over the past year. The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and the U.S. Dollar (in Rupees per U.S. Dollar) based on the reference rate released by the RBI. No representation is made that the Rupee amounts actually represent such U.S. dollar amounts or could have been or could be converted into U.S. Dollar at the rates indicated, any other rate, or at all. Exchange Rate (₹ Per U.S. Dollar) Fiscal Year: Fiscal Year 2018 Fiscal Year 2017 Fiscal Year 2016 Quarters ended: September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Months ended: November 30, 2018 October 31, 2018 September 30, 2018 August 31, 2018 July 31, 2018 June 30, 2018
Period End 65.04 64.84 66.33
Average 64.45 67.09 65.46
High 65.76 68.72 68.78
Low 63.35 64.84 62.16
72.55 68.58 65.04 63.93
70.18 67.79 64.31 64.74
72.81 68.94 65.23 65.55
68.30 67.02 63.35 63.93
69.66 73.99 72.55 70.93 68.61 68.58
71.85 73.63 72.22 69.55 68.69 67.79
73.83 74.39 72.81 70.93 69.05 68.94
69.66 72.80 70.77 68.36 68.30 67.02
Source: www.rbi.org.in Note: High, low and average are based on the RBI reference rates and rounded off to two decimals. In case of holidays, the exchange rate on the last traded day of the month has been considered as the rate for the period end. Exchange Rate (₹ Per AED) Fiscal Year: Fiscal Year 2018 Fiscal Year 2017 Fiscal Year 2016 Quarters ended: September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Months ended: November 30, 2018 October 31, 2018 September 30, 2018 August 31, 2018 July 31, 2018 June 30, 2018
Period End 17.72 17.65 18.03
Average 17.55 18.26 17.82
High 17.86 18.73 18.72
Low 17.23 17.64 16.87
19.75 18.64 17.72 17.39
19.08 18.25 17.53 17.62
19.87 18.76 17.77 17.86
18.60 17.66 17.23 17.39
19.00 20.17 19.75 19.30 18.65 18.64
19.53 20.06 19.65 18.96 18.69 18.46
19.91 20.25 19.87 19.35 18.77 18.76
18.99 19.90 19.38 18.60 18.60 18.20
Source: Bloomberg Note: High, low and average are fetched from Bloomberg and rounded off to two decimals. In case of holidays, the exchange rate on the last traded day of the month has been considered as the rate for the period end.
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CERTAIN DEFINITIONS AND ABBREVIATIONS Our Company has prepared this Placement Document using certain definitions and abbreviations which you should consider when reading the information contained herein. Capitalised terms used in this Placement Document shall have the meaning set forth below, unless specified otherwise or the context indicates or requires otherwise, and references to any statute or regulations or policies shall include amendments thereto, from time to time. Terms Related to our Company and our business General Terms Term ‘J. K. Cement Limited’, ‘the Company’, ‘our Company’, or ‘the Issuer’ ‘we’, ‘our’ or ‘us’
Description J. K. Cement Limited, a public limited company incorporated under the Companies Act, 1956 and having its registered and corporate office at Kamla Tower, Kanpur, Uttar Pradesh 208 001, India. Our Company together with its Subsidiaries and Joint Venture.
Company Related Terms Term Description ‘Articles’ or ‘Articles of The articles of association of our Company, as amended from time to time. Association’ Audit Committee The audit committee of the Board of Directors of our Company. Audited Financial Statements Together, the Audited Standalone Financial Statements and Audited Consolidated Financial Statements. Audited Consolidated Financial Collectively, the audited consolidated financial statements for the Fiscal Years ended Statements (i) March 31, 2018, read along with all the notes thereto, prepared under Ind-AS; (ii) March 31, 2017 read along with all the notes thereto, prepared under Ind-AS; and (iii) March 31, 2016 prepared under the Indian GAAP. Audited Standalone Financial Collectively, the audited standalone financial statements for the Fiscal Years ended (i) Statements March 31, 2018, read along with all the notes thereto, prepared under Ind-AS; (ii) March 31, 2017 read along with all the notes thereto, prepared under Ind-AS; and (iii) March 31, 2016 prepared under the Indian GAAP. ‘Board’ or ‘Board of Directors’ Board of Directors of our Company or a duly constituted committee thereof, as the ‘our Board’ context may refer to. Corporate and Registered Office The corporate and registered office of our Company situated at Kamla Tower, Kanpur, Uttar Pradesh 208 001, India. ‘Director(s)’ or ‘our Director(s)’ Director(s) of our Company. ‘Memorandum’ or The memorandum of association of our Company, as amended from time to time. ‘Memorandum of Association’ Equity Shares The equity shares of our Company of face value ₹ 10 each. Joint Venture The joint venture of our Company, in terms of the applicable accounting standards being Bander Coal Company Private Limited. Key Management Personnel Key management/ managerial personnel of our Company in terms of the SEBI ICDR Regulations and the Companies Act, 2013 and as disclosed in “Board of Directors and Senior Management” on page 123. Previous Statutory Auditors Statutory auditors of our Company for the Fiscal Years ended March 31, 2017, and March 31, 2016, namely, M/s. P.L Tandon & Co., Chartered Accountants. Promoters The promoters of our Company, being 1. Yadupati Singhania 2. Yadu International Limited Promoter Group Promoter group of our Company as determined in terms of Regulation 2(1)(pp) of the SEBI ICDR Regulations. Shareholders The holders of the Equity Shares from time to time. Statutory Auditor The statutory auditor of our Company, being M/s. S. R. Batliboi & Co, LLP, Chartered - 19 -
Term
Description Accountants. Subsidiaries The subsidiaries of our Company being: 1. J. K. Cement (Fujairah) FZC 2. J. K. Cement Works (Fujairah) FZC 3. Jaykaycem (Central) Limited 4. JK White Cement (Africa) Limited Unaudited Standalone Financial The unaudited standalone financial information as of and for the six-month period Results ended September 30, 2018 prepared pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, read with SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016 and subjected to limited review. Issue Related Terms Term “Allocated” or “Allocation”
Description The allocation of Equity Shares, in consultation with the BRLM, following the determination of the Issue Price, to QIBs on the basis of the PPD cum Application Form submitted by them in compliance with Chapter VI of the SEBI ICDR Regulations. Allottees QIBs to which Equity Shares are Allotted pursuant to the Issue. “Allotment” or “Allotted” or Unless the context otherwise requires, the issue and allotment of Equity Shares pursuant “Allot” to the Issue. Application Form The form as set forth in section “Application Form” on page 180 of this Placement Document which was submitted by the QIBs for registering a Bid in this Issue. Bid An indication of interest by a QIB, including all revisions and modifications of interest, as provided in the PPD cum Application Form, to subscribe for Equity Shares in the Issue. Bid Amount The price per Equity Share indicated in the bid multiplied by the number of Equity Shares Bid for by such QIB and payable by the QIB in the Issue. Bid Closing Date December 28, 2018, which is the date on which our Company (or the BRLM on behalf of our Company) shall cease acceptance of the PPD cum Application Forms. Bid Opening Date December 24, 2018 which is the date on which our Company (or the BRLM on behalf of our Company) commenced acceptance of the PPD cum Application Forms. Bidding Period The period between the Bid Opening Date and Bid Closing Date, inclusive of both dates, during which Bidder can submit their Bids. Bidder A QIB, who made a Bid pursuant to the terms of the PPD cum Application Form. “Book Running Lead Edelweiss Financial Services Limited. Manager” or “BRLM” “CAN” or “Confirmation of Note or advice or intimation to Bidders confirming the Allocation of Equity Shares to Allocation Note” such QIBs after discovery of the Issue Price. Designated Date The date of credit of Equity Shares pursuant to the Issue to the Allottees’ demat accounts, as applicable to the relevant Allottees. Eligible FPIs FPIs that are eligible to participate in this Issue and do not include Category III Foreign Portfolio Investors who are not allowed to participate in the Issue. Escrow Account The bank account opened by our Company with the Escrow Agent, pursuant to the Escrow Agreement, into which application/ subscription money received towards subscription of the Equity Shares were deposited by Bidders. Escrow Agent Axis Bank Limited, with which the Escrow Account has been opened. Escrow Agreement Agreement amongst our Company, the BRLM and the Escrow Agent in relation to the Issue. Floor Price The price of ₹ 732.42/- per Equity Share which has been calculated in accordance with Regulation 176 of Chapter VI of the SEBI ICDR Regulations. Our Company has offered a discount of 5% on the Floor Price in terms of Regulation 176 of the SEBI ICDR Regulations. FPIs Foreign portfolio investors as defined under the SEBI FPI Regulations and includes person who has been registered under the SEBI FPI Regulations. Issue The offer, issue and Allotment of up to 73,41,001 Equity Shares to QIBs pursuant to Chapter VI of the SEBI ICDR Regulations and the provisions of the Companies Act, 2013 and the rules thereunder. - 20 -
Term Issue Price Issue Size Placement Agreement Placement Document
“Preliminary Placement Document” or “PPD cum Application Form” “QIBs” or “Qualified Institutional Buyers” QIP Refund Intimation Letter Relevant Date Systemically NBFC
Important
Description ₹ 695.80 per Equity Share. The issue of up to 73,41,001 Equity Shares aggregating up to ₹ 510.79 crore. The placement agreement dated December 24, 2018 entered into between our Company and the BRLM. This placement document dated December 28, 2018 issued in accordance with Chapter VI of the SEBI ICDR Regulations and section 42 of the Companies Act, 2013 and the rules thereunder. The preliminary placement document-cum-application form dated December 24, 2018, issued in accordance with Chapter VI of the SEBI ICDR Regulations and section 42 of the Companies Act, 2013 and the rules thereunder, pursuant to which a QIB could submit a Bid in the Issue. Qualified institutional buyers as defined in Regulation 2(1)(ss) of the SEBI ICDR Regulations. Qualified Institutions Placement under Chapter VI of the SEBI ICDR Regulations. Letters from the Company intimating the Bidders on the amount to be refunded, if any, either in part or whole, to their respective bank accounts. December 24, 2018 which is the date of the meeting of the Board, or any committee duly authorised by the Board, deciding to open the Issue. A non-banking financial company registered with the RBI and having a net-worth of more than ₹ 500 crore as per the last audited financial statements.
Industry/Project Related Terms Term CRISIL Report EPC MnT MnTPA OPC PPC PSC TPA
Description Industry report titled ‘CRISIL Research on Cement – Annual Review’ published in March 2018). Engineering, Procurement and Construction. Million metric tonnes. Million metric tonnes per annum. Ordinary Portland Cement. Portland Pozzalana Cement. Portland Slag Cement. Tonnes per annum.
Conventional and General Terms/ Abbreviations Term AGM AIF(s)
Description Annual general meeting. Alternative investment funds, as defined and registered with SEBI under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. BSE BSE Limited. Beneficiary Account Demat account as maintained with a Depository Participant. CAGR Compounded annual growth rate. CCI Competition Commission of India. CDSL Central Depository Services (India) Limited. CFO Chief Financial Officer. Civil Procedure Code, Civil The Code of Civil Procedure, 1908. Code CIN Corporate Identity Number. Companies Act Companies Act, 2013, to the extent notified and the rules thereunder and the Companies Act, 1956, to the extent in force. Competition Act The Competition Act, 2002. CSR Corporate Social Responsibility. Depositories Act The Depositories Act, 1996. Depository A depository registered with SEBI under the Securities and Exchange Board of India (Depositories and Participant) Regulations, 1996. ‘Depository Participant’ or A depository participant as defined under the Depositories Act. - 21 -
Term ‘DP’ DIN DP ID EBITDA EGM EPS FDI FEMA FEMA 20
Description
Director Identification Number. Depository Participant identity Earnings before interest, tax, depreciation and amortisation. Extra ordinary general meeting. Earnings per share. Foreign direct investment. The Foreign Exchange Management Act, 1999, and the regulations issued thereunder. Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017. ‘Form PAS-4’ or ‘PAS-4’ The private placement offer cum application letter in Form PAS-4 as prescribed under Rule 14(3) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. ‘Foreign Portfolio Foreign portfolio investor under the Securities and Exchange Board of India (Foreign Investor(s)’ or ‘FPI(s)’ Portfolio Investors) Regulations. ‘financial year’ or ‘fiscal Unless stated otherwise, financial year of our Company ending on March 31 of a year’ or “fiscal” or ‘fiscal particular year. year’ FVCI Foreign venture capital investors (as defined and registered with SEBI under the SEBI (Foreign Venture Capital Investors) Regulations, 2000). GDP Gross domestic product. Government Government of India or State Government, as applicable. ‘Government of India’ or Central government of India. ‘GoI’ ICAI Institute of Chartered Accountants of India. IFRS International Financial Reporting Standards of the International Accounting Standards Board. IND AS Accounting standards notified under section 133 of Companies Act read with Companies Accounts Rules 2015, as amended. Indian GAAP Accounting standards notified under section 133 of Companies Act read with Companies Accounts Rules 2014, as amended. IPC The Indian Penal Code, 1860. IT Information technology. Listing Agreements The listing agreements entered into by our Company with the Stock Exchanges. Income Tax Act The Income Tax Act, 1961. MAT Minimum alternate tax. MCA Ministry of Corporate Affairs MMDR Act Mines and Minerals (Development and Regulation) Act, 1957. MoU Memorandum of understanding. ‘Mutual Fund’ or ‘MF’ A mutual fund registered with SEBI under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. Negotiable Instruments Act Negotiable Instruments Act, 1881. NRI Non-resident Indian. NSDL National Securities Depository Limited. NSE National Stock Exchange of India Limited. p.a. Per annum. PAN Permanent Account Number. PAT Profit after tax. PBT Profit before tax. Portfolio Investment Scheme Portfolio investment scheme under the FEMA. RBI Reserve Bank of India. Regulation S Regulation S under the U.S. Securities Act. RoC The erstwhile Registrar of Companies, Uttar Pradesh & Uttarakhand at Kanpur. ‘Rs.’, ‘Rupees’, ‘INR’ or ‘₹’ The legal currency of the Republic of India. SCRA Securities Contracts (Regulation) Act, 1956. SCRR Securities Contracts (Regulation) Rules, 1957. SEBI Securities and Exchange Board of India. SEBI Act The Securities and Exchange Board of India Act, 1992. - 22 -
Term SEBI FPI Regulations SEBI Listing Regulations SEBI ICDR Regulations State Government Stock Exchanges STT Takeover Regulations ‘U.S.’ or ‘United States’ U.S. GAAP U.S. Securities Act VCF
Description Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. Government of a state of the Republic of India. BSE and NSE. Securities Transaction Tax. Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations 2011. United States of America. Generally accepted accounting principles in the U.S. The U.S. Securities Act of 1933, as amended. A venture capital fund (as defined and registered with SEBI under the erstwhile Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996) or the SEBI AIF Regulations, as the case may be.
Notwithstanding the foregoing, terms in the sections titled “Financial Statements”, “Legal Proceedings”, and “Issue Procedure” on pages 177, 166 and 140, respectively, shall have the meaning given to such terms in such sections.
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SUMMARY OF OUR BUSINESS Overview We are one of the leading cement manufacturers in the country in terms of production capacity (Source: Survey of Cement Industry and Directory, 2017). We manufacture grey cement, white cement and wall putty. We are one of the two major players in the white cement market in the country, who together hold 80-85% of the total market share in terms of the installed capacity (Source: CRISIL Report). In the grey cement segment, we manufacture and market ordinary portland cement (“OPC”) (43-grade and 53-grade), portland pozzalana cement (“PPC”) and portland slag cement (“PSC”) under the brand name “J.K. Super Cement (Build Safe)”. Our white cement and wall putty are sold under the brand name “J.K. White” and “J.K. Wall Putty”, respectively. We own and operate integrated cement manufacturing plants and split grinding units, which are strategically located near our limestone mines and are well connected to the end-markets by road and rail networks. We own and operate four grey cement plants in Rajasthan and Karnataka and a grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. We are presently seeking to expand our grey cement production capacity in north India by 4.2 MTPA, through brownfield expansion of our Mangrol plant in Rajasthan, and the establishment of grinding facilities of 1 MTPA each at Mangrol and Nimbahera, and greenfield split grinding units at Aligarh and Balsinor having 1.5 MTPA and 0.7 MTPA capacities, respectively. Limestone and power are two of the key inputs used in the manufacture of cement, in addition to fuel. We source limestone for our manufacturing plants from captive limestone mines located in proximity to our plants. In Fiscals 2016, 2017 and 2018 and the six-month period ended September 30, 2018, significantly all of our limestone requirements in India across plants were met by our captive limestone mines. As on September 30, 2018, we own and operate 10 limestone mines situated in Rajasthan and Karnataka, and have access to limestone reserves aggregating up to 502.99 MnT (including proven and probable). The remaining lease duration for these mines ranges from 12 to 44 years. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement adjacent to our plant site, which is yet to be operationalized. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable). Further, we have three captive power plants and two waste heat recovery power plants across Rajasthan and Karnataka, with an aggregate capacity of approximately 125.70 MW, as on September 30, 2018. During Fiscals 2016 to 2018 and the six-month period ended September 30, 2018, over 70% of our power requirement in India were met by captive thermal and waste-heat-recovery-based power plants. We sell grey cement over 15 states/ union territories in India, as well as grey clinker to customers in Nepal. Our white cement and wall putty are sold across the country. As on September 30, 2018, our grey cement is supplied through a network of over 11,000 dealers and retailers. We also supply our white cement and wall putty products through a network of over 44,000 dealers and retailers. As on September 30, 2018, our distribution network is further augmented through 186 feeder depots serviced by 23 sales offices for grey cement and 84 feeder depots serviced by 33 sales office for white cement spread across India. We also directly sell our products to builders, EPC contractors and government entities for various projects undertaken by them. Our consolidated revenue from operations in Fiscals 2016, 2017 and 2018 was ₹ 4,368.78 crores, ₹ 4,654 crores, and ₹ 5,020.47 crores respectively, and our profit for the year was ₹ 54.83 crores, ₹ 171.97 crores, and ₹ 285.59 crores, respectively. Our EBITDA in Fiscals 2016, 2017 and 2018 was ₹ 555.10 crores, ₹ 762.83 crores, and ₹ 856.43 crores, respectively. Our Strengths We believe that we possess a number of competitive strengths, which enable us to successfully execute our business strategies, including the following:
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Dominant position in the white cement segment along with a strong presence in wall putty segment We are one of the two major players in the white cement market in the country, who together hold 80-85% of the total market share (Source: CRISIL Report). As on September 30, 2018, we have an aggregate installed capacity of 0.60 MTPA and 0.90 MTPA for white cement and wall putty, respectively. White cement is primarily used as filler between ceramic tiles and for decorative purposes. The white cement market in India is very small as it is nearly three times more expensive than grey cement (Source: CRISIL Report). The white cement industry has significant entry barriers due to high capital costs, availability of limestone reserves suitable for white cement being concentrated at select locations and need for a pan India distribution network. In 2004, as part of our acquisition of the cement division of Jaykay Enterprises Limited (then known as J.K. Synthetics Limited), we acquired the white cement plant at Gotan, along with the relevant mining leases. We have been able to overcome the entry barrier due to our captive limestone mines that supply limestone needed for our white cement operations. Since 2004, we have doubled our white cement capacity in India, to 0.6 MTPA through the expansion of our Gotan plant. We also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only, with a capacity of 0.60 MTPA. We currently operate two limestone mines in Dhanappa, Rajasthan on lease, valid until 2031 and 2034 respectively, with white-cement grade limestone reserves. In Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement. While we are yet to operationalize the mine at Fujairah, the lease is valid until 2033. We also operate white clay mines in the State of Rajasthan at Rajputon-ki-Dhani and Kanthariya, both of which are situated in relative proximity to our plant. We manufacture wall putty at the white cement plant at Gotan, Rajasthan and at a dedicated plant at Katni, Madhya Pradesh. Wall putty is used primarily as a preparatory material for painting that has both residential and industrial application. White cement is a key raw material used in the manufacture of wall putty. We believe that our white cement manufacturing capabilities have also contributed to our growth in the wall putty segment. As on September 30, 2018, we had an aggregate installed capacity of wall putty of 0.90 MTPA. Our annual production of wall putty increased from 0.47 MnT in Fiscal 2016 to 0.62 MnT in Fiscal 2018, at a CAGR of 14.85%. Due to the high entry barrier and significantly less competition in the white cement segment, white cement (including wall putty) has higher realizations and margins, leading to stable cash flows for us. Our consolidated revenue from white cement segment (white cement and wall putty) accounted for 34 %, 37 %, and 33 %, of our total net sales in Fiscals 2016, 2017 and 2018, respectively. Our EBITDA from this segment has grown from ₹ 323.19 crores in Fiscal 2016 to ₹ 409.11 crores in Fiscal 2018. Further, while white cement and wall putty accounted for 33 % of our revenue in Fiscal 2018, it generated EBITDA of ₹409.11 crores in Fiscal 2018, which was 48 % of the total EBITDA in the same period. We believe that our access to white cement grade limestone enables us to retain our dominant position in the white cement segment. Access to large limestone reserves for future expansion Limestone is a key raw material used in the manufacture of cement. Therefore, access to limestone reserve is a key consideration for production of cement in a cost-efficient manner. Limestone consumption at our manufacturing units in India in Fiscals 2016, 2017, 2018 and the six-month period ended September 30, 2018 was approximately 8.59 MnT, 8 MnT, 8.94 MnT and 4.66 MnT, respectively, which was almost entirely serviced by our captive mines. We currently operate 10 limestone mines in the states of Rajasthan and Karnataka. As on September 30, 2018, we have access to limestone reserves aggregating up to 502.99 MnT (including proven and probable), with the remaining lease duration for the mines ranging from 12 to 44 years. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement, adjacent to our plant site. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable), providing ample opportunity for greenfield expansion up to 15 MTPA (assuming an average plant life of 30 years). The demand for cement is expected to grow at a CAGR of 6-6.5 % over Fiscal 2018 to Fiscal 2023, as against a CAGR of 4.5% during Fiscal 2013 and Fiscal 2018 (Source: CRISIL Report). We are therefore presently seeking to increase our grey cement production capacity in North India from 7.47 MTPA to 11.67 MTPA by Fiscal 2020, through the brownfield expansion of our Mangrol plant in Rajasthan, and the establishment of grinding facilities of 1 MTPA each at Mangrol and Nimbahera, and greenfield split grinding units at Aligarh and Balsinor having 1.5 MTPA and 0.7 MTPA capacities, respectively. We believe that our limestone reserve can support our expansion plans without incurring additional cost on - 25 -
prospecting of the area or seeking allotment of new mining leases, which is now done through a government mandated auction process. Integrated manufacturing plants at strategic locations We own and operate integrated cement manufacturing plants and split grinding units, which are strategically located near our limestone mines and are well connected to the end-markets by road and rail networks. We own and operate four grey cement plants in Rajasthan and Karnataka and a split grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. Our plants are located in close proximity to the raw material needed for production and are well connected by rail and road transport to the end market. Being located close to the raw material helps us save time and cost towards transportation of raw materials and lesser turnaround time for supply of product to the end customer. Limestone is a key raw material in the manufacture of cement. Additionally, limestone being bulky in nature, it is not commercially viable to transport it over long distances (Source: CRISIL Report). We source limestone for our manufacturing plants from captive limestone mines located in relative proximity to the respective plants. Further, additional raw materials like gypsum, white clay, fly ash, slag and dolomite, as required, are also sourced from locations closer to the respective plants. Power and fuel is another significant expense item in our production and accounted for 22%, 17% and 20% of our Total Expenses in Fiscals 2016, 2017 and 2018, respectively, on a consolidated basis. During Fiscals 2016 to 2018 and the six-month period ended September 30, 2018, over 70 % of our power requirements in India were met by captive thermal and waste-heat-recovery-based power plants. As on September 30, 2018, we have an aggregate thermal and waste-heat-recovery-based captive power generation capacity of approximately 125.70 MW. Further, all our plants are located close to railway and road networks. Muddapur and Katni plant are accessible through nearby railway connectivity, with the white cement plant at Gotan utilizing the railway siding set up for the grey cement plant. Further, we are also seeking to establish a railway siding at Katni plant in Madhya Pradesh. We believe that our integrated approach to cement production allows us to control our costs, especially those pertaining to power supply requirements, raw materials and logistics. This enables us to offer our products at competitive prices, and also assists in increasing internal cash accruals for future expansion. Strong brand name with extensive distribution network in India We believe that we have a high degree of brand recall and trust in India, attributable to our quality of products, vast experience and wide spread distribution network. We also engage in a wide range of marketing activities, including award ceremonies and brand campaigns, which we believe enable us to maintain the popularity, quality and recall value of our brand portfolio. We supply our products throughout India to industrial and retail consumers, through various channels including dealers and retailers. Our OPC (43-grade and 53-grade), PPC and PSC products are all marketed under the brand name “J.K. Super Cement (Build Safe)”, our white cement is sold under the brand name “J.K. White”, and our wall putty is sold under the brand name “J.K. Wall Putty”. We have a pan-India presence in the white cement and wall putty segment, with a network of over 44,000 dealers and retailers, as on September 30, 2018. Further, in the grey cement segment, we are present in over 15 states/ union territories, through a network of over 11,000 dealers and retailers. As on September 30, 2018, our distribution network is further augmented through 270 feeder depots serviced by 56 sales offices, spread across India. We believe that the extent of this network, and our relationships with the dealers and retailers, enables us to market and distribute our products widely and efficiently. Further, we also directly sell our products to builders, EPC contractors and government entities for various projects undertaken by them. We believe we have developed long term customer relationships. Experienced Promoters supported by professionally qualified and experienced management team We have a qualified and experienced management team led by our Promoter and the Chairman and Managing Director, Yadupati Singhania. Yadupati Singhania has been associated with our Company since its incorporation, and has an
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overall experience of over 40 years in the cement sector. We believe that while we are a promoter driven Company, we are professionally managed by an experienced Board. Our Board is ably supported by members of our senior management, including our Key Management Personnel and Senior Management Personnel, who have an average of over two decades of experience in their respective areas of expertise. We believe that we benefit significantly from the experience and strategic guidance of our well-qualified management team. The strength and quality of our senior management team and their understanding of the cement industry enables us to formulate sound business strategies and execute them in an effective manner. Our Strategy Increasing our manufacturing capacity by brownfield/greenfield expansion and consequently expanding our market reach Cement demand in India is projected to increase at 6-6.5% CAGR from Fiscal 2018 to Fiscal 2023, as against the 4.5% CAGR recorded from Fiscal 2013 to Fiscal 2018. At a regional level, from Fiscal 2018 to Fiscal 2023, cement markets in central, southern and northern India are expected to grow at a CAGR of 6-7 %, 5.5-6% and 5.5-6.5%, respectively. (Source: CRISIL Report) As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. We intend to increase our production capacity to 14.67 MPTA, in the grey cement through the following projects:
Brownfield expansion of Mangrol and Nimbahera plants: We are proposing to enhance the cement grinding capacity at Mangrol and Nimbahera by 1 MTPA each. In addition, we also intend to increase the existing clinker capacity at Mangrol by 2.48 MTPA. The surplus clinker production will be utilised to serve the split grinding units proposed to be set up at Aligarh and Balsinor, and also to meet the additional clinker requirement at Nimbahera plant due to the brownfield expansion. We are also proposing to set up a waste heat recovery power generation facility at Mangrol with a capacity of 13 MW.
Establishment of grinding units at Aligarh and Balsinor: Utilizing the clinker sourced from Mangrol, we are proposing to set up fly ash-based split grinding units at Aligarh and Balsinor, having a capacity of 1.5 MTPA and 0.7 MTPA, respectively.
We believe the proposed setting up of a split grinding unit in Balsinor (in the state of Gujarat) will enable us, inter alia, to increase our presence of grey cement in Western India. Aligarh split grinding location is expected to further strengthen the Company’s position in Western UP, besides opening avenues for new markets in the region. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable). We believe that the aforementioned leases provides us access to adequate limestone reserves to sustain a greenfield expansion at these sites, up to a maximum capacity of 15 MTPA (assuming average plant life of 30 years), thereby allowing for greenfield expansion in the state of Madhya Pradesh. In order to increase our market share, we also intend to continue to focus on the expansion of our distribution network and the promotion of our brands, through adding additional authorized dealers and retailers to our network, strengthening our relationships with the existing dealers that distribute our products, and organizing ‘dealer meets’ which involves advice on marketing and sales techniques and technical applications of cement products.
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Improving cost efficiency through brownfield and greenfield expansion We intend to focus on reducing our operating costs, which is critical in determining profitability. The relatively higher efficiency of the new facilities at Mangrol will help us reduce our incremental power and fuel costs. Additionally, by virtue of the increase in clinker production capacity at Mangrol, our waste-heat-recovery-based captive power generation capacity is expected to increase by 13 MW, which would further subsidize costs incurred towards power consumption. New grinding units proposed to be set up at Nimbahera, Aligarh and Balsinor will also help us reduce our grinding costs, due to relatively higher efficiency. We are also seeking to reduce our logistics costs through the proposed establishment of (i) overland belt conveyor in Maliakhera for the transport of crushed limestone at our Maliakhera and Karunda mines; and (ii) split grinding units at Aligarh and Balsinor, which will be in close proximity to sources of certain raw material as well as the end market. Consolidate our strong presence in wall putty market through expansion. We manufacture wall putty at our white cement plant at Gotan, Rajasthan and at a dedicated plant at Katni, Madhya Pradesh. As on September 30, 2018, we had an aggregate installed capacity for wall putty of 0.90 MTPA. Our annual production of wall putty increased from 0.47 MnT in Fiscal 2016 to 0.62 MnT in Fiscal 2018, at a CAGR of 14.85%. White cement is a key raw material used in the manufacture of wall putty. We believe that our white cement manufacturing capabilities have also contributed to our growth in the wall putty segment. Our wall putty segment has shown a year-on-year growth of around 15% in terms of production volume and we expect this trend to continue. We intend to leverage the growth in the Indian wall putty market by increasing our wall putty production capacity. Improve the capacity utilisation at our Fujairah plant We commenced operations at our Fujairah plant in September 2014 with a dual process cement plant. The plant is currently being used for the production of white cement, with an installed white cement production capacity of 0.6 MTPA, as on September 30, 2018. Our Fujairah plant recorded an annual production of 0.24 MnT, 0.29 MnT and 0.29 MnT in calendar years 2015, 2016 and 2017, constituting an annual capacity utilization of 40%, 48% and 48%, respectively, and a production of 0.19 MnT in the nine-month period ended September 30, 2018, constituting a capacity utilization of 42% for the said period. We intend to rationalise our operations and begin shipping white cement from our Fujairah plant to our south Indian markets in addition to the international markets we already supply. We believe that this will help us in improving the utilisation rates as well as improve profitability. Further, we believe that this will also help free up some capacity at our Gotan plant which we can use to market to our north Indian and central Indian markets.
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SUMMARY OF THE ISSUE The following is a general summary of the terms of the Issue. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed information appearing elsewhere in this Placement Document, including in “Risk Factors”, “Use of Proceeds”, “Issue Procedure” and “Description of the Shares” on pages 52, 70, 140 and 161, respectively. Issuer Issue Size
J. K. Cement Limited Up to 73,41,001 Equity Shares aggregating up to ₹ 510.79 crore. A minimum of 10% of the Issue Size, i.e., at least 7,34,101 Equity Shares, shall be available for Allocation to Mutual Funds only, and the balance 66,06,900 Equity Shares shall be available for Allocation to all QIBs, including Mutual Funds.
Face Value Issue Price Floor Price
Eligible Investors
Equity Shares issued and outstanding immediately prior to the Issue Equity Shares issued and outstanding immediately after the Issue Issue Procedure
Listing
Lock-up
Proposed allottees
Transferability Restrictions
Use of Proceeds
Risk Factors Closing Date
In case of under-subscription in the portion available for Allocation to Mutual Funds, such portion may be Allocated to other QIBs. ₹ 10 per Equity Share. ₹ 695.80 per Equity Share. The floor price for the Issue calculated on the basis of Regulation 176 of Chapter VI of the SEBI ICDR Regulations is ₹ 732.42 per Equity Share. Our Company has offered a discount of 5.00% on the Floor Price in terms of Regulation 176 of the SEBI ICDR Regulations. QIBs, to whom the PPD cum Application Forms have been circulated and who are eligible to bid and participate in the Issue. The list of QIBs to whom the PPD cum Application Form has been delivered was determined by the Company, in consultation with the BRLM. See “Issue Procedure”, “Selling Restrictions” and “Transfer Restrictions” on pages 140, 150 and 156, respectively. 6,99,27,250 Equity Shares 7,72,68,251 Equity Shares. The Issue is being made only to QIBs in reliance on Section 42 of the Companies Act, 2013, read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, and Chapter VI of the SEBI ICDR Regulations. For further details, see “Issue Procedure” on page 140. Our Company has received in principle approvals each dated December 24, 2018, from NSE and BSE, under Regulation 28(1) of the SEBI Listing Regulations. Our Company shall apply to the Stock Exchanges for the listing approvals and the final listing and trading approvals, after the Allotment and after the credit of Equity Shares to the Beneficiary Account, respectively. Please see “Placement – Lock-up”on page 149 for a description of restrictions on our Promoters and Promoter Group in relation to Equity Shares. Please see “Capital Structure - Proposed allottees” on page 74 for names of the proposed allottees and the percentage of post Issue capital that may be held by them in the Company. The Equity Shares being Allotted pursuant to this Issue shall not be sold for a period of one year from the date of Allotment, except on the Stock Exchanges. For further transfer restrictions, see “Transfer Restrictions” on page 156. The net proceeds of the Issue, after deduction of fees, commissions and expenses in relation to the Issue, is approximately ₹ 503.49 crore. See “Use of Proceeds” on page 70. See “Risk Factors” on page 52 for discussion of risks that you should consider before participating in this Issue. The Allotment pursuant to the Issue is expected to be made on or about - 29 -
Ranking
Approvals Security Codes for the Equity Shares
December 31, 2018 (“Closing Date”). The Equity Shares being issued pursuant to the Issue shall be subject to the provisions of the Company’s Memorandum and Articles of Association and shall rank pari passu in all respects with the existing Equity Shares including rights in respect of dividends. The holders of such Equity Shares (who hold Equity Shares as on the record date) will be entitled to participate in dividends and other corporate benefits, if any, declared by our Company after the Closing Date, in compliance with the Companies Act, 2013, the SEBI Listing Regulations and other applicable laws and regulations. The holders of such Equity Shares may attend and vote in shareholders’ meetings in accordance with the provisions of the Companies Act. See “Description of the Shares” on page 161. The Issue has been approved by our Board on June 28, 2018 and our Shareholders in the AGM dated July 28, 2018. ISIN INE823G01014 BSE Scrip Code 532644 NSE Symbol JKCEMENT
*
16,920 Equity Shares allotted by the Company are yet to be listed on the Stock Exchanges due to regulatory/court orders and certain legal disputes regarding title.
- 30 -
SELECTED FINANCIAL INFORMATION We have included in this section: (i) financial information for Fiscals 2017 and 2018, extracted from our audited financial statements for Fiscal 2018, prepared in accordance with the Ind-AS (containing restated comparative financial information for Fiscal 2017); (ii) the comparative financial information pertaining to Fiscal 2016, included in the audited financial statements for Fiscal 2017, prepared under the Ind-AS; (iii) financial information for Fiscal 2016, presented in accordance with Indian GAAP, extracted from our audited financial statements for Fiscal 2016; and (iv) the unaudited standalone financial information as of and for the six-month period ended September 30, 2018 prepared pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, read with SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016 and subjected to limited review. The information included in this section should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our "Financial statements, including the notes thereto and the reports thereon, which appear in the section “Financial Statements”. Ind AS and Indian GAAP differ in certain material respects from US GAAP and IFRS. Neither the information set forth below nor the format in which it is presented should be viewed as comparable to the information prepared in accordance with US GAAP or IFRS or other accounting principles. The Company adopted Indian Accounting Standards (“IND-AS”) effective April 01, 2016 (transition date being April 01, 2015) and accordingly, the financial statements for fiscal year ended March 31, 2017 have been prepared in accordance with the IND AS prescribed under section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and the other accounting principles generally accepted in India. Notes to the Summary Financial Information: I.
Important Note on Application of Ind-AS and its Impact on the Preparation and Presentation of our Financial Statements
The Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015 providing the schedule for implementation of Ind-AS in a phased manner. Pursuant to such regulations, we have adopted Ind-AS with effect from April 1, 2016 with the transition date of April 1, 2015, and our financial statements for any period commencing from or subsequent to April 1, 2016 were required to be prepared in accordance with Ind-AS. Potential investors should consult their own professional advisors for an understanding of the differences between Indian GAAP and Ind-AS and how those differences might affect the financial information disclosed in this Placement Document. II. Important Note on Adjustments to Audited Standalone Financial Statements for the period ended March 31, 2017 a)
During the financial year ended 31 March 2018, the Company discovered that the deferred tax charge was erroneously created lower by ₹48.80 crore due to consideration of incorrect carried forward unabsorbed depreciation and business loss. Consequently, Deferred tax liability (net) was shown lower by the same amount. Financial statements for the year ended 31 March 2017 has been restated to correct this error. The effect of the restatement on those financial statements is summarised below. There is no effect in financial year 2017-18. In financial year ended 31 March 2017, the Company reported as follows: Particulars (₹ Crore) Profit before tax Current Tax MAT credit entitlement Earlier years tax adjustments Deferred tax Profit/(loss) for the year Basic and Diluted earnings per share (₹)
31-Mar-17 324.43 70.47 (70.47) (0.03) 64.88 259.58 37.12
Deferred tax liability (net) was shown ₹ 214.01 crore in the Balance Sheet as at March 31, 2017
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The following are the restated amounts which are being reported after correction for the year ended March 31, 2017 as comparatives against March 31, 2018: Particulars (₹ Crore) Profit before tax Current Tax Earlier years tax adjustments Deferred tax charged/ (credited) Profit/(loss) for the year Basic and Diluted earnings per share (₹)
31-Mar-17 (Restated) 324.43 70.47 (0.03) 43.21 210.78 30.14
Deferred tax liability (net) was restated to ₹262.81 crore in the Balance Sheet as at March 31, 2017 b) In addition to the above, following are the reclassifications made in the previous year figures (year end March 31, 2017) to make them comparable/better presentation with the current year figures. These reclassification does not have any significant effect on the balance sheet at the beginning of the preceding financial year, i.e, April 1, 2016. Also, these reclassifications do not have any impact on the profit other than those described in note (a) above. (Unless stated otherwise, amount ₹ in crores) Particulars ASSETS NON CURRENT ASSETS Non current – Investments Non current – Loans and advances Other non current assets CURRENT ASSETS Current Assets – Financial assets – Cash and cash equivalents Current Assets – Financial assets – Bank balances other than (iii) above Other Current Financial Assets Other current assets EQUITY AND LIABILITIES Other Equity Borrowings – Non Current Deferred tax liabilities (net) Other non-current liabilities Current Liabilities Borrowings – Current Trade Payable – Current Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Profit & loss Account Revenue from operations Other income Cost of materials consumed Changes in inventories of finished goods, stock-in-Trade and work-inprogress Finance costs Other expenses Tax Expense MAT Credit Entitlement
As at 31st March 2017 (Restated)
As at 31st March 2017 (Published)
470.38 134.57 104.71 121.72
470.38 142.43 89.07 417.85
305.21
0.99
48.62 161.56 1801.59 2,282.37 262.80
45.22 174.19 1,850.39 2,318.46 214.01
86.33 167.29 377.74 431.45 155.92 7.07 1.49 4,379.83 99.32 644.06 (9.77)
52.71 165.77 205.18 659.97 83.36 16.02 1.57 4,420.71 51.19 695.53 (3.26)
Nature
Reclassification items Reclassification items Reclassification items
Reclassification items Reclassification items Reclassification items Reclassification items
Reclassification items Reclassification items Variance due to error as mentioned in note a above Reclassification items
Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items
Reclassification items Reclassification items Reclassification items Reclassification items
272.90 2,775.73 -
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265.65 2,717.75 (70.47)
Reclassification items Reclassification items
Reclassification items
Particulars
As at 31st March 2017 (Restated) 43.21
As at 31st March 2017 (Published) 64.88
210.78
259.58
30.14 30.14
37.12 37.12
Deferred Tax
Profit/ (loss) for the year Earning per equity share (in ₹) Basic Diluted
Nature Variance due to :i) reclassification of MAT credit entitlement in deferred tax and ii) error as mentioned in note a above
III. Important Note on Adjustments to Audited Consolidated Financial Statements for the period ended March 31, 2017 c)
During the financial year ended 31 March 2018, the Company discovered that the deferred tax charge was erroneously created lower by ₹48.80 crore due to consideration of incorrect carried forward unabsorbed depreciation and business loss. Consequently, Deferred tax liability (net) was shown lower by the same amount. Financial statements for the year ended 31 March 2017 has been restated to correct this error. The effect of the restatement on those financial statements is summarised below. There is no effect in financial year 2017-18. In financial year ended 31 March 2017, the Company reported as follows: Particulars (₹ Crore) Profit before tax Current Tax MAT credit entitlement Earlier years tax adjustments Deferred tax Profit/(loss) for the year
31-Mar-17 285.61 70.47 (70.47) (0.03) 64.88 220.76
Basic and Diluted earnings per share (₹)
32.39
Deferred tax liability (net) was shown ₹ 211.07 crore in the Balance Sheet as at March 31, 2017 The following are the restated amounts which are being reported after correction for the year ended March 31, 2017 as comparatives. Particulars (₹ Crore) Profit before tax Current Tax Earlier years tax adjustments Deferred tax charged/ (credited) Profit/(loss) for the year
31-Mar-17 285.62 70.47 (0.03) 43.21 171.97
Basic and Diluted earnings per share (₹)
25.42
Deferred tax liability (net) was restated to ₹259.87 crore in the Balance Sheet as at March 31, 2017 d) In addition to the above, following are the reclassifications made in the previous year figures to make them comparable/better presentation with the current year figures. These reclassification does not have any significant effect on the balance sheet at the beginning of the preceding financial year, i.e, April 1, 2016. Also, these reclassifications do not have any impact on the profit other than those described in note (c) above. (Unless stated otherwise, amount ₹ in crores) Particulars
As at 31st March 2017 (Restated)
ASSETS NON CURRENT ASSETS
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As at 31st March 2017 (Published)
Nature
Particulars Non current - Investments Non current - Loans and advances Other non current assets
As at 31st March 2017 (Restated) 15.01 134.77 113.37
As at 31st March 2017 (Published) 15.01 142.64 97.73
130.11
426.25
305.21
0.99
52.66 163.20
49.26 175.83
1,640.76 2,870.15 259.87
1,689.55 2,906.23 211.07
86.33
52.71
225.93 427.13 459.32 156.38 10.51 1.49
224.41 233.72 708.69 83.82 19.47 1.57
Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items
4,654.00 98.43 686.48 14.52
4,694.88 50.29 737.94 21.03
Reclassification items Reclassification items Reclassification items
302.66 2,910.42
295.40 2,852.45
Reclassification items Reclassification items
43.21
(70.47) 64.88
171.97
220.76
25.42 25.42
32.39 32.39
CURRENT ASSETS Current Assets - Financial assets - Cash and cash equivalents Current Assets - Financial assets - Bank balances other than (iii) above Other Current Financial Assets Other current assets EQUITY AND LIABILITIES Other Equity Borrowings - Non Current Deferred tax liabilities (net) Other non-current liabilities Current Liabilities Borrowings - Current Trade Payable - Current Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Profit & loss Account Revenue from operations Other income Cost of materials consumed Changes in inventories of finished goods, stockin-Trade and work-in-progress Finance costs Other expenses Tax Expense MAT Credit Entitlement
Deferred Tax
Profit/ (loss) for the year Earning per equity share (in ₹) Basic Diluted
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Nature Reclassification items Reclassification items Reclassification items
Reclassification items Reclassification items Reclassification items Reclassification items
Reclassification items Reclassification items Variance due to error as mentioned in note (c) above Reclassification items
Reclassification items
Reclassification items Variance due to :i) reclassification of MAT credit entitlement in deferred tax and ii) error as mentioned in note (c) above
Standalone Balance Sheet data as on March 31, 2016, 2017 and 2018 (Amount ₹ in crores) Particulars
2016
1
As at March 31, 20172
2018
3
ASSETS Non-current assets Property, plant and equipment 3,520.56 3,674.46 3,592.32 Capital work-in-progress 152.40 104.82 87.81 Intangible assets 2.00 5.57 4.37 Financial assets (i) Investments 373.27 470.38 556.94 (ii) Loans & Advances 137.31 134.57 50.13 Other non-current assets 127.85 104.71 114.92 Total non-current assets 4,313.39 4,494.51 4,406.49 Current assets Inventories 428.93 498.07 531.61 Financial assets (i) Current investments 63.38 65.26 77.58 (ii) Trade receivables 165.69 148.13 187.97 (iii) Cash and cash equivalents 367.35 121.72 182.44 (iv) Bank balances other than (iii) above 1.10 305.21 361.08 (v) other current financial assets 56.87 48.62 72.63 Current tax assets (net) 5.47 7.53 Other current assets 161.62 161.56 145.63 Assets held for sale 9.02 Total current assets 1,250.41 1,348.57 1,575.49 Total assets 5,563.80 5,843.08 5,981.98 EQUITY AND LIABILITIES Equity Equity share capital 69.93 69.93 69.93 Other equity 1,620.36 1,801.59 2,077.41 Total equity 1,690.29 1,871.52 2,147.34 Liabilities Non-current liabilities Financial liabilities (i) Borrowings 2,302.26 2,282.37 2,069.71 (ii) Other financial liabilities 139.75 176.72 206.79 Long-term provisions 18.29 22.38 25.07 Deferred tax liabilities (net) 216.52 262.80 267.19 Other non-current liabilities 56.53 86.33 92.32 Total non-current liabilities 2,733.35 2,830.60 2,661.08 Current liabilities Financial liabilities (i) Borrowings 194.99 167.29 113.52 (ii) Trade payables 280.65 377.74 413.56 (iii) Other financial liabilities 579.95 431.45 437.52 Other current liabilities 70.52 155.92 190.12 Short-term provisions 14.05 7.07 18.84 Current tax Liability (net) 1.49 Total Current liabilities 1,140.16 1,140.96 1,173.56 Total liabilities 3,873.51 3,971.56 3,834.64 Total equity and liabilities 5,563.80 5,843.08 5,981.98 Notes: 1. Extracted from the standalone financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). 2. These have been extracted from the standalone financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). The standalone financial statements for the Fiscal 2017 should be read in conjunction with “ — Notes to the Summary Financial Information – II. Important Note on Adjustments to Audited Standalone Financial Statements for the period ended March 31, 2017” on page 31. 3. Extracted from the standalone financial statements prepared for Fiscal 2018.
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Standalone Profit and Loss Account data for the years ended on March 31, 2016, 2017 and 2018 (Amount ₹ in crores) Particulars Revenue from operations Other income Total income Expenses Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods stock-in-Trade and work-in-progress Employee benefits expense Finance costs Depreciation and amortisation expense Other expenses Total Expenses Profit/(loss) before tax & Exceptional items Exceptional Items Profit/(loss) before tax Tax expense: Current tax Earlier Years Tax Adjustments Deferred tax charge/(credit) Profit/ (loss) for the year Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement gains/(losses) of defined benefit plans Income tax relating to remeasurement of defined benefit plans
As at March 31, 1 2 2016 2017 4,131.19 4379.83 57.11 99.32 4,188.30 4479.15
2018 4758.18 127.64 4885.82
665.80 1.52 8.29 234.86 270.75 164.12 2,700.84 4,046.18 142.12 142.12
644.06 0.93 (9.77) 275.46 272.90 176. 09 2775.73 4,135.40 343.75 19.32 324.43
730.38 0.85 42.01 325.45 245.35 186.27 2898.82 4,429.13 456.69 16.96 439.73
30.60 (7.00) 15.20 103.32
70.47 (0.03) 43.21 210.78
94.14 3.72 341.87
2.44 (0.84) 1.60 104.92
0.48 (0.16) 0.32 211.10
1.95 (0.67) 1.28 343.15
3
Total comprehensive income for the year Earnings per equity share (in ₹) Basic 14.78 30.14 48.89 Diluted 14.78 30.14 48.89 Notes: 1. Extracted from the standalone financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). 2. These have been extracted from the standalone financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). The standalone financial statements for the Fiscal 2017 should be read in conjunction with “— Notes to the Summary Financial Information – II. Important Note on Adjustments to Audited Standalone Financial Statements for the period ended March 31, 2017” on page 31. 3. Extracted from the standalone financial statements prepared for Fiscal 2018.
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Standalone Cash Flow Statement data for the years ended on March 31, 2016, 2017 and 2018 (Amount ₹ in crores) For the year ended March 31 1 2 3 2016 2017 2018
Particulars A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax Adjustment for :Depreciation & amortization expenses Loss on the sale of property, plant & equipment/impairment Dividend on 3% preference shares/Ind as/adjustment Amortisation of mininig rights/OCI adjustment Interest paid Interest received Bad Debts /Loans and Advances Provision for doubtful debts/loans and advances Profit on sale of current Investment Net fair value gain on financial assets measured at fair value through profit or loss Net loss on unrealised Foreign currency transaction and translation Government Grant Mines restoration charges Dividend Income Operating Profit Before Working Capital Changes Movements in working capital :Increase / (Decrease) in Trade Payables Increase / (Decrease) in Other financial liabilities Increase / (Decrease) in Other liabilities Increase / (Decrease) in provisions (Increase )/ Decrease in Inventories (Increase)/ Decrease in Trade receivables (Increase)/ Decrease in Other financial assets (Increase)/ Decrease in Other assets Cash Generated From Operations Less : Income Tax Paid (inclusive of tax deducted at source) Net Cash From Operating Activities B. CASH USED IN INVESTING ACTIVITIES Proceed from maturity of Fixed Deposit Investment in fixed deposit Acquisition /Purchase of Property ,plant & equipment Net (purchase)of Fixed assets Sale of Property ,plant & equipment Investment in Equity, Mutual fund & Bonds Investment in Subsidary Sale of Current Investment/Impairment Intercorporate loan given Repayment of intercorporate loan Net (purchase)of current investment Net (purchase)of investment Interest received Dividend Received Net Cash Used In Investing Activities C. CASH USED IN FINANCING ACTIVITIES Proceed of Deferred Sales tax/vat loans Repayment of Deferred Sales tax/vat loans Repayment of short term borrowings Proceed from Term loan Repayment of Long term Borrowings Net (Repayment) of Short term Borrowings Proceed from Vehicle Loans Interest Expense Paid (inclusive of tax deducted at source) Dividend paid (including dividend distribution tax) Net Cash Used in Financing Activities Net Increase/( Decrease ) in Cash and Cash Equivalents Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year
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142.13
324.43
439.73
164.12 0.16 0.48 1.59 267.22 (40.85) (1.66) (7.45)
176.10 27.09
186.27 17.48
267.05 (48.88) 10.00 1.72 (2.40) 7.24 1.08
238.88 (41.71) 0.10 1.75 (1.72) (2.85) (0.84)
(16.15) 0.08 (0.08) 509.59
0.21 763.64
0.14 837.23
51.39 65.12 23.70 1.67 80.85 (26.29) (96.29) 9.55 619.29 (30.56) 588.73
(47.22) 78.34 34.32 (3.11) (69.14) 5.84 25.22 (15.63) 772.26 (60.40) 711.86
35.82 61.20 40.19 14.33 (33.54) (41.69) (36.05) 14.50 892.00 (102.49) 789.51
0.05
(301.84) (294.93)
60.30 (17.50) (177.54)
8.37 (176.91) (81.75) 162.07 (78.62) 78.62
57.51 (657.66) (60.22) 620.71 (45.00) 45.00
29.62 (655.37)
43.20
(316.33)
(31.13) (84.45) 42.07 0.08 (389.71)
(17.03)
(131.20) 23.14 (19.10)
150.07
(66.90) (264.71) (33.67) (215.21) (16.19) 383.54 367.35 (16.19)
135.42 (92.73) (27.70) 2.18 (268.60) (33.67) (302.13) (245.64) 367.35 121.71 (245.64)
(240.76) (53.77) 1.33 (241.09) (67.33) (597.58) 60.73 121.71 182.44 60.73
Notes: 1. 2.
3.
Extracted from the standalone financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). These have been extracted from the standalone financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). The standalone financial statements for the Fiscal 2017 should be read in conjunction with “— Notes to the Summary Financial Information – II. Important Note on Adjustments to Audited Standalone Financial Statements for the period ended March 31, 2017” on page 31. Extracted from the standalone financial statements prepared for Fiscal 2018.
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Consolidated Balance Sheet data as on March 31, 2016, 2017 and 2018 (Amount ₹ in crores) Particulars
2016
1
As at March 31, 2 2017
2018
3
ASSETS Non-current assets Property plant and equipment 4,233.32 4,518.39 4,421.21 Capital work-in-progress 321.09 126.75 104.26 intangible assets 20.22 23.32 22.13 Financial assets (i) Investments 15.25 15.01 41.35 (ii) Loans & Advances 138.12 134.77 38.03 Other non-current assets 129.81 113.37 123.39 Total non-current assets 4,857.81 4,931.61 4,750.37 Current assets Inventories 493.11 560.89 589.81 Financial assets (i) Current investments 63.38 65.26 77.58 (ii) Trade receivables 211.35 201.93 235.79 (iii) Cash and cash equivalents 372.02 130.11 198.40 (iv) Bank balances other(iii) than above 1.10 305.21 361.08 (v) Other current financial assets 17.45 52.66 74.42 Current tax assets (net) 5.47 7.57 Other current assets 163.18 163.20 150.15 Assets held for sale 9.02 Total current assets 1,327.06 1,479.26 1,703.82 Total assets 6,184.87 6,410.87 6,454.19 EQUITY AND LIABILITIES Equity Equity share capital 69.93 69.93 69.93 Other equity 1,517.10 1,640.76 1,904.94 Equity attributable to equity holders of the J K Cement Ltd. 1,587.03 1,710.69 1,974.87 Non-controlling interests 9.75 3.99 Total equity 1,596.78 1,714.67 1,974.87 Liabilities Non-current liabilities Financial liabilities (i) Borrowings 2,871.06 2,870.14 2,574.10 (ii) Other financial liabilities 139.75 176.72 206.79 Long-term provisions 20.23 22.38 27.37 Deferred tax liabilities (net) 216.52 259.87 266.97 Other non-current liabilities 56.53 86.33 92.32 Total non-current liabilities 3,304.09 3,415.44 3,167.55 Current liabilities Financial liabilities (i) Borrowings 249.36 225.93 156.47 (ii) Trade payables 304.69 427.13 435.72 (iii) Other financial liabilities 637.29 459.32 505.85 Other current liabilities 75.86 156.38 190.91 Short-term provisions 16.80 10.51 22.82 Current Tax liability (Net) 1.49 Total Current liabilities 1,284.00 1,280.76 1,311.77 Total liabilities 4,588.09 4,696.20 4,479.32 Total equity and liabilities 6,184.87 6,410.87 6,454.19 Notes: 1. Extracted from the consolidated financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). 2. These have been extracted from the consolidated financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). The consolidated financial statements for the Fiscal 2017 should be read in conjunction with “— Notes to the Summary Financial Information – III. Important Note on Adjustments to Audited Consolidated Financial Statements for the period ended March 31, 2017” on page 33. 3. Extracted from the consolidated financial statements prepared for Fiscal 2018.
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Consolidated Profit and Loss Account data for the years ended on March 31, 2016, 2017 and 2018 (Amount ₹ in crores) Particulars Revenue from operations Other income Total income Expenses Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods stock-in-Trade and work-in-progress Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses Total Expenses Profit/(loss) before exceptional items and tax Exceptional items Profit/(loss) before tax Tax expense: Current tax Earlier Years Tax Adjustments Deferred tax charged/(credit) Profit/ (loss) for the year Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement gains/(losses) of defined benefit plans Income tax relating to remeasurement of defined benefit plans Exchange differences on translations Total comprehensive income for the year Profit attributable to: Equity holders of the J K Cement Limited Non-controlling interests Other comprehensive income attributable to: Equity holders of the J K Cement Limited Non-controlling interests Total comprehensive income attributable to: Equity holders of the J K Cement Limited Non-controlling interests
For the year ended March 31 1 2 3 2016 2017 2018 4,368.78 4,654.00 5,020.47 49.81 98.43 128.14 4,418.59 4,752.43 5,148.61 709.48 1.52 (14.18) 268.75 304.92 197.40 2,857.06 4,324.95 93.64 93.64
686.48 0.93 14.52 315.54 302.66 216.95 2,910.42 4,447.50 304.93 19.31 285.62
781.86 0.85 18.69 368.28 284.09 231.32 3,063.34 4,748.43 400.18 16.96 383.22
30.60 (7.00) 15.21 54.83
70.47 (0.03) 43.21 171.97
94.14 3.49 285.59
2.44 (0.84) (21.18) (19.58) 35.25
0.48 (0.17) (18.96) (18.65) 153.32
1.96 (0.68) 16.80 18.08 303.67
57.85 (3.02) 54.83
177.74 (5.77) 171.97
289.58 (3.99) 285.59
(19.59) -
(18.65) -
18.08 -
38.27 (3.02) 35.25
159.09 (5.77) 153.32
307.66 (3.99) 303.67
Earnings per equity share (₹) Basic 8.27 25.42 41.41 Diluted 8.27 25.42 41.41 Notes: 1. Extracted from the consolidated financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). 2. These have been extracted from the consolidated financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). The consolidated financial statements for the Fiscal 2017 should be read in conjunction with “— Notes to the Summary Financial Information – III. Important Note on Adjustments to Audited Consolidated Financial Statements for the period ended March 31, 2017” on page 33. 3. Extracted from the consolidated financial statements prepared for Fiscal 2018.
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Consolidated Cash Flow Statement data for the years ended on March 31, 2016, 2017 and 2018 (Amount ₹ in crores) For the year ended March 31 1 2 3 2016 2017 2018
Particulars A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax Adjustment for :Depreciation & ammortization expenses Profit/ (Loss) ) on the sale of property plant & equipment/Impairment Dividend on 3% preference shares/Ind as/adjustment Amortisation of mining rights/OCI adjustment Interest paid Interest received Bad Debts /Loans and Advances Provision for doubtful debts/loans and advances Profit on sale of current Investment Net fair value gain on financial assets measured at fair value through profit or loss Net loss on unrealised Foreign currency transaction and translation Government grant Mines restoration charges Dividend Income Operating Profit Before Working Capital Changes Movements in working capital :Increase / (Decrease) in Trade Payables Increase / (Decrease) in Other financial liabilities Increase / (Decrease) in Other liabilities Increase / (Decrease) in provisions (Increase )/ Decrease in Inventories (Increase)/ Decrease in Trade receivables (Increase)/ Decrease in Other financial assets (Increase)/ Decrease in Other assets Cash Generated From Operations Less : Income Tax Paid (inclusive of tax deducted at source) Net Cash From Operating Activities B. CASH USED IN INVESTING ACTIVITIES Proceed from maturity of fixed deposit Investment in Fixed deposit Acquisition /Purchase of Property ,plant & equipment Acquisition/ Purchase of Property, Plant & Equipment Sale of Property ,plant & equipment Investment in Equity, Mutual fund & Bonds Intercorporate loan given Repayment of intercorporate loan Sale of Current Investment/Impairment Net (purchase)of current investment Net (purchase)of investment Interest received Dividend Received Exchange rate Fluctuation Reserve on conversion Net Cash Used In Investing Activities C. CASH USED FROM FINANCING ACTIVITIES Deferred Sales tax/vat Advances to related party Net proceeds from Long term Borrowings Increase in Long Term Borrowings Repayment of Long term Borrowings Net (Repayment) of Short term Borrowings Cash credit accounts Vehicle Loans Interest Expense Paid (inclusive of tax deducted at source) Dividend paid Net Cash Used in Financing Activities Net Increase/( Decrease ) in Cash and Cash Equivalents Exchange rate fluctuation reserve on conversion Cash and Cash Equivalents at the beginning of the year
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100.96
285.62
383.22
197.40 0.29 0.48 1.59 303.71 (40.85)
216.95 27.10
231.32 17.48
295.14 (42.40) 10.00 1.72 (2.40) 1.65
276.99 (42.20) 0.10 1.75 (1.72) (2.85) (0.84)
(1.66) (7.45) (16.15) 0.08 (.08) 538.32
0.21
0.14
793.59
863.39
(5.38) 94.23 24.00 3.32 48.37 (19.53) (82.31) 9.55 610.57 (30.55) 580.02
(4.11) (18.66) 110.33 (4.35) (67.79) (2.31) (20.10) 48.55 835.15 (63.34) 771.81
8.59 89.58 40.52 41.01 (28.92) (35.70) (7.38) 11.62 982.71 (99.60) 883.11
(304.11) (403.71)
(310.16) 352.78 (201.80)
19.76 (176.92) (78.62) 78.62 177.68
57.52 (657.66) (45.00) 45.00 620.72
38.14
42.79
(649.16)
(95.81)
(17.02) (9.16)
23.14 (13.03) (19.10)
0.05 (381.29)
(31.13) (18.81) 42.08 0.08 (18.59) (407.61)
191.21 751.05 (718.28)
(312.47)
(23.42) 1.99 (297.10) (33.66) (345.60) (222.95) (18.96) 372.02
(69.46) 1.33 (278.90) (67.33) (735.82) 51.48 16.81 130.11
(49.89)
(300.88) (33.67) (193.23) (20.82) 392.84
For the year ended March 31 1 2 3 2016 2017 2018 372.02 130.11 198.40 (20.82) (222.95) 51.48
Particulars Cash and Cash Equivalents at the end of the year Notes: 1. 2.
3.
Extracted from the consolidated financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). These have been extracted from the consolidated financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). Extracted from the consolidated financial statements prepared for Fiscal 2018.
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Standalone Balance Sheet data as on March 31, 2015 and 2016 prepared in accordance with I-GAAP (Amount ₹ in crores) As at March 31,
Particulars
2015
EQUITY AND LIABILITIES Shareholders’ Funds Share Capital Reserves and Surplus Non Current Liabilities Long Term Borrowings Deferred Tax Liability (Net) Other Long Term Liabilities Long Term Provisions Current Liabilities Short term Borrowings Trade Payables Other Current Liabilities Short Term Provisions Total ASSETS Non Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Non-Current Investments Long term Loans and Advances Current Assets Current Investments Inventories Trade Receivables Cash and Cash Equivalents Short Term Loans and Advances Other Current Assets Total
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2016
69.93 1,576.61 1,646.54
69.93 1,644.48 1,714.41
2,158.80 279.85 116.77 16.59 2,572.01
2,307.88 328.44 139.65 18.28 2,794.25
263.35 229.26 589.20 47.67 1,129.48 5,348.03
196.21 280.64 645.77 47.72 1,170.34 5,679.00
3,335.99 1.97 191.18 284.01 153.40 3,966.55
3,488.84 2.00 152.40 362.80 162.51 4,168.55
30.50 509.79 139.40 407.71 284.54 9.54 1,381.48 5,348.03
61.50 474.24 165.69 475.87 324.83 8.32 1,510.45 5,679.00
Standalone Profit and Loss Statement data for the years ended March 31, 2015 and 2016 prepared in accordance with I-GAAP (Amount ₹ in crores) For the year ended March 31, 2015 2016
Particulars INCOME Revenue From Operations Other Income Total Revenue EXPENSES Cost of Materials Consumed Purchases of Stock-in-Trade Changes in inventories of finished goods work-in-progress and Stock-in-Trade Employee Benefits Expense Finance Costs Depreciation and amortization expense Other Expenses Total Expenses Profit before Tax Tax Expense: Current Tax Less: MAT Credit entitlement Earlier Years Tax Adjustments Deferred Tax Profit for the Year Earning per Equity share of ₹10/- each Basic and Diluted (In ₹)
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3,357.17 51.35 3,408.52
3,560.32 49.99 3,610.31
556.20 1.04 (0.95) 202.54 219.42 136.60 2,134.52 3,249.37 159.15
665.80 1.52 8.29 231.44 269.59 156.28 2,134.26 3,467.18 143.13
33.39 (33.39) 2.23 156.92
30.60 (30.60) (7.00) 48.59 101.54
22.44
14.52
Standalone Cash Flow Statement data for the years ended March 31, 2015 and 2016 prepared in accordance with I-GAAP (Amount ₹ in crores) For the year ended March 31, 2015 2016
Particulars A) CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax as per Profit & Loss Account Adjusted for : Depreciation Interest Interest received Dividend Income Profit on sale of Investments Net (profit)/loss on sale of assets Mines restoration Charges Govt. Grants CSR Expenses Operating Profit before Working Capital Changes Adjusted for : Trade & Other Receivables Inventories Trade Payable & Other Liabilities Cash Generated from Operations Adjusted for : Tax Paid (Net of TDS) Corporate Dividend Tax Dividend paid CSR Expenses Net cash from operating activities B) CASH FLOW USED IN INVESTING ACTIVITIES Acquisition/Purchase of fixed assets including capital advances Sale of fixed assets Purchase of Investments Sale of Investments Dividend Interest Income Net cash used in investing activities C) CASH FLOW FROM FINANCING ACTIVITIES Loan to Subsidary Captial subsidy received Deferred Sales Tax / VAT Long Term Borrowings Cash Credit Accounts Repayment of Long Term Borrowings Interest Paid Security Deposits Vehicle Loans Net cash used in financing activities Net increase in Cash and Cash Equivalents (a+b+c) Opening balance of Cash and Cash Equivalents Closing balance of Cash and Cash Equivalents
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159.15 136.60 215.47 (39.35) (4.42) 2.13 0.14 (2.22) 308.35 467.50 (39.39) 32.17 29.69 22.47 489.97 (31.23) (3.56) (20.98) (55.77) 434.20
143.13 156.28 266.06 (40.58) (0.08) (1.65) (0.23) 0.08 (12.00) 4.64 372.52 515.65 (0.68) 35.54 150.57 185.43 701.08 (27.41) (5.69) (27.97) (4.64) (65.71) 635.37
(487.65) 2.94 (143.00) 132.42 37.53 (457.76)
(281.02) 1.76 (291.79) 183.73 37.41 (349.91)
(10.06) 2.51 3.54 369.05 64.85 (149.71) (216.54) 19.62 0.45 83.71 60.15 347.55 407.70
(27.50) 12.00 25.26 256.19 (67.15) (172.94) (265.54) 22.88 (0.50) (217.30) 68.16 407.71 475.87
Consolidated Balance Sheet data as on March 31, 2015 and 2016 prepared in accordance with I-GAAP (Amount ₹ in crores) As at March 31,
Particulars
2015
EQUITY AND LIABILITIES Shareholders’ Funds Share Capital Reserves and Surplus Minority Interest Non Current Liabilities Long Term Borrowings Deferred Tax Liability (Net) Other Long Term Liabilities Long Term Provisions Current Liabilities Short term Borrowings Trade Payables Other Current Liabilities Short Term Provisions Total ASSETS Non Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Intangible Assets under Development Non-Current Investments Long term Loans and Advances Current Assets Current Investments Inventories Trade Receivables Cash and Cash Equivalents Short Term Loans and Advances Other Current Assets Total
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2016
69.93 1,547.04 1,616.97 12.77
69.93 1,555.58 1,625.51 9.75
2,730.09 279.84 116.77 18.00 3,144.70
2,876.68 328.44 139.65 20.23 3,365.00
300.71 307.11 618.56 49.30 1,275.68 6,050.12
250.57 304.69 708.45 50.47 1,314.18 6,314.44
4,052.97 20.65 337.15 0.16 6.01 154.85 4,571.79
4,201.60 20.22 321.09
30.50 541.47 177.08 417.14 302.60 9.54 1,478.33 6,050.12
61.50 538.42 211.35 480.72 286.97 8.32 1,587.28 6,314.44
19.15 165.10 4,727.16
Consolidated Profit and Loss Statement data for the years ended March 31, 2015 and 2016 prepared in accordance with I-GAAP (Amount ₹ in crores) For the year ended March 31, 2015 2016
Particulars INCOME Revenue from Operations Other Income Total Revenue EXPENSES Cost of Materials Consumed Purchases of Stock-in-Trade Changes in inventories of finished goods work-in-progress and Stock-in-Trade Employee Benefits Expense Finance Costs Depreciation and amortization expense Other Expenses Total Expenses Profit before exceptional items and extraordinary items and tax Exceptional Item Profit before Tax Tax Expense: Current Tax Less: MAT Credit entitlement Earlier Years Tax Adjustments Deferred Tax Profit for the Year Add: Share of Loss transferred to Minority Interest Profit after Tax & Minority Interest Earning per Equity share of ₹10/- each Basic and Diluted (In ₹)
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3,407.22 51.46 3,458.68
3,790.43 50.02 3,840.45
582.50 1.04 (10.70) 210.26 229.11 146.07 2,173.47 3,331.74 126.94 (17.21) 144.15
709.48 1.52 (14.18) 265.33 303.77 189.56 2,283.01 3,738.49 101.96 101.96
33.39 (33.39) 2.23 141.92 1.72 143.64
30.60 (30.60) (7.00) 48.60 60.36 3.02 63.38
20.54
9.06
Consolidated Cash Flow Statement data for the years ended March 31, 2015 and 2016 prepared in accordance with I-GAAP (Amount ₹ in crores) For the year ended March 31, 2015 2016
Particulars A) CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax as per Profit & Loss Account Adjusted for : Depreciation Assets Written off Interest Interest received Dividend Income Profit on sale of Investments Net (profit)/loss on sale of assets Mines restoration Charges CSR Exp.debited to P&L Govt. Grants Operating Profit before Working Capital Changes Adjusted for : Trade & Other Receivables Inventories Trade Payable & Other Liabilities Cash Generated from Operations Adjusted for : CSR Exp.Paid Tax Paid Corporate Dividend Tax Dividend paid Net cash from operating activities B) CASH FLOW USED IN INVESTING ACTIVITIES Acquisition/Purchase of fixed assets including capital advances Sale of fixed assets Purchase of Investments Sale of Investments Exchange Rate Fluctuation Reserve on Conversion Interest Income Net cash used in investing activities C) CASH FLOW FROM FINANCING ACTIVITIES Loan to Associates Captial subsidy received Deferred Sales Tax / VAT Long Term Borrowings Cash Credit Accounts/OD Accounts Repayment of Long Term Borrowings Interest Paid Security Deposits Vehicle Loans Net cash used in financing activities Net increase in Cash and Cash Equivalents (A+B+C) Opening balance of Cash and Cash Equivalents Closing balance of Cash & Cash Equivalents
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144.15
101.96
146.07 224.43 (39.45) (4.42) 2.13 0.14 5.15 334.05 478.20 (93.95) 0.48 (67.61) (161.08) 317.12 (5.15) (31.22) (3.57) (20.98) (60.92) 256.20 (550.19) 2.94 (97.00) 132.42 (3.99) 37.81 (478.01)
189.56 0.16 302.57 (40.59) (0.08) (1.66) (0.26) 0.08 4.64 (12.00) 442.42 544.38 20.11 3.06 95.74 118.91 663.29 (4.64) (27.40) (5.70) (27.97) (65.71) 597.58 (346.50) 2.29 (226.14) 183.73 (18.59) 37.42 (367.79)
(10.06) 0.28 3.55 497.06 94.70 (149.71) (225.42) 19.62 0.29 230.31 8.50 408.64 417.14
12.00 25.25 299.13 (50.14) (172.94) (301.71) 22.88 (0.68) (166.21) 63.58 417.14 480.72
STATEMENT OF STANDALONE UNAUDITED FINANCIAL RESULTS DATA FOR THE SIX-MONTHS ENDED SEPTEMBER 30, 2018
(Amount ₹ in crores) S. No.
Particulars
Six-Months Ended September 30, 2018 September 30, 2017 (Unaudited) (Unaudited)
Revenue: a) Income from Operations b) Other Operating Income I Revenue from Operations (a + b) II Other Income III Total Revenue (I+II) IV Expenses a) Cost of materials consumed b) Purchase of stock in trade c) Changes in inventories of finished Goods,work in progress and stock in trade d) Employee benefits expense e) Finance costs f) Depreciation and amortisation expense g) Excise duty h) Power and fuel i) Stores and spares j) Freight and handling outwards k) Other expenses Total Expenses (a to k) V Profit before exceptional items and tax (III-IV) VI Exceptional Items* VII Profit before tax (V-VI) a) Current Tax b) Earlier Years Tax Adjustments c) Deferred Tax VIII Tax Expense IX Profit after tax (VII-VIII) X Other Comprehensive Income / (Loss) Items that will not be reclassified to profit and loss in subsequent period, net of tax Other Comprehensive Income / Loss for the period, net of tax XI Total Comprehensive Income for the period, net of tax (IX+X) XII Paid-up Equity Share Capital (Face value of ₹ 10/- per share) XIII Other Equity (Excluding Revaluation Reserves) XIV Basic and Diluted Earnings Per Share(of ₹10/-each) ( Not Annualized) i Before Extraordinary Items (in ₹ ) ii After Extraordinary Items ((in ₹ ) * It includes loss on sale/impairement of asset and reversal of govt.cess of earlier years.
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2,190.46 25.74 2,216.20 33.53 2,249.73
2,289.18 26.93 2,316.11 53.01 2,369.12
382.33 (36.52) 180.83 112.73 96.08 487.46 152.87 499.96 229.15 2,104.88 144.85 144.84 31.38 (0.55) 30.83 114.02
340.91 0.69 12.28 155.80 131.38 94.22 166.96 386.13 152.92 482.04 213.46 2,136.80 232.32 7.77 224.55 50.08 1.98 52.06 172.49
0.45 0.45 114.46 69.93
0.01 0.01 172.50 69.93
16.30 16.30
24.67 24.67
STANDALONE STATEMENT OF ASSETS AND LIABILITIES (Amount ₹ in crores) As at September 30, 2018 1
2
1
2
3
ASSETS Non Current Assets: (a) Property, Plant & Equipment (b) Capital Work in Progress (c) Intangible Assets (d) Financial Assets: (i) Investments (ii) Loans & Advances (e) Other non current Assets Sub Total: Non Current Assets Current Assets: (a) Inventories (b) Financial Assets: (i) Current Investments (ii) Trade Receivables (iii) Cash and cash equivalents (iv) Bank Balances other than (iii) above (v) Other Current Financial Assets (c) Current Tax Assets (Net) (d) Other Current Assets (e) Assets held for Sale Sub Total: Current Assets TOTAL-ASSETS EQUITY AND LIABILITIES Equity: Equity Share Capital Other Equity Sub Total Equity: Non Current Liabilities: (a) Financial Liabilities (i) Borrowings (ii) Other Financial Liabilities (b) Long TermProvisions (c) Deferred tax liabilities (Net) (d) Other Non Current Liabilities Sub Total: Non Current Liabilities Current Liabilities: (a) Financial Liabilities (i)Borrowings (ii)Trade Payables a)Total outstanding dues to micro enterprises and small enterprises b)Total outstanding dues to creditors other than micro enterprises and small enterprises (iii)Other Financial Liabilities (b) Refund Liabilities (c) Other Current Liabilities (d) Short Term Provisions Sub Total: Current Liabilities TOTAL-EQUITY AND LIABILITIES
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As at March 31, 2018
3,628.15 162.30 3.23
3,592.32 87.81 4.37
580.16 62.61 127.35 4,563.79
556.94 50.13 114.92 4,406.49
587.90
531.61
39.42 278.44 107.67 268.65 104.40 18.06 207.83 0.95 1,613.32 6,177.11
77.58 187.97 182.44 361.08 72.63 7.53 145.63 9.02 1,575.49 5,981.98
69.93 2,107.58 2,177.51
69.93 2,077.41 2,147.34
1,931.08 230.24 30.89 266.88 87.76 2,546.85
2,069.71 206.79 25.07 267.19 92.32 2,661.08
304.47
113.52
5.90 431.72 298.74 251.24 150.97 9.71 1,452.75 6,177.11
12.27 401.29 221.63 215.89 190.12 18.84 1,173.56 5,981.98
Reconciliation of EBITDA on a consolidated basis: (Amount ₹ in crores) Fiscal Year ended Particulars Profit/ (Loss) before tax
March 31, 2016 93.64
March 31, 2017 285.62
March 31, 2018
30.60
32.69
31.33
10.27
9.70
197.40
216.95
304.93
302.66
555.10
762.83
4,368.78
4,654.00
12.71%
16.39%
383.22
Less: Interest income from financial assets measured at amortised cost
from Bank Deposits from Others
10.86
Add: Depreciation and Amortization expenses Finance Costs EBITDA (A) Revenue from Operation (B) EBITDA Margin (B/A)
231.32 284.09 856.43 5,020.47 17.06%
Reconciliation of Interest Coverage Ratio on a consolidated basis: (Amount ₹ in crores)
Particulars
March 31, 2016 54.83
Profit/ (Loss) for the year
Fiscal Year ended March 31, 2017 March 31, 2018 171.97 285.59
Add: Depreciation and Amortization expenses
197.40
216.95
231.32
Interest expense
303.72
295.14
276.98
Total (A)
555.95
684.06
793.89
Interest expense (B)
303.72
295.14
276.98
1.83
2.32
2.87
Interest Coverage Ratio (A/B)
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RISK FACTORS An investment in equity shares involves a high degree of risk. Investors should carefully consider all the information in this Placement Document, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks occur, our business, results of operations, cash flows and financial condition could suffer, the price of our Equity Shares could decline, and investors may lose all or part of their investments. The risks and uncertainties described below are not the only risks that we currently face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also have an adverse effect on our business, results of operations, cash flows and financial condition. The financial and other related implications of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However, there are risks where the effect is not quantifiable and hence has not been disclosed in the applicable risk factors. Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing all or a part of their investment. Investors are advised to read the risk factors described below carefully before making an investment decision in this Issue. In making an investment decision, prospective investors must rely on their own examination of our Company and the terms of the Issue, including the merits and risks involved. Investors should consult their tax, financial and legal advisors about the particular consequences to them of an investment in this Issue. To obtain a complete understanding of our Company, this section should be read in conjunction with the sections titled “Our Business” and “Industry Overview” on pages 112 and 104, respectively, as well as the financial statements and other financial information included elsewhere in this Placement Document. This Placement Document also contains forward-looking statements that involve risks and uncertainties. Our Company's actual results could differ materially from those anticipated in these forward-looking statements because of certain factors, including considerations described below and in the section titled "Forward-Looking Statements" on page 15.
INTERNAL RISK FACTORS
Our business is dependent upon our ability to mine sufficient limestone for our operations. Limestone is a key raw material used in the manufacture of cement. Limestone consumption at our manufacturing units in India in Fiscals 2016, 2017, 2018 and the six-month period ended September 30, 2018 was approximately 8.59 MnT, 8 MnT, 8.94 MnT and 4.66 MnT, respectively, which was almost entirely serviced by our captive mines. We source limestone for our manufacturing plants in India from captive limestone mines located in proximity to our plants. As on September 30, 2018, we operated 10 limestone mines situated in Rajasthan and Karnataka, with aggregate limestone reserves amounting to approximately 502.99 MnT (including proven and probable), with remaining lease duration for the mines ranging from 12 to 44 years. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement. While the mine at Fujairah is yet to be operationalized, the lease for the mine at Fujairah is valid until 2033. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining other regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable). If our mining rights are revoked or not renewed upon expiration, or significant restrictions on the usage of the rights are imposed or applicable environmental standards are substantially increased, our ability to operate our plants adjacent to the affected mining sites could be disrupted until alternative limestone sources are located, which could materially and adversely affect our financial condition and results of operations. Pursuant to a recent amendment to the MMDR Act and rules issued thereto, the grant of mining leases by respective state governments is to be compulsorily carried out through an auction process. For the purpose of participating in the auction of mining lease, an applicant is also required to meet certain eligibility requirements. For instance, if the value of estimated resources is more than ₹ 1,000 crores, the applicant, including an individual, is required to have a net worth more than 2% of the value of the estimated resources. The respective state governments may also prescribe additional eligibility requirements from time to time. We cannot assure you if we will be able to successfully
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compete in the auction process, or be able to participate at all. Any failure on our part to acquire mining leases in the future, or to be able to retain our extant leases, may have an adverse impact on our business and operations. We also do not own all the land in respect of which we have received mining leases. Such land is acquired from the respective owners from time to time, depending on our requirements. We cannot assure you that we will be successfully acquire (whether on freehold or leasehold basis), the lands to which we have obtained mining rights from the respective state governments. Further, there are numerous uncertainties inherent in estimating quantities of reserves, including many factors beyond our control. In general, estimates of reserves by independent consultants or our Company are based upon several variable factors and assumptions, such as geological and geophysical characteristics of the reserves, historical production performance from the properties, the quality and quantity of technical and economic data, extensive engineering judgments, the assumed effects of regulation by GoI agencies and future operating costs. All such estimates involve uncertainties, and classifications of reserves are only attempts to define the degree of likelihood that the reserves will result in revenue for our Company. For those reasons, estimates of the economically recoverable reserves attributable to any group of properties and classification of such reserves based on risk of recovery, prepared by different engineers or by the same engineers at different times, may vary substantially. In addition, such estimates can be and will be subsequently revised as additional pertinent data becomes available prompting revision. Actual reserves may vary significantly from such estimates. To the extent actual reserves are significantly less than our estimates, our financial conditions, cash flows and results of operations are likely to be materially and adversely impacted. While these estimates are based on detailed studies conducted by independent experts, there can be no assurance that these estimates would not be materially different from estimates prepared by other experts in accordance with different internationally recognized codes or standards.
The operations of our Company are subject to manufacturing risk and may be disrupted by failure in the facilities. We own and operate four grey cement plants in Rajasthan and Karnataka and a grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. Our Company’s manufacturing operations could be disrupted for reasons beyond its control. These disruptions may include extreme weather conditions, fire, natural catastrophes or raw material supply disruptions. In addition, there is a risk that production difficulties such as capacity constraints, mechanical and systems failures, construction/upgrade delays or delays in the delivery of machinery may occur, causing suspension of production and reduced output. For instance, in January 2016, clinker extraction and cement production activity at our Muddapur plant was temporarily stopped, owing to damage to the clinker silo. While the operations at the plant resumed in February 2016 by way of alternate arrangements, the restoration of the clinker silo was completed by October 2016. Any significant manufacturing disruption could adversely affect the ability of our Company to make and sell products, which could have a material adverse effect on its business, financial condition and future results of operations. In addition, due to the nature of our business and despite compliance with requisite safety requirements and standards, the operations of our Company are subject to operating risks associated with cement manufacturing. These hazards include storage tank leaks and ruptures, explosions, discharges or releases of hazardous substances, manual handling, exposure to dust and the operation of mobile equipment and manufacturing machinery. Our Company is also engaged in mining operations for limestone and is subject to risks associated with mining, including fires, explosions and other accidents at the mine site. These operating risks may result in personal injury and property damage and in the imposition of civil and criminal penalties. The occurrence of any of these events could have a material adverse effect on the productivity and profitability of our plants and on the business, financial condition, cash flows and future results of operations of our Company. Inability to utilize our Company’s manufacturing capacities to optimum levels or streamline its production planning and procurement processes will adversely impact its future results of operation.
We are subject to risks associated with our expansion strategy, which is to be funded partially out of the Net Proceeds
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As part of our strategy, we are seeking to expand our manufacturing capacity and consequently expanding our market reach in the country. We intend to utilize a part of the Net Proceeds of the Issue towards capital expenditure for the brownfield expansion of our Mangrol plant in Rajasthan, and the establishment of grinding facilities of 1 MTPA each at Mangrol and Nimbahera, and greenfield split grinding units at Aligarh and Balsinor having 1.5 MTPA and 0.7 MTPA capacities, respectively, which is expected to increase our grey cement production capacity by 4.2 MTPA (“Expansion Plan”). For further details, see “Our Business – Our Strategy” on page 115. The Expansion Plan is proposed to be funded partially with a debt component of ₹ 1,300 crores, for which we are in the process of approaching financial institutions/ prospective lenders. We cannot assure you that we will be able to secure such financing, whether at favourable terms or at all. Further, in the event we are able to secure such debt financing, any inability to complete conditions precedent or to maintain existing covenants stipulated in the governing regulations may result in a failure to achieve financial closure and could adversely affect our ability to complete expansion plans in a timely manner or at all, and may subject us to time and cost overruns. Our management will have flexibility in deploying the Net Proceeds received by our Company from the Issue. We may have to revise our funding requirements and deployment from time to time on account of various factors, such as financial and market conditions, competition, business and strategy and interest/ exchange rate fluctuations and other external factors, which may not be within the control of our Company. This may entail revising the schedule of the proposed utilization of the Net Proceeds and changing the allocation of funds from its planned allocation at the discretion of our Board Further, there can be no assurance that our expansion plans will be implemented as planned or on schedule, or that we will achieve our increased planned output capacity or operational efficiency. If we experience significant delays or mishaps in the implementation of the expansion plans or if there are significant cost overruns, then the overall benefit of such plans to our revenues and profitability may decline. To the extent that the planned expansion does not produce anticipated or desired output, revenue or cost-reduction outcomes, our profitability and financial condition will be adversely affected. Our expansion plans and other activities targeted towards or supporting our growth will also require us to continuously evolve and improve our operational, financial and internal controls across our organization. In particular, the propose expansion would require us to
developing and improving our internal administrative infrastructure, particularly our financial, operational, communications, internal control and other internal systems; recruiting, training and retaining sufficient skilled management, technical and marketing personnel; and maintaining high levels of customer satisfaction.
Any inability on our part to manage our growth, including failure to address any of the above factors, is likely to adversely affect our business, financial condition and results of operations.
We may be unable to sustain our growth and margins in the white cement segment. We are one of the two major players in the white cement market in the country, who together hold 80-85% of the total market share (Source: CRISIL Report). As on September 30, 2018, we have an aggregate installed capacity of 1.20 MTPA for white cement (including 0.6 MTPA in UAE) and of 0.90 MTPA for wall putty. Our EBITDA from this segment has grown from ₹ 323.19 crores in Fiscal 2016 to ₹ 409.11 crores in Fiscal 2018, which was 48% of the total EBITDA in the same period. We cannot assure you that we will be able to sustain the growth and margins recorded by us in the white cement segment. We manufacture white cement at our plants in Gotan, Rajasthan and Fujairah, UAE. There is a risk that production difficulties such as capacity constraints, mechanical and systems failures, construction/upgrade delays or delays in the delivery of machinery may occur, causing suspension of production and reduced output. Any significant manufacturing disruption could adversely affect the ability of our Company to manufacture and distribute white cement. The operations at these plants could also be disrupted for reasons beyond our control, including extreme weather conditions, fire, natural catastrophes or raw material supply disruptions, including by way of changes in governmental policy and judicial intervention. For instance, on October 24, 2017, the Supreme Court of India banned the use of petcoke in the states of Uttar Pradesh, Haryana and Rajasthan with effect from November 1, 2017. The ban, however, was subsequently relaxed for use of petcoke in the cement industry. Similarly, in August 2018, the Government of India banned the import of petcoke for use as fuel in the country, with an exception for import of - 54 -
petcoke for use as feedstock or in the manufacturing process in, among others, the cement industry. While adequate exceptions have been made for the cement industry in recent policy decisions banning the use and import of petcoke, we cannot assure you that we will continue to enjoy such exemptions or that any further prohibitions or more stringent compliance requirements will not be imposed on us. Petcoke is a key fuel used in the white cement manufacturing process. In the event the supply of petcoke is interrupted, we would be required to rely on more expensive alternatives, including fuel oil. Any such ban on import or use of petcoke may therefore affect our production volumes, as well as profitability. Further, pursuant to a recent amendment to the MMDR Act and rules issued thereto, the grant of mining leases in India by respective state governments is to be compulsorily carried out through an auction process. We cannot assure you if we will be able to successfully compete in the auction process, or to participate at all. Any failure on our part to acquire mining leases for white-cement grade limestone, or to be able to retain our extant leases, may have an adverse impact on white cement production. In the future, we may also face competition from new entrants in the segment, who might gain access to white cement grade limestone reserves through the auction process. Some of these players may already have robust distribution networks, which could eat into our market share. So as to retain our dominant position in the segment, we may also be required to incur additional expenditure towards expanding our production capacity, securing larger limestone reserves through the auction process, and also strengthening and incentivising our distribution network.
We are dependent upon the continued supply of power and fuel, the supply and cost of which can be subject to significant variation due to factors outside our control. We use significant amounts of energy, including electricity and coal, in the manufacturing, distribution and sale of our products. Power and fuel expenses are our most significant expenses and together comprised 22%, 17% and 20% of our Total Expenses in Fiscals 2016, 2017 and 2018, respectively, on a consolidated basis. A significant portion of electricity requirements at our plants in Mangrol, Nimbahera, Muddapur and Gotan is met by our thermal and waste heat recovery power plants, having an aggregate capacity of approximately 125.70 MW, as on September 30, 2018. Further, we also procure electricity from state electricity boards and private suppliers through the grid at market rates, across our plants, including in Fujairah, UAE. If the power supply to one or more of our manufacturing facilities is disrupted, we may not be able to make alternative arrangements in a timely manner, or at all, and any such alternative arrangements may be on terms that are not favourable to us. Accordingly, any such disruption could adversely affect the normal operations of the affected manufacturing facility, reduce the economies of scale which we currently enjoy and would have an adverse effect on our business and results of operations. Additionally, we also use coke, petcoke, lignite and fuel oil as fuel for clinkerisation, as part of our manufacturing processed. We do not enter into long term agreements with our suppliers of coal, petcoke and lignite, and instead procure such fuel on the basis of spot or fortnightly contracts with our suppliers. While both our clinker process and our captive thermal power plant have the capability to use alternate fuels of varying calorific value, absence of long term supply contracts subject us to risks such as price volatility and failure to source fuel in time, which would result in a delay in manufacturing of the final product. For instance, in the past, there have been instances where the lignite made available was insufficient and while we were able to supplement our requirements with imported coal, we cannot assure you that such disruptions in supply of such fuels, as the case may be, will not take place or that we will be able to anticipate shortfalls in time to compensate with other sources in every instance. Changes in governmental policy and judicial intervention may also lead to disruption of our fuel supply. On October 24, 2017, the Supreme Court of India banned the use of petcoke in the states of Uttar Pradesh, Haryana and Rajasthan with effect from November 1, 2017. The ban, however, was subsequently relaxed for use of petcoke in the cement industry. Similarly, in August 2018, the Government of India banned the import of petcoke for use as fuel in the country, with an exception for import of petcoke for use as feedstock or in the manufacturing process in, among others, the cement industry. While adequate exceptions have been made for the cement industry in recent policy decisions banning the use and import of petcoke, in the event any such bans are extended to the cement industry, it may adversely impact our fuel supply or cost thereof, affecting our production volumes and profitability. Energy prices, in particular, have been and may continue to be volatile. Factors such as international political and military instability, adverse weather conditions and other natural disasters may disrupt fuel supplies and further increase prices in the future. As we are often responsible for delivering products to the dealers or customers, as the case may be, we are further exposed to increased energy prices as a component of our transportation costs. While we generally attempt to pass increased costs, including higher energy costs, on to our customers, pricing pressure from our competitors, the market power of our customers or other pricing factors may limit our ability to do so, and any increases in energy prices could have a material adverse effect on our business, financial condition and results of operations. - 55 -
There can be no assurance that we will have an adequate, uninterrupted and cost effective supply of power and fuel required for our manufacturing process, the lack of which could disrupt our operations, thereby adversely affecting our business, financial condition and results of operations.
We are dependent on third party distributors, with whom we don’t have binding term agreements We supply our products to industrial and retail consumers, through various channels including dealers and retailers. Our white cement and wall putty products are supplied pan-India, through a network of over 44,000 dealers and retailers, as on September 30, 2018. In the grey cement segment, we are present in over 15 states/ union territories, through a network of over 11,000 dealers and retailers, as on September 30, 2018. We do not enter into any short or long term agreements with our distributors, and conduct our distribution business through purchase orders. Any adverse experience of distributors (whether dealers or retailers), or negative publicity attracted by such distributors could adversely affect our reputation and brand and business prospects. As we do not have any exclusivity arrangements with our distributors, our distributors may also freely deal with our competitors. If the terms offered to such distributors by our competitors are more favourable than those offered by us, they may decline to distribute our products and terminate their arrangements with us. In such a case, our products may not attain as much reach as our competitors in the market and we may lose market share. We are also continuously seeking to increase penetration through distribution by engaging distributors targeted at different markets and geographies. We cannot assure you that we will be able to successfully identify and appoint new distributors. Further, we may not be able to enter into distribution arrangements in new geographic regions due to existing relationships of our competitors with distributors in such areas, including any exclusive arrangements that may be in place. Any inability to enter into new geographic markets or penetrate existing markets could adversely affect our growth, future prospects, financial condition and results of operation.
Disruptions in transportation of raw materials and finished products could affect our business. The production of cement is dependent on a steady supply of various raw materials. These inputs are transported to our plants by road, and cement is transported to our customers by road and rail transport. Transport of our inputs and finished products is subject to various bottlenecks and other hazards beyond our control, including poor road and other transport infrastructure, accidents, adverse weather conditions, strikes and civil unrest. Either an increase in the price of transportation or interruptions in transportation of our inputs or finished products could have an adverse effect on our business, financial condition and results of operations. In addition, cement is a perishable product as its quality deteriorates upon contact with moisture over a period. Therefore, prolonged storage or exposure to moisture during transport may result in such cement stocks being written off. Similarly, our cement is sold in bags that may split open during transport, again resulting in such stock being written off. There can be no assurance that any such disruption will not occur in the future because of these factors and that such disruptions will not be material. We typically use third party transportation providers for the supply of our raw materials and for deliveries of our products to our customers. Transportation strikes by members of various Indian truckers’ unions have had in the past, and could have in the future, an adverse effect on our receipt of supplies and our ability to deliver our products. In addition, transportation costs have been steadily increasing. In Fiscals 2016, 2017, 2018, freights and forwarding amounted to 18%, 18% and 23% of our total expenditure. Continuing increases in transportation costs or unavailability of freights and forwarding for our products may have an adverse effect on our business and results of operations. An increase in the freight costs or unavailability of carriers for transportation of our products to our export markets may also have an adverse effect on our business, operating margins and results of operations.
Construction activity, whether residential or non-residential, is influenced by many factors, and any reduction in the activity in one or both markets could have a material adverse effect on us Our results of operations can vary materially in response to market conditions and changes in the demand for our products. Historically, demand for our products has been closely tied to construction activity, residential, nonresidential and infrastructure related in India. Our success and future growth prospects depend, to a significant extent, on conditions in these end markets and the degree to which these markets are strong in the future.
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Residential construction activity levels are influenced by and sensitive to a number of factors, including mortgage availability, the cost of financing a home (in particular, mortgage terms and interest rates), unemployment levels, household formation rates, gross domestic product, residential vacancy and foreclosure rates, demand for second homes, existing housing prices, rental prices, housing inventory levels, building mix between single- and multifamily homes, consumer confidence, seasonal weather factors, the available labour pool and government policy and incentives. Similarly, non-residential construction activity is primarily driven by levels of business investment, availability of credit and interest rates, as well as many of the factors that impact residential construction activity levels. For instance, from Fiscal 2013 to Fiscal 2017, demand for cement grew at a CAGR of 3.2%, due to slow growth in housing sector on account of high real estate inventory in urban areas and two consecutive years of poor monsoon, which kept rural housing demand subdued (Source: CRISIL Report). We cannot control the foregoing factors. Although cement demand has shown increased growth during the past year, attributable to pick-up in affordable housing and infrastructure segment (Source: CRISIL Report), there is still uncertainty regarding the timing and extent of the recovery and whether it will be sustained, and there can be no assurances that there will not be any future downturns. There can be no assurances regarding whether more recent growth in our markets can be sustained. If construction activity in our markets does not continue to recover, or if there are future downturns, whether locally, regionally or nationally, our business, financial condition, cash flows and results of operations could be materially and adversely affected.
We engage in a highly competitive business and any failure to effectively compete could have a material adverse effect on us The cement industry in India is highly fragmented and competitive. We face competition from domestic cement companies which operate in the Indian market, as well as companies that are joint ventures with international cement companies. These competitors may limit our opportunity to expand our market share and may compete with us on pricing of products. Some of our competitors are larger than we are, are more diversified, with operations across India, have greater financial resources than we do, have access to a better technology, cheaper cost of capital and may be able to produce cement more efficiently or to invest larger amounts of capital into their businesses. Our business could be adversely affected if we are unable to compete with our competitors. For example, if any of our current or future competitors develop more efficient production facilities, enabling them to produce cement and clinker at a significantly lower cost and sell at lower prices than us, we may be required to lower the prices we charge for our products and our business, cash flows and results of operations could be adversely impacted. Current and future competitors may also introduce new and more competitive products and supporting services, make strategic acquisitions or establish cooperative relationships among themselves or with third parties, including distributors of our products, thereby increasing their ability to address the needs of our target customers. If we cannot compete in pricing, provide competitive products or services or expand into new markets, this could have a material negative effect on our business, financial condition and prospects.
The business and activities of our Company are regulated by the Competition Act, 2002, which may restrain our flexibility in pricing our products The Competition Act, 2002, as amended (“Competition Act”) regulates, among others, practices having an appreciable adverse effect on competition (“AAEC”) in the relevant market in India. Under the Competition Act, any formal or informal arrangement, understanding or action in concert, which causes or is likely to cause an AAEC is considered void and results in imposition of substantial penalties. Furthermore, any agreement among competitors which directly or indirectly involves determination of purchase or sale prices, limits or controls production, shares the market by way of geographical area or number of customers in the relevant market or directly or indirectly results in bid-rigging or collusive bidding is presumed to have an AAEC in the relevant market in India and is considered void. The Competition Act also prohibits abuse of a dominant position by any enterprise. On March 4, 2011, the Government of India issued and brought into force the combination regulation (“Merger Control”) provisions under the Competition Act with effect from June 1, 2011. These provisions require acquisitions of shares, voting rights, assets or control or mergers or amalgamations that cross the prescribed asset and turnover based thresholds to be mandatorily notified to and pre-approved by the Competition Commission of India ("CCI"). Additionally, on May 11, 2011, the CCI issued the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, as amended, which sets out the mechanism for implementation of the Merger Control regime in India. The Competition Act aims to, among others, prohibit all agreements and transactions which may have an AAEC in India. Further, the CCI has extra-territorial powers and
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can investigate any agreements, abusive conduct or combination occurring outside India if such agreement, conduct or combination has an AAEC in India. In the event we enter into any agreement or transaction that is held to have an AAEC on competition in the relevant market in India, the provisions of the Competition Act will be applicable. Any prohibition or substantial penalties levied under the Competition Act could adversely affect our financial condition and results of operations, which in turn may have a material adverse impact our business or prospects, and our ability to make distributions to the shareholders. For instance, the Competition Commission of India (“CCI”) has imposed penalties of ₹ 12,854 lakhs and ₹ 928 lakhs on our Company, in two separate orders dated August 31, 2016 and January 19, 2017, respectively for alleged contravention of provisions of the Competition Act 2002. Our Company preferred appeals before the Competition Appellate Tribunal (“COMPAT”) against the above orders. The notification dated May 26, 2017 issued by the Ministry of Finance replaced the COMPAT with the National Company Law Tribunal (“NCLAT”) with effect from May 26, 2017. Subsequently NCLAT, New Delhi by its common order dated July 25, 2018 dismissed both the appeals i.e. Appeal No. 1 and Appeal No. 2 and reaffirmed the quantum of penalty. Aggrieved by the said order, our Company filed an appeal dated September 18, 2018 before the Supreme Court of India under section 53T of the Competition Act to set aside the common order dated July 25, 2018, where the matter is currently pending. Further, this matter may impact the going concern status of the Company and its future operations. For further details, see “Legal Proceedings” on page 166. There can be no assurance that we will be successful in our appeal before the Supreme Court. Further, any similar proceedings in the future may restrain our flexibility in pricing our products, and have a material adverse effect on our business, prospects, results of operations, cash flows and financial condition.
We may be unable to respond to technological advances and emerging industry standards in relation to the products we manufacture. Our grey cement plants at Nimbahera and Mangrol were acquired as part of the erstwhile cement division of Jaykay Enterprises Limited (then known as J.K. Synthetics Limited), with effect from November 4, 2004. Changes in technology and high fuel costs may make newer plants or equipment more competitive than ours or may require us to make additional capital expenditures to upgrade our facilities. Our future success will depend in part on our ability to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. We cannot assure you that we will be able to successfully implement new technologies or adapt our processing systems to customer requirements or emerging industry standards.
Credit and non-payment risks of our customers, especially during times of economic uncertainty and tight credit markets, could have a material adverse effect on us. Most of our sales to trade and non-trade customers are on a credit basis, with standard payment terms of between 15 to 60 days. While we generally monitor the ability of our customers to pay these open credit arrangements and limit the credit we extend to what we believe is reasonable based on an evaluation of each customer’s financial condition and payment history, we may still experience losses because of a customer’s inability to pay. As a result, while we maintain what we believe to be a reasonable allowance for doubtful receivables for potential credit losses based upon our historical trends and other available information, there is a risk that our estimates may not be accurate, particularly in times of economic uncertainty and tight credit markets. There may also be delays associated with the collection of receivables from our clients. As on March 31, 2018, ₹ 1,790.31 lakhs of our accounts receivable were outstanding for a period of more than six months. Our operations involve significant working capital requirements and inability to collect receivables from our clients in a timely manner or at all, or inadequate provisions for doubtful receivables, could adversely affect our business, results of operations and cash flow.
The seasonality of our business and its susceptibility to adverse weather and other conditions could have a material adverse effect on us. Demand for our products in some markets is typically seasonal, as climatic conditions, particularly the monsoon, affect the level of activity in the construction industry. The seasonal nature of our business has led to variation in our quarterly results in the past and may continue to do so in the future.
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Construction activity can also be affected in any period by adverse weather conditions such as storms, torrential rains and floods, natural disasters such as fires and earthquakes and similar events, any of which could reduce demand for our products, push back existing orders to later dates or lead to cancellations. Furthermore, our ability to deliver products on time or at all to our customers can be significantly impeded by such conditions and events, such as these described above. These conditions, particularly when unanticipated, can leave both equipment and personnel underutilized. The general seasonality of our business and any severe or prolonged adverse weather conditions or other similar events could have a material adverse effect on our business, financial condition, cash flows and results of operations.
We are required to deploy large amounts of working capital in addition to our capital expenditure which we fund through a mixture of debt and equity. This may lead to higher fixed costs and consequently, our earnings may be sensitive to changes in our production and sales volumes. Due to the high levels of fixed capital required to produce cement, our profitability is susceptible to significant changes in volume. Although we believe that our current cash balance, along with our projected internal cash flows and our available financing resources, will provide sufficient cash to support our currently anticipated operating and capital needs, if we are unable to generate sufficient cash to operate and maintain the property and machinery necessary to operate our cement business, we may be required to reduce or delay planned capital expenditures or incur additional debt. In addition, given the level of fixed and semi-fixed costs within our cement business and at our cement production facilities, decreases in volumes could have an adverse effect on our financial condition, cash flow, results of operations and liquidity.
Our financial statement for Fiscal 2017 contained certain errors that were then restated along with the financial statements for Fiscal 2018. During the Fiscal 2018, our Company discovered that the deferred tax charge was erroneously created lower by ₹48.80 crore due to consideration of incorrect carried forward unabsorbed depreciation and business loss. Consequently, deferred tax liability (net) was shown lower by the same amount. As a result of this, our financial statements for the Fiscal 2017 were restated and disclosed along with the financial statements for the Fiscal 2018. The modifications and the resultant impact on the profit for the Fiscal 2017 is given below: Particulars (₹ Crore) Profit before tax Current Tax MAT credit entitlement Earlier years tax adjustments Deferred tax Profit/(loss) for the year Basic and Diluted earnings per share (₹)
Fiscal 2017 (Reported) 324.43 70.47 (70.47) (0.03) 64.88 259.58 37.12
Fiscal 2017 (Restated) 324.43 70.47 (0.03) 43.21 210.78 30.14
Difference 70.47 (21.67) (48.80) (6.98)
Further, the Deferred tax liability (net) was restated to ₹262.81 crore in the Balance Sheet as at March 31, 2017. For further details, see “Selected Financial Information” on page 31. For details of emphasis of matter in connection with this restatement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Certain Matters Reported by our Auditors” on page 101.
Insufficient insurance coverage could have a material adverse effect on us. We maintain industrial and fire insurance coverage for our plants, that include material damages to property and business interruption, subject to specific exclusions. We also maintain fire insurance for products stored at our godowns. We believe that our insurance arrangements are consistent with industry standards for cemet manufacturers in India. However, our insurance program does not cover, or may not adequately cover, every potential risk associated with our business and the consequences thereof. Further, we cannot assure you that any claim under the insurance policies maintained by us will be honoured fully, in part or on time. In addition, market conditions or any significant claim or several claims made by or against us could cause our premiums and deductibles to increase substantially and, in some instances, our coverage may be reduced or become entirely unavailable. In the future, we may not be able to obtain meaningful coverage at reasonable rates for a variety - 59 -
of risks, including certain types of environmental hazards and on-going regulatory compliance. To the extent that we suffer loss or damage, for which we did not obtain or maintain insurance, and which is not covered by insurance, exceeds our insurance coverage or where our insurance claims are rejected, the loss would have to be borne by us and our results of operations, cash flows and financial performance could be adversely affected.
We regularly work with hazardous materials and activities in our operations may cause injuries to people or property. Manufacturing and mining sites are inherently dangerous workplaces. Our sites often put our employees and others near with large pieces of mechanized equipment, moving vehicles, chemical and manufacturing processes, heavy products and items and highly regulated materials. As a result, we are subject to a variety of health and safety laws and regulations dealing with occupational health and safety. Unsafe work sites have the potential to increase employee turnover and raise our operating costs and impact our reputation. Further, these hazards can cause personal injury and loss of life, catastrophic damage or destruction of property and equipment as well as environmental damage, which could result in suspension of operations and the imposition of civil or criminal liabilities. For instance, a criminal complaint is pending before the Judicial Magistrate First Class, Mudhol against Kailash Nath Khandelwal, Director of our Company, for alleged violation of rule 84 of the Karnataka Factories Rules, 1969 punishable under section 92 of the Factories Act, 1948 in relation to an accident at J.K. Cement Works, Muddapur that led to death of a worker. For further details, see “Legal Proceedings – Litigation involving our Company and its Subsidiaries – Outstanding criminal proceedings involving our Company and/or its Subsidiaries” on page 166. The loss or shutting down of our facilities could disrupt our business operations and adversely affect our results of operations, financial condition and reputation. We could in the future face claims and litigation filed on behalf of persons alleging injury predominantly because of occupational exposure to hazards at our facilities which could have an adverse impact on our business. Any failure to maintain safe work sites or violations of applicable law could expose us to significant financial losses and reputational harm, any of which could have a material adverse effect on our business, financial condition and results of operations.
We are required to obtain, renew or maintain statutory and regulatory permits, licenses and approvals to operate our business and our manufacturing facilities, and any delay or inability in obtaining, renewing or maintain such permits, licenses and approvals could result in an adverse effect on our results of operations. We require certain statutory and regulatory permits, licenses, registrations and approvals to operate our business. We will be required to renew such permits, licenses and approvals, and obtain new permits, licenses and approvals for any existing or proposed operations. For instance, our licenses to store oxygen cylinders at our Nimbahera and Mangrol plants have expired on September 30, 2018. While we believe that we will be able to renew or obtain such permits, licenses and approvals as and when required, there can be no assurance that the relevant authorities will issue any of such permits or approvals in the time-frame anticipated by us or at all. Failure by us to renew, maintain or obtain the required permits or approvals may result in the interruption of our operations and may have a material adverse effect on our business, financial condition and results of operations. Further, these permits, licenses and approvals could be subject to several conditions, and we cannot assure you that we and our Subsidiaries would be able to continuously meet such conditions or be able to prove compliance with such conditions to the statutory authorities. Any non-compliance may lead to cancellation, revocation or suspension of relevant permits, licenses or approvals, which may result in the interruption of our operations and may adversely affect our business, financial condition and results of operations.
Our operations are subject to environmental, labour and other regulations We are subject to environmental, health and safety and other regulatory and/ or statutory requirements in the jurisdictions in which we operate. Our manufacturing operations may generate pollutants and waste, some of which may be hazardous. We are accordingly subject to various national, state, municipal and local laws and regulations concerning environmental protection in India, including laws addressing the discharge of pollutants into the air and water, the management and disposal of any hazardous substances, and wastes and the clean-up of contaminated sites. We may incur substantial costs in complying with environmental laws and regulations, including for reasons of investment in, among other things, environmental monitoring, pollution control equipment, and emissions management. We cannot assure you that compliance with such laws and regulations will not result in delays in curtailment of production, a material increase in our costs or otherwise have an adverse effect on our financial condition, cash flows and results of operations. If we were to be in non-compliance with any such laws regulations, we could further be exposed to civil penalties, criminal sanctions and revocation of key business licenses.
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We are also subject to laws and regulations governing relationships with employees, in such areas as minimum wage and maximum working hours, overtime, working conditions, hiring and terminating of employees, contract labour and work permits. Furthermore, the success of our expansion strategy is contingent upon, among other things, receipt of all required licenses, permits and authorisations. Changes or concessions required by regulatory authorities could also involve significant costs and delay or prevent completion of the construction or opening of a plant or could result in the loss of an existing license. The legal framework governing environmental protection, labour welfare and safety in India are becoming more stringent, and the scope and extent of such developments, including their effect on our operations, cannot be predicted with any certainty. Stricter laws and regulations, or stricter interpretation of the existing laws and regulations, may impose new liabilities on us or result in the need for additional investment, either of which could affect our business, financial condition or prospects.
Labour disruptions and other union activity could have a material adverse effect us As of September 30, 2018, we had a total of 3,216 full-time employees, including trainees. Further, as of September 30, 2018, approximately 2,668 contract labourers were working at our manufacturing facilities. A significant portion of the workers of our Company, including contract labourers, are represented by labour unions. While we consider the current labour relations to be good, there can be no assurance that our Company will not experience future disruptions to its operations due to disputes or other problems with its work force, which could adversely affect its business and future results of operations. For instance, a writ petition filed by the secretary of Nirman Mazdoor Panchayat Sangam is pending before the High Court of Delhi against our Company and six other cement companies praying for, inter alia, issue of a writ of mandamus for payment of minimum wages to the workers involved in loading and unloading work of cement as per the minimum wages prescribed by the Government of Delhi and provision of welfare measures to such workers under the Unorganized Workers’ Social Security Act, 2008. For further details, see “Legal Proceedings – Litigation involving our Company and its Subsidiaries – Material outstanding civil litigation involving our Company and/or its Subsidiaries” on page 166. Our Company employs sizeable contract labourers at its facilities. The numbers of contract labourers vary from time to time based on the nature and extent of work contracted to independent contractors. While we believe that such a high proportion of employees on contract gives us the necessary flexibility and helps us run our business in an efficient and cost-effective manner, it also makes us more susceptible to sudden shortages and lack of skilled personnel while competing for them with our competitors in the market we operate. All contract labourers engaged at our facilities are assured minimum wages that are fixed by the respective state government from time to time. Any upward revision of such minimum wages, or offer of permanent employment, or the unavailability of the required number of contract labourers, may also adversely affect our business and future results of our Company’s operations. If we are unable to manage increases in our overhead costs, this could have a material adverse effect on our business, prospects, results of operations, cash flows and financial condition.
Our operations are dependent on our ability to attract and retain qualified personnel and any inability on our part to do so, could adversely affect our business, cash flow, results of operations and financial condition. Our success is, to a large extent, attributable to the vision, expertise and managerial skills of our directors and management team. In view of their experience in and knowledge of the cement business, their combined involvement is important to our future prospects. Competition for qualified personnel with relevant industry expertise is intense and the loss of services of our key personnel may adversely affect our business, cash flow, results of operations and financial condition. We may require a long period of time to hire and train replacement personnel when qualified personnel terminate their employment with our Company. We may also be required to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting employees that our business requires. We cannot assure you that we will be able to retain these individuals or find adequate replacements in a timely manner, or at all. Any inability on our part to attract and retain qualified personnel and senior management could adversely affect our business, cash flow, results of operations and financial condition.
Any inability to protect our intellectual property or claims that we infringe on the intellectual property rights of others could have a material adverse effect on us
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We believe that we have a high degree of brand recall and trust in India, which is one of our key strengths in a highly competitive industry. We have obtained 37 trademark registrations in India, including for key brand names such as “J.K. Super Cement (Build Safe)”, “J.K. White”, “J.K. Wall Putty”, “J.K. PrimaxX”, “J.K. SuperGrip” and “J.K. Super Duracrete”. Additionally, from time to time, we also obtain trade mark registrations in certain foreign jurisdictions where or products are sold. Further, we have also applied for registration of 13 other trademarks, which are pending at various stages of the registration process. However, there can be no assurance that third parties will not infringe our intellectual property, causing damage to our business prospects, reputation and goodwill. We may not be able to prevent infringement of our trademarks and a passing off action may not provide sufficient protection. Additionally, we may be required to litigate to protect our trademarks, which may adversely affect our business. We cannot assure you that we will successfully obtain or enforce our trademarks and any such event could have an adverse effect on our business, cash flow, results of operations and prospects.
Inability to effectively achieve operational efficiency by its Subsidiaries and market its product in international market We had invested in our Fujairah Plant with a view of capitalising on the growing demand for cement as a result of a fast-growing construction sector in the GCC region. However, there was a slowdown of construction in the GCC region on account of huge corrections in the price of crude oil. This resulted in our plant not being run at optimum capacity utilisation, causing us to incur losses at the Fujairah Plant. While we intend to rationalise our operations and begin shipping white cement from our Fujairah plant to our south Indian markets in addition to the international markets we already supply, there can be no guarantee that we would be able to do this successfully or at all. If we are unable to effectively utilise our capacity, it could have a material adverse effect on our business, results of operations, financial condition and prospects.
Currency exchange rates and disruptions in our foreign operations could have a material adverse effect on us. We operate production facilities in UAE and we are therefore subject to several risks specific to that country. These risks include economic downturns, social, political and economic instability, unexpected changes in regulatory requirements, tariffs and other trade barriers, currency exchange fluctuations, acts of war or terrorism and import/export requirements. For instance, as a result of the slowdown of construction in the Middle East, our Fujairah plant recorded an annual production of 0.24 MnT, 0.29 MnT and 0.29 MnT in calendar years 2015, 2016 and 2017, constituting an annual capacity utilization of 40%, 48% and 48%, respectively, and a production of 0.19 MnT in the nine-month period ended September 30, 2018, constituting a capacity utilization of 42% for the said period. Further, our financial statements are reported in Indian Rupees with international transactions being translated into Indian Rupees. If the Indian Rupee strengthens in relation to the UAE Dirham, our Indian Rupee reported net sales and income will decrease. Additionally, since we incur costs in foreign currencies, fluctuation in those currencies’ value can negatively impact manufacturing and selling costs. Changes in the relevant exchange rates between the Indian Rupee and the other currencies to which we are exposed, which can be and have been volatile, have affected and will continue to affect the value of our assets and liabilities denominated in currencies other than the Indian Rupee, our costs and our revenues, each of which could have an adverse effect on our results of operations. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 79. There can be no assurances that any of these factors will not materially impact our production cost or otherwise have a material adverse effect on our business, financial condition and results of operations.
Our Company has, in the past, been in violation of certain provisions of foreign exchange laws in relation to its overseas direct investment in Fujairah The Foreign Exchange Management Act, 1999, along with the regulations framed thereunder (together “FEMA”) impose stringent conditions on overseas direct investments, including the amount of permissible investment, method of funding, and the routing of the investment. In addition to requiring prior approval of the RBI in certain cases, the FEMA also lays down various post facto reporting requirements to be followed by companies making overseas direct investments. Our Company has, in the past, been non-compliant with provisions of the FEMA, in relation to its investment in it foreign Subsidiaries, being J. K. Cement (Fujairah) FZC and J. K. Cement Works (Fujairah) FZC. The contraventions included delay in making requisite filings under FEMA for remittances made to and bank guarantee issued to our foreign Subsidiaries, and routing of such remittances through different authorized dealers - 62 -
instead of one. The RBI, pursuant to its order dated April 26, 2012 had taken a lenient view because of the violation having arisen out of our maiden overseas investment and allowed the offences to be compounded on a payment of ₹2.5 lakhs, which has since been paid by the Company. There can be no assurance that similar violations of foreign exchange laws shall not occur in the future or shall not be dealt with in a more stringent manner by the RBI. Further, there can be no assurance that our investments in Fujairah shall not get adversely affected because of changes in foreign exchange laws and the policy towards overseas direct investment.
Inability to meet our obligations, including financial and other covenants, under our debt financing arrangement could adversely affect our business and results of operations. In order to secure our financing arrangements, we have created charge by way of equitable mortgage on certain of our immovable properties and hypothecated certain movable properties, present and future including movable plant and machinery related to our projects. In the event of a default by our Company under any loan facility, the respective lender may enforce its rights against our Company, including by way of appropriation and sale of such property. We cannot assure you that we will not default on any of our repayment obligations or other terms of the borrowing arrangements in the future, or that our respective lenders will not enforce their rights upon such default. Our business, financial condition, cash flows and results of operations could be adversely affected in the event of any such default on our part. Our financing agreements also contain certain restrictive covenants that limit our ability to undertake certain types of transactions, any of which could affect our business and financial conditions. We are required to obtain prior approval from our lenders for, among other things:
alteration of our capital structure; effecting any amalgamation or reconstruction; amending our memorandum of articles and articles of association; concluding any borrowing arrangements, either secured or unsecured; permit transfer of controlling interest or make any drastic change in the management set-up; creation of further charge, lien or encumbrance in favour of any other lenders; undertaking new projects or implementing any scheme of expansion or acquire fixed assets; investment by way of share capital in or lend or advance to or place deposits with any other entity; undertaking guarantee obligations on behalf of any other lender or any third party; declaring dividends; and effecting any repayment of monies brought in by the promoters/Directors or principal shareholders.
Certain of our borrowings also require us to maintain certain financial ratios which are tested at times on an annual basis, such as total debt to net worth and debt service coverage ratios and impose other obligations on us such as requiring us to maintain promoter and promoter group shareholding of at least 51% of our paid-up capital. The financing arrangements entered by our Company also have cross-default provisions with respect to other facilities availed of by our Company and provisions prescribing debt to equity and other financial ratios. Further, certain financing arrangements of our Company also entitle the lenders to cancel the undrawn amount of the facility in certain circumstances, including downgrading of the credit rating of our Company by a credit rating agency or adverse remark, qualified opinion or its equivalent by the auditors of our Company. We may be forced to sell some or all our assets if we do not have sufficient cash or credit facilities to make repayments. Additionally, some of our borrowings may be secured against all or a portion of our assets, and lenders may be able to sell such assets to enforce their claims for repayment. Any failure to meet our obligations under credit facilities could have an adverse effect on our business, cash flow, results of operations and financial results. In the event we breach any financial or other covenants contained in any of our financing arrangements, we may be required to immediately repay our borrowings either in whole or in part, together with any related costs.
Our current indebtedness and any future indebtedness that we may incur could have a material adverse effect on us As at March 31, 2018 our Company’s total borrowings amounted to ₹ 2,940.55 crores. Total borrowings consist of current maturities of long-term debt of ₹ 209.98 crores, short term borrowings of ₹ 156.47 crores and non-current borrowings of ₹ 2,574.10 crores and short term borrowings of ₹ 156.47 crores. As part of the Expansion Plan, we - 63 -
further propose to borrow an additional amount of ₹ 1,300 crores from certain financial institutions and lenders, which are yet to be identified. We are permitted by the terms of our debt instruments to incur substantial additional indebtedness, subject to the restrictions therein. Our substantial indebtedness may, among others:
limit our ability to borrow money for our working capital, capital expenditures, debt service requirements or other corporate purposes; require us to dedicate a substantial portion of our cash flows to payments on our indebtedness, which would reduce the amount of cash flows available to fund working capital, capital expenditures, product development and other corporate requirements; increase our vulnerability to general adverse economic and industry conditions; and limit our ability to respond to business opportunities, including growing our business through acquisitions.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms, could have a material adverse effect on our business, financial condition, cash flows and results of operations.
Our Promoters will continue to retain majority control in our Company after the Issue, which will enable them to influence the outcome of matters submitted to shareholders for approval. As on September 30, 2018, our Promoters held 60.44 % of our Company’s issued, subscribed and paid-up Equity Share capital. Upon completion of the Issue, our Promoters will continue to own a substantial portion of our postIssue Equity Share capital. Accordingly, our Promoters will continue to exercise significant influence over our business policies and affairs and all matters requiring shareholders’ approval, including the composition of our Board of Directors, the adoption of amendments to our AoA and MoA, the approval of mergers, strategic acquisitions or joint ventures or the sales of substantially all our assets, and the policies for dividends, lending, investments and capital expenditures. This concentration of ownership may also delay, defer or even prevent a change in control of our Company and may make some transactions more difficult or impossible without the support of these stockholders. The interests of the Promoters as our Company’s controlling shareholders could conflict with our Company’s interests or the interests of its other shareholders. We cannot assure you that our Promoters will act to resolve any conflicts of interest in our Company’s or your favour.
We have entered into certain related party transactions. These transactions or any future transactions with our related parties could potentially involve conflicts of interest. We have entered into certain transactions with related parties, including members of our Promoter Group. For details, please see the “Related Party Transactions” on page 78. Furthermore, it is likely that we will enter into related party transactions in the future. We cannot assure you that we could not have achieved more favourable terms if such transactions were not entered into with related parties. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operations.
Certain of our Promoters, Directors, Key Management Personnel and Senior Management Personnel have interest in our Company other than to the extent of reimbursement of expenses incurred or normal remuneration or benefits Other than regular remuneration or benefits and reimbursement of expenses, certain of our Promoters, Directors, Key Management Personnel and Senior Management Personnel are interested in our Company to the extent of their shareholding in our Company, and professional/advisory fees and rent payable to them. For details on the interest of our Promoters, Directors, Key Management Personnel and Senior Management Personnel of our Company, other than reimbursement of expenses incurred or normal remuneration or benefits, see “Board of Directors and Senior Management” on page 123.
We do not own our Registered and Corporate Office and certain other premises from which we operate. We do not own the premises on which our Registered and Corporate office is situated. Such premises have been leased to us by the current owners of the premises, being Yadupati Singhania, one of our Promoters, and five others, until 2026. If the owners of such premises revoke the arrangement under which we occupy the premises, or refuse to renew the lease on favourable terms or at all, we may suffer a disruption in our operations which could have a material adverse effect on our business and operations.
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Certain of our plants are situated on leased premises. For details, see “Our Business” on page 112. For instance, our grey cement units at Nimbahera and Mangrol are situated on land leased by the State of Rajasthan for a period of 99 years and are subject to certain terms and conditions. If we are unable to meet such terms and conditions, the land shall revert to the State of Rajasthan and it shall have the power to remove therefrom all buildings and structures constructed by our Company, and we may suffer a disruption in our operations which could have a material adverse effect on our business and operations. Substantially all of our feeder depots and certain sales offices are located leased/ licensed property. Certain of these properties may not have been constructed or developed in accordance with local planning and building laws and other statutory requirements. In addition, there may be certain irregularities in title in relation to some of our leased properties. For example, some of the agreements for such arrangements may not have been duly executed and/or adequately stamped or registered in the land records of the local authorities. We cannot assure you that we will be able to continue our use of all such properties or enforce our rights under such agreements, which may impair our operations and adversely affect our financial condition.
There are outstanding litigation pending against our Company, its Promoters and Directors, which, if determined adversely, could affect our business, cash flow, results of operations and financial condition. Our Company, its Promoters and Directors are currently involved in several legal proceedings. These legal proceedings are pending at different levels of adjudication before various courts, tribunals and statutory, regulatory and other judicial authorities in India, and, if determined against us, could adversely affect our business, cash flow, results of operations and financial condition. We can give no assurance that these legal proceedings will be decided in our favour or that any further liability may arise from these claims in the future. Any adverse decision could adversely affect our cash flows and results of operations. For details in relation to material legal proceedings, see the section titled “Legal Proceedings” on page 166 . The amounts claimed in these proceedings have been disclosed in our consolidated financial statements to the extent ascertainable. Should any new developments arise, such as any change in applicable Indian law or any rulings against us by appellate courts or tribunals, we may need to make provisions in our financial statements that could increase expenses and current liabilities, which could adversely affect our results of operations.
We have certain contingent liabilities, which, if materialized, may adversely affect our financial condition. As of March 31, 2018, we had certain contingent liabilities not provided for, amounting to ₹ 57,904.10 lakhs on a standalone basis determined in accordance with Ind AS 37. This includes demand against the Company in certain taxation related matters, on issues such as not allowing depreciation on financial leases, aggregating to ₹ 9,702.23 lakhs (as of March 31, 2018). These matters are pending adjudication at various levels and any adverse order may impact our financial condition. Further, the contingent liability of amounts disclosed in our audited financial statements represents estimates and assumptions of our management. For further information on such contingent liabilities determined in accordance with Ind AS 37, see “Financial Statements” on page 177. If any of these contingent liabilities materialize, our financial condition may be adversely affected.
Our Company has given corporate guarantees in relation to certain debt facilities provided to one of our Subsidiaries, which, if invoked, will require the Company to pay the guaranteed amounts. Our Company has provided corporate guarantees in relation to certain debt facilities presently availed by one of its Subsidiaries. As on March 31, 2018, the aggregate outstanding amount in relation to such facilities is ₹ 542,92.26 lakhs. Any default or failure by the relevant borrower(s) to repay the loans in a timely manner, or at all, could trigger repayment obligations on the part of our Company in respect of such loans, thereby potentially having an adverse effect on our financial conditions and results of operations.
Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures. The amount of future dividend payments, if any, will depend upon a number of factors, including but not limited to our future earnings, financial condition, cash flows, working capital requirements, contractual obligations, applicable Indian legal restrictions and capital expenditures. In addition, our ability to pay dividends may be impacted by a number of factors, including restrictive covenants under the loan or financing agreements our Company may enter - 65 -
into to finance our fund requirements for our business activities. There can be no assurance that we will be able to pay dividends in the future. We may decide to retain all of our earnings to finance the development and expansion of our business and, therefore, may not declare dividends on our Equity Shares. Additionally, in the future, we may be restricted by the terms of our financing agreements in making dividend payments unless otherwise agreed with our lenders. EXTERNAL RISK FACTORS
The cement industry is cyclical and is affected by a number of factors beyond our control. The cement industry, like most capital-intensive commodity industries, is cyclical in nature, especially with respect to supply. Given the high gestation period, there is a time lag between the capacity build-up and cement demand, being approximately 24 to 30 months (Source: CRISIL Report). Demand for cement is linked to economic growth. Hence, when the economy is strong, demand increases. As a result, the profitability of players increases, leading to capacity additions by existing players and the entry of new players. However, since it takes around two to three years to build a cement plant, it is likely that demand could either decrease or stagnate, or capacity additions could exceed demand before completion of these capacities. This could lead to decrease in cement prices with the industry facing a downturn, and players reducing operating rates or shutting their plants.
A slowdown in economic growth in India could cause our business to suffer Our performance and the growth of our business are necessarily dependent on the health of the overall Indian economy. Any slowdown or perceived slowdown in the Indian economy or future volatility in global commodity prices could adversely affect our business. Additionally, an increase in trade deficit, a downgrading in India’s sovereign debt rating or a decline in India’s foreign exchange reserves could negatively affect interest rates and liquidity, which could adversely affect the Indian economy and our business. Any downturn in the macroeconomic environment in India could also adversely affect our business, results of operations, financial condition and the trading price of the Equity Shares. India’s economy could be adversely affected by a general rise in interest rates or inflation, adverse weather conditions affecting agriculture, commodity and energy prices as well as various other factors. A slowdown in the Indian economy could adversely affect the policy of the GoI towards our industry, which may in turn adversely affect our financial performance and our ability to implement our business strategy. The Indian economy is also influenced by economic and market conditions in other countries, particularly emerging market conditions in Asia. A decline in India’s foreign exchange reserves and exchange rate fluctuations may also affect liquidity and interest rates in the Indian economy, which could adversely impact our financial condition. A loss of investor confidence in other emerging market economies or any worldwide financial instability may adversely affect the Indian economy, which could materially and adversely affect our business, cash flow, results of operations and the market price of the Equity Shares. Further, other factors which may adversely affect the Indian economy are scarcity of credit or other financing in India, resulting in an adverse impact on economic conditions in India and scarcity of financing of our developments and expansions; volatility in, and actual or perceived trends in trading activity on, India’s principal stock exchanges; changes in India’s tax, trade, fiscal or monetary policies, like application of GST; political instability, terrorism or military conflict in India or in countries in the region or globally, including in India’s various neighbouring countries; occurrence of natural or man-made disasters; infectious disease outbreaks or other serious public health concerns; prevailing regional or global economic conditions, including in India’s principal export markets; and other significant regulatory or economic developments in or affecting India or its financial services sectors.
Political instability or changes in the economic policies by the GoI could impact our financial results and prospects. We are incorporated in India and derive substantial majority of our revenues from operations in India. Consequently, our performance and the market price of our Equity Shares may be affected by interest rates, government policies, taxation, social and ethnic instability and other political and economic developments affecting India. The GoI has traditionally exercised and continues to exercise significant influence over many aspects of the Indian economy. Our business, and the market price and liquidity of our Equity Shares, may be affected by changes in the GoI's policies, including taxation.
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Since 1991, successive Indian governments have pursued policies of economic liberalisation, including significantly relaxing restrictions on the private sector. However, there can be no assurance that such policies will be continued and any significant change in the GoI's policies in the future could affect our business and economic conditions in India in general. As economic liberalisation policies have been a major force in encouraging private funding in the Indian economy, any change in these policies could have a significant impact on business and economic conditions in India, which could adversely affect our business and our future financial condition and the price of our Equity Shares. In addition, any geopolitical stability affecting India will adversely affect the Indian economy and the Indian securities markets in general, which could affect the price of our Equity Shares.
Any downgrading of India's debt rating by an international rating agency could have an adverse impact on our business. Any adverse revision to the rating of India's domestic or international debt by international rating agencies may adversely impact our ability to raise additional financing and the interest rates and other commercial terms at which such funding is available. This could have an adverse effect on our business and future financial performance, its ability to obtain financing for capital expenditures and the trading price of the Equity Shares.
Economic developments and volatility in securities markets in other countries may cause the price of the Equity Shares to decline. The Indian economy and its securities markets are influenced by economic developments and volatility in securities markets in other countries. Investor’s reactions to developments in one country may have adverse effects on the market price of securities of companies situated in other countries, including India. For instance, the recent financial crisis in the United States and European countries led to a global financial and economic crisis that adversely affected the market prices in the securities markets around the world, including Indian securities markets. Negative economic developments, such as rising fiscal or trade deficits, or a default on national debt, in other emerging market countries may affect investor confidence and cause increased volatility in Indian securities markets and indirectly affect the Indian economy in general.
The extent and reliability of Indian infrastructure, to the extent insufficient, could adversely impact our cash flow, results of operations and financial condition. India's physical infrastructure is less developed than that of many developed nations. Any congestion or disruption with its port, rail and road networks, electricity grid, communication systems or any other public facility could disrupt our normal business activity. Any deterioration of India's physical infrastructure would harm the national economy, disrupt the transportation of goods and supplies, and add costs to doing business in India. These problems could interrupt our business operations, which could have adverse effect on our cash flow, results of operations and financial condition.
Significant increases in the price of or shortages in the supply of crude oil could adversely affect the Indian economy in general, including the cement manufacturing industry, which could have an adverse effect on our business and results of operations. India relies significantly on imports to meet its requirements of crude oil. Crude oil prices are volatile and are subject to several factors, including the level of global production and political factors, such as war and other conflicts, particularly in the Middle East, where a substantial proportion of the world's oil reserves are located. Any significant increase in the price of or shortages in the supply of crude oil could adversely affect the Indian economy in general, including the cement manufacturing industry and consequently an adverse effect on our business, cash flows and results of operations.
Our Equity Shares are quoted in Indian rupees in India and investors may be subject to potential losses arising out of exchange rate risk on the Indian rupee and risks associated with the conversion of Indian rupee proceeds into foreign currency. Investors are subject to currency fluctuation risk and convertibility risk since our Equity Shares are quoted in Indian rupees on the Indian stock exchanges on which they are listed. Dividends on the Equity Shares will also be paid in Indian Rupees. In addition, foreign investors that seek to sell Equity Shares will have to obtain approval from the RBI, unless the sale is made on a stock exchange or in connection with an offer made under regulations regarding takeovers. The volatility of the Indian rupee against the US dollar and other currencies may subject investors who convert funds into Indian rupees to purchase our Equity Shares to currency fluctuation risks. - 67 -
Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares. Under current Indian tax laws, unless specifically exempted capital gains arising from the sale of the Equity Shares are generally taxable in India. Any gain realized on the sale of the Equity Shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if the securities transaction tax has been paid on the transaction. The securities transaction tax will be levied on and collected by an Indian stock exchange on which the Equity Shares are sold. Any gain realized on the sale of the Equity Shares held for more than 12 months, which are sold other than on a recognized stock exchange and on which no securities transaction tax has been paid, will be subject to capital gains tax in India. Further, any gain realized on the sale of the Equity Shares held for a period of 12 months or less will be subject to capital gains tax in India. Capital gains arising from the sale of the Equity Shares will be exempt from taxation in India in cases where the exemption from taxation in India is provided under a treaty between India and the country of which the seller is resident. Generally, Indian tax treaties do not limit India’s ability to impose tax on capital gains. As a result, residents of other countries may be liable for tax in India as well as in their own jurisdiction on a gain upon the sale of the Equity Shares. Additionally, in terms of the Finance Act, 2018, which has been notified on March 29, 2018 with effect from April 1, 2018, the tax payable by an assessee on the capital gains arising from transfer of long term capital asset (introduced as section 112A of the Income-Tax Act, 1961) shall be calculated on such long-term capital gains at the rate of 10%, where the long-term capital gains exceed ₹ 100,000, subject to certain exceptions in case of a resident individuals and HUF.
Investors may have difficulty enforcing foreign judgments against us or our management. We are a limited liability company incorporated under the laws of India. All our Directors and Key Managerial Personnel are residents of India. Almost all our assets and the assets of our Directors and Key Managerial Personnel are in India. As a result, it may be difficult for investors to effect service of process upon us or such persons outside India or to enforce judgments obtained against us or such parties outside India.
The price of the Equity Shares may be volatile. The trading price of our Equity Shares may fluctuate after this Issue due to a variety of factors, including our results of operations and the performance of our business, competitive conditions, general economic, political and social factors, the performance of the Indian and global economy and significant developments in India’s fiscal regime, volatility in the Indian and global securities market, performance of our competitors, changes in the estimates of our performance or recommendations by financial analysts and announcements by us or others regarding contracts, acquisitions, strategic partnerships, joint ventures, or capital commitments. In addition, if the stock markets in general experience a loss of investor confidence, the trading price of our equity shares could decline for reasons unrelated to our business, financial condition or operating results. The trading price of our equity shares might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. Each of these factors, among others, could adversely affect the price of our equity shares.
Investors may be restricted in their ability to exercise pre-emptive rights under Indian law and may be adversely affected by future dilution of their ownership position. Pursuant to the Companies Act, 2013 a company incorporated in India must offer its holders of equity shares preemptive rights to subscribe and pay for a proportionate number of equity shares to maintain their existing ownership percentages before the issuance of any new equity shares, unless the pre-emptive rights have been waived by adoption of a special resolution when the votes cast in favour of the resolution by the holders who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting. However, if the law of the jurisdiction the Investor is in does not permit them to exercise their pre-emptive rights without us filing a placement document or registration statement with the applicable authority in the jurisdiction they are in, they will be unable to exercise their pre-emptive rights unless we make such a filing. If we elect not to make such a filing, you may not be able to exercise your pre-emptive rights in relation to such an offering. To the extent that Investors are unable to exercise pre-emptive rights granted in respect of the Equity Shares held by them, their proportional interest in us would be reduced.
Investors will not be able to sell any of the Equity Shares other than on a recognized Indian stock exchange for a period of 12 months from the date of allotment pursuant to this Issue. - 68 -
The Equity Shares are subject to restrictions on transfers. Pursuant to the SEBI ICDR Regulations, for a period of 12 months from the date of the allotment of the Equity Shares, QIBs subscribing to the Equity Shares may only sell their Equity Shares on the Stock Exchanges and may not enter into any off-market trading in respect of these Equity Shares. We cannot be certain that these restrictions will not have an impact on the price and liquidity of the Equity Shares.
Investors will be subject to market risks until the Equity Shares credited to the investor’s demat account are listed and permitted to trade Investors can start trading the Equity Shares allotted to them only after they have been credited to an investor’s demat account, are listed and permitted to trade. Since the Equity Shares are currently traded on BSE and NSE, investors will be subject to market risk from the date they pay for the Equity Shares to the date when trading approval is granted for the same. Further, there can be no assurance that the Equity Shares allocated to an investor will be credited to the investor’s demat account in a timely manner or that trading in the Equity Shares will commence in a timely manner.
There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholder’s ability to sell or the price at which it can sell, Equity Shares at a particular point in time. The Equity Shares are subject to a daily circuit breaker imposed on listed companies by all stock exchanges in India, which does not allow transactions beyond a certain volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by SEBI on Indian stock exchanges. The percentage limit on the Equity Shares’ circuit breaker will be set by the stock exchanges based on historical volatility in the price and trading volume of the Equity Shares. The stock exchanges are not required to inform us of the percentage limit of the circuit breaker and they may change the limit without our knowledge. This circuit breaker would effectively limit the upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, there can be no assurance regarding the ability of shareholders to sell Equity Shares or the price at which shareholders may be able to sell their Equity Shares.
Foreign investors are subject to foreign investment restrictions under Indian law that limit our ability to attract foreign investors, which may adversely affect the trading price of our Equity Shares. Under the foreign exchange regulations currently in force in India, transfers of shares between non-residents and residents are freely permitted (subject to certain exceptions) if they comply with the requirements specified by the RBI. If the transfer of shares is not in compliance with such requirements or falls under any of the specified exceptions, then prior approval of the RBI will be required. In addition, shareholders who seek to convert the Rupee proceeds from a sale of shares in India into foreign currency and repatriate that foreign currency from India will require a no-objection or tax clearance certificate from the income tax authority. Additionally, the Indian government may impose foreign exchange restrictions in certain emergency situations, including situations where there are sudden fluctuations in interest rates or exchange rates, where the Indian government experiences extreme difficulty in stabilizing the balance of payments or where there are substantial disturbances in the financial and capital markets in India. These restrictions may require foreign investors to obtain the Indian government’s approval before acquiring Indian securities or repatriating the interest or dividends from those securities or the proceeds from the sale of those securities. There can be no assurance that any approval required from the RBI or any other government agency can be obtained on any particular terms or at all.
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USE OF PROCEEDS The gross proceeds from the Issue are approximately up to ₹ 510.79 crore. The net proceeds from the Issue, after deducting the estimated expenses in relation to the Issue (including fees and commissions), will be approximately up to ₹ 503.49 crore (“Net Proceeds”). Our Board has in its meeting held on February 3, 2018 resolved to take up an expansion plan (“Expansion Plan”) primarily consisting of:
Brownfield expansion of Mangrol and Nimbahera plants: We are proposing to enhance the cement grinding capacity at Mangrol and Nimbahera by 1 MTPA each. In addition, we also intend to increase the existing clinker capacity at Mangrol by 2.48 MTPA. The surplus clinker production will be utilised to serve the split grinding units proposed to be set up at Aligarh and Balsinor, and also to meet the additional clinker requirement at Nimbahera plant due to the brownfield expansion. We are also proposing to set up a waste heat recovery power generation facility at Mangrol with a capacity of 13 MW.
Establishment of grinding units at Aligarh and Balsinor: Utilizing the clinker sourced from Mangrol, we are proposing to set up PPC-based split grinding units at Aligarh and Balsinor, having a capacity of 1.5 MTPA and 0.7 MTPA, respectively.
For details, see ‘Our Business’ on page 112. Subject to compliance with applicable laws and regulations, we intend to use the Net Proceeds towards capital expenditure for the Expansion Plan and general corporate purposes. The proposed capital expenditure includes cost for, inter alia, land and site development, civil works, plant and machinery, technical know-how fees and other incidental expenses in respect of the Expansion Plan. The break-up of the total capital expenditure towards the Expansion Plan aggregating to ₹ 1,998.90 crore is set forth below: (₹ in crores) Estimated cost as per the Expansion Plan Sr. No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Total
Particulars
Land and site development Civil works Plant & machinery Technical know-how fees Expenses on training Miscellaneous fixed assets Pre-operative expenses Interest during construction period Contingency @ 7.5%* Margin money for working capital
Mangrol, Chittogarh, Rajasthan
Nimbahera, Rajasthan
89.15 292.68 616.2 6 0.5 231.84 9.51
21 79.5 1.2
0.50
Harduaganj, Aligarh, Uttar Pradesh 21.9 74.76 130.36 3 0.5 28.4 7.50
Taluka Balsinor of District Kheda, Gujarat 11.86 61.16 75.99 2.25 0.5 26.14 7.50
Aggregate Estimated cost
122.91 449.6 902.05 12.45 1.5 286.38 25.01 57.18 133.83 7.99 1,998.90
*
7.5% of the estimated cost towards Expansion Plan has been reserved as contingent to meet any unforeseen escalation in the estimated project cost. Source: Techno-Economic Feasibility Report Expansion Plan indicated hereinabove is based on the report titled “Techno-Economic Feasibility Report for brownfield expansion of Mangrol & Nimbahera integrated units and green-field split grinding units” dated March 2018, by Holtec Consulting Private Limited, management estimates, current circumstances of our business and the prevailing market conditions. The estimated project cost of the Expansion Plan is ₹ 1,998.90 crore, out of which our Company is in the process of availing debt financing facilities amounting to ₹ 1,300 crore from certain lenders. The balance cost for the Expansion Plan shall be met through (i) a portion of the Net Proceeds, and (ii) internal accruals. We intend to utilize the Net Proceeds towards the Expansion Plan within a two-year period from achievement of financial closure or entering into definitive consortium loan agreements for debt financing for the Expansion Plan, whichever is later.
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Our Company proposes to deploy the balance Net Proceeds towards general corporate purposes, including but not limited to meeting our working capital requirements, investment in any future potential opportunity in our business, strategic initiatives, meeting fund requirements which our Company may face in the ordinary course of business, meeting expenses incurred in the ordinary course of business, meeting ongoing general corporate exigencies, and any other purpose in accordance with applicable law. If the Net Proceeds are not completely utilised for the purposes stated hereinabove by such periods due to factors such as (i) economic and business conditions; (ii) increased competition; (iii) delay in procuring and operationalizing assets; (iv) receiving the necessary approvals; and (v) other commercial considerations, the same would be utilised (in part or full) in the subsequent periods as may be decided by our Board, in accordance with applicable law. As permissible under applicable laws, our management will have flexibility in deploying the Net Proceeds received by our Company from the Issue. Our Company may have to revise our funding requirements and deployment from time to time on account of various factors, such as financial and market conditions, competition, business and strategy and interest/ exchange rate fluctuations and other external factors, which may not be within the control of our Company. This may entail revising the schedule of the proposed utilization of the Net Proceeds and changing the allocation of funds from its planned allocation at the discretion of our Board. Further, if the actual utilization of Net Proceeds towards any of the aforesaid purposes is lower than the proposed deployment, then such balance will be utilised towards general corporate purposes. For further details, please see “Risk Factors – We are subject to risks associated with our expansion strategy, which is to be funded partially out of the Net Proceeds” on page 53. Pending utilization of proceeds of the Issue as described above, the Company intends to temporarily invest funds in creditworthy instruments, including money market, mutual funds and fixed deposits. Such investments would be in accordance with the investment policies as approved by the Board from time to time and all applicable laws and regulations. Our main objects clause and objects incidental or ancillary to the main objects clause of our Memorandum of Association enable us to undertake the activities towards which the proceeds from this Issue will be applied. Neither our Promoters nor our Directors are making any contribution either as part of the Issue or separately in furtherance of the objects of the Issue. Further, neither our Promoters nor our Directors shall receive any proceeds from the Issue, whether directly or indirectly. Since the Issue is only made to QIBs, our Promoters, Directors or Key Managerial Personnel are not eligible to subscribe in the Issue. Our Company shall not utilise monies raised through the Issue until the Allotment is made and the return of Allotment is filed with the RoC, or receipt of final listing and trading approvals from the Stock Exchanges, whichever is later.
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CAPITALISATION The following table sets forth our Company’s capitalization and total debt as at March 31, 2018, on the basis of our Audited Consolidated Financial Statements, and as adjusted for the Issue. This table should be read in conjunction with the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Financial Statements” and “Risk Factors” on pages 79 and 52, respectively. (₹ in crores) Particulars
As of March 31, 2018, Actual
Short term borrowings#: Secured Unsecured Total short-term borrowings
As adjusted for the Allotment and the Issue
359.85 6.60 366.45
359.85 6.60 366.45
Non-Current borrowing: Secured Unsecured
2,542.52 31.58
2,542.52 31.58
Total non-Current borrowings
2,574.10
2,574.10
Total borrowings (A) Shareholders’ funds: Share capital Securities premium reserve Other Equity (excluding securities premium reserve) Total Equity (B)
2,940.55
2,940.55
69.92 259.88 1,645.05 1,974.86
77.26 763.33 1,645.05 2,485.64
Total capitalisation (A+B)
4,915.41
5,426.19
1.49
1.18
Debt/Equity Ratio (A/B) #
Including current maturities of long-term debt.
Note: As adjusted for the Allotment and the Issue column reflects changes in shareholders' funds only on account of proceeds from the fresh issue of shares. Share capital and Securities premium reserve have changed pursuant to the issue of 73,41,001 equity shares of face value of Rs. 10 each at securities premium of ` 685.80 per Equity Share.
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CAPITAL STRUCTURE The Equity Share capital of our Company as at the date of this Placement Document is set forth below. (In ₹, except share data or unless otherwise stated) Sr. No. (A) (B) (C) (D) (E)
Particulars
Aggregate at face value
AUTHORISED SHARE CAPITAL 8,00,00,000 Equity Shares ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL BEFORE THE ISSUE 6,99,27,250 Equity Shares PRESENT ISSUE* Up to 73,41,001 Equity Shares ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL AFTER THE ISSUE 7,72,68,251 Equity Shares SECURITIES PREMIUM ACCOUNT Before the Issue After the Issue**
80,00,00,000 69,92,72,500 7,34,10,010 77,26,82,510 259.89 crores 763.33 crores
*
The Issue has been authorised by the Board of Directors on June 28, 2018 and our shareholders pursuant to their resolution at the AGM dated July 28, 2018. ** Calculated on the basis of gross proceeds from the Issue and adjustments do not include Issue expenses.
Share Capital History of our Company The history of the Equity Share capital of our Company is provided in the following table: Date of allotment
Face value per Equity Share (₹)
December 20, 1994 10 September 16, 2002 March 4, 2004 March 29, 2004 October 16, 2004
10 10 10 10
March 10, 2005 10 March 9, 2006 10
Nature of allotment
Number of Equity Shares allotted
Issue price per Equity Share (₹)
Consideration
700
10
Cash
1,19,700
10
Cash
3,59,25,000
10
Cash
5,00,000
10
Cash
59,54,900
10
Cash
74,26,950
10
Other than cash
2,00,00,000
148
Cash
Initial subscription to the Memorandum of Association Preferential allotment Preferential allotment Preferential allotment Preferential allotment Allotment pursuant to scheme of rehabilitation* Allotment pursuant to initial public offering
6,99,27,250**
Total *
Pursuant to a scheme of rehabilitation of J.K. Synthetics Limited relating to the one time settlement of debts of secured creditors of J.K. Synthetics Limited, involving among other matters, the slump sale of J.K. Synthetics Limited cement division to our Company as sanctioned by the Appellate Authority for Industrial and Financial Reconstruction, New Delhi, pursuant to its order dated January 23, 2003, 74,26,950 Equity Shares were allotted to equity shareholders of J.K. Synthetics Limited in the ratio of 1:10, i.e., one Equity Share for every 10 equity shares of J.K. Synthetics Limited held by them. ** 16,920 Equity Shares allotted by the Company are yet to be listed on the Stock Exchanges due to regulatory/court orders and certain legal disputes regarding title.
In the last one year preceding the date of this Placement Document, our Company has not made any allotments (either on preferential basis, or private placements or rights issue) including for consideration other than cash. Our Company does not have any employee stock options plan. Proposed allottees The names of the proposed allottees and the percentage of post Issue capital that may be held by them in the Company is set forth below: Sr. No.
Name of the proposed Allottees
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Number of Equity Shares proposed
Percentage of the postIssue capital (%)*
1. 2. 3. 4. 5. 6. 7. 8 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
to be allotted 2,87,439 10,060 10,060 10,060 18,53,981 4,16,786 7,04,225 53,176 1,43,719 1,03,480 5,27,542 1,42,578 1,85,352 4,99,026 85,548 1,42,579 71,290 1,42,578 3,59,298 5,74,877 5,25,000 1,43,719 1,95,000 5,400 26,041 18,936 32,514 32,403 20,712 17,622
SBI Small Cap Fund SBI Tax Advantage Fund Series - II SBI Tax Advantage Fund Series - III SBI Long Term Advantage Fund – Series IV SBI Mutual Fund – SBI Magnum Tax Gain Scheme SBI Contra Fund SBI Large and Midcap Fund SBI Resurgent India Opportunities Scheme SBI Infrastructure Fund SBI Magnum Multi Cap Fund ICICI Prudential Equity and Debt Fund ICICI Prudential Infrastructure Fund ICICI Prudential Multi Cap Fund ICICI Prudential Multi-Asset Fund ICICI Prudential Mutual Fund – ICICI Prudential Small Cap Fund ICICI Prudential Equity Savings Fund ICICI Prudential Mutual Fund – ICICI Prudential Value Fund - Series 15 ICICI Prudential Mutual Fund – ICICI Prudential Manufacture In India Fund Reliance Capital Trustee Co. LTD - A/C Reliance Small Cap Fund HDFC Mutual Fund - HDFC Capital Builder Value Fund HDFC Standard Life Insurance Company Limited IDFC Mutual Fund - IDFC Sterling Value Fund Integrated Core Strategies (Asia) Pte. Ltd. Sundaram Mutual Fund A/C Sundaram Emerging Small Cap – Series VI Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series-XI Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series - XII Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series - XIV Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series - XV Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series - XVI Sundaram Mutual Fund A/C Sundaram Select Micro Cap - Series - XVII
0.37 0.01 0.01 0.01 2.40 0.54 0.91 0.07 0.19 0.13 0.68 0.18 0.24 0.65 0.11 0.18 0.09 0.18 0.47 0.74 3.26 0.19 0.25 0.01 0.03 0.02 0.04 0.04 0.03 0.02
*
The percentage of the post-Issue capital is only based on the number of Equity Shares proposed to be Allotted to the Allottees in the Issue, except where name of any proposed Allottee is appearing in the names of persons holding more than 1% of the total number of shares in the Company’s shareholding pattern as on September 30, 2018, as filed by the Company with the Stock Exchanges.
Pre-Issue and post-Issue shareholding pattern The pre-Issue (as of September 30, 2018) and post-Issue shareholding pattern of the Company is set forth below. Sr. No. A. 1.
2. B. 1. 2.
^
Category Promoters' holding^ Indian Individual Bodies corporate Sub-total Foreign promoters Sub-total (A) Non - Promoters' holding Institutional Investors Non-Institutional Investors Private Corporate Bodies Directors and relatives Indian public Others (including Non-resident Indians (NRIs)) Sub-total (B) Grand Total
Pre-Issue No. of Equity Shares % of share holding held
Post-Issue* No. of Equity Shares held
% of share holding
1,44,85,739 3,03,80,832 4,48,66,571 4,48,66,571
20.71% 43.15% 64.16% 64.16%
1,44,85,739 3,03,80,832 4,48,66,571 4,48,66,571
18.75% 39.32% 58.07% 58.07%
1,91,06,746
27.32%
2,64,47,747
34.23%
7,80,702 500 46,42,295 5,30,436
1.12% Negligible 6.64% 0.76%
7,80,702 500 46,42,295 5,30,436
1.01% 0.00% 6.01% 0.69%
2,50,60,679 6,99,27,250
35.84% 100.00%
3,24,01,680 7,72,68,251
41.93% 100.00%
Includes shareholding of the members of Promoter Group.
*
Assuming Allotment of Equity Shares pursuant to the Issue.
Other Confirmation
No change in control of the Company is expected as a consequence to the Issue. Also, see “Risk Factor - Our Promoters will continue to retain majority control in our Company after the Issue, which will enable them to influence the outcome of matters submitted to shareholders for approval” on page 64.
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MARKET PRICE INFORMATION AND OTHER INFORMATION CONCERNING THE EQUITY SHARES Our Equity Shares are listed and traded on BSE and NSE. The closing price of the Equity Shares on BSE as of December 21, 2018 was ₹ 749.95 and on NSE as of December 21, 2018 was ₹ 747.70. The tables set forth below provide certain stock market data for BSE and NSE and is for the periods that indicate the high and low closing prices of the Equity Shares and also the volume of trading activity. High, low and average market closing prices of the Equity Shares during the last three Fiscal Years NSE Fiscal Year
High (₹)
Date of High
FY16 709.90 27-Nov FY17 968.00 10-Oct FY18 1,153.15 23-Jan (Source: www.nseindia.com) Note: 1. 2. 3.
Total Low (₹) Date of Total No. of No. of Volume Low Equity Equity Volume on date Shares on date of Shares High traded on traded on of Low (₹mn) the date of (₹mn) the date high of low
49,578 27,437 14,953
34.73 26.76 17.16
438.00 560.55 917.70
16-Feb 6-May 17-Apr
20,857 19,575 29,111
9.38 11.04 26.81
No. of Equity Shares traded during the Fiscal Year (#mn)
Total Volume Average of Equity (₹) shares traded in value (₹ mn)
6.41 8.69 8.87
3,864.96 6,507.46 9,147.13
607.15 747.86 1,022.75
Total Volume of Equity shares traded in value (₹ mn)
Average (₹)
423.12 2,605.20 2,026.73
606.98 748.84 1,021.84
Average price is average of the closing prices for the period. High and low prices are based on high and low of the daily prices. In case of two days with the same closing price, the date with the higher volume has been considered.
BSE Fiscal Year
High (₹)
Date of High
FY16 702.49 9-Apr FY17 974.67 10-Oct FY18 1,161.52 18-Jan (Source: www.bseindia.com) Note: 1. 2. 3.
Total Low (₹) Date of Total No. of No. of Volume Low Equity Equity Volume on date on date Shares Shares traded on of High traded on of Low (₹mn) the date of (₹mn) the date high of low
549 3,023 1,560
2.14 2.15 3.97
435.96 17-Feb 562.82 11-May 916.20 19-Apr
49,258 2,742 2,068
0.16 0.41 3.65
No. of Equity Shares traded during the Fiscal Year (#mn)
0.69 3.65 2.00
Average price is average of the closing prices for the period. High and low prices are based on high and low of the daily prices. In case of two days with the same closing price, the date with the higher volume has been considered.
Monthly high, and low and average of the closing prices of the Equity Shares for the six months preceding the date of filing of the Placement Document NSE Month
High (₹)
Date of High No. of
Nov-18 Oct-18
745.00 773.85
20-Nov-18 1-Oct-18
Equity Shares traded on the date of high 39,245 33,574
Sep-18
812.00
7-Sep-18
6,394
Total Volume on date of High (₹mn)
Low (₹)
Date of Low
28.80 25.12
672.20 649.55
1-Nov-18 29-Oct-18
5.15
760.00
28-Sep-18
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Total No. of Traded Equity Volume volume Shares on date (No. of traded of Low Equity on the (₹mn) Shares) date of low 16,494 11.16 8,36,229 6,25,07 406.98 8,96,024 7 11,446 8.80 4,11,852
Total value of Equity Shares traded (₹ mn)
Average (₹)
588.42 597.99
702.66 696.80
327.26
794.09
High (₹)
Month
Date of High No. of
Aug-18 819.00 29-Aug-18 Jul-18 879.00 2-Ju-18 Jun-18 948.50 1-Jun-18 (Source: www.nseindia.com) Notes: 1. 2. 3.
Equity Shares traded on the date of high 33,407 9,133 8,477
Total Volume on date of High (₹mn)
Low (₹)
Date of Low
27.06 7.88 7.96
750.00 748.35 860.00
13-Aug-18 23-Jul-18 28-Jun-18
Total No. of Traded Total Equity Volume volume value of Shares on date (No. of Equity traded of Low Equity Shares on the (₹mn) Shares) traded date of (₹ mn) low 24,909 18.84 5,48,603 430.67 20,330 15.32 16,03,536 1,291.60 6,165 5.33 3,75,948 340.06
Average (₹)
783.61 805.77 900.89
Average price is average of the closing prices for the period. High and low prices are based on high and low of the daily prices. In case of two days with the same closing price, the date with the higher volume has been considered.
BSE Month High (₹)
No. of Total Equity Volume on Shares date of traded on High (₹ the date of mn) high Nov-18 743.90 20-Nov-18 1,399 1.02 Oct-18 779.00 1-Oct-18 4,444 3.34 Sep-18 814.30 7-Sep-18 268 0.22 Aug-18 819.30 29-Aug-18 2,618 2.13 Jul-18 875.00 2-Jul-18 677 0.58 Jun-18 953.45 5-Jun-18 31,275 28.79 (Source: www.bseindia.com) Notes: 1. 2. 3.
Date of High
Low (₹)
Date of Low
No. of Total Traded Total Average Equity Volume volume value of (₹) Shares on date of (No. of Equity traded on Low Equity Shares the date of (₹mn) Shares) traded low (₹ mn) 669.00 5-Nov-18 645 0.45 4,42,312 309.79 703.49 650.00 29-Oct-18 3,07,411 199.95 3,55,579 233.48 696.04 757.00 28-Sep-18 2,327 1.79 54,641 43.05 792.43 729.00 8-Aug-18 3,038 2.36 79,609 62.33 783.16 750.00 23-Jul-18 627 0.47 1,55,893 129.24 807.36 855.25 22-Jun-18 583 0.51 1,49,359 135.60 900.71
Average prices are based on the daily closing prices. High and low prices are based on high and low of the daily prices. High and low prices are based on high and low of the daily prices.
Market price on the first working day following the Board meeting approving the Issue, i.e., on June 29, 2018. NSE Date
Open (₹)
High (₹)
Low (₹)
Close (₹)
Traded volume (No. of Equity Shares)
June 29, 2018
868.00
875.00
860.15
869.85
35,890
Total value of Equity Shares traded (₹ mn) 31.24
(Source: www.nseindia.com) BSE Date
Open (₹)
High (₹)
Low (₹)
Close (₹)
Traded volume (No. of Equity Shares)
June 29, 2018
868.00
875.00
860.00
871.85
4,041
(Source: www.bseindia.com)
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Total value of Equity Shares traded (₹ mn) 3.51
DIVIDENDS Our Board adopted the Dividend Distribution Policy pursuant to its resolution dated November 11, 2017. In line with this policy, the declaration and payment of dividends, if any, will be recommended by our Board of Directors and thereafter the same shall be approved by our Shareholders at their discretion. All dividend payments are made in cash to the shareholders of our Company. The details of the dividends declared by our Company in respect of the fiscal years 2018, 2017 and 2016 are set out below. Any amounts paid as dividends in the past are not necessarily indicative of the future dividend policy or dividend amounts of our Company. Dividend declared in relation to Equity Shares:
*
Fiscal Year
Rate of dividend
2018 2017 2016
100% 80% 40%
Dividend per Equity Shares (₹) 10 8 4
Total amount of dividend* (in ₹ crore) 84.30 67.33 33.67
Inclusive of tax on dividend distribution
The declaration of dividends is dependent on a number of factors, including but not limited to the earnings, capital requirements, contractual obligations, applicable legal restrictions, results of operations, overall financial position of our Company and other factors that may be considered relevant by the Board. The amounts paid as dividends in the past are not necessarily indicative of our Company’s future dividend amounts, which will depend on the revenue, cash flows, financial condition (including capital position) and other factors affecting our Company. Any shareholder who ceases to be a shareholder prior to the record date or who becomes a shareholder after the record date will not be entitled to the dividend declared by our Company. For a summary of certain Indian tax consequences of dividend distributions to shareholders, see “Statement of Possible Tax Benefits Available to the Company and its Shareholders under the Applicable Laws in India” on page 164.
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RELATED PARTY TRANSACTIONS For details of the related party transactions during the Fiscals 2017 and 2018, as per the requirements under Ind-AS 24, see “Financial Statements” on page 177. For details of the related party transactions during the Fiscal 2016, as per the requirements under the Indian GAAP, see “Financial Statements” on page 177.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Placement Document may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Placement Document. For further information, see “Forward-Looking Statements” and “Risk Factors” on pages 15 and 52, respectively. In this section, unless the context otherwise requires, a reference to “our Company” is a reference to J.K. Cement Limited on a standalone basis, while any reference to “we”, “us” or “our” refers to J.K. Cement Limited on a consolidated basis. Our Company’s fiscal year ends on March 31 of each year, and references to a particular fiscal are to the twelve months ended March 31 of that year. Unless otherwise indicated or if context requires otherwise, the financial information for Fiscals 2017 and 2018 are based on our Audited Consolidated Financial Statements for Fiscal 2018, prepared in accordance with the Ind-AS (containing restated comparative financial information for Fiscal 2017) and the comparative financial information for Fiscal 2016, included in the Audited Consolidated Financial Statements for Fiscal 2017, prepared under the Ind- AS. Pursuant to the Companies Act, 2013, and related regulations issued by the Ministry of corporate Affairs, GoI and SEBI, our Company was required to prepare and present standalone and consolidated financials in accordance with Ind-AS with effect from April 1, 2016. Given that the accounting standards and policies under Ind-AS vary in many respects from those under Indian GAAP, the Audited Consolidated Financial Statements under IND- AS may not be comparable to our historical audited consolidated financial statements prepared under Indian-GAAP. Accordingly, the degree to which the Audited Consolidated Financial Statements will provide meaningful information is entirely dependent on the reader’s level of familiarity with Ind-AS and accounting practises in India. For further information see, “Financial Information” included in this Placement Document.
OVERVIEW We are one of the leading cement manufacturers in the country in terms of production capacity (Source: Survey of Cement Industry and Directory, 2017). We manufacture grey cement, white cement and wall putty. We are one of the two major players in the white cement market in the country, who together hold 80-85% of the total market share in terms of the installed capacity (Source: CRISIL Report). In the grey cement segment, we manufacture and market ordinary portland cement (“OPC”) (43-grade and 53-grade), portland pozzalana cement (“PPC”) and portland slag cement (“PSC”) under the brand name “J.K. Super Cement (Build Safe)”. Our white cement and wall putty are sold under the brand name “J.K. White” and “J.K. Wall Putty”, respectively. We own and operate integrated cement manufacturing plants and split grinding units, which are strategically located near our limestone mines and are well connected to the end-markets by road and rail networks. We own and operate four grey cement plants in Rajasthan and Karnataka and a grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. We are presently seeking to expand our grey cement production capacity in north India by 4.2 MTPA, through brownfield expansion of our Mangrol plant in Rajasthan, and the establishment of grinding facilities of 1 MTPA each at Mangrol and Nimbahera, and greenfield split grinding units at Aligarh and Balsinor having 1.5 MTPA and 0.7 MTPA capacities, respectively. Limestone and power are two of the key inputs used in the manufacture of cement, in addition to fuel. We source limestone for our manufacturing plants from captive limestone mines located in proximity to our plants. In Fiscals 2016, 2017 and 2018 and the six-month period ended September 30, 2018, significantly all of our limestone requirements in India across plants were met by our captive limestone mines. As on September 30, 2018, we own and operate 10 limestone mines situated in Rajasthan and Karnataka, and have access to limestone reserves aggregating up to 502.99 MnT (including proven and probable). The remaining lease duration for these mines ranges from 12 to 44 years. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement - 79 -
adjacent to our plant site, which is yet to be operationalized. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable). Further, we have three captive power plants and two waste heat recovery power plants across Rajasthan and Karnataka, with an aggregate capacity of approximately 125.70 MW, as on September 30, 2018. During Fiscals 2016 to 2018 and the six-month period ended September 30, 2018, over 70% of our power requirement in India were met by captive thermal and waste-heat-recovery-based power plants. We sell grey cement over 15 states/ union territories in India, as well as grey clinker to customers in Nepal. Our white cement and wall putty are sold across the country. As on September 30, 2018, our grey cement is supplied through a network of over 11,000 dealers and retailers. We also supply our white cement and wall putty products through a network of over 44,000 dealers and retailers. As on September 30, 2018, our distribution network is further augmented through 186 feeder depots serviced by 23 sales offices for grey cement and 84 feeder depots serviced by 33 sales office for white cement spread across India. We also directly sell our products to builders, EPC contractors and government entities for various projects undertaken by them. Our consolidated revenue from operations in Fiscals 2016, 2017 and 2018 was ₹ 4,368.78 crores, ₹ 4,654 crores, and ₹ 5,020.47 crores, respectively, and our profit for the year was ₹ 54.83 crores, ₹ 171.97 crores, and ₹ 285.59 crores, respectively. Our EBITDA in Fiscals 2016, 2017 and 2018 was ₹ 555.10 crores, ₹ 762.83 crores, and ₹ 856.43 crores, respectively. PRINCIPAL FACTORS AFFECTING OUR RESULTS OF OPERATIONS Our financial performance and results of operations are influenced by a variety of factors, including conditions in the residential and non-residential and infrastructure construction markets, general economic conditions, changes in cost of goods sold, and seasonality and weather conditions. Some of the more important factors are discussed below, as well as in the section titled “Risk Factors” beginning on page 52. Seasonality and weather The construction industry and, therefore, demand for cement, concrete and building materials are seasonal and heavily dependent on local weather and climatic conditions. Typically, demand is lower in periods of heavy rainfall. As a result, weather patterns can, at times, contribute to some volatility in our quarterly results. During periods of lower demand, and therefore lower operations, we may take up scheduled maintenance of our plants resulting in higher maintenance costs during said period. We expect our results of operations will continue to be affected by seasonality in the future. Our results of operations for any quarter in a given year may not, therefore be comparable with other quarters from that year. Demand trends and prices Our business is directly affected by the cyclical nature of the construction industry, especially in the areas of residential construction, commercial property construction and infrastructure project development. Activity levels in and demand from the construction industry vary across regions, and are influenced by national and regional economic factors, such as GDP growth rates and prevailing long-term interest rates. In addition, fiscal, tax and other policies of national and state governments have the effect of stimulating or discouraging construction activity. Consequently, our operations in each of our geographic markets are cyclical, with periods of growth typically followed by downturns. We operate in an increasingly competitive market and face competition from other manufacturers in relation to our offerings. Further, many of our competitors may have competitive advantages, including greater access to financial, marketing, distribution and other resources, larger product offerings and greater specialization than us. This could put pressure on our realisations in the short term as the demand/supply stabilises and could have a material impact on our results of operations. Availability and cost of raw materials, fuel and transportation Cement companies depend on availability of limestone in their production, in addition to an adequate supply of gypsum, iron ore, bauxite and other raw materials. While our operations currently have access to such materials, in the event of depletion of these quantities or in the event that we face barriers preventing us from extracting these materials from the earth, we might be forced to search for other sources to secure these materials which will raise significantly the cost of production, and consequently will reduce our profit margins.
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In addition, the supply of gypsum, iron ore, bauxite and other raw materials required for the manufacture of cement are sourced from different areas that may typically be far from the plant site requiring us to bear the cost of transporting these materials. Lack of availability of transport, or a spike in the cost of transportation or an interruption of any of these materials for reasons relating to transportation could disrupt our production and have a material impact on our results of operations. Cement manufacturing consumes large amounts of energy, which represents a significant portion of production costs and prices of the fuel we use can vary significantly. The prices of raw materials and energy needed to the Company’s activities are subject to rise from time to time, whether due to government actions to increase imposed fees or impose new fees on the extraction of raw materials, or due to higher prices of raw material and fuel supplies. While the Company has captive sources of power, there can be no guarantee of availability of raw material to run our power plant optimally, or at all. Therefore, if the Company is unable, for any reason, to obtain adequate supplies of raw materials, fuel or electricity in a timely manner or under acceptable commercial terms or in the event of interruptions or delays in the supply of these materials, or if there are significant increases in the cost of these supplies, or if suppliers, with whom the Company has contracted, are exposed to shortage of materials or operational issues, there will be no assurance that the Company will be able to find alternative suppliers capable to supply the Company with the required raw materials or fuel at prices acceptable to it, and accordingly the Company’s activities and operating results will be adversely and significantly affected. SIGNIFICANT ACCOUNTING POLICIES The Company has consistently applied the following accounting policies to all periods presented in the financial statements. Principles of Consolidation 1.
2.
The consolidated financial statements of the Group have been prepared on the following basis: (a)
The consolidated financial statements of the Group are prepared in accordance with Accounting Standard IND(AS) 110 “ Consolidated Financial Statements” issued by MCA.
(b)
The financial statements of the Company, its Subsidiary Company and Joint Venture Company have been consolidated on a line-by-line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances.
(c)
Foreign Subsidiaries, being non integral foreign operations, revenue items are consolidated at the rate prevailing on the date of transactions. All assets and liability are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognized in Foreign Currency translation reserve.
(d)
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as the Company’s separate financial statements.
(e)
Calendar year as accounting year is adopted by J.K. Cement Fujairah (FZC) and J.K. Cement Works Fujairah (FZC) and the books are being prepared on year ending 31.12.2017.
The Companies considered in the consolidated financial statements are:
Name of the Company J.K. Cement (Fujairah)FZC J.K. Cement Works (Fujairah) FZC Bander Coal Company Pvt Ltd Jaykaycem(Central)Ltd
Nature Company Subsidiary
of
Country of Incorporation U.A.E.
Holding as on31.03.2017 100%
Fellow Subsidiary
U.A.E.
90%
Joint Venture
India
37.5%
Date of period consolidation Calendar year 2017 Calendar year 2017 FY 2017-2018
Subsidiary
India
100%
FY 2017-2018
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3.
Investment in subsidiary company is expressed in Indian Rupees at the rate of exchange prevailing at the date of investment.
4.
The Subsidiary Companies have prepared the Financial Statements in accordance with International Financial Reporting Standards for Small and Medium Enterprises (IFRS for SME’s)
5.
Profit or loss attributable to ‘non-controlling interest’ and to ‘owners of the parent’ in the statement of profit and loss is presented as allocation for the period. Further, ‘total comprehensive income’ for the period attributable to ‘noncontrolling interest’ and to ‘owners of the parent’ is presented in the statement of profit and loss as allocation for the period. The aforesaid disclosures for ‘total comprehensive income’ is made in the statement of changes in equity.
‘Non-controlling interests’ in the Balance Sheet and in the Statement of changes in Equity, within equity, is presented separately from the equity of the ‘owners of the parent’. 6.
Basis of preparation
These financial statements have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard (‘Ind AS’) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (‘the Act’) and other relevant provisions of the Act. These financial statements were authorised for issue by the Board of Directors on 12.05.2018. 7.
Basis of measurement
The financial statements have been prepared on a historical cost basis except the following items, which are measured on alternative basis on each reporting date: -
8.
Certain financial assets and liabilities that is measured at fair value (Refer Note 41) Defined benefit liability/(assets): fair value of plan assets less present value of defined benefit obligation (Refer Note 38)
Functional and presentation currency
These financial statements are presented in Indian National Rupee (‘INR’), which is the Company’s functional currency. All amounts have been rounded to the nearest lacs unless otherwise indicated. 9.
Use of judgments and estimates
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. A. Judgments Information about the judgments made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below: -
Classification of leases into finance and operating lease Classification of financial assets: assessment of business model within which the assets the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding.
B. Assumptions and estimation uncertainties
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Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the financial statements for the year ended 31March 2018 is included below: -
Measurement of defined benefit obligations: key actuarial assumptions; Recognition of deferred tax assets: availability of future taxable profit against which carry-forward tax losses can be used; Impairment test: key assumptions underlying recoverable amounts, including the recoverability of development costs; Useful life and residual value of fixed assets Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources Impairment of financial assets: key assumptions used in estimating recoverable cash flows
10. Classification of Assets and Liabilities as Current and Non-Current The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: -
Expected to be realised or intended to be sold or consumed in normal operating cycle. Held primarily for the purpose of trading Expected to be realised within twelve months after the reporting period, or Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. An liability is treated as current when: -
It is expected to be settled in normal operating cycle. It is held primarily for the purpose of trading It is due to be settled within twelve months after the reporting period, or There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current. Deferred tax liabilities are classified as non-current liabilities. The operating cycle is the time between the acquisition of the assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle. 11. Property, plant and equipment(PP) Recognition and measurement: Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred upto the date when the assets are ready to use.Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Items such as spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory. Any gain on disposal of property, plant and equipment is recognised in Profit and loss account. Subsequent Measurement: Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
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Depreciation: Depreciation on fixed assets is calculated on Straight Line Method using the rates arrived at based on the estimated useful lives given in Schedule II of the Companies Act, 2013. Depreciation on additions due to machinery spares is provided retrospectively from the date the related assets are put to use. Depreciation on additions to or on disposal of assets is calculated on pro-rata basis. Leasehold land is being amortised over the period of lease tenure. Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes, if any, are accounted for prospectively. 12. Intangible assets Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Intangible assets are amortized on straight line method basis over the estimated useful life. Estimated useful life of the Software is considered as 3 years. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company. Amortisation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively. 13. Financial instruments A financial instrument is any contract that gives rise to asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency foreign exchange forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract. Financial Assets Initial recognition and measurement: All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the company commits to purchase or sell the asset. Classifications: The Company classifies its financial assets as subsequently measured at either amortised cost or fair value depending on the company’s business model for managing the financial assets and the contractual cash flows characteristics of the financial assets. Business model assessment: The Company makes an assessment of the objective of a business model in which an asset is held at an instrument level because this best reflects the way the business is managed and information is provided to management. Debt instruments at amortised cost: A financial asset is measured at amortised cost only if both of the following conditions are met: -
it is held within a business model whose objective is to hold assets in order to collect contractual cash flows. the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (‘EIR’) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
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Debt instrument at fair value through Other Comprehensive Income (FVOCI): Debt instruments with contractual cash flows characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI. Debt instrument at fair value through profit and loss (FVTPL): Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. In addition, the company may elect to classify a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. Equity Instruments: All equity instruments in scope of Ind AS 109 are measured at fair value. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. All other Financial Instruments are classified as measured at FVTPL. Derecognition of financial assets: A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the company’s balance sheet) when: -
The rights to receive cash flows from the asset have expired, or The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company’s continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss. Impairment of financial assets: The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables. Financial liabilities Initial recognition and measurement: Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. - 85 -
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events on a financial instrument that are possible within 12 months after the reporting date Subsequent measurement: The measurement of financial liabilities depends on their classification, as described below: Financial Liabilities measured at amortised cost: After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. Derecognition of financial liabilities: The company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. Reclassification of financial assets: The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The company’s senior management determines change in the business model as a result of external or internal changes which are significant to the company’s operations. Such changes are evident to external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest. 14. Inventories i)
Inventories are valued as follows:
Raw materials, packing materials, stores and spares Work-in-progress, finished goods and traded goods Waste
Lower of cost and net realisable value. Cost is determined on a moving weighted average basis. Materials and other items held for use in the production of inventories are at cost not written down below costs, if finished goods in which they will be incorporated are expected to be sold at or above cost Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads. Cost of finished goods includes excise duty (internal power for valuation is used on local Govt. market rate, wherever applicable. At net realisable value
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale. 15. Investment in subsidiary and joint venture
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Investment in subsidiaries and joint venture are carried at cost/fair value as per requirement of IND AS 32 and IND AS 109 in the separate financial statements. Investment carried at cost is tested for impairment as per IND AS 36.
16. Provisions Contingent Liabilities and Assets: Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurance or non-occurrence of one or more future uncertain events not wholly within the control of the company, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. Contingent Assets are not recognized in the financial statements. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. Mines Restoration Expenditure: The expenditure on restoration of the mines based on technical estimates by Internal/External specialists is recognized in the accounts. The total estimated restoration expenditure is apportioned over the estimated quantity of mineral resources (likely to be made available) and provision is made in the accounts based on minerals mined during the year. 17. Revenue Recognition (a) Sale of goods: Revenue is recognised when the significant risk and rewards of ownership have been transferred to the customer which coincide with the delivery of goods, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty upto 30.06.2017 and net of returns, trade discounts and volume rebates. (b) Revenue (other than sale) is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. (c) Dividend Income from investments is recognized when the right to receive payment is established and recovery is possible. (d) Interest income is recognized using the EIR method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate. (e) Insurance Claims: Claims lodged with the insurance Companies are accounted for on accrual basis to the extent only these are measurable and ultimate collection is reasonably certain. 18. Government Grants and Subsidies Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants that compensate the Company for expenses incurred are recognised in profit or loss as income on a systematic basis in the periods in which the expense is recognised.
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Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other operating income.
19. Employee benefits (i)
Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (ii)
Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided. The company has following defined contribution plans: a) b) (iii)
Provident fund Superannuation scheme Defined benefit plans
The company net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements. Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The company has following defined benefit plans: a)
Gratuity
The company provides for its gratuity liability based on actuarial valuation of the gratuity liability as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary and contributes to the gratuity fund formed by the Company. The contributions made are recognized as plan assets. The defined benefit obligation as reduced by fair value of plan assets is recognized in the Balance Sheet. Re-measurements are recognized in the Other Comprehensive Income, net of tax in the year in which they arise. (iv)
Other long-term employee benefits
The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise.
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The company has following long term employment benefit plans: a)
Leave encashment
Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment, which is a defined benefit scheme, is provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary. 20. Foreign currency transactions Transactions in foreign currencies are translated into the Company’s functional currency at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Nonmonetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss. 21. Borrowing Cost General and specific borrowing costs that are directly attributable to the acquisition, construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred. 22. Income tax Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income i)
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company: a) Has a legally enforceable right to set off the recognised amounts; and b) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. ii)
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. - 89 -
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if: a) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and b) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. iii)
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognized for MAT credit available only to the extent that it is probable that the concerned Company will pay normal income tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period
23. Impairment of non-financial assets At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (‘CGUs’). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 24. Segment Reporting Operating segments are reported in a manner consistent with the internal reporting depends on nature of product provided to the chief operating decision maker. The board of directors of the Company has been identified as being the chief operating decision maker by the Management of the company. Refer note 37 for segment information presented. 25. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 26. Leases Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is - 90 -
allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Companyas lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. 27. Non Current Assets held for sale The company classifies non current assets and (or disposal groups) as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the sale expected within one year from the date of classification. For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded met only when the assets or disposal group is available for immediate ale in its present condition, subject only to terms that are usual and customary for sales of such assets (or disposal group), its sale is highly probable; and it will genuinely be sold, not abandoned. The group treats sale of the asset or disposal group to be highly probable when:
The appropriate level of management is committed to a plan to sell the asset (or disposal group), An active programme to locate a buyer and complete the plan has been initiated The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value, The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and Actions required to complete the plan indicate that it is unlikely those significant changes to the plan will be made or that the plan will be withdrawn.
28. Exceptional Item Items of income or expense of non routine are presented separately when their nature and amount of such significance and is relevant to an understanding of the entity’s financial performance. 29. EPS Basic earnings per share are computed by dividing the Total Comprehensive Income by the weighted average number of equity shares outstanding during the period. Diluted earnings per shares is computed by dividing Total Comprehensive Income by the weighted average number of equity shares considered for deriving basic earnings per shares and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Important Note on Adjustments to Audited Standalone Financial Statements for the period ended March 31, 2017 a)
During the financial year ended 31 March 2018, the Company discovered that the deferred tax charge was erroneously created lower by ₹48.80 crore due to consideration of incorrect carried forward unabsorbed depreciation and business loss. Consequently, Deferred tax liability (net) was shown lower by the same amount. Financial statements for the year ended 31 March 2017 has been restated to correct this error. The effect of the restatement on those financial statements is summarised below. There is no effect in financial year 2017-18.
In financial year ended 31 March 2017, the Company reported as follows: (Unless stated otherwise, amount in ₹ crores) Particulars Profit before tax Current Tax MAT credit entitlement Earlier years tax adjustments
31-Mar-17 324.43 70.47 (70.47) (0.03) - 91 -
Particulars Deferred tax Profit/(loss) for the year Basic and Diluted earnings per share (₹)
31-Mar-17 64.88 259.58 37.12
Deferred tax liability (net) was shown ₹ 214.01 crore in the Balance Sheet as at March 31, 2017 The following are the restated amounts which are being reported after correction for the year ended March 31, 2017 as comparatives. (Unless stated otherwise, amount in ₹ crores) Particulars 31-Mar-17 (Restated) Profit before tax 324.43 Current Tax 70.47 Earlier years tax adjustments (0.03) Deferred tax charged/ (credited) 43.21 210.78 Profit/(loss) for the year Basic and Diluted earnings per share (₹) 30.14 Deferred tax liability (net) was restated to ₹262.81 crore in the Balance Sheet as at March 31, 2017 b) In addition to the above, following are the reclassifications made in the previous year figures to make them comparable/better presentation with the current year figures. These reclassification does not have any significant effect on the balance sheet at the beginning of the preceding financial year, i.e, April 1, 2016. Also, these reclassifications do not have any impact on the profit other than those described in note (a) above. (Unless stated otherwise, amount in ₹ crores) Particulars
As at 31st March 2017 (Restated)
As at 31st March 2017 (Published)
470.38 134.57 104.71 -
470.38 142.43 89.07 -
Reclassification items Reclassification items Reclassification items
121.72
417.85
Reclassification items
305.21
0.99
Reclassification items
48.62 161.56 1801.59 2,282.37
45.22 174.19 1,850.39 2,318.46
Reclassification items Reclassification items
Deferred tax liabilities (net)
262.80
214.01
Other non-current liabilities
86.33 167.29 377.74 431.45 155.92 7.07 1.49 4,379.83
52.71 165.77 205.18 659.97 83.36 16.02 1.57 4,420.71
ASSETS NON CURRENT ASSETS Non current - Investments Non current - Loans and advances Other non current assets CURRENT ASSETS Current Assets - Financial assets - Cash and cash equivalents Current Assets - Financial assets - Bank balances other than (iii) above Other Current Financial Assets Other current assets EQUITY AND LIABILITIES Other Equity Borrowings - Non Current
Current Liabilities Borrowings - Current Trade Payable - Current Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Profit & loss Account Revenue from operations
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Nature
Reclassification items Reclassification items Variance due to error as mentioned in note a above Reclassification items
Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items
Reclassification items
Particulars
As at 31st March 2017 (Restated)
Other income Cost of materials consumed Changes in inventories of finished goods, stock-in-Trade and work-in-progress Finance costs Other expenses Tax Expense MAT Credit Entitlement Deferred Tax
Profit/ (loss) for the year Earning per equity share (in ₹) Basic Diluted
99.32 644.06
As at 31st March 2017 (Published) 51.19 695.53
Nature
(9.77)
(3.26)
Reclassification items
272.90 2,775.73 -
265.65 2,717.75 (70.47)
Reclassification items Reclassification items
43.21
64.88
210.78
259.58
30.14 30.14
37.12 37.12
Reclassification items Reclassification items
Reclassification items Variance due to :i) reclassification of MAT credit and ii) error as mentioned in note a above
Important Note on Adjustments to Audited Consolidated Financial Statements for the period ended March 31, 2017 a)
During the financial year ended 31 March 2018, the Company discovered that the deferred tax charge was erroneously created lower by ₹48.80 crore due to consideration of incorrect carried forward unabsorbed depreciation and business loss. Consequently, Deferred tax liability (net) was shown lower by the same amount. Financial statements for the year ended 31 March 2017 has been restated to correct this error. The effect of the restatement on those financial statements is summarised below. There is no effect in financial year 2017-18.
In financial year ended 31 March 2017, the Company reported as follows: (Unless stated otherwise, amount in ₹ crores) Particulars Profit before tax Current Tax MAT credit entitlement Earlier years tax adjustments Deferred tax Profit/(loss) for the year Basic and Diluted earnings per share (₹)
31-Mar-17 285.61 70.47 (70.47) (0.03) 64.88 220.76 32.39
Deferred tax liability (net) was shown ₹ 211.07 crore in the Balance Sheet as at March 31, 2017 The following are the restated amounts which are being reported after correction for the year ended March 31, 2017 as comparatives. (Unless stated otherwise, amount in ₹ crores) Particulars 31-Mar-17 Profit before tax 285.62 Current Tax 70.47 Earlier years tax adjustments (0.03) Deferred tax charged/ (credited) 43.21 171.97 Profit/(loss) for the year Basic and Diluted earnings per share (₹)
25.42
Deferred tax liability (net) was restated to ₹259.87 crore in the Balance Sheet as at March 31, 2017
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b) In addition to the above, following are the reclassifications made in the previous year figures to make them comparable/better presentation with the current year figures. These reclassification does not have any significant effect on the balance sheet at the beginning of the preceding financial year, i.e, April 1, 2016. Also, these reclassifications do not have any impact on the profit other than those described in note (a) above. (Unless stated otherwise, amount in ₹ crores) Particulars
ASSETS NON CURRENT ASSETS Non current - Investments Non current - Loans and advances Other non current assets
As at 31st March 2017 (Restated)
As at 31st March 2017 (Published)
Nature
15.01 134.77 113.37
15.01 142.64 97.73
Reclassification items Reclassification items Reclassification items
130.11
426.25
Reclassification items
305.21
0.99
Reclassification items
52.66 163.20
49.26 175.83
Reclassification items Reclassification items
1,640.76 2,870.15
1,689.55 2,906.23
Deferred tax liabilities (net)
259.87
211.07
Other non-current liabilities
86.33
52.71
225.93 427.13 459.32 156.38 10.51 1.49
224.41 233.72 708.69 83.82 19.47 1.57
Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items
4,654.00 98.43 686.48
4,694.88 50.29 737.94
Reclassification items Reclassification items Reclassification items
14.52
21.03
Reclassification items
302.66 2,910.42
295.40 2,852.45
Reclassification items Reclassification items
CURRENT ASSETS Current Assets - Financial assets - Cash and cash equivalents Current Assets - Financial assets - Bank balances other than (iii) above Other Current Financial Assets Other current assets EQUITY AND LIABILITIES Other Equity Borrowings - Non Current
Current Liabilities Borrowings - Current Trade Payable - Current Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Profit & loss Account Revenue from operations Other income Cost of materials consumed Changes in inventories of finished goods, stock-in-Trade and work-in-progress Finance costs Other expenses Tax Expense MAT Credit Entitlement Deferred Tax
Profit/ (loss) for the year Earning per equity share (in ₹) Basic Diluted
(70.47) 43.21
64.88
171.97
220.76
25.42 25.42
32.39 32.39
Results of Operations
- 94 -
Reclassification items Reclassification items Variance due to error as mentioned in note a above Reclassification items
Reclassification items Variance due to: i) reclassification of MAT credit entitlement in deferred tax and ii) error as mentioned in note a above
The following tables sets forth our income statement data for our consolidated operations for the Fiscal Years ended March 31, 2018, 2017 and 2016. Please read the notes to restatement and reclassification of numbers for Fiscal 2017 at the beginning of this chapter. Particulars 2016 INR crore Revenue from operations Other income Total income Expenses Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods stockin-Trade and work-in-progress Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses Total Expenses Profit/(loss) before exceptional items and tax Exceptional items Profit/(loss) before tax Tax expense: Current tax MAT Credit entitlement Earlier Years Tax Adjustments Deferred tax charged/ (credit) Profit/ (loss) for the year
4,368.78 49.81 4,418.59
For the year ended March 31 2017 2018 % of % of % of Total INR crore Total INR crore Total Income Income Income 98.9% 4,654.00 97.9% 5,020.47 97.5% 1.1% 98.43 2.1% 128.14 2.5% 100.0% 100.0% 100.0% 4,752.43 5,148.61
709.48 1.52 (14.18) 268.75 304.92 197.40 2,857.06 4,324.95 93.64 93.64 30.60 (30.60) (7.00) 45.81 54.83
16.1% 0.0% (0.3%)
686.48 0.93
14.4% 0.0%
781.86 0.85
15.2% 0.0%
14.52
0.3%
18.69
0.4%
6.1% 6.9% 4.5% 64.7% 97.9% 2.1% 0.0% 2.1% 0.0% 0.7% (0.7%) (0.2%) 1.0% 1.2%
315.54 302.66 216.95 2,910.42 4,447.50 304.93 19.31 285.62
6.6% 6.4% 4.6% 61.2% 93.6% 6.4% 0.4% 6.0% 0.0% 1.5% 0.0% 0.0% 0.9% 3.6%
368.28 284.09 231.32 3,063.34 4,748.43 400.18 16.96 383.22
7.2% 5.5% 4.5% 59.5% 92.2% 7.8% 0.3% 7.4% 0.0% 1.8% 0.0% 0.0% 0.1% 5.5%
70.47 (0.03) 43.21 171.97
94.14 3.49 285.59
Results of consolidated operations for the Fiscal Year ended March 31, 2018 compared with the Fiscal Year ended March 31, 2017 All figures in ₹ crore For the year ended March 31 20171 20182 4,654.00 5,020.47 98.43 128.14 4,752.43 5,148.61
Particulars
Change (%)
Revenue from operations 7.9% Other income 30.2% 8.3% Total income Expenses Cost of materials consumed 686.48 781.86 13.9% Purchase of Stock in Trade 0.93 0.85 (8.6%) Changes in inventories of finished goods stock-in-Trade and work-in-progress 14.52 18.69 28.7% Employee benefits expenses 315.54 368.28 16.7% Finance costs 302.66 284.09 (6.1%) Depreciation and amortization expenses 216.95 231.32 6.6% Other expenses 2,910.42 3,063.34 5.3% 6.8% Total Expenses 4,447.50 4,748.43 31.2% Profit/(loss) before exceptional items and tax 304.93 400.18 Exceptional items 19.31 16.96 (12.2%) 285.62 Profit/(loss) before tax 383.22 34.2% Tax expense: Current tax 70.47 94.14 33.6% MAT Credit entitlement Earlier Years Tax Adjustments (0.03) Deferred tax charged/ (credit) 43.21 3.49 (91.9%) Profit/ (loss) for the year 171.97 285.59 66.1% 1. These have been extracted from the consolidated financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). The consolidated financial statements for the Fiscal 2017 should be read in conjunction with “— Notes to the Summary Financial Information – III. Important Note on Adjustments to Audited Consolidated Financial Statements for the period ended March 31, 2017” on page 33. 2. Extracted from the consolidated financial statements prepared for Fiscal 2018.
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Revenue from operations Our revenue from operations increased by 7.9% from ₹ 4,654.00 crore in Fiscal 2017 to ₹ 5,020.47 crore in Fiscal 2018. This increase was led by strong volume growth in both northern and southern markets. Realisations, however, were muted. Other Income Our other income in the Fiscal 2018 increased by 30.2% to ₹ 128.14 crore from ₹ 98.43 crore in the Fiscal 2017. This was driven by adjustment of discounts and fair value gain on financial instruments. Cost of Materials Consumed Our cost of materials consumed in the Fiscal 2018 increased by 13.9% to ₹ 781.86 crore from ₹ 686.48 crore in the Fiscal 2017, 14.2% increase on account of production volume and 0.3% decrease due to positive rate variance mainly on account of clinker purchased in last FY. Purchase of Stock-in-Trade Our purchase of stock-in-trade in the Fiscal 2018 decreased to ₹ 0.85 crore from ₹ 0.93 crore in the Fiscal 2017 primarily due to higher sales volume and lower purchases of certain finished products for sale. Employee Benefits Expense Our employee benefits expenses in the Fiscal 2018 increased by 16.7% to ₹ 368.28 crore from ₹ 315.54 crore in the Fiscal 2017 due to an increase in our workforce, increase in gratuity limit and general annual increments given to the staff. Finance Costs Our finance costs in the Fiscal 2018 reduced by 6.1% to ₹ 284.09 crore from ₹ 302.66 crore in the Fiscal 2017 due to reduction in our gross debt as well as exchange differences regarded as an adjustment to borrowing costs. Depreciation and Amortization Expense Our depreciation and amortization expense in the Fiscal 2018 increased by 6.6% to ₹ 231.32 crore from ₹ 216.95 crore in the Fiscal 2017 due to by new investment and amortisation of freehold land in mining area. Other Expenses Our other expenses in Fiscal 2018 increased by 5.3% to ₹ 3,063.34 crore from ₹ 2,910.42 crore in the Fiscal 2017, 3.6% higher due to higher production volume and 1.7% higher due to increase in power & fuel cost due to ban on petcoke and increase in fuel price. This was partly offset by a reduction in excise duty. Exceptional Items Our exceptional items in the Fiscal 2018 was ₹ 16.96 crore and ₹ 19.31 crore in Fiscal 2017. The exceptional items included loss on sale/impairment of asset and reversal of government cess in earlier year. Tax Expense Our tax expense decreased from ₹ 113.65 crore in Fiscal 2017 to ₹ 97.63 crore in Fiscal 2018. The 14.1% decrease yearon-year was on account of 80IA exemption in current year. Profit/(Loss) for the Year As a result of the foregoing, we recorded a 66.1% increase in our profit for the year from ₹ 171.97 crore in Fiscal 2017 to ₹ 285.59 crore in Fiscal 2018. Please refer to “Important Note on Adjustments to Audited Consolidated Financial Statements for the period ended March 31, 2017”. - 96 -
Results of Operations for the Fiscal Year ended March 31, 2017 (as extracted from restated comparative financial information included in the audited consolidated financial statement for Fiscal 2018), compared with the Fiscal Year ended March 31, 2016 (as extracted from the comparative financial information included in the audited consolidated financial statement for Fiscal 2017). All figures in ₹ crore Particulars
Revenue from operations Other income Total income EXPENSES Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods stock-in-Trade and work-inprogress Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses Total Expenses Profit/(loss) before exceptional items and tax Exceptional items Profit/(loss) before tax Tax expense: Current tax MAT Credit entitlement Earlier Years Tax Adjustments Deferred tax Profit/ (loss) for the year
For the year 31 2016 4,368.78 49.81 4,418.59
ended March
Change (%)
2017 4,654.00 98.43 4,752.43
6.5% 97.6% 7.6%
709.48 1.52
686.48 0.93
(3.2) (38.8)
(14.18)
14.52
(202.4)
268.75 304.92 197.40 2,857.06 4,324.95 93.64 93.64
315.54 302.66 216.95 2,910.42 4,447.50 304.93 19.31 285.62
17.4 (0.7) 9.9 1.9 2.8 225.6
30.60 (30.60) (7.00) 45.81 54.83
70.47
130.3 (99.6) (5.7) 213.6
(0.03) 43.21 171.97
205.0
Revenue from operations Our revenue from operations increased by 6.5% to ₹ 4,654.00 crore in Fiscal 2017 from ₹ 4,368.78 crore in Fiscal 2016. This was mainly driven by our White Cement segment which registered a growth of 9% on YOY basis in production volumes and our White Cement based Wall Putty, which registered growth of 14% on YOY basis. Other Income Our other income in the Fiscal 2017 increased by 97.6% to ₹ 98.43 crore from ₹ 49.81 crore in the Fiscal 2016 as interest income from financial assets increased. Cost of Materials Consumed Our cost of materials consumed in the Fiscal 2017 decreased by 3.2% to ₹ 686.48 crore from ₹ 709.48 crore in the Fiscal 2016. Purchase of Stock-in-Trade Our purchase of stock-in-trade in the Fiscal 2017 decreased to ₹ 0.93 crore from ₹ 1.52 crore in the Fiscal 2016 primarily due to higher sales volume and purchase of certain finished products for sale. Employee Benefits Expense Our employee benefits expense in the Fiscal 2017 increased by 17.4% to ₹ 315.54 crore from ₹ 268.75 crore in the Fiscal 2016 due to an overall increase in our workforce as well as annual increments.
- 97 -
Finance Costs Our finance costs in the Fiscal 2017 decreased by 0.7% to ₹ 302.66 crore from ₹ 304.92 crore in the Fiscal 2016 due to a reduction in our gross debt as well as exchange differences regarded as an adjustment to borrowing costs. Depreciation and Amortization Expense Our depreciation and amortization expense in the Fiscal 2017 increased by 9.9% to ₹ 216.95 crore from ₹ 197.40 crore in the Fiscal 2016 due to new investment and change of useful life of some capital items. Other Expenses Our other expenses in the Fiscal 2017 remained flat from ₹ 2,857.06 crore in the Fiscal 2016 to ₹ 2,910.42 crore in Fiscal 2017. While our expenses on repairs and maintenance on our plant and machinery; stores and spares consumed; excise duty paid and miscellaneous expenses recorded increased due to higher production, this was offset by a significant reduction in our power and fuel costs from ₹ 828.64 crore in Fiscal 2016 to ₹ 664.51 crore. Exceptional Items Our exceptional items in the Fiscal 2017 was ₹ 19.31 crore. The exceptional items included loss on sale/impairment of asset and reversal of government cess of earlier year. Tax Expense Our total tax expense increased to ₹ 113.65 crore in Fiscal 2017 from ₹ 38.81 crore in Fiscal 2016. The 192.8% increase year-on-year was on account of increased profits and expenses on payment basis. Profit/(Loss) for the Year As a result of the aforementioned factors, we recorded a 213.6% increase in our profit to ₹ 171.97 crore in the Fiscal 2017 compared to ₹ 54.83 crore in the Fiscal 2016. Liquidity and Capital Resources Capital Requirements Our principal capital requirements are for payment of principal and interest on our borrowings, capital expenditure and, in some years infusion of capital in our Subsidiaries. Our principal source of funding has been and is expected to continue to be, cash generated from our operations, supplemented by borrowings from banks/ raising of funds through issuance of NCDs and optimisation of operating working capital. For the past three Fiscals ended March 31, 2018, we met our funding requirements including satisfaction of debt obligations, capital expenditure, investments, other working capital requirements, dividends and other cash outlays, principally with funds generated from operations, optimisation of operating working capital with the balance met from external borrowings. However, from the last Fiscal, we have consciously begun reducing our debt obligations from internal accruals to increase overall margins. For the brownfield expansion project that we intend to undertake, we will be utilising the funds generated from this Issue along with debt financing and internal accruals. Cash Management Policy We follow a prudent policy of monitoring our budgeted cash flows on a monthly basis. Timing of inflows and outflows are matched so as to ensure smooth and efficient operations in a cost effective manner. Further, cash outflows are processed based on priority. As at March 31, 2018, we had overdraft facilities in place to balance out any mismatches in cash flows. We believe we are able to arrange other short-term funding at competitive rates to avail of interest rate arbitrage. Liquidity Our liquidity requirements arise principally from our operating activities, capital expenditures for construction of new projects, the repayment of borrowings and debt service obligations. Historically, our principal sources of funding have - 98 -
included cash from operations, short- and long- term borrowings from banks, overdraft facilities that are repayable on demand, cash and cash equivalents and equity and financing provided by our shareholders. We have also entered into various revolving credit and other working capital facilities, which provides sufficient liquidity for the requirements of our Company. Cash Flows The following table summarizes our consolidated cash flows for the Fiscals 2016, 2017 and 2018 All figures in ₹ crore Particulars Net Cash from Operating Activities Net Cash Used in Investing Activities Net Cash Used in Financing Activities Net Increase / (Decrease) in Cash and Cash Equivalents Exchange rate fluctuation reserve on conversion Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year Net Increase / (Decrease) in Cash and Cash Equivalents Notes: 1. 2.
3.
For the year ended March 31 2016(1) 2017(2) 2018(3) 580.02 771.81 883.11 (407.61) (649.16) (95.81) (193.23) (345.60) (735.82) (20.82) (222.95) 51.48 (18.96) 16.81 392.84 372.02 130.11 372.02 130.11 198.40 (20.82) (222.95) 51.48
Extracted from the consolidated financial statements prepared for Fiscal 2017 (containing comparative financial information for Fiscal 2016). These have been extracted from the consolidated financial statements prepared for Fiscal 2018 (containing restated comparative financial information for Fiscal 2017). Extracted from the consolidated financial statements prepared for Fiscal 2018.
Cash Flows Generated from Operating Activities We generated ₹ 883.11 crore net cash from operating activities during the year ended March 31, 2018 as compared to ₹771.81 crore in the year ended March 31, 2017. The cash generated from operating profit before working capital changes in the year ended March 31, 2018 was ₹ 863.39 crore against ₹793.59 crore during the year ended March 31, 2017, reflecting improved revenues. Cash from operations was higher than the previous year due to movement in working capital, which was primarily comprised of a ₹ 28.92 crore decrease in inventory as well as decrease of ₹ 35.70 crore in trade receivable and an increase of ₹ 8.58 crore in trade payable. Cash Flows Used in Investing Activities Net cash used in investing activities was ₹ 95.81 crore in the year ended March 31, 2018, primarily due to decrease in investment by ₹ 48.48 crore and net interest ₹ 144.28 crore in different property plant and equipment. Net cash used in investing activities was ₹ 649.16 crore in the year ended March 31, 2017, primarily for purchase of property plant and equipment, which net totalled ₹ 383.95 crore in the period and ₹ 265.21 crore fixed deposit equity, mutual fund and bonds. Cash Flows Generated from/(Used in) Financing Activities Net cash used in financing activities in the year ended March 31, 2018 (which consists of loan receipts net of loan repayments, interest payments and dividend payments) amounted to ₹735.82 crore, compared to cash used in financing activities of ₹345.60 crore in the year ended March 31, 2017. Cash used in financing activities (which consists of loan receipts net of loan repayments and interest payments) in the year ended March 31, 2017 was ₹345.60 crore, compared to cash from financing activities of ₹193.23 crore during the year ended March 31, 2016, primary due to proceeds from borrowings during the year. Capital and Other Commitments At March 31, 2018, the estimated amount of contract remaining to be executed on capital account not provided for was ₹ 38.05 crore. The details in relation to commitments in relation to leases is as follows:
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As at 31-Mar-18 (₹ crore) 38.05 38.05
Particulars Within one year After one year but not more More than five years Total Capital Expenditure
(₹ crore) For the year ended March 31 2016 2017 396.92 546.36 0.39 5.36 (16.22) (194.34) 381.09 357.38
Particulars Tangible Assets Intangible Assets Work in Progress Total Capital Expenditure
2018 213.72 1.5 (22.48) 192.74
Contingent Liabilities Contingent liabilities and claims against us, to the extent not provided for, as at March 31, 2018, as determined in accordance with Ind AS 37, are described below
All figures in ₹ crore S no.
Contingent Liabilities
A.
Contingent liabilities (not provided for) in respect of:
1.
2. a) b) c) d) 3. 4.
5.
6. 7. 8
Amount
Claim against the Company not acknowledged as debts (includes show-cause notices pertaining to excise duty and others) (cash flow is dependent on court decision pending at various levels): Other money for which the Company is contingently liable In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts – no provision has been considered necessary by the Management Excise duty* Sales Tax and Entry Tax* Service Tax* Income Tax (Primarily on account of disallowance of depreciation on goodwill and additional depreciation on power plants etc.) In respect of interest on “Cement Retention Price” realised in earlier years In respect of penalty of non lifting of fly Ash The Competition commission of India (CCI) has imposed penalty of ₹128.54 crores and ₹ 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders. COMPAT has stayed the CCI order in first matter on deposit of ₹ 6.56 crores and Appeal is being heard. In second matter stayed demand and appeal are yet to be heard. The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts. In respect of land tax levied by the state government of Rajasthan In respect of demand of Railway Administration pending with Jodhpur High Court In respect of charges on account of electricity duty, water cess etc. levied by Ajmer Vidyut Vitran Nigam Ltd. In respect of Environmental and Health cess
9 Total B. Financial Guarantees 10 Other Financial Guarantees including of Joint Ventures. * Disputes are primarily on account of disallowance of input credit, interest on entry tax etc. Financial indebtedness
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223.45
17.25 54.70 13.63 54.50 12.51 12.71
137.82
2.07 2.19 44.97 3.25 579.04 -
The following table sets forth our Company’s secured and unsecured debt position (on a consolidated basis) as at March 31, 2018.
All figures in ₹ crore Payment due by period Particulars
Total
Non-Current borrowings Secured 2,542.52 Unsecured 31.58 Total Non-Current borrowings 2574.10 Short Term Borrowings* Secured 359.85 Unsecured 6.60 Total Short-Term Borrowings 366.45 * Including current maturities of long term debt.
Not later than 1 year
1-3 years
More than 5 years
3 -5 years
-
699.51 6.44 705.95
545.44 13.31 558.75
1,297.58 11.82 1,309.40
359.85 6.60 366.45
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Certain matters reported by our Auditors Emphasis of Matter On A Standalone Basis For the Fiscal 2016: NIL For the Fiscal 2017 The Competition Commission of India CCI has imposed penalty of ₹ 128.54 crores and ₹ 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the competition Act 2002 by the Company. The Company has filed appeals with the Competition Appellate tribunal (COMAT) against above orders COMPAT has stayed the CCI order in first matter on deposit of ₹ 6.56 crores and Appeal is being heard. In second matter issued notice and stayed demand in the meantime, stay petition and appeal are yet to be heard. For the Fiscal 2018 Auditors have drawn attention to note 36(A)(5) to the standalone Ind AS financial statements wherein it has been stated that The Competition commission of India (CCI) has imposed penalty of Rs. 128.54 crores and Rs. 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders. COMPAT has stayed the CCI order in first matter on deposit of Rs. 6.56 crores and hearing of appeal is concluded and order stayed. In second matter stayed demand and appeal are yet to be heard. The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts. Auditors have drawn attention to note 42 of the standalone Ind AS financial statement which describes the impact on deferred tax charge, deferred tax liability and reclassifications to the previous year figures, which has led to the restatement of the comparative year figures in the financial statements for the year ended March 31, 2018. On A Consolidated Basis For the Fiscal 2016: NIL For the Fiscal 2017 The Competition Commission of India CCI has imposed penalty of ₹ 128.54 crores and ₹ 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the competition Act 2002 by the Company. The Company has filed appeals with the Competition Appellate tribunal (COMAT) against above orders COMPAT has stayed the CCI order in first matter on deposit of ₹ 6.56 crores and Appeal is being heard. In second matter issued notice and stayed demand in the meantime, stay petition and appeal are yet to be heard. For the Fiscal 2018 Auditors have drawn attention to note 36(A)(65) to the consolidated Ind AS financial statements wherein it has been stated that The Competition commission of India (CCI) has imposed penalty of Rs. 128.54 crores and Rs. 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with
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Response by Company (if any)
The Company, backed by a legal opinion, believes that it has a good case and accordingly no Provision has been made in the Accounts.
The Company, backed by a legal opinion, believes that it has a good case and accordingly no Provision has been made in the Accounts.
Due to disallowance of 80IA of tax provisions, figures revised after filing of the return.
The Company, backed by a legal opinion, believes that it has a good case and accordingly no Provision has been made in the Accounts.
The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts.
Emphasis of Matter Competition Appellate Tribunal (COMPAT) against above orders. COMPAT has stayed the CCI order in first matter on deposit of Rs. 6.56 crores and hearing of appeal is concluded, and order stayed. In second matter stayed demand and appeal are yet to be heard. The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts. Auditors have drawn attention to note 42 of the consolidated Ind AS financial statement which describes the impact on deferred tax charge, deferred tax liability and reclassifications to the previous year figures, which has led to the restatement of the comparative year figures in the financial statements for the year ended March 31, 2018.
Response by Company (if any)
Due to disallowance of 80IA of tax provisions, figures revised after filing of the return.
Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Interest rates for borrowings have been volatile in India in recent periods. Our operations are funded to an extent by debt and increases in interest expense may have an adverse effect on our results of operations, cash flows and financial condition. Our current debt facilities carry interest at variable rates as well as fixed rates. Although we engage in interest rate hedging transactions or exercise any right available to us under our financing arrangements to terminate the existing debt financing arrangement on the respective reset dates and enter into new financing arrangements, there can be no assurance that we will be able to do so on commercially reasonable terms, that our counterparties will perform their obligations, or that these agreements, if entered into, will protect us adequately against interest rate risks. Credit Risk Credit risk is the risk that counterparty will not meet its obligations under customer contracts, primarily a failure to make required payments on amounts due to us, leading to a financial loss. Liquidity Risk Adequate and timely cash availability for our projects under implementation and our operations is the liquidity risk associated with our operations. Market Risk Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the foreign currency exchange rates, interest rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments, foreign currency payables and debt. Foreign Exchange Rate Risk Changes in currency exchange rates influence our results of operations. A portion of our revenues, particularly relating to our export sales and sales by our subsidiary, is denominated in currencies other than Indian Rupees, most significantly the United Arab Emirates dirham. Similarly, a portion of our expenses, including cost of any imported equipment or machinery, freight costs and other operating expenses in connection with our capital expenditure, are denominated in currencies other than Indian Rupees. Although we enter into hedging transactions to minimize our currency exchange risks, there can be no assurance that such measures will enable us to avoid the effect of any adverse fluctuations in the value of the Indian Rupee against the U.S. Dollar or other relevant foreign currencies. Commodity Price Risk We are subject to market risks related to the volatility in the price of our raw materials limestone, gysum and coal. Market forces generally determine prices for our products that we sell both within and outside India. Our financial results can be affected significantly by fluctuations in these prices, which depend on many factors, including the monsoon, global supply and demand, manufacturing costs (including the costs of raw materials), changes in the economy, global production levels, global inventory levels and disruptions in the supply chain.
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Interest coverage ratio The interest coverage ratio, which we define as cash profit after tax plus interest paid/interest paid, for Fiscals 2016, 2017, and 2018 was 1.83, 2.32 and 2.87, respectively. Significant Developments after March 31, 2018 Except as stated in this Placement Document and disclosed below, to our knowledge no circumstances have arisen since the date of the last audited financial statements as disclosed in this Placement Document, that could materially affect our future result of operations.: 1.
Our Independent Director, Shyam Lal Bansal resigned as Independent Director of the company with effect from June 12, 2018 on account of personal reasons.
2.
In June 2018, we commissioned an additional capacity of 0.20 MTPA of white cement-based wall putty at our Katni plant in Madhya Pradesh. With this, the installed capacity at Katni stands at 0.40 MTPA and our overall white cement-based wall putty manufacturing capacity has increased to 0.90 MTPA.
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INDUSTRY OVERVIEW The information contained in this section is derived from various industry and publicly available resources. The information also includes information available from reports or databases of CRISIL. The Company, its Directors, the Placement Agents nor any other person connected with the Issue have independently verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed, and their reliability cannot be assured. Industry publications are also prepared on information as of specific dates and may no longer be current or reflect current trends. Accordingly, investment decisions should not be based on such information. CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing the Cement Annual Review, released in March 2018 (the “Report”) based on the Information obtained by CRISIL from sources which it considers reliable (“Data”). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any entity covered in the Report and no part of this Report should be construed as an expert advice or investment advice or any form of investment banking within the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to the subscribers / users / transmitters/ distributors of this Report. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary permission and/or registration to carry out its business activities in this regard. The Company will be responsible for ensuring compliances and consequences of non-compliances for use of the Report or part thereof outside India. CRISIL Research operates independently of and does not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and Infrastructure Solutions Ltd (CRIS), which may, in their regular operations, obtain information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be published/reproduced in any form without CRISIL’s prior written approval. GREY CEMENT Overview of Cement Industry In FY19, cement demand is expected to remain healthy and grow by 6.5-7.5%, led by affordable housing, rural IHB (indirectly supported by govt. rural initiatives) and infrastructure led activities especially in a pre-election year. (Source: CRISIL Report) The cement industry in India has been growing at 1.2 times of GDP growth in the past two decades. However, with continued decline in the investment-to-GDP ratio, there has been significantly lower capital formation in the economy. This, in turn, has reflected in the cement-to-GDP multiplier being consistently below one till 2016-17. In 2017-18, cement demand to GDP multiplier is estimated to touch 1.3, highest since 2009-10, when cement demand grew faster than GDP. Though this level of multiplier is not sustainable, we believe this signals the start of healthy multiplier phase. (Source: CRISIL Report) The share of housing sector has dropped over the past five years on back of housing sector being caught in a quagmire of slow economic growth, weak demand, high finance cost and buyer-unaffordability. Further, increased government induced spending in infrastructure sector has pushed its share upwards. In 2017-18, cement demand is estimated to have grown 8-9% aided by government’s push on affordable housing, increased infrastructure spendings and low-base of previous year. (Source: CRISIL Report)
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Exhibit 1: Cement Demand – GDP growth trend
(Source: CRISIL Report) Cement demand outlook In the long term cement demand is expected to grow at 6-6.5% compound annual growth rate (CAGR) over 2017-18 to 2022-23 as against 4.5% CAGR during 2012-13 to 2017-18 led by raft of infrastructure investments. (Source: CRISIL Report) Exhibit 2: Cement Demand Forecast
(Source: CRISIL Report) Housing cement demand to be driven by government focus on affordable housing While implementation of Real Estate Regulation Act (RERA) and continued high inventory levels in metros, continues to plague urban housing cement demand growth and limiting recovery, steps taken by central government are appearing to have impact on affordable housing segment, which was a key driver of growth in FY18. We estimate around 0.3 mn houses were constructed in 2017-18 under PMAY-U. As the government has significantly increased the budget for urban housing, this is expected to provide momentum and aid the completion of houses and revival in urban housing demand. We estimate around 0.8-1.2 mn houses to be completed under PMAY-U in FY19. Out of Rs 315 bn sanctioned for the scheme, Rs 250 bn would be funded by IEBR. Given the magnitude of this amount and lack of clarity, the funding remains a key monitorable for urban housing growth. (Source: CRISIL Report) Infrastructure demand to be propelled by roads, irrigation and urban infrastructure Union government has continued its focus on infrastructure segment and increased its budget on roads and rails by 11% and 22% respectively. This along with significant increase in capital expenditure by state governments is expected to keep infrastructure demand momentum healthy. Over the next 5 years, construction investments from the infrastructure sector is projected to expand about 1.7 times over the next five years. Although financing and regulatory hurdles have slowed awarding of infrastructure projects over the past 1-2 years, the situation is expected to gradually improve. Within - 105 -
the infrastructure space, we expect the share of high-intensity segments such as road, irrigation and urban infrastructure to rise in overall infrastructure cement demand pie. In the roads sector, an increase in investments in state roads and national highways (2.1 times against last five years), and rising cement intensity of road projects is likely to push up cement demand; use of paver blocks/ concrete tiles, construction of flyovers and other structures has increased cement intensity of road projects. (Source: CRISIL Report) Larger states in south, west and central together form around 75% of total investments in irrigation projects. They are followed by Bihar, Orissa, Jharkhand, Chhattisgarh, Tamil Nadu and West Bengal, which together account for about ~15% of the total investments. (Source: CRISIL Report) Exhibit 3: Forecast of infrastructure spending
(Source: CRISIL Report) Moderate demand from industrial and commercial segments Over the next five years, cement demand from commercial construction projects is forecasted to grow at a moderately healthy pace, as compared to negligible growth during the past five years, primarily led by development of office spaces, hotels, hospitals and educational institutes with state government led initiatives (especially for education and hotels segment), other initiatives like smart city (which envisages to set up a number of commercial complexes, revamp market places, etc.). (Source: CRISIL Report) Exhibit 4: Major government policies and initiative to drive growth in end-use sectors
(Source: CRISIL Report) Regional Demand Outlook In contrast with a subdued demand growth in FY17, cement demand is estimated to have grown 8-9% in FY18, aided by low base. North, east and Central region led the growth. (Source: CRISIL Report)
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Exhibit 5: Regional Cement demand trend
(Source: CRISIL Report) North India Cement demand is expected to remain healthy in FY19, as infrastructure spends are likely to remain robust before elections in Rajasthan in December 2018. In addition, affordable housing would continue to support demand growth in FY19. In the long term CRISIL Research expects cement demand in the north to grow at 5.5-6.5% CAGR, higher compared to previous five years period of 4-5% CAGR. Key infrastructure projects in the region such as dedicated freight corridor in Haryana; metro projects in Delhi, Gurugram (Gurugram-Alwar metro); smart city related development in Delhi, Rajasthan (Jaipur and Udaipur), Faridabad (Haryana); several road and highway projects; etc. will drive cement demand in the region. Real estate development in key existing and emerging pockets will also drive cement demand. Cities in Haryana- Bahadurgarh, Rohtak, Rajasthan-Jaipur, Udaipur, Punjab-Chandigarh, etc. will drive urban demand. (Source: CRISIL Report)
Exhibit 6: Demand drivers for cement in North India
(Source: CRISIL Report) Central India Infrastructure development to spearhead moderate growth over long-term. Madhya Pradesh grew at relatively faster pace compared to Uttar Pradesh, where weaker monsoons this year have impacted rural housing demand to a certain extent. Also, Uttar Pradesh has increased its capital expenditure budget by 20% for FY19. Thus, infrastructure related demand is likely to remain healthy. Further, with resolution of sand mining issues and pick-up in affordable housing segment, housing segment is likely to remain robust as well. In long term CRISIL Research expects cement demand in the region to grow moderately at 6-7% CAGR, from 2017-18 to 2022-23 against 4-5% CAGR recorded in the previous five years. Key infrastructure projects in the region such as metro projects in Bhopal and Indore; smart city related development in Madhya Pradesh (Bhopal, Indore and Jabalpur) Uttar Pradesh (Lucknow); several road and highway projects; etc. will drive cement demand in the region. Further housing demand in new emerging pockets of Meerut (post metro linkage to NCR), Aligarh, etc. and continued development in key centers of Indore, Bhopal, Noida, etc. to continue to aid demand. Exhibit 7: Demand drivers for cement in Central India
(Source: CRISIL Report)
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South India Demand to grow moderately over long-term. As typically house construction takes 12-18 months, we expect demand in urban housing to remain healthy and support the regions’ demand growth of 4.5 5-5.5% in FY19. Further, capital expenditure budget by Telangana and Tamil Nadu government have been increased by 31% and 16% respectively in FY19, which is expected to support infrastructure demand in the region. In long term CRISIL Research expects cement demand to grow moderately at 5.5-6.5% CAGR during 2017- 18 to 2022-23 against muted growth period recorded in the corresponding previous five years. States with poor growth in the past such as Tamil Nadu and Karnataka are expected to witness some upward bias on back of growth in some pockets such as North Karnataka. However, slowdown in IT sector, which was the largest job generating sector in past few years and contributing to cement demand from the real estate indirectly, is expected to limit any sharp uptick in the overall state housing demand in Karnataka. Double digit high growth in Andhra Pradesh (driven by development of commercial and government infrastructure in Amarawati) and Telangana is expected to aid in the region’s revival. (Source: CRISIL Report) Exhibit 8: Demand drivers for cement in South India
(Source: CRISIL Report) Regional Supply Outlook Overall supply outlook Industry to potentially witness around 90-95 MTPA capacity addition in the next five years. The cement industry is estimated to have added 16 MTPA of capacity addition in 2017-18 in addition to the approximately 20 MTPA of capacities commissioned in 2016-17. This is on the back of players having earmarked capital expenditure over last 3-4 years (Since an integrated plant takes around 3-4 years to be set up-including securing environmental clearances, players tend to add capacity much ahead in anticipation of demand). As of March 31, 2018, CRISIL Research estimates overall installed capacity of 448 MTPA (adjusted for period of commissioning this would be close to 429 MTPA on an effective basis). (Source: CRISIL Report). Exhibit 9: Overall Capacity Addition Outlook
(Source: CRISIL Report) In 2016-17 and 2017-18, the north, east and west together comprised of ~80% of overall capacity additions, with east cornering the largest share as the player set up plants in fast-growing eastern region. Pace of capacity addition has slowed significantly in south region as the operating rates in the region are the lowest in the country. Going forward, while the north and eastern region would continue to drive the capacity addition, share of central region is expected to increase on account of its attractiveness viz. healthy demand growth.
Exhibit 10: Region-wise share in installed capacity additions
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(Source: CRISIL Report)
Inter and Intra-regional cement movement patterns to shift gradually Uttar Pradesh in the central region has traditionally been an importing region (i.e., demand is met from production from other regions). However, its dependence on production from other regions like Madhya Pradesh has reduced drastically following capacity additions in the last few years. The trend is expected to continue with further increase in cement capacity. However, most of these capacities would be in split grinding units (as there is scarcity of limestone in the state) and hence would need to depend on clinker produced outside the state within the region or from other regions (eastChhatisgarh, north-Rajasthan, Himachal). Thus, a shift from inter-regional transport of cement to clinker is likely. (Source: CRISIL Report) IBC proceedings drive fresh round of consolidation Acquisition of Murli Industries and Kalyanpur cements by Dalmia bharat and transfer of Jaypee assets to UltraTech consolidated the space and increased the share of the top five players to close to 50%. ACC and Ambuja merger put on hold, which would lead to further increase in the share. Companies have indicated that the merger is in long term interest of the shareholders however the deal attributes lack of clarity on mineral concessions. Another deal between the local arms of Heidelberg and Italcementi is likely following global acquisition of Italcementi by Heidelberg. Further acquisition of financially distressed assets of Binani Cement would also aid some more consolidation in the sector. Though, we believe that (currently under IBC proceedings) most of the current consolidation cycle is over, sell-off of capacities by debt laden Jaiprakash Associates (which only has 6.25 MTPA capacity), may trigger a new brief round of consolidation. (Source: CRISIL Report). Regional Price Outlook Exhibit 11: Trend in pan-India cement prices
(Source: CRISIL Report) North: Prices to strengthen in remainder of FY18 post monsoon We expect prices to continue strengthening as region-based players would be passing on the increase in costs (increase in import duty on petcoke, rising freight costs) supported by healthy demand growth in the region. Central: Healthy price hike in FY17 to be followed by moderate increase in FY18 Though infrastructure projects such as Lucknow Metro, pre-election related govt. spending on infrastructure and PMAYU are expected to keep driving the growth in the region, reduced reliance of the east region on the central region is expected to keep any sharp improvement in prices limited in FY19. South: Improving demand supply balance to provide support for uptick in pricing - 109 -
As demand-supply balance improves in South, with capital construction related demand and slow capacity addition, we expect an uptick in prices in FY19.
Exhibit 12: Region-wise outlook on prices
(Source: CRISIL Report) Operating Rates Operating rates increase in FY18; to continue its upward trajectory even in long term. Utilisation rates of cement industry, which were fairly stagnant over last several years, was expected to exhibit an increase in FY18. The improvement in utilisation rates was driven by healthy growth in demand that far outpaced incremental effective capacity. Barring west, all regions witnessed increase in utilisation rates. West was an exception due to a sharp increase in effective capacity additions in the region. With incremental demand outpacing supply in FY19 too, utilization rates are expected to increase marginally in FY19. Further in long term we foresee that pan-India operating rates will average at 74% over 2018-19 to 2022-23 (both years inclusive), marginally higher that 71% for previous five periods (viz. 2013-14 to 2017-18, both years inclusive) primarily on back of prudent capacity additions amidst moderately healthy growth phase. Despite healthy growth in Eastern and Central regions we do not expect operating rates to improve much on back of number of capacity additions planned in the region over next five years. (Source: CRISIL Report) WHITE CEMENT White cement has all the physical properties of OPC and can be substituted for OPC. However, its use is limited to tiling, flooring or decorative purposes as it is more expensive. White cement is produced under a fixed manufacturing process, with smaller quantities of iron and manganese. Although white cement and grey cement have similar physical properties, they cannot be produced in the same plant. OPC is grey in colour due to the chemical complexes formed with iron oxide present in the cement raw feed. Moreover, OPC is manufactured by heating haematite, bauxite and limestone using coal, which gives the cement its dark colour. When the iron oxide proportion in cement is reduced to less than 0.4%, cement becomes white. Thus, the use of haematite is minimised in manufacturing white cement, and it is replaced by pure silica or sand. Also, the clinker for white cement is burnt using fuel oil instead of coal. Special cooling techniques are also used to manufacture white cement. White cement is primarily used as a filler between ceramic tiles or for decorative purposes. The white cement market in India is very small, as it is nearly three times more expensive than grey cement; the use of pure silica adds to the production cost. Moreover, white cement plants are few, while the markets are spread across India, which increases the freight cost. The excise duty on an ad valorem basis and higher temperature (requiring more oil) add to production costs. (Source: CRISIL Report) - 110 -
There are only two large players that currently manufacture white Cement, i.e. Ultratech, which has capacity to produce 0.7 MTPA white cement and 0.8 MTPA wall care putty and JK Cement, which has the capacity to produce 0.6 MTPA of white cement and 0.6 MTPA of wall care putty. These two players have a combined market share of over 80 – 85%. (Source: CRISIL Report).
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OUR BUSINESS Overview We are one of the leading cement manufacturers in the country in terms of production capacity (Source: Survey of Cement Industry and Directory, 2017). We manufacture grey cement, white cement and wall putty. We are one of the two major players in the white cement market in the country, who together hold 80-85% of the total market share in terms of the installed capacity (Source: CRISIL Report). In the grey cement segment, we manufacture and market ordinary portland cement (“OPC”) (43-grade and 53-grade), portland pozzalana cement (“PPC”) and portland slag cement (“PSC”) under the brand name “J.K. Super Cement (Build Safe)”. Our white cement and wall putty are sold under the brand name “J.K. White” and “J.K. Wall Putty”, respectively. We own and operate integrated cement manufacturing plants and split grinding units, which are strategically located near our limestone mines and are well connected to the end-markets by road and rail networks. We own and operate four grey cement plants in Rajasthan and Karnataka and a grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. We are presently seeking to expand our grey cement production capacity in north India by 4.2 MTPA, through brownfield expansion of our Mangrol plant in Rajasthan, and the establishment of grinding facilities of 1 MTPA each at Mangrol and Nimbahera, and greenfield split grinding units at Aligarh and Balsinor having 1.5 MTPA and 0.7 MTPA capacities, respectively. Limestone and power are two of the key inputs used in the manufacture of cement, in addition to fuel. We source limestone for our manufacturing plants from captive limestone mines located in proximity to our plants. In Fiscals 2016, 2017 and 2018 and the six-month period ended September 30, 2018, significantly all of our limestone requirements in India across plants were met by our captive limestone mines. As on September 30, 2018, we own and operate 10 limestone mines situated in Rajasthan and Karnataka, and have access to limestone reserves aggregating up to 502.99 MnT (including proven and probable). The remaining lease duration for these mines ranges from 12 to 44 years. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement adjacent to our plant site, which is yet to be operationalized. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable). Further, we have three captive power plants and two waste heat recovery power plants across Rajasthan and Karnataka, with an aggregate capacity of approximately 125.70 MW, as on September 30, 2018. During Fiscals 2016 to 2018 and the six-month period ended September 30, 2018, over 70% of our power requirement in India were met by captive thermal and waste-heat-recovery-based power plants. We sell grey cement over 15 states/ union territories in India, as well as grey clinker to customers in Nepal. Our white cement and wall putty are sold across the country. As on September 30, 2018, our grey cement is supplied through a network of over 11,000 dealers and retailers. We also supply our white cement and wall putty products through a network of over 44,000 dealers and retailers. As on September 30, 2018, our distribution network is further augmented through 186 feeder depots serviced by 23 sales offices for grey cement and 84 feeder depots serviced by 33 sales office for white cement spread across India. We also directly sell our products to builders, EPC contractors and government entities for various projects undertaken by them. Our consolidated revenue from operations in Fiscals 2016, 2017 and 2018 was ₹ 4,368.78 crores, ₹ 4,654 crores, and ₹ 5,020.47 crores, respectively, and our profit for the year was ₹ 54.83 crores, ₹ 171.97 crores, and ₹ 285.59 crores, respectively. Our EBITDA in Fiscals 2016, 2017 and 2018 was ₹ 555.10 crores, ₹ 762.83 crores, and ₹ 856.43 crores, respectively. Our Strengths We believe that we possess a number of competitive strengths, which enable us to successfully execute our business strategies, including the following:
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Dominant position in the white cement segment along with a strong presence in wall putty segment We are one of the two major players in the white cement market in the country, who together hold 80-85% of the total market share (Source: CRISIL Report). As on September 30, 2018, we have an aggregate installed capacity of 0.60 MTPA and 0.90 MTPA for white cement and wall putty, respectively. White cement is primarily used as filler between ceramic tiles and for decorative purposes. The white cement market in India is very small as it is nearly three times more expensive than grey cement (Source: CRISIL Report). The white cement industry has significant entry barriers due to high capital costs, availability of limestone reserves suitable for white cement being concentrated at select locations and need for a pan India distribution network. In 2004, as part of our acquisition of the cement division of Jaykay Enterprises Limited (then known as J.K. Synthetics Limited), we acquired the white cement plant at Gotan, along with the relevant mining leases. We have been able to overcome the entry barrier due to our captive limestone mines that supply limestone needed for our white cement operations. Since 2004, we have doubled our white cement capacity in India, to 0.6 MTPA through the expansion of our Gotan plant. We also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only, with a capacity of 0.60 MTPA. We currently operate two limestone mines in Dhanappa, Rajasthan on lease, valid until 2031 and 2034 respectively, with white-cement grade limestone reserves. In Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement. While we are yet to operationalize the mine at Fujairah, the lease is valid until 2033. We also operate white clay mines in the State of Rajasthan at Rajputon-ki-Dhani and Kanthariya, both of which are situated in relative proximity to our plant. We manufacture wall putty at the white cement plant at Gotan, Rajasthan and at a dedicated plant at Katni, Madhya Pradesh. Wall putty is used primarily as a preparatory material for painting that has both residential and industrial application. White cement is a key raw material used in the manufacture of wall putty. We believe that our white cement manufacturing capabilities have also contributed to our growth in the wall putty segment. As on September 30, 2018, we had an aggregate installed capacity of wall putty of 0.90 MTPA. Our annual production of wall putty increased from 0.47 MnT in Fiscal 2016 to 0.62 MnT in Fiscal 2018, at a CAGR of 14.85%. Due to the high entry barrier and significantly less competition in the white cement segment, white cement (including wall putty) has higher realizations and margins, leading to stable cash flows for us. Our consolidated revenue from white cement segment (white cement and wall putty) accounted for 34 %, 37 %, and 33 %, of our total net sales in Fiscals 2016, 2017 and 2018, respectively. Our EBITDA from this segment has grown from ₹ 323.19 crores in Fiscal 2016 to ₹ 409.11 crores in Fiscal 2018. Further, while white cement and wall putty accounted for 33 % of our revenue in Fiscal 2018, it generated EBITDA of ₹409.11 crores in Fiscal 2018, which was 48 % of the total EBITDA in the same period. We believe that our access to white cement grade limestone enables us to retain our dominant position in the white cement segment. Access to large limestone reserves for future expansion Limestone is a key raw material used in the manufacture of cement. Therefore, access to limestone reserve is a key consideration for production of cement in a cost-efficient manner. Limestone consumption at our manufacturing units in India in Fiscals 2016, 2017, 2018 and the six-month period ended September 30, 2018 was approximately 8.59 MnT, 8 MnT, 8.94 MnT and 4.66 MnT, respectively, which was almost entirely serviced by our captive mines. We currently operate 10 limestone mines in the states of Rajasthan and Karnataka. As on September 30, 2018, we have access to limestone reserves aggregating up to 502.99 MnT (including proven and probable), with the remaining lease duration for the mines ranging from 12 to 44 years. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement, adjacent to our plant site. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable), providing ample opportunity for greenfield expansion up to 15 MTPA (assuming an average plant life of 30 years). The demand for cement is expected to grow at a CAGR of 6-6.5 % over Fiscal 2018 to Fiscal 2023, as against a CAGR of 4.5% during Fiscal 2013 and Fiscal 2018 (Source: CRISIL Report). We are therefore presently seeking to increase our grey cement production capacity in North India from 7.47 MTPA to 11.67 MTPA by Fiscal 2020, through the brownfield expansion of our Mangrol plant in Rajasthan, and the establishment of grinding facilities of 1 MTPA each at Mangrol and Nimbahera, and greenfield split grinding units at Aligarh and Balsinor having 1.5 MTPA and 0.7 MTPA capacities, respectively. We believe that our limestone reserve can support our expansion plans without incurring additional cost on - 113 -
prospecting of the area or seeking allotment of new mining leases, which is now done through a government mandated auction process. Integrated manufacturing plants at strategic locations We own and operate integrated cement manufacturing plants and split grinding units, which are strategically located near our limestone mines and are well connected to the end-markets by road and rail networks. We own and operate four grey cement plants in Rajasthan and Karnataka and a split grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. Our plants are located in close proximity to the raw material needed for production and are well connected by rail and road transport to the end market. Being located close to the raw material helps us save time and cost towards transportation of raw materials and lesser turnaround time for supply of product to the end customer. Limestone is a key raw material in the manufacture of cement. Additionally, limestone being bulky in nature, it is not commercially viable to transport it over long distances (Source: CRISIL Report). We source limestone for our manufacturing plants from captive limestone mines located in relative proximity to the respective plants. Further, additional raw materials like gypsum, white clay, fly ash, slag and dolomite, as required, are also sourced from locations closer to the respective plants. Power and fuel is another significant expense item in our production and accounted for 22%, 17% and 20% of our Total Expenses in Fiscals 2016, 2017 and 2018, respectively, on a consolidated basis. During Fiscals 2016 to 2018 and the six-month period ended September 30, 2018, over 70 % of our power requirements in India were met by captive thermal and waste-heat-recovery-based power plants. As on September 30, 2018, we have an aggregate thermal and waste-heat-recovery-based captive power generation capacity of approximately 125.70 MW. Further, all our plants are located close to railway and road networks. Muddapur and Katni plant are accessible through nearby railway connectivity, with the white cement plant at Gotan utilizing the railway siding set up for the grey cement plant. Further, we are also seeking to establish a railway siding at Katni plant in Madhya Pradesh. We believe that our integrated approach to cement production allows us to control our costs, especially those pertaining to power supply requirements, raw materials and logistics. This enables us to offer our products at competitive prices, and also assists in increasing internal cash accruals for future expansion. Strong brand name with extensive distribution network in India We believe that we have a high degree of brand recall and trust in India, attributable to our quality of products, vast experience and wide spread distribution network. We also engage in a wide range of marketing activities, including award ceremonies and brand campaigns, which we believe enable us to maintain the popularity, quality and recall value of our brand portfolio. We supply our products throughout India to industrial and retail consumers, through various channels including dealers and retailers. Our OPC (43-grade and 53-grade), PPC and PSC products are all marketed under the brand name “J.K. Super Cement (Build Safe)”, our white cement is sold under the brand name “J.K. White”, and our wall putty is sold under the brand name “J.K. Wall Putty”. We have a pan-India presence in the white cement and wall putty segment, with a network of over 44,000 dealers and retailers, as on September 30, 2018. Further, in the grey cement segment, we are present in over 15 states/ union territories, through a network of over 11,000 dealers and retailers. As on September 30, 2018, our distribution network is further augmented through 270 feeder depots serviced by 56 sales offices, spread across India. We believe that the extent of this network, and our relationships with the dealers and retailers, enables us to market and distribute our products widely and efficiently. Further, we also directly sell our products to builders, EPC contractors and government entities for various projects undertaken by them. We believe we have developed long term customer relationships. Experienced Promoters supported by professionally qualified and experienced management team We have a qualified and experienced management team led by our Promoter and the Chairman and Managing Director, Yadupati Singhania. Yadupati Singhania has been associated with our Company since its incorporation, and has an
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overall experience of over 40 years in the cement sector. We believe that while we are a promoter driven Company, we are professionally managed by an experienced Board. Our Board is ably supported by members of our senior management, including our Key Management Personnel and Senior Management Personnel, who have an average of over two decades of experience in their respective areas of expertise. We believe that we benefit significantly from the experience and strategic guidance of our well-qualified management team. The strength and quality of our senior management team and their understanding of the cement industry enables us to formulate sound business strategies and execute them in an effective manner. Our Strategy Increasing our manufacturing capacity by brownfield/greenfield expansion and consequently expanding our market reach Cement demand in India is projected to increase at 6-6.5% CAGR from Fiscal 2018 to Fiscal 2023, as against the 4.5% CAGR recorded from Fiscal 2013 to Fiscal 2018. At a regional level, from Fiscal 2018 to Fiscal 2023, cement markets in central, southern and northern India are expected to grow at a CAGR of 6-7 %, 5.5-6% and 5.5-6.5%, respectively. (Source: CRISIL Report) As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. We intend to increase our production capacity to 14.67 MPTA, in the grey cement through the following projects:
Brownfield expansion of Mangrol and Nimbahera plants: We are proposing to enhance the cement grinding capacity at Mangrol and Nimbahera by 1 MTPA each. In addition, we also intend to increase the existing clinker capacity at Mangrol by 2.48 MTPA. The surplus clinker production will be utilised to serve the split grinding units proposed to be set up at Aligarh and Balsinor, and also to meet the additional clinker requirement at Nimbahera plant due to the brownfield expansion. We are also proposing to set up a waste heat recovery power generation facility at Mangrol with a capacity of 13 MW.
Establishment of grinding units at Aligarh and Balsinor: Utilizing the clinker sourced from Mangrol, we are proposing to set up fly ash-based split grinding units at Aligarh and Balsinor, having a capacity of 1.5 MTPA and 0.7 MTPA, respectively.
We believe the proposed setting up of a split grinding unit in Balsinor (in the state of Gujarat) will enable us, inter alia, to increase our presence of grey cement in Western India. Aligarh split grinding location is expected to further strengthen the Company’s position in Western UP, besides opening avenues for new markets in the region. We have also obtained mining leases for additional limestone mines in the state of Madhya Pradesh, and are in the process of obtaining the requisite regulatory and environmental approvals for the same. The estimated limestone reserves in these mines are approximately 518 MnT (including proven and probable). We believe that the aforementioned leases provides us access to adequate limestone reserves to sustain a greenfield expansion at these sites, up to a maximum capacity of 15 MTPA (assuming average plant life of 30 years), thereby allowing for greenfield expansion in the state of Madhya Pradesh. In order to increase our market share, we also intend to continue to focus on the expansion of our distribution network and the promotion of our brands, through adding additional authorized dealers and retailers to our network, strengthening our relationships with the existing dealers that distribute our products, and organizing ‘dealer meets’ which involves advice on marketing and sales techniques and technical applications of cement products. Improving cost efficiency through brownfield and greenfield expansion We intend to focus on reducing our operating costs, which is critical in determining profitability. The relatively higher efficiency of the new facilities at Mangrol will help us reduce our incremental power and fuel costs. Additionally, by virtue of the increase in clinker production capacity at Mangrol, our waste-heat-recovery-based captive power generation capacity is expected to increase by 13 MW, which would further subsidize costs incurred towards power consumption. New grinding units proposed to be set up at Nimbahera, Aligarh and Balsinor will also help us reduce our grinding costs, due to relatively higher efficiency. - 115 -
We are also seeking to reduce our logistics costs through the proposed establishment of (i) overland belt conveyor in Maliakhera for the transport of crushed limestone at our Maliakhera and Karunda mines; and (ii) split grinding units at Aligarh and Balsinor, which will be in close proximity to sources of certain raw material as well as the end market. Consolidate our strong presence in wall putty market through expansion. We manufacture wall putty at our white cement plant at Gotan, Rajasthan and at a dedicated plant at Katni, Madhya Pradesh. As on September 30, 2018, we had an aggregate installed capacity for wall putty of 0.90 MTPA. Our annual production of wall putty increased from 0.47 MnT in Fiscal 2016 to 0.62 MnT in Fiscal 2018, at a CAGR of 14.85%. White cement is a key raw material used in the manufacture of wall putty. We believe that our white cement manufacturing capabilities have also contributed to our growth in the wall putty segment. Our wall putty segment has shown a year-on-year growth of around 15% in terms of production volume and we expect this trend to continue. We intend to leverage the growth in the Indian wall putty market by increasing our wall putty production capacity. Improve the capacity utilisation at our Fujairah plant We commenced operations at our Fujairah plant in September 2014 with a dual process cement plant. The plant is currently being used for the production of white cement, with an installed white cement production capacity of 0.6 MTPA, as on September 30, 2018. Our Fujairah plant recorded an annual production of 0.24 MnT, 0.29 MnT and 0.29 MnT in calendar years 2015, 2016 and 2017, constituting an annual capacity utilization of 40%, 48% and 48%, respectively, and a production of 0.19 MnT in the nine-month period ended September 30, 2018, constituting a capacity utilization of 42% for the said period. We intend to rationalise our operations and begin shipping white cement from our Fujairah plant to our south Indian markets in addition to the international markets we already supply. We believe that this will help us in improving the utilisation rates as well as improve profitability. Further, we believe that this will also help free up some capacity at our Gotan plant which we can use to market to our north Indian and central Indian markets. History Our Company was incorporated as a public limited company on November 24, 1994. Pursuant to a scheme of rehabilitation as sanctioned by the AAIFR, our Company acquired the cement division of Jaykay Enterprises Limited (then known as J.K. Synthetics Limited), including grey cement plants at Nimbahera and Mangrol and a white cement plant at Gotan, with effect from November 4, 2004. Since November 2004, we have made continual investments for the expansion of our production facilities. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.6 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. Key Milestones Year 2004 2006 2007 2009 2013 2014
2016 2018
Milestone Acquired the cement division of Jaykay Enterprises Limited (then known as J.K. Synthetics Limited). Enhanced grey cement capacity by 0.50 MTPA at Nimbahera. Set up 20 MW coal-based and 13.2 MW of heat recovery based power plant at Nimbahera. Commissioned a 3 MTPA greenfield plant in South India at Muddapur, Karnataka. Set up a coal based 50 MW power plant at Muddapur, Karnataka. Enhanced white cement capacity at Gotan by 0.2 MTPA, increasing total white cement capacity to 0.6 MTPA. Enhanced wall putty capacity to 0.3 MTPA at Gotan, Rajasthan. Commissioned 1.5 MTPA grinding unit for grey cement at Jharli, Haryana. Commissioned 1.5 MTPA grey cement capacity at Mangrol, Rajasthan, along with a 25 MW coal based power plant and a 10 MW waste heat recovery power plant. Commissioned 0.6 MTPA white cement capacity at Fujairah, UAE. Expanded wall putty capacity to 0.5 MTPA at Gotan, Rajasthan. Set up wall putty plant at Katni with a capacity of 0.20 MTPA. Commissioned additional wall putty capacity of 0.20 MTPA at Katni.
Awards and Accreditations Our Company was recognised as the ‘India’s second fastest growing cement company in the medium category’ at the Second Indian Cement Review Awards, 2016 at Mumbai. - 116 -
In 2016, Yadupati Singhania, the Chairman and Managing Director of our Company, was conferred with the ‘Lifetime Achievement Award’ by the Indian Cement Review, for his contribution to the cement industry. He has also been recognised as the ‘Best CEO (Cement)’ by Business Today Mind Rush, 2018 at Mumbai. Our Products We have a variety of cement products from which we generate revenues and seek to maximize our margins based on the mix of products we sell in accordance with market demand. We produce grey cement, white cement, white cement-based wall putty and certain other value added products. Our consolidated EBITDA in Fiscals 2016, 2017 and 2018 was ₹ 555.10 crores, ₹ 762.83 crores, and ₹ 856.43 crores, respectively. White cement segment (including wall putty) accounted for EBITDA of ₹ 323.19 crores, ₹ 397.36 crores, and ₹ 409.11 crores, respectively, for Fiscals 2016, 2017 and 2018. The following table sets forth the total quantity of each of grey cement, white cement and wall putty produced by us during the periods specified:
Period Six-month period ended September 30, 2018 Fiscal 2018 Fiscal 2017 Fiscal 2016
*
(quantity in MnT) Wall putty
Grey cement
White cement
3.85
0.45
0.30
7.88 6.77 6.89
0.85 0.83 0.74
0.62 0.54 0.47
*
Data for the Fujairah plant provided for calendar years 2015, 2016 and 2017 and nine-month period ended September 30, 2018.
Grey Cement Cement manufactured by us complies with the relevant standards prescribed by the BIS. Ordinary Portland Cement (“OPC”) We manufacture two grades of OPC that are differentiated by their compressive strengths, as specified by the BIS. These grades are 53-grade OPC and 43-grade OPC, with 53-grade OPC having the highest compressive strength. The customer selects the grade of OPC based on the intended application. Portland Pozzalana Cement (“PPC”) We also manufacture PPC by blending additives such as fly ash and gypsum to clinker. The advantage of PPC is its low heat of hydration and corresponding resistance to exposure to various environmental chemicals such as salt water. It is particularly suitable for marine and hydraulic construction and other mass concrete structures. This cement has a durability that is equivalent to OPC, and can be used for most of the applications where OPC is used. Portland Slag Cement (“PSC”) PSC is produced by inter grinding a mixture of Portland cement clinker and granulated blast furnace slag in varying proportions. PSC imparts better performance than OPC because of factors such as:
low free lime leads to reduction in leaching;
low heat of hydration in concrete gives a durable structures;
better workable and dense mortar;
high ultimate strength;
develops a gel like structure which reduces the permeability making the structures less porous and increasing the durability;
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reduced alkali, an aggregates reaction due to low alkali content; corrosion resistant concrete; helps in low carbon emission as lesser amount of clinker is used and hence environment friendly; and it can be used in any type of structures from foundation to roof.
White Cement We manufacture white cement under the brand name “J.K. White”, which is supplied pan-India. White cement is produced using a different quality of limestone and is distinguished from grey cement by its white colour. White cement is typically used in three principal areas of application, as set forth below:
flooring, for the manufacturing and laying of mosaic tiles and as tile fixing grout; wall applications, such as decorative white cement paints, wall putty and plain and spray plasters; and other specialized applications including glass fibre reinforced concrete, garden furniture, lamp posts, as pointing for brick and stone works and as pre-cast cladding panels.
Wall Putty We manufacture wall putty under the brand name “J.K. Wall Putty”, which is supplied across India. Wall putty is used primarily as a preparatory material for painting that has both residential and industrial application. It is typically used as sub-surface material for decorative paints which helps to increase the appearance of both interior and external wall. It also minimises the impact of UV rays and is water resistant. Other value added products We manufacture a white cement-based wall dressing under the brand name “J.K PrimaxX”. Additionally, we have also recently introduced a floor and wall tile adhesive, which is marketed as “J.K. SuperGrip”, and a water proofing compound marketed as “J.K. Water Proof”. Our Production Facilities Following is a map depicting select current and proposed production facilities in India:
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We own and operate four grey cement plants in Rajasthan and Karnataka and a grinding unit at Haryana. In addition, we own and operate a white cement plant at Gotan, Rajasthan (which also manufactures wall putty) and an additional wall putty plant at Katni, Madhya Pradesh. Further, we also own and operate a dual process cement plant having capacity to produce both white and grey cement (interchangeably) in Fujairah, U.A.E. The Fujairah plant is currently used for manufacturing white cement only. As on September 30, 2018, we have an aggregate installed capacity of 10.47 MTPA for grey cement, 1.20 MTPA (including 0.60 MTPA in UAE) for white cement and 0.90 MTPA for wall putty. Further, we have coal-based and waste-heat-recovery-based captive power generation capacity of more than 125.70 MW, spread across our plants. Location
Year of commencement/ acquisition
Installed capacity as on September 30, 2018 (MTPA)
Fiscal 2016
Production Volumes (MTPA) Six-month Fiscal Fiscal period ended 2017 2018 September 30, 2018
Grey Cement Nimbahera, Rajasthan 2004* 3.25 1.74 1.51 2.36 1.04 Mangrol, Rajasthan 2004* 2.25 2.07 2.35 2.23 1.21 Gotan, Rajasthan 2007 0.47 0.28 0.06 0.07 0.03 Jharli, Haryana (Grinding 0.72 2014 1.50 0.98 1.18 1.32 Unit) Muddapur, Karnataka 2009 3.00 1.82 1.67 1.90 0.85 Total 10.47 6.89 6.77 7.88 3.85 White Cement Gotan, Rajasthan 2004* 0.60 0.50 0.54 0.56 0.26 Fujairah, UAE 2014 0.60 0.24** 0.29** 0.29** 0.19** 0.45 Total 1.20 0.74 0.83 0.85 Wall Putty Gotan, Rajasthan 2007 0.50 0.47 0.46 0.46 0.21 Katni, Madhya Pradesh 2016 0.40 0.00 0.08 0.16 0.09 0.30 Total 0.90 0.47 0.54 0.62 * Acquired as part of the erstwhile cement division of Jaykay Enterprises Limited (then known as J.K. Synthetics Limited), with effect from November 4, 2004. ** Data for the Fujairah plant provided for calendar years 2015, 2016 and 2017 and nine-month period ended September 30, 2018.
Proposed Expansion We intend to increase our production capacity to 14.67 MPTA in the grey cement segment through the following projects:
Brownfield expansion of Mangrol and Nimbahera plants: We are proposing to enhance the cement grinding capacity at Mangrol and Nimbahera by 1 MTPA each. In addition, we also intend to increase the existing clinker capacity at Mangrol by 2.48 MTPA. The surplus clinker production will be utilised to serve the split grinding units proposed to be set up at Aligarh and Balsinor, and also to meet the additional clinker requirement at Nimbahera plant due to the brownfield expansion. We are also proposing to set up a waste heat recovery power generation facility at Mangrol with a capacity of 13 MW.
Establishment of grinding units at Aligarh and Balsinor: Utilizing the clinker sourced from Mangrol, we are proposing to set up PPC-based split grinding units at Aligarh and Balsinor, having a capacity of 1.5 MTPA and 0.7 MTPA, respectively.
Raw Materials In Fiscals 2016, 2017, 2018, cost of raw materials consumed amounted to 19%, 17% and 18% of our total expenses, respectively. Total expenditure does not include interest and depreciation expenses but includes freight and handling charges and selling expenses. Limestone Limestone is a key raw material for cement production. Limestone consumption at our manufacturing units in India in Fiscals 2016, 2017, 2018 and the six-month period ended September 30, 2018 was approximately 8.59 MnT, 8 MnT, 8.94 MnT and 4.66 MnT, respectively, which was almost entirely serviced by our captive mines. - 119 -
Grey cement grade We currently operate six grey-cement grade limestone mines, each situated in relative proximity to our plants at Nimbahera and Mangrol, in Rajasthan. Further, we also operate two limestone mines in Halki and Muddapur, in the state of Karnataka, for meeting the requirements at our Muddapur plant. The remaining lease durations of these mines ranges from 12 to 44 years. White cement grade The quality of limestone required for producing white cement differs from the limestone used for grey cement in terms of colour and purity. We currently operate two limestone quarries at Dhanappa, Rajasthan that supply our white cement operations, each situated in relative proximity to our Gotan plant with the lease valid until 2031 and 2034, respectively. Further, in Fujairah, UAE, we have been allotted one limestone mine with reserves suitable for production of white cement. While the mine is not operational yet, the lease for the mine is valid until 2033. We also source a small quantity of limestone from nearby external sources depending upon the prevailing market prices of such limestone. Pursuant to a recent amendment to the MMDR Act and rules issued thereto, the grant of mining leases by respective state governments, with respect to certain notified minerals including limestone, is to be compulsorily carried out through an auction process. Other raw material Gypsum: Another principal raw material used in the manufacture of cement is gypsum, which acts as a retarding agent to control the setting time for cement. It is added to clinker at the grinding stage in quantities that vary on the requirements of the final product as well as the quality of the gypsum. We believe we have an adequate supply of gypsum available to us to meet our existing and planned needs. Fly ash: Used in the manufacture of PPC, fly-ash is a by-product of the coal burning process at thermal power plants. Some of the fly ash we use is obtained from our captive power plant. Fly ash is also available through bidding process from nearby thermal power plants, and we presently have arrangements to access all of our fly ash requirements. We typically incur the cost of transportation when transporting the fly ash to our plants. Slag: A by-product from steel plants, slag is required for production of PSC at our plant at Muddapur, Karnataka. We procure slag from steel plants at Bellary, Koppal and Goa. Others: Additives like laterite, red ochre, bauxite and iron ore are also required in small quantities for manufacture of OPC, PPC and PSC, all of which are available from local suppliers within the states of Rajasthan and Karnataka. White cement requires additives like white clay, feldspar and fluorspar, which are largely sourced from nearby sites within the state of Rajasthan. We currently operate white clay mines in the State of Rajasthan at Rajputon-ki-Dhani and Kanthariya, both of which are situated in relative proximity to our plant. Dolomite required for the production of wall putty is procured from local markets and other chemicals are primarily imported from our overseas suppliers. Power and Fuel Power and fuel expenses are our most significant expenses and together comprised 22%, 17% and 20% of our Total Expenses in Fiscals 2016, 2017 and 2018, respectively, on a consolidated basis. We have total captive power generation capacity of 125.70 MW, spread across our plants, including waste-heat-recoverybased plants and thermal power plants. Our coal based power plants for captive consumption are situated at Nimbahera, Mangrol, Gotan and Muddapur. We also have waste heat recovery power plants for captive consumption at Nimbahera and Mangrol. During Fiscals 2016 to 2018 and the six-month period ended September 30, 2018, over 70% of our power requirements in India were met by captive thermal and waste-heat-recovery-based power plants. The fuel used in the kiln for conversion of limestone to clinker, for the production of both grey and white cement, comprises petcoke, coal and lignite. We also use coal as raw material for our thermal power plants. Our petcoke requirements are sourced from domestic as well as foreign suppliers, on purchase order basis. We procure coal through our linkage arrangements, e-auctions and spot purchases, including from foreign suppliers. Lignite is purchased in the spot market and through e-auctions. - 120 -
Sales and Marketing Due to the nature of the industry, characterised by logistical difficulties, the costs of transporting cement are high and necessitates the need to locate cement plants close to available deposits of limestone. Consequently, the cement manufacturing industry in India tends to be geographically segmented, with manufacturers in a particular region of India mainly supplying to customers in that region. Three of our grey cement plants are located in Rajasthan and one each in Haryana and Karnataka. Our principal markets for grey cement cover 15 states/ union territories. White cement manufactured by us is distributed across India. Sales are made to dealers on a principal to principal basis. Our dealers comprise wholesale and retail outlets. We have a team of sales officers operating within each district where we sell cement who are in regular contact with our dealers and help us monitor these sales relationships and inventory requirements. Orders are obtained from dealers on a daily basis and their requirements transmitted to our plants and depots through regional and branch offices. For sales to end customers, orders are received at our offices as well as through canvassing agents. For sales to dealers, orders from the dealers are communicated to the branch office by sales officers. Each dealer has a maximum credit limit and orders will generally be approved if the value of the order plus the existing amount outstanding does not exceed this limit. Each regional office has online access to information on the availability of stock. For details of our distribution network and key markets, see “– Our Strengths - Strong brand name with extensive distribution network in India” on page 114. Competition In the grey cement segment, we face significant competition from other manufacturers, including UltraTech Cement Limited, Ambuja Cement, Shree Cement and J.K. Lakshmi Cement. We face relatively lesser competition in the white cement segment, where we are one of the two largest players in the country. However, in the future, we may also face competition from new entrants in the segment, who may gain access to white cement grade limestone reserves through the auction process, which has now been made compulsory. Some of these players may already have robust distribution networks, which could eat into our market share. Some of our competitors are larger than we are, have greater financial resources than we do, and may be able to deliver products on more attractive terms or to invest larger amounts of capital into their businesses, including expenditure for better and more efficient production capabilities. See “Risk Factors - We engage in a highly competitive business and any failure to effectively compete could have a material adverse effect on us.” on page 52. Research and Development Our principal research and development activities focus on increasing the productivity and cost efficiency of our operations, particularly with respect to the efficient use of power. In recent years, we have focused our research and development activities on reducing specific power consumption, and the reduction of heat consumption per tonne of clinker. In addition, we are currently conducting research on the optimal coal mix in our manufacturing facilities and maximizing the benefits of converting our kilns to petcoke as a source of fuel. Our research and development activities are carried out by our own team, under the advice and consultancy of foreign consultants appointed for this purpose. Employees As on September 30, 2018, we had a total of 3,216 full-time employees, including trainees. Further, as of September 30, 2018, approximately 2,668 contract labourers were working at our manufacturing facilities. The numbers of contract labourers vary from time to time based on the nature and extent of work contracted to independent contractors. We principally use contract labourers in connection with our packing operations, but also have a small number of contract labourers for cleaning, miscellaneous and other work assignments. Labour relations at our facilities have been positive with no significant interruption of manufacturing activities. At each of our plants, we have from time to time entered into settlements with employees which are registered with the relevant government authorities, or are parts of registered trade unions.
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Insurance We maintain industrial and fire insurance coverage for our plants, that include material damages to property and business interruption, subject to specific exclusions. We also maintain fire insurance for products stored at our godowns. We believe that our insurance arrangements are consistent with industry standards for cement manufacturers in India. Our insurance coverage is typically revised on a yearly basis. See “Risk Factors - Insufficient insurance coverage could have a material adverse effect on us” on page 52. Intellectual Property We have obtained 37 trademark registrations in India, including for key brand names such as “J.K. Super Cement (Build Safe)”, “J.K. White”, “J.K. Wall Putty”, “J.K. PrimaxX”, “J.K. SuperGrip” and “J.K. Super Duracrete”. Additionally, from time to time, we also obtain trade mark registrations in certain foreign jurisdictions where or products are sold. Further, we have also applied for registration of 13 other trademarks, which are pending at various stages of the registration process. Property We do not own the premises on which our Registered and Corporate office is situated. Such premises have been leased to us by the current owners of the premises, being Yadupati Singhania, one of our Promoters, and five others, until 2026. The following list sets forth details relating to the properties on which our production facilities are located: Location Grey Cement Nimbahera, Rajasthan Mangrol, Rajasthan Gotan, Rajasthan Jharli, Haryana (Grinding Unit) Muddapur, Karnataka White Cement Gotan, Rajasthan Fujairah, UAE Wall Putty Katni, Madhya Pradesh
Nature of Ownership (Leasehold or Freehold) Freehold/ Leasehold Freehold/ Leasehold Freehold/ Leasehold Freehold Freehold/ Leasehold Freehold/ Leasehold Leasehold Freehold/ Leasehold
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BOARD OF DIRECTORS AND SENIOR MANAGEMENT Board of Directors The composition of our Board is governed by the provisions of the Companies Act, the SEBI Listing Regulations and our Articles of Association. As per the provisions of our Articles of Association, the Board shall comprise of not less than three and not more than 15 Directors. We currently have ten Directors on the Board out of which one is an executive Director, three are nonexecutive, non-independent Directors and six are non-executive, independent Directors (including one additional non-executive, independent Director). The following table sets forth details regarding the Board of Directors as on the date of this Placement Document: Name, Address, Occupation, DIN, Term and Nationality Yadupati Singhania
Age 65
Designation Chairman and Managing Director
Occupation: Business Address: 11, Ganga Kuti, Cantonment, Kanpur, Uttar Pradesh, India 208004 Nationality: Indian Term: Re-appointed for a period of three years with effect from April 1, 2017 DIN: 00050364 Kailash Nath Khandelwal
74
Non-executive, Director
non-independent
69
Non-executive, Director
non-independent
83
Non-executive, Director
non-independent
Occupation: Professional Address: 50, MIG Bunglow, W Block, Keshav Nagar, Kanpur, Uttar Pradesh, India 208014 Nationality: Indian Term: Liable to retire by rotation DIN: 00037250 Paul Heinz Hugentobler Occupation: Professional Address: Eschenweg 10, CH-8645, Jona, Switzerland Nationality: Swiss Term: Liable to retire by rotation DIN: 00452691 Sushila Devi Singhania Occupation: Business
Address: 11, Ganga Kuti, Cantonment, Kanpur, Uttar Pradesh, India - 123 -
Name, Address, Occupation, DIN, Term and Nationality 208 004
Age
Designation
72
Non-executive, independent Director
73
Non-executive, independent Director
79
Non-executive, independent Director
64
Non-executive, independent Director
Nationality: Indian Term: Liable to retire by rotation DIN: 00142549 Achintya Karati Occupation: Professional Address: 29/203, East End Apartments, Mayur Vihar Phase – I Extension, Delhi, India 110 096 Nationality: Indian Term: Up to five consecutive years from July 26, 2014 DIN: 00024412 Jayant Narayan Godbole Occupation: Professional Address: 604/A, Cottage Land CHS, Plot 16/A, Sector 19/A, Nerul(E), Navi Mumbai, Maharashtra, India 400 706 Nationality: Indian Term: Up to five consecutive years from July 26, 2014 DIN: 00056830 Krishna Behari Agarwal Occupation: Business Address: 7/177, Swaroop Nagar, Kanpur, Uttar Pradesh, India 208 002 Nationality: Indian Term: Up to five consecutive years from July 26, 2014 DIN: 00339934 Raj Kumar Lohia Occupation: Business Address: B-2/15, Safdarjung Enclave, New Delhi, India 110 029 Nationality: Indian Term: Up to five consecutive years from July 26, 2014 DIN: 00203659 - 124 -
Name, Address, Occupation, DIN, Term and Nationality Suparas Bhandari
Age
Designation
73
Non-executive, independent Director
63
Additional non-executive, independent Director
Occupation: Professional Address: A-63, 2nd Floor, Gulmohar Park, Delhi, India 110 049 Nationality: Indian Term: Up to five consecutive years from July 26, 2014 DIN: 00159637 Deepa Gopalan Wadhwa Occupation: Retired Government Officer Address: N-35, Panchsheel Park, Malviya Nagar, New Delhi, India 110017 Nationality: Indian Term: Up to the date of the next Annual General Meeting from November 3, 2018 DIN: 07862942 Brief profiles of our Directors* Yadupati Singhania is the Chairman and Managing Director of our Company. He holds a bachelor of technology degree from the Indian Institute of Technology, Kanpur. He has over 40 years of experience in the cement industry. Kailash Nath Khandelwal is a non-executive, non-independent director on our Board, and has been the Director of our Company since 2004. He holds a bachelor’s degree in commerce from Agra University. He is a fellow of the Institute of Chartered Accountants of India and a practicing chartered accountant. He has over 45 years of experience in the field of finance, accounts, and taxation. He has served as president (finance and accounts) of Jaykay Enterprises Limited (formerly J.K. Synthetics Limited). Paul Heinz Hugentobler is a non-executive, non-independent Director of our Company. He graduated in civil engineering from Swiss Federal Institute of Technology, Zurich and also has a degree in economic science from the Graduate School of Economics and Business of St. Gallen. He has served as the area manager for the Holcim Asia Pacific Region and was a member of the Holcim Executive Committee responsible for South Asia and ASEAN. He is also the chairman of Siam City Cement Group having its operations in Thailand, Vietnam, Indonesia, Bangladesh and Sri Lanka. Sushila Devi Singhania is a non-executive, non-independent Director of our Company since July 26, 2014. She is also a director of Yadu International Limited. She is a member of managing committee of Seth Anandram Jaipuria School, Kanpur, president of Juhari Devi Girls Inter College, Kanpur and president of Juhari Devi Girls Post Graduate College, Kanpur. She has been actively associated with programmes for welfare and upliftment of economically weaker sections of the society, children and women, and also with religious activities. Achintya Karati is a non-executive, independent Director of our Company. He holds a bachelor’s degree in law from the Calcutta University. He served as the country head of Government and Institutions, NCDEX and has also worked as senior advisor to ICICI Securities Limited, and also with ICICI Prudential Life Insurance Company Limited. He retired as the country head, Government and Institutional Solutions Group, ICICI Bank Limited in March 2004. During his association with ICICI Limited, he served in various capacities, including as the Deputy Zonal Manager (North) and Head of Major Client Group (North). He has been associated with our Company since 2005.
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Jayant Narayan Godbole is a non-executive, independent Director of our Company. He holds a bachelor’s degree in technology (honours) from the Indian Institute of Technology, Mumbai and also holds a certificate in Financial Management from University of Bombay. He has officiated as the chairman and managing director of the Industrial Development Bank of India in 2005 and has also served as the chairman of an empowered group working on the stabilization of the corporate debt restructuring mechanism in India. Krishna Behari Agarwal is a non-executive, independent director of our Company. He holds a bachelor’s degree in law from Kanpur University and is a fellow of the Institute of Cost and Works Accountants of India and Institute of Company Secretaries of India. He is experienced in the fields of finance, accounts and capital markets. He has served Merchants Chamber of Uttar Pradesh and Uttar Pradesh Stock Exchange Association Limited as their president. He has been a member of the Federation of Indian Chambers of Commerce and Industry and the Associated Chambers of Commerce & Industry of India. Raj Kumar Lohia is a non-executive, independent Director of our Company. He holds a bachelor’s degree in economics from Kanpur University. He joined our Board in 2004 and is also on the board of directors of several other companies. Suparas Bhandari is a non-executive, independent Director of our Company. He holds a bachelor’s degree in science and a bachelor’s degree in law from the University of Jodhpur. He is the founder, chairman and managing director of Agriculture Insurance Company of India Limited and has served as the general manager of Oriental Insurance Company of India Limited and as the assistant general manager of United India Insurance Company Limited. Deepa Gopalan Wadhwa is an additional non-executive, independent Director of our Company. She holds a bachelor’s degree in chemistry and a master’s degree in English literature from University of Madras. She has served as a joint secretary in the Ministry of External Affairs, Government of India. She is currently co-chair of the India-Japan Partnership Forum in FICCI and a member of the governing council of the Institute of China Studies. She joined our Board in 2018 and is also on the board of directors of several other companies. *Details included in the profiles of Directors have been taken from back-up documents, wherever available and affidavits provided by the respective Directors.
Relationship between Directors Except for Sushila Devi Singhania, who is the mother of Yadupati Singhania, none of our Directors are related to each other. Interest of Directors of our Company Except as stated below and in “Related Party Transactions” on page 78, our Directors do not have any other interest in our Company or its business. Our Directors are interested in our Company to the extent of their remuneration, commission, sitting fees, reimbursement of expenses and other benefits to which they are entitled as per their terms of appointment. Certain of our Directors may also be deemed to be interested to the extent of any dividend payable and other distributions in respect of the Equity Shares held by them, their relatives or the companies in which they are interested as directors or members. For details regarding Equity Shares held by our Directors in our Company, see “Board of Directors and Senior Management” on page 123. Further, certain of our Directors may also be deemed to be interested to the extent any benefit arising out of contracts, agreements/ arrangements or transactions entered into or to be entered into by our Company with companies in which they are interested as directors or members. Our Company sold its property situated at DLF Chatarpur Farm to Yadupati Singhania for a total consideration of ₹ 50.88 crores pursuant to a sale deed dated September 29, 2017. Our Company also pays rent to Yadupati Singhania, Sushila Devi Singhania, Abhishek Singhania and certain others in relation to premises situated at 22/134, J.K. Kothi, Dwarika Dheesh Road, Kanpur, Uttar Pradesh, India – 208 001, Kamla Tower, 29/1, Shri Dwarika Dhish Road, Kanpur, Uttar Pradesh, India – 208 001 and to Yadupati Singhania, Abhishek Singhania and certain others in relation to premises situated at 5A, Bhagwan Das Road, C-Scheme, Jaipur 302 001, leased by our Company.
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Paul Heinz Hugentobler, non-executive, non-independent Director of our Company is entitled to receive a payment of US $ 150,000 per annum, net of applicable taxes in India from our Company for rendering professional services to our Company. For details, see “Board of Directors and Senior Management” on page 123. Except as otherwise stated in this Placement Document, we have not entered into any contract, agreements, arrangements during the preceding two years from the date of this Placement Document in which our Directors are interested directly or indirectly and no payments have been made to them or are proposed to be made to them in respect of these contracts, agreements or arrangements. Other than as disclosed in this Placement Document, there are no outstanding transactions other than in the ordinary course of business undertaken by our Company, in which the Directors are interested. As on the date of this Placement Document, none of our Directors have availed any loan from our Company. Further, our Company has not availed any loans from the Directors which are currently outstanding. Borrowing powers of the Board of Directors In accordance with the shareholders’ resolution dated August 6, 2016 and subject to the provisions of Section 180 (1) (c) of the Companies Act, the Board may, from time to time, as they may consider fit, any sum or sums of money, from banks or financial institutions, other person or persons, firms, bodies corporate, notwithstanding that the monies to be borrowed together with the monies already borrowed by the Company, may exceed the aggregate of the Company’s paidup capital and free reserves i.e. reserves not set apart for any specific purpose, provided that the total amount so borrowed and outstanding at any time shall not exceed ₹ 7,500 crores. Terms of appointment and remuneration of our Chairman and Managing Director Yadupati Singhania has been re-appointed as the Chairman and Managing Director of our Company for a term of three years from April 1, 2017, pursuant to the resolution dated May 28, 2016 passed by the Board of Directors and resolution dated August 6, 2016 passed by the shareholders of our Company. He is entitled to a salary of ₹ 0.25 crore per month (in the salary range of ₹ 0.25 crore - ₹ 0.05 crore - ₹ 0.35 crore per month) along with, inter alia, consequential benefits (maximum ceiling of 125% of annual salary) inclusive of certain perquisites and allowances such as house rent allowance, personal accident insurance, servant allowance, leave travel allowance, entertainment allowance and reimbursements, performance linked incentives (as may be decided by the Board of Directors from time to time, subject to a maximum ceiling of 50% of annual salary) and commission (as may be decided by the Board from time to time, not exceeding 2% of the net profit of the Company computed under section 197 of the Companies Act, 2013). As per the resolution of Board of Directors passed on May 12, 2018, in addition to the commission and performance linked incentives as may be decided by the Board of Directors, Yadupati Singhania is entitled to a total monthly salary of ₹ 0.68 crore for financial year 2018-19. The following table sets forth the compensation paid by our Company to our Chairman and Managing Director in the current Fiscal (till November 30, 2018) and for Fiscals 2018, 2017 and 2016: (₹ in crores) Name of Director Total remuneration (including salary and other benefits)* Till November 30, Fiscal 2018 Fiscal 2017 Fiscal 2016 2018 Yadupati Singhania 15.84 17.61 12.67 7.27 *does not include payment of contribution to Provident Fund, which is an exempted perquisite under applicable provisions of the Companies Act, 2013; all amounts have been rounded off to two decimal points.
Remuneration of our non-executive Directors Pursuant to a resolution dated July 26, 2014 passed by the shareholders of our Company, our non-executive Directors are entitled to a total commission of up to 1% of the net profits of our Company computed under section 197 of the Companies Act, 2013 in addition to the sitting fees for attending meetings of the Board and the committees of the Board. The following table sets forth the sitting fees and commission paid by our Company to our existing non-executive Directors in the current Fiscal (till November 30, 2018) and for Fiscals 2018, 2017 and 2016: (₹ in crores) Name of Director
Till November 30, 2018
Total remuneration* Fiscal 2018 Fiscal 2017
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Fiscal 2016
Commiss Sitting ion fees Kailash Nath Khandelwal Paul Heinz Hugentobler** Sushila Devi Singhania Achintya Karati Jayant Narayan Godbole Krishna Behari Agarwal Raj Kumar Lohia Suparas Bhandari Deepa Gopalan Wadhwa***
Total
Commiss Sitting ion fees
Total
Commiss Sitting ion fees
Total
Commiss Sitting ion fees
Total
-
0.04
0.04
0.09
0.05
0.14
0.08
0.04
0.12
0.07
0.04
0.11
-
0.01
0.01
0.09
0.02
0.11
0.08
0.02
0.10
0.07
0.01
0.08
-
0.04
0.04
0.09
0.05
0.14
0.08
0.05
0.13
0.07
0.04
0.11
-
0.02
0.02
0.09
0.03
0.12
0.08
0.04
0.12
0.07
0.03
0.10
-
0.03
0.03
0.09
0.05
0.14
0.08
0.04
0.12
0.07
0.03
0.10
-
0.05
0.05
0.09
0.08
0.17
0.08
0.07
0.15
0.07
0.06
0.13
-
0.02 0.03
0.09 0.09
0.04 0.04
0.13 0.13
0.08 0.08
0.05 0.04
0.13 0.12
0.07 0.07
0.04 0.03
0.11 0.10
-
0.01
0.02 0.03 0.01
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
* All amounts have been rounded off to two decimal points. ** does not include the compensation paid for the professional/advisory services. *** appointed to our Board post March 31, 2018.
In addition to the above, pursuant to a resolution dated July 26, 2014 passed by the Board of Directors, Paul Heinz Hugentobler, non-executive, non-independent Director of our Company is entitled to receive a payment of US $ 150,000 per annum, net of applicable taxes in India from our Company for rendering professional services to our Company with effect from October 1, 2014 and reimbursement of expenses incurred on travel, boarding and lodging either directly or by way of reimbursement in connection with the advisory services rendered by him to our Company. The following table sets forth the amount paid by our Company to Paul Heinz Hugentobler for rendering his professional/advisory services in the current Fiscal (till November 30, 2018) and for Fiscals 2018, 2017 and 2016: (₹ in crores) Name of Director
Paul Heinz Hugentobler
Till November 30, 2018 0.71
Total professional/advisory fee paid* Fiscal 2018 Fiscal 2017 1.08
1.11
Fiscal 2016 1.11
* All amounts have been rounded off to two decimal points.
Corporate Governance Our Board is in compliance with the corporate governance requirements under SEBI Listing Regulations, and under the Companies Act. Committees of the Board of Directors The Board of Directors has constituted the following committees: (i) Audit Committee; (ii) Nomination and Remuneration Committee; (iii) Stakeholders’ Relationship Committee; (iv) Corporate Social Responsibility Committee; and (v) Committee of Directors. The Audit Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee and Corporate Social Responsibility Committee have been constituted and function in accordance with the relevant provisions of the Companies Act and the SEBI Listing Regulations. The following table sets forth the members of the aforesaid committees as of the date of this Placement Document: Committee Audit Committee Nomination Committee
and
Remuneration
Stakeholders’ Relationship Committee Corporate Social Committee Committee of Directors
Responsibility
Members Krishna Behari Agarwal (Chairman), Kailash Nath Khandelwal, Achintya Karati, Jayant Narayan Godbole, Raj Kumar Lohia Raj Kumar Lohia (Chairman), Achintya Karati, Jayant Narayan Godbole, Suparas Bhandari Krishna Behari Agarwal (Chairman), Kailash Nath Khandelwal, Raj Kumar Lohia, Suparas Bhandari Krishna Behari Agarwal (Chairman), Jayant Narayan Godbole, Suparas Bhandari, Sushila Devi Singhania Raj Kumar Lohia, Krishna Behari Agarwal, Yadupati Singhania, Sushila - 128 -
Committee
Members Devi Singhania
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Management Organization Chart
Key Management Personnel and Senior Management Personnel of our Company The following table sets forth the details of our Key Management Personnel: Name of the Key Management Personnel Yadupati Singhania Ajay Kumar Saraogi Shambhu Singh
Designation Chairman and Managing Director Chief Financial Officer and President (Corporate Affairs) Assistant Vice President (Legal) & Company Secretary and Compliance Officer
In addition to the above, the following table sets forth the details of our Senior Management Personnel: Name of the Senior Management Personnel Abhishek Singhania Andleeb Jain Ashok Ghosh B.K. Arora Madhavkrishna Singhania Raghavpat Singhania Rajnish Kapur Santosh Kumar Tejwani
Designation Special Executive Chief People Officer President, Education and CSR Business Head (White Cement) Special Executive Special Executive Business Head (Grey Cement) Head (Projects)
Brief profiles of our Key Management Personnel* For brief profile of our Chairman and Managing Director, see “Board of Directors and Senior Management” on page 123. Ajay Kumar Saraogi, aged 62 years, is the Chief Financial Officer and President (Corporate Affairs) of our Company. He holds a bachelor of arts (honours) degree in economics from Shri Ram College of Commerce, University of Delhi and a bachelor of laws degree from Kanpur University. He has over 40 years of experience in the field of finance. He received a gross remuneration of ` 1.68 crore in the current Fiscal (till November 30, 2018). Shambhu Singh, aged 53 years, is the Assistant Vice President (Legal) & Company Secretary and Compliance Officer at our Company. He holds a bachelor’s degree in commerce and a bachelor’s degree in law from the University of Calcutta and is a fellow member of Institute of Company Secretaries of India. Prior to joining our Company, he worked with Asiatic Oxygen Limited. He joined our Company in 2008. He is responsible for overseeing legal and secretarial functions of our Company. He received a gross remuneration of ` 0.30 crore in the current Fiscal (till November 30, 2018). *Details included in the profiles of Key Management Personnel have been taken from back-up documents, wherever available and affidavits provided by the respective Key Management Personnel.
Brief profiles of our Senior Management Personnel* Abhishek Singhania, aged 45 years, is a Special Executive of our Company. He completed his schooling from Modern School, New Delhi and graduated from Kanpur University with a bachelor’s degree in commerce. He has over 24 years of experience in computer software. He was a promoter director of J.K. Technosoft Limited. He is presently looking after the corporate affairs of our Company. Andleeb Jain, aged 48 years, is the Chief People Officer of our Company. He holds a bachelor of engineering degree in chemical engineering from Panjab University, Chandigarh and a diploma in business finance from the Institute of Chartered Financial Analysts of India University. Prior to joining our Company, he worked with, inter alia, Grasim Industries, Rallis India Limited, GMR Group, Punj Lloyd Group and Isolux Corsan. He joined our Company in 2017. Ashok Ghosh, aged 65 years, is the President, Education and CSR, of our Company. He holds a master’s degree in economics from Kanpur University. At present, he is looking after the affairs of Sir Padampat Singhania University, Udaipur, Rajasthan and is also coordinating other CSR activities of our Company. He joined our Company in 2004.
B.K. Arora, aged 69 years, is the Business Head (White Cement) of our Company. He holds a bachelor of science degree from the Institute of Technology, Benaras Hindu University. He has over 40 years of experience in the cement industry. Madhavkrishna Singhania, aged 30 years, is a Special Executive of our Company. He is an electrical and computer engineer from Carnegie Mellon University, USA. He is currently heading the new projects division of our Company and has been instrumental in our expansion plan. Raghavpat Singhania, aged 34 years, is a Special Executive of our Company. He holds a bachelor’s degree in science from Sheffield Hallam University. He is responsible for white cement and wall putty operations of our Company. Rajnish Kapur, aged 55 years, is the Business Head (Grey Cement) of our Company. He holds a master’s degree in technology from the Indian Institute of Technology, Mumbai. Prior to joining our Company, he was the managing director of Holcim Cement. He has also served in the Corps of Electronics and Mechanical Engineers of the Indian Army for 23 years. Santosh Kumar Tejwani, aged 60 years, is the Head (Projects) of our Company. He holds a bachelor of engineering degree in mechanical engineering from Maulana Azad College of Technology, Bhopal University, Bhopal. He has a rich experience in execution of green field and brown field projects. His expertise also includes operation and maintenance of plants. Prior to joining our Company, he worked with, inter alia, Birla Corporation Limited, Ambuja Cements Limited, Prism Cement Limited and Reliance Cement Private Limited. He joined our Company in 2017. *Details included in the profiles of Senior Management Personnel have been taken from back-up documents, wherever available and affidavits provided by the respective Senior Management Personnel.
Relationship among our Key Management Personnel: None of our Key Management Personnel are related to each other. Interest of our Key Management Personnel and Senior Management Personnel Except as stated below and in “Related Party Transactions” on page 78, our Key Management Personnel and Senior Management Personnel do not have any other interest in our Company or its business. For details of interest of Yadupati Singhania and Abhishek Singhania in our Company, see “Interest of Directors of our Company” on page 126. Our Key Management Personnel and Senior Management Personnel do not have any interest in our Company other than to the extent of the remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them and to the extent of the Equity Shares held by them or their relatives or the entities in which they are interested as directors or members, in our Company, if any. Other than as disclosed in this Placement Document, there are no outstanding transactions other than in the ordinary course of business undertaken by our Company, in which the Key Management Personnel or the Senior Management Personnel are interested. None of the Key Management Personnel or Senior Management Personnel has taken any loans from our Company. Further, our Company has not availed any loans from the Key Management Personnel or the Senior Management Personnel which are currently outstanding. Shareholding of the Directors
As of December 21, 2018, except as stated below, none of the Directors hold any Equity Shares in our Company: Sr. No. 1. 2. 3. 4.
Name Yadupati Singhania Kailash Nath Khandelwal Sushila Devi Singhania Achintya Karati
Number of Equity Shares 12,064,198 1,000 920,957 640
- 132 -
Sr. No. 5.
Name Krishna Behari Agarwal
Number of Equity Shares 300
Shareholding of the Key Management Personnel As of December 21, 2018, except as stated below, none of the Key Management Personnel hold any Equity Shares in our Company: Sr. No. 1. 2. 3.
Name Yadupati Singhania Ajay Kumar Saraogi Shambhu Singh
Number of Equity Shares 12,064,198 3,340 5
Shareholding of the Senior Management Personnel As of December 21, 2018, except as stated below, none of the Senior Management Personnel hold any Equity Shares in our Company: Sr. No. 1. 2. 3.
Name Abhishek Singhania Madhavkrishna Singhania Raghavpat Singhania
Number of Equity Shares 58,994 210 210
Other confirmations Except as otherwise stated in this Placement Document, none of the Directors, Promoter or any Key Management Personnel have any financial or other material interest in the Issue. None of our Company, our Directors or Promoters have been identified as wilful defaulters as defined under the SEBI ICDR Regulations. Neither our Promoters nor our Directors have been declared a fugitive economic offender under section 12 of the Fugitive Economic Offenders Act, 2018. As on the date of the Placement Document, our Company has no subsisting employee stock option plans. Related Party Transactions For details of the related party transactions during the Fiscals 2017 and 2018, as per the requirements under Ind-AS 24, see “Related Party Transactions” on page 78. For details of the related party transactions during the Fiscal 2016, as per the requirements under the Indian GAAP, see “Related Party Transactions” on page 78.
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PRINCIPAL SHAREHOLDERS The shareholding pattern of our Company as of September 30, 2018 is as follows: 1.
Summary statement of the shareholding pattern
Category Category of No. of No. of fully No. of No. of (I) shareholder (II) shareholders paid-up equity partly shares (III) shares held paid- underlying (IV) up Depository equity Receipts shares (VI) held (V)
Total No. Shareholding as a shares held % of total no. of (VII)= shares(calculated (IV)+(V)+ as per SCRR,1957) (VI) (VIII) As a % of (A+B+C2)
Number of Voting rights held in each class of securities (IX)
No. of voting Rights
(A)
(B) ( C) (C1) (C2)
Promoter & Promoter Group Public Non promoterNon Public Shares underlying DRs Shares held by Employee Trusts Total
No. of Shares Shareholding, as Number of Number of Number of equity Underlying a % assuming locked in shares shares pledged or shares held in Outstanding full conversion (XII) otherwise dematerialized form convertible of convertible encumbered (XIV) securities securities (as a (XIII) (including percentage of Warrants) diluted share (X) capital) (XI)=(VII)+(X) No. As a % of Number As a % Total as a % As a % of of (A+B+C) (a) total (a) of total (A+B+C2) shares shares held (b) held (b) Total as a % of (A+B+C) 64.16 0 0 0 0 4,48,66,451
23
4,48,66,571
0
0
4,48,66,571
64.16
Class- eg: X Class eg : Total y 4,48,66,571 4,48,66,571
71,091
2,50,60,679
0
0
2,50,60,679
35.84
2,50,60,679
2,50,60,679
35.84
0
0
0
0
NA
2,46,67,837 NA
0
0
0
0
0
0.00
0
0
0.00
0
0
0
0
NA
0
0
0
0
0
0
0.00
0
0
0.00
0
0
0
0
NA
0
71,114
6,99,27,250
0
0
6,99,27,250
100.00
6,99,27,250
6,99,27,250
100.00
0
0
0
0
6,95,34,288
2.
Statement showing shareholding pattern of the Promoter and Promoter Group Category and
(1) (a) 1
2 3
Name of the Shareholders (I)
INDIAN Individuals/Hindu undivided Family Gaur Hari Singhania Vasantlal D.Mehta Raghubir Prasad Singhania Sushila Devi Singhania Yadupati Singhania
No. of No. of fully Part No. of Total No. shares Shareholding shareholders paid up ly shares held % calculate (III) equity shares paid underlying (VII)=(IV+V+VI as per held (IV) -up Depository ) SCRR, 1957 equi Receipts As a % of ty (VI) (A+B+C2) shar (VIII) es held (V)
1
20 0 0 9,20,957 1,20,64,198
0 0 0 0 0
0 0 0 0 0
20 0 0 9,20,957 1,20,64,198
0.000 0.000 0.000 1.317 17.252
0 0 0 0 0 0 0 0 0 0 0 0
1 1 1
4,263 13,05,452 31,465 33,428 49,662 58,994 210 210 3,340 3,000 3,940 1,000 0 20 5,040 500
0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
4,263 13,05,452 31,465 33,428 49,662 58,994 210 210 3,340 3,000 3,940 1,000 0 20 5,040 500
1
40
0
0
1 1
0 0 0 0 0
0.006 1.867 0.045 0.048 0.071 0.084 0.001 0.001 0.005 0.004 0.006 0.001 0.000 0.000 0.007 0.001
40
0.000
19 (d) 1 2 3
Any Other (specify) J.K.Traders Ltd. G.H.Securities Pvt.Ltd. Yadu International Ltd.
1 1 1
1,81,254 20 3,01,99,518
0 0 0
0 0 0
1,81,254 20 3,01,99,518
0.259 0.000 43.187
4
Yadu Securities Pvt.Ltd.
1
40
0
0
40
0.000
16 17 18
(2) (a) (b) (c ) (d) (e)
1 1 1 1 1 1 1 1 1 1 1 1
No. of voting Rights ClassClas Total Equity s eg : y
20 0 0 9,20,957 1,20,64,1 98 4,263 13,05,452 31,465 33,428 49,662 58,994 210 210 3,340 3,000 3,940 1,000 0 20 5,040 500
Kalpana Singhania Kavita Y Singhania Manorama Devi Singhania Nidhipati Singhania Ramapati Singhania Abhishek Singhania Madhav Krishna Singhania Raghavpat Singhania Ajay Kumar Saraogi Amrita Saraogi Anil Kumar Agrawal Kailash Nath Khandelwal Radha Rani Khandelwal Prashant Seth Pushpa Saraogi Radha Rani Khandelwal Kailash Nath Khandelwal Satish Kumar Agarwal
4 5 6 7 8 9 10 11 12 13 14 15
Number of Voting Rights held in each class of securities (IX)
FOREIGN Individuals (Non-resident Individual/ Foreign Individuals) Government Institutions Foreign Portfolio Investor Any other (specify)
- 135 -
No. of Shareholding, Number of Number of shares as a % locked in Shares Underlying assuming full shares pledged or Outstanding conversion of (XII) otherwise convertible convertible encumbered securities securities (as a (XIII) percentage of No. As a No. As a Total (including diluted share (a) % of as a % Warrants) (a) % of (X) capital) of Total total total (XI)=(VII)+(X voting shares shares ) as a % of rights held held A+B+C2 (b) (b)
Number of equity shares held in dematerialize d form (XIV)
0.000 0.000 0.000 1.317 17.252
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 9,20,957 1,20,64,198
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
20 0 0 9,20,957 1,20,64,1 98 4,263 13,05,452 31,465 33,428 49,662 58,994 210 210 3,340 3,000 3,940 1,000 0 20 5,040 500
0.006 1.866 0.045 0.048 0.071 0.084 0.001 0.001 0.005 0.004 0.006 0.001 0.000 0.000 0.007 0.001
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
40
0
40
0.000
0
0
0
0
0
0
4,263 13,05,452 31,465 33,428 49,662 58,994 210 210 3,340 3,000 3,940 1,000 0 20 5,040 500 0 40
1,81,254 20 3,01,99,5 18 40
0 0 0
1,81,254 20 3,01,99,5 18 40
0.259 0.000 43.187
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
1,81,254 0 3,01,99,478
0.000
0
0
0
0
0
0
0
0
Category and
Name of the Shareholders (I)
Sub-total (A) (2) Total Shareholding of Promoter and Promoter Group (A) = (A)(1) + (A)(2)
No. of No. of fully Part No. of Total No. shares Shareholding shareholders paid up ly shares held % calculate (III) equity shares paid underlying (VII)=(IV+V+VI as per held (IV) -up Depository ) SCRR, 1957 equi Receipts As a % of ty (VI) (A+B+C2) shar (VIII) es held (V)
0 23
0 4,48,66,571
0 0
0 0
0 4,48,66,571
- 136 -
0.000 64.161
Number of Voting Rights held in each class of securities (IX)
No. of voting Rights ClassClas Total Equity s eg : y
0
0
0
No. of Shareholding, Number of Number of shares as a % locked in Shares Underlying assuming full shares pledged or Outstanding conversion of (XII) otherwise convertible convertible encumbered securities securities (as a (XIII) percentage of No. As a No. As a Total (including diluted share (a) % of as a % Warrants) (a) % of (X) capital) of Total total total (XI)=(VII)+(X voting shares shares ) as a % of rights held held A+B+C2 (b) (b) 0.000 0 0 0 0 0 0 64.161 0 0 0 0 0 0
Number of equity shares held in dematerialize d form (XIV)
0 4,48,66,451
3.
Statement showing shareholding pattern of the public shareholders
Category & Name of the Shareholders
(1) (a) 1 (b) (c ) (d) (e) 1 2 3 (f) (g) 1 2 (h) (i)
(2) (3)
(a)
(b) (c ) (d) 1 (e) 1 2 3
(I)
Institutions Mutual funds/UTI Franklin Templetion Mutual Fund A/c Venture Capital Funds Alternate Investment Funds Foreign venture Capital Investors Foreign Portfolio Investors Fidellity Investment Trust Fidelity Series Franklin Templeton Investment Funds Templeton Global Investment Trust-TEM Financial Institutions/Banks Insurance Companies Gereral Insurance Corporation of India HDFC Standard Life Insurance Co. Provident funds/Pension Funds Foreign Institutional Investors Sub-Total (B)(1) Central Government/ State Government(s)/ President of India Sub-Total (B)(2) Non-Institutions Individuals. i. Individual shareholders holding nominal share capital upto Rs.2 lakhs ii. Individual shareholders holding nominal share capital in excess of Rs.2 lakhs. NBFCs registered with RBI Employee Trusts overseas Depositaries (holding DRs ) (balancing figure) Any other (specify) Bodies Corporate Non-Resident (REP) Non-Resident (Non-REP)
No. of No. of fully Partly No. of Total No. of Share shareholder paid-up equity paidshares shares held holding % s shares held up underlying VII = IV+ calculated as (III) (IV) equity Depository V + VI per SCRR, shares Receipts 1957 held (VI) As a % of (V) (A+B+C2) VIII
Number of Voting rights held in each class of securitiees (IX) No. of voting Rights Class- Class Total Equity Eg : y
No. of Total Number Number of shares shares shareholding of Locked Pledged or otherwise Underlying as a % in shares encumbered Outstanding assuming (XII) (XIII) full Total convertible No. As a No. As a % of as a securities conversion (a) % of (a) (not total of % of (including total applicable) shares Total Warrants) convertible shares held (b) (X) securities voting held (Not (as a rights (b) applicable) pecentage of diluted share capital) (XI) NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 0 0 0 0 0 0 0
Number of equity shares held in dematerialized form (XIV)
61 1 0 1 0 81 1 1 1 62 5 1 1
75,54,941 12,17,476 0 1,402 0 20,22,493 26,30,117 20,28,405 7,61,388 16,991 1,58,577 7,00,060 19,90,472
0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
75,54,941 12,17,476 0 1,402 0 20,22,493 26,30,117 20,28,405 7,61,388 16,991 1,58,577 7,00,060 19,90,472
10.804 1.741 0.000 0.002 0.000 2.893 3.761 2.900 1.089 0.024 0.227 1.001 2.846
75,54,941 12,17,476 0 1,402 0 20,22,493 26,30,117 20,28,405 7,61,388 16,991 1,58,577 7,00,060 19,90,472
0 0 0 0 0 0 0 0 0 0 0 0 0
75,54,941 12,17,476 0 1,402 0 20,22,493 26,30,117 20,28,405 7,61,388 16,991 1,58,577 7,00,060 19,90,472
16 0 232
25,826 0 1,91,08,148
0 0 0
0 0 0
25,826 0 1,91,08,148
0.036 0.000 27.324
25,826 0 1,91,08,148
0 0 0
25,826 0 1,91,08,148
0
0
0
0
0
0
0
0
0
0
0
0
0
0
NA
0
0
0.000
0
0
0
0.000
0
0
0
0
0
0
0
0
NA NA
0
67,363
35,14,660
0
0
35,14,660
5.026
35,14,660
0
35,14,660
0
0
0
0
0
NA
32,29,414
4
11,28,069
0
0
11,28,069
1.613
11,28,069
0
11,28,069
0
0
0
0
0
NA
11,28,069
75,34,989 12,17,476 0 1,402 0 20,22,493 26,30,117 20,28,405 7,61,388 13,065 1,58,567 7,00,060 19,90,472 0 3,914 0 1,90,62,348
NA NA NA 0
0
0
0
0
0.000
0
0
0
0
0
0
0
0
683 2,173 483
7,80,702 1,29,884 60,401
0 0 0
0 0 0
7,80,702 1,29,884 60,401
1.116 0.185 0.086
7,80,702 1,29,884 60,401
0 0 0
7,80,702 1,29,884 60,401
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
- 137 -
NA NA NA NA NA
0 7,73,653 1,11,175 60,249
Category & Name of the Shareholders
4 5 6 7 8 9 10 11 12
Non-Domestic Cos./ OCB Foreign Nationals Trusts Escrow Account Societies Clearing Members Foreign Corporate Bodies Enemy Nationals' Investor Education & Protection Fund Sub-Total (B)(3) Total Public Shareholding (B) = (B)(1) + (B)(2) + (B)(3)
(I)
No. of No. of fully Partly No. of Total No. of Share shareholder paid-up equity paidshares shares held holding % s shares held up underlying VII = IV+ calculated as (III) (IV) equity Depository V + VI per SCRR, shares Receipts 1957 held (VI) As a % of (V) (A+B+C2) VIII
Number of Voting rights held in each class of securitiees (IX) No. of voting Rights Class- Class Total Equity Eg : y
0 0 9 1 4 132 5 1 1 70,859
0 0 2,216 160 1,09,411 27,625 54,612 66 1,44,725 59,52,531
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 2,216 160 1,09,411 27,625 54,612 66 1,44,725 59,52,531
0.000 0.000 0.003 0.000 0.156 0.039 0.078 0.000 0.206 8.514
0 0 2,216 160 1,09,411 27,625 54,612 66 1,44,725 59,52,531
0 0 0 0 0 0 0 0 0
0 0 2,216 160 1,09,411 27,625 54,612 66 1,44,725 59,52,531
71,091
2,50,60,679
0
0
2,50,60,679
35.838
2,50,60,679
0
2,50,60,679
- 138 -
No. of Total Number Number of shares shares shareholding of Locked Pledged or otherwise Underlying as a % in shares encumbered Outstanding assuming (XII) (XIII) full Total convertible No. As a No. As a % of as a securities conversion (a) % of (a) (not total of % of (including total applicable) shares Total Warrants) convertible shares held (b) (X) securities voting held (Not (as a rights (b) applicable) pecentage of diluted share capital) (XI) 0 0 0 0 0 NA 0 0 0 0 0 NA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0
0
0
0
0
NA
Number of equity shares held in dematerialized form (XIV)
0 0 689 160 75,613 27,625 54,117 0 1,44,725 56,05,489 2,46,67,837
4.
Statement showing shareholding pattern of the non-promoter- non public shareholders
Category & Name of the Shareholders (I)
(1) (a) (i) (ii) (2)
(a)
No. of shareholders (III)
No. of Partly No. of Total No. fully paidshares shares paidup underlying held up equity Depository (VII= equity shares Receipts IV+V+VI) shares held (VI) held (V) (IV)
Shareholding % calculated as per SCRR, 1957 As a % of (A+B+C2) (VIII)
Number of Voting rights held in each class of securities (IX)
No. of voting Rights ClassClass Total eg X eg : y
Custodian/DR Holder Name of DR Holder (if applicable) abc…. efg…. Employee Benefit Trust (under SEBI (Share based Employee Benefit) Regulations,2014) Name(abc…
Total as a % of Total voting rights
No. of Shares Underlying Outstanding convertible securities (including Warrants) (X)
Total shareholding, as a % assuming full conversion of convertible securities (as a percentage of diluted share capital) (XI)
Number of Locked in shares (XII) No.
Number of shares pledged or otherwise encumbered (XIII) As a % No. (Not As a % of of total applicable) total shares shares held held ( Not applicable) NA NA NA NA NA NA
Total Non-Promoter- Non Public Shareholding(C ) = (C )(1)+(C )(2)
NA
- 139 -
Number of equity shares held in dematerialized form (XIV) (Not applicable)
ISSUE PROCEDURE Set forth below is a summary intended to present a general outline of the procedure relating to the application, payment of Bid Amount, Allocation and Allotment of the Equity Shares to be issued pursuant to the Issue. The procedure followed in the Issue may differ from the one mentioned below and the investors are presumed to have apprised themselves of such changes from our Company or the BRLM. Our Company, the BRLM and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any Bidder on whether such Bidder is eligible to acquire the Equity Shares. Prospective investors are also advised to inform themselves of any restrictions or limitations that may be applicable to them. See ‘Selling Restrictions’ and ‘Transfer Restrictions’ on pages 150 and 156 respectively. Investors that apply in the Issue will be required to confirm and will be deemed to have represented to our Company, the BRLM and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares being offered in the Issue. The Issue is being made to QIBs in reliance upon Chapter VI of the SEBI ICDR Regulations, section 62 and section 42 of the Companies Act, 2013 and the rules thereunder. The Issue has been approved by our Board in its meeting on June 28, 2018 and by our members in its AGM on July 28, 2018. Our Company has received the in-principle approvals each dated December 24, 2018 from NSE and BSE, under Regulation 28(1) of the SEBI Listing Regulations. Our Company has also filed a copy of the Preliminary Placement Document and this Placement Document with the Stock Exchanges. After the Allotment of Equity Shares, our Company shall make applications to the Stock Exchanges for the listing approvals. Subsequently, after the credit of Equity Shares to the Beneficiary Accounts, our Company shall make applications to the Stock Exchanges for the final listing and trading approvals. Our Company shall also make the requisite filings with the RoC within the stipulated period as required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014. The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States and, unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers, and sales are made. For further information, see the sections “Selling Restrictions” and “Transfer Restrictions” beginning on pages 150 and 156, respectively. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Issue Procedure 1.
Our Company, in consultation with the BRLM has identified QIBs and circulated serially numbered, specifically addressed copies of the PPD cum Application Form either in electronic form or physical form to such QIBs. In terms of section 42(3) of the Companies Act, 2013, our Company shall maintain records of the QIBs to whom the PPD cum Application Form have been dispatched.
2.
The list of QIBs to whom the PPD cum Application Form has been delivered was determined by the Company in consultation with the BRLM. Unless a serially numbered PPD cum Application Form was addressed to a particular QIB, no invitation shall be deemed to have been made to such QIB to make an offer to subscribe to Equity Shares pursuant to the Issue. Even if such documentation were to come into the possession of any person other than the intended recipient, no offer or invitation to offer shall be deemed to have been made to such person and any application that does not comply with this requirement shall be treated as invalid.
3.
The duly completed Application Form and a copy of the PAN card were to be submitted to the BRLM.
4.
QIBs could submit their Bids through the Application Form, including any revisions thereof, during the Bidding Period to the BRLM.
5.
QIBs were required to indicate the following in the Application Form: a.
Full official name of the QIB to whom Equity Shares are to be Allotted;
b.
Number of Equity Shares Bid for;
c.
Bid Amount;
d.
The details of the Beneficiary Account(s) to which the Equity Shares should be credited; and
e.
a representation that it is outside the United States and is acquiring the Equity Shares in an offshore transaction in reliance on Regulation S and it has agreed to all the representations set forth in the PPD cum Application Form.
NOTE: Eligible FPIs are required to indicate the SEBI FPI registration number in the Application form. 6.
QIBs were required to transfer the Bid Amount in the Escrow Account in the name of “J. K. Cement QIP – Escrow Account” with Axis Bank Limited. No payment should be made by QIBs in cash. Please note that any payment of Bid Amount should have been made from the bank accounts of the QIBs applying for the Equity Shares and our Company shall keep a record of the bank account from where such payment for subscriptions have been received. Monies payable on Equity Shares to be held by joint holders should have been paid from the bank account of the person whose name appears first in the application. Until Allotment, and the filing of return of Allotment by our Company with the RoC, or receipt of final listing and trading approvals from the Stock Exchanges, whichever is later, all monies received for subscription of the Equity Shares shall be kept in a separate bank account with a scheduled bank and shall be utilised only for the purposes permitted under the Companies Act, 2013.
7.
Once a duly filled Application Form is submitted by a QIB and the Bid Amount is transferred to the Escrow Account, it constitutes an irrevocable offer and cannot be withdrawn or revised downwards after the Bid Closing Date. The Bid Closing Date shall be notified to the Stock Exchanges and upon such notification the QIBs shall be deemed to have been given notice of such date.
8.
Bids made by asset management companies or custodians of Mutual Funds shall specifically state the names of the concerned schemes for which the Bids are made. In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids, provided that the Bids clearly indicate the scheme for which the Bid has been made.
9.
Upon the receipt of the duly completed Application Forms and the Bid Amount through electronic transfer and after the Bid Closing Date, our Company has in consultation with the BRLM, determined the final terms, including (i) the Issue Price, (ii) the number of Equity Shares to be Allocated; and (iii) the QIBs to whom such Equity Shares shall be Allocated. Upon such determination, the BRLM on behalf of our Company will send serially numbered CANs to the QIBs who have been Allocated the Equity Shares, together with a serially numbered Placement Document either in electronic form or through physical delivery. The CAN shall contain details on the number of Equity Shares Allocated to the QIB and the dispatch of a CAN shall be deemed a valid, binding and irrevocable contract in respect of the Equity Shares that have been Allocated. Please note that the Allocation will be at the absolute discretion of our Company and will be in consultation with the BRLM.
10.
Our Company shall Allot the Equity Shares as per the details provided in the CANs to such QIBs. Our Company shall intimate the Stock Exchanges about the Allotment.
11.
After our Board passes the resolution for Allotment and prior to crediting the Equity Shares into the Beneficiary Accounts of the successful Bidders, our Company shall apply to the Stock Exchanges for listing approvals. After receipt of the listing approvals from the Stock Exchanges, our Company shall credit the Equity Shares into the Beneficiary Accounts of the respective QIBs. Our Company shall then apply for the final trading approvals from the Stock Exchanges.
12.
The Equity Shares that have been credited to the Beneficiary Accounts of the QIBs shall be eligible for trading on the Stock Exchanges only upon the receipt of final listing and trading approvals from the Stock Exchanges. - 141 -
13.
The final listing and trading approvals granted by the Stock Exchanges are also ordinarily available on the websites of the Stock Exchanges, and our Company may communicate the receipt of the final listing and trading approvals to the QIBs who have been Allotted Equity Shares. Our Company or the BRLM shall not be responsible for any delay or non-receipt of the communication of the final listing and trading approvals from the Stock Exchanges or any loss arising from such delay or non-receipt. QIBs are advised to apprise themselves of the status of the receipt of such approvals from the Stock Exchanges or our Company.
Qualified Institutional Buyers Only QIBs that are not otherwise excluded pursuant to Regulation 179(2)(b) of the SEBI ICDR Regulations are eligible to invest in the Equity Shares pursuant to the Issue. A QIB means:
A Mutual Fund, a VCF registered with SEBI, AIF registered with SEBI, and FVCI registered with SEBI; Eligible FPI; public financial institution as defined in section 2(72) of the Companies Act, 2013; scheduled commercial bank; a multilateral and bilateral development financial institution; a state industrial development corporation; an insurance company registered with the Insurance Regulatory and Development Authority; a provident fund with minimum corpus of ₹ 25 crore; a pension fund with minimum corpus of ₹ 25 crore; National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India; insurance funds set up and managed by army, navy or air force of the Union of India; insurance funds set up and managed by the Department of Posts, India; and Systemically Important NBFCs
Eligible FPIs are permitted to participate in this Issue subject to compliance with applicable law and such that the shareholding of the Eligible FPIs does not exceed the specified limits as prescribed under applicable law in this regard. All non-resident QIBs shall ensure that the investment amount is paid as per RBI’s notification no. FEMA 20(R)/ 2017-RB dated November 7, 2017, as amended from time to time.
In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which means the same set of ultimate beneficial owner(s) investing through multiple entities) must be below 10% of our post-Issue equity share capital. Further, in terms of the FEMA, the total holding by each FPI shall be below 10% of the total paid-up equity share capital of our Company and the total holdings of all FPIs put together shall not exceed 24% of the paid-up equity share capital of our Company. The aggregate limit of 24% may be increased up to the sectoral cap by way of a resolution passed by the Board, followed by a special resolution passed by the shareholders of our Company and subject to prior intimation to RBI. In this regard, please note that as on the date of this Placement Document, our Company has not completed the process of increase in limit of aggregate holding of FPIs above 24%.
Allotments made to FVCIs, VCFs and AIFs in the Issue are subject to the rules and regulations that are applicable to them, including in relation to lock-in requirements. Specifically, investments by FVCIs are required to be made in compliance with Schedule 1 of FEMA 20. Eligible FPIs are permitted to participate in this Issue subject to compliance with conditions and restrictions which may be specified by the Government from time to time. In terms of the FEMA 20, for calculating the aggregate holding of FPIs in a company, holding of all registered FPIs shall be included. Our Company, the BRLM and any of their respective shareholders, directors, partners, officers, employees, counsel, advisors, representatives, agents or affiliates are not liable for any amendments or modifications or changes to applicable laws or regulations, which may occur after the date of this Placement Document. QIBs are advised to make their independent investigations and satisfy themselves that they are eligible to apply. QIBs are advised to ensure that any single application from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable laws or regulations or as specified in this Placement Document. Further, QIBs are required - 142 -
to satisfy themselves that any requisite compliance pursuant to this Allotment such as public disclosures under applicable laws is complied with. QIBs are advised to consult their advisers in this regard. Further, QIBs are required to satisfy themselves that their Bids would not eventually result in triggering an open offer under the Takeover Regulations. The QIB shall be solely responsible for compliance with the provisions of the Takeover Regulations, the SEBI (Prohibition of Insider Trading) Regulations, 2015 and other applicable laws, rules, regulations, guidelines, notifications and circulars. Under Regulation 179(2)(b) of the SEBI ICDR Regulations, no Allotment shall be made pursuant to the Issue, either directly or indirectly, to any QIB being, our Promoters, or any person related to, the Promoters. QIBs which have all or any of the following rights shall be deemed to be persons related to the Promoters:
rights under a shareholders’ agreement or voting agreement entered into with the Promoters or promoter group; veto rights; or a right to appoint any nominee director on the Board,
Provided, however, that a QIB which does not hold any shares in us and which has acquired the aforesaid rights in the capacity of a lender shall not be deemed to be related to the Promoters. A minimum of 10% of the Equity Shares offered in this Issue shall be available for Allocation to Mutual Funds. In case of under-subscription in the portion available for Allocation only to Mutual Funds, such portion or part thereof may be Allotted to other QIBs. Our Company and the BRLM are not liable for any amendment or modification or change to applicable laws or regulations, which may occur after the date of this Placement Document. QIBs are advised to make their independent investigations and satisfy themselves that they are eligible to apply. QIBs are advised to ensure that any single application from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Placement Document. Further, QIBs are required to satisfy themselves that their Bids would not eventually result in triggering an open offer under the Takeover Regulations. Note: Affiliates or associates of the BRLM, who are QIBs may participate in the Issue subject to compliance with applicable laws. Application Process PPD cum Application Form QIBs shall only use the serially numbered PPD cum Application Forms (specifically addressed to them) supplied by our Company and/ or the BRLM in either electronic form or by physical delivery for the purpose of making a Bid (including any revision of Bid) in terms of the Preliminary Placement Document and this Placement Document. By making a Bid (including the revision thereof) for Equity Shares through the PPD cum Application Form, each QIB will be deemed to have made the representations, warranties, acknowledgements and undertakings under the sections titled “Notice to Investors”, “Representations by Investors”, “Selling Restrictions” and “Transfer Restrictions” on pages 3, 5, 150 and 156, respectively, including: 1.
the QIB confirms that it is a QIB in terms of Regulation 2(1)(ss) of the SEBI ICDR Regulations, has a valid and existing registration under the applicable laws in India (as applicable) and is not excluded under Regulation 179(2)(b) of the SEBI ICDR Regulations and is eligible to participate in this Issue;
2.
the QIB has no right to withdraw its Bid or revise its Bid downwards after the Bid Closing Date;
3.
the QIB confirms that if Equity Shares are Allotted pursuant to this Issue, it shall not, for a period of one year from Allotment, sell such Equity Shares otherwise than on the floor of the Stock Exchanges;
4.
the QIB confirms that it is eligible to Bid and hold Equity Shares so Allotted and together with any Equity Shares held by the QIB prior to the Issue. The QIB further confirms that its holding of the Equity Shares, does not and shall not, exceed the level permissible as per any applicable regulations applicable to the QIB;
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5.
the QIB confirms that the Bids would not eventually result in triggering an open offer under the Takeover Regulations;
6.
the QIB confirms that it is not a Promoter of our Company and is not a person related to the Promoters of our Company, either directly or indirectly and its Application does not directly or indirectly represent the Promoters or Promoter Group or a person related to the Promoters;
7.
the QIB confirms that it has no rights under a shareholders’ agreement or voting agreement with the Promoter or promoter group, no veto rights or right to appoint any nominee director on the Board other than those acquired in the capacity of a lender (not holding any Equity Shares) which shall not be deemed to be a person related to the Promoters;
8.
the QIB confirms that to the best of its knowledge and belief, together with other QIBs participating in the Issue that belong to the same group or are under common control, the Allotment to the QIB shall not exceed 50% of the Issue Size. For the purposes of this statement:
a.
QIBs belonging to the “same group” shall mean entities where (a) any of them controls, directly or indirectly, through its subsidiary or holding company, not less than 15% of the voting rights in the other; or (b) any of them, directly or indirectly, by itself, or in combination with other persons, exercise control over the others; or (c) there is a common director, excluding nominee and independent directors, amongst a QIB, its subsidiary or holding company and any other QIB; “Control” shall have the same meaning as is assigned to it by clause 1(e) of Regulation 2 of the Takeover Regulations.
b.
9.
the QIB shall not undertake any trade in the Equity Shares credited to its Beneficiary Account until such time that the final listing and trading approvals for the Equity Shares are issued by the Stock Exchanges.
10. The QIB acknowledges that no Allotment shall be made to them if the price at which they have Bid for in the Issue is lower than the Issue Price. 11. The QIB acknowledges, represents and agrees that in the event its total interest in the paid-up share capital of our Company or voting rights in our Company, whether direct or indirect, beneficial or otherwise (any such interest, your “Holding”), when aggregated together with any existing Holding and/or Holding of any of the persons acting in concert, results in Holding of 5% or more of the total paid-up share capital of, or voting rights in our Company a disclosure of the aggregate shareholding and voting rights will have to be made under the Takeover Regulations. In case such QIB is an existing shareholder who, together with persons acting in concert, holds 5% or more of the underlying paid up share capital of, or voting rights in our Company a disclosure will have to be made under the Takeover Regulations in the event of a change of 2% or more in the existing Holding of the QIB and persons acting in concert. 12. The QIB represents that it is outside the United States and is acquiring the Equity Shares in an offshore transaction in reliance on Regulation S under the U.S. Securities Act and it has agreed to certain other representations set forth in the PPD cum Application Form and is not our affiliate or a person acting on behalf of such an affiliate. 13. It has read and understood, and by making a Bid for the Equity Shares through the PPD cum Application Forms and pursuant to the terms of the Preliminary Placement Document, will be deemed to have made the representations, warranties and agreements made under the sections “Notice to Investors”, “Representations by Investors”, “Selling Restrictions” and “Transfer Restrictions” on pages 3, 5, 150, and 156, respectively. QIBs MUST PROVIDE THEIR BENEFICIARY ACCOUNT DETAILS, PERMANANT ACCOUNT NUMBER, THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE PPD CUM APPLICATION FORM. QIBS MUST ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE BENEFICIARY ACCOUNT IS HELD. IF SO REQUIRED BY THE BRLM, THE QIBs SUBMITTING A BID, ALONG WITH THE PPD CUM APPLICATION FORM, WILL ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO THE BRLM TO EVIDENCE THEIR STATUS AS A “QIB” AS DEFINED HEREINABOVE. IF SO REQUIRED BY THE BRLM, THE ESCROW AGENT OR ANY STATUTORY OR REGULATORY AUTHORITY IN THIS - 144 -
REGARD, INCLUDING AFTER THE BID CLOSING DATE, THE QIB SUBMITTING A BID AND/ OR BEING ALLOTTED EQUITY SHARES IN THE ISSUE, WILL ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO FULFILL THE KNOW YOUR CLIENT (KYC) NORMS. Demographic details such as address, and bank account will be obtained from the Depositories as per the Depository Participant account details given above. Submission of PPD cum Application Form All PPD cum Application Forms must be duly completed with information including the name of the QIB, the price, payment mechanism and the number of Equity Shares Bid for. The Application Form were to be submitted to the BRLM either through electronic form or through physical delivery at the following address:
Name of BRLM Edelweiss Financial Services Limited
Address 14th Floor, Edelweiss House Off CST Road, Kalina, Mumbai 400 098, India
Contact Person Siddharth Disha Doshi
Shah/
Email
[email protected] om
Phone (Telephone and Fax) Tel: +91 22 4009 4400 Fax: +91 22 4086 3610
The BRLM shall not be required to provide any written acknowledgement of such submission. All Application Forms duly completed, Bid Amount and a copy of the PAN card were to be submitted to the BRLM as per the details provided in the respective PPD cum Application Forms. Bank Account for payment of Bid Amount Our Company has opened the Escrow Account in the name of “J. K. Cement QIP – Escrow Account” with Axis Bank Limited. The section titled “Application Form” on page 180 of this Placement Document includes details of the bank account(s) for the electronic transfer of funds. Each QIB was required to deposit the Bid Amount payable for the Equity Shares Bid by it pursuant to the PPD cum Application Form. QIBs could make payment of the Bid Amount only through electronic transfer of funds from their own bank accounts. Note: Payments through cash or cheques are liable to be rejected. Further, If the payment is not made favouring the Escrow Account, the PPD cum Application Form is liable to be cancelled. Pricing and Allocation There is a minimum pricing requirement under the SEBI ICDR Regulations. The Floor Price shall not be less than the average of the weekly high and low of the closing prices of the Equity Shares quoted on the stock exchange during the two weeks preceding the Relevant Date. However, a discount of 5% of the Floor Price has been offered by our Company in accordance with the provisions of the SEBI ICDR Regulations. The Company accepted Bids at any price at or above the 5% discount to the Floor Price. The “Relevant Date” referred to above, for Allotment, will be the date of the meeting in which the Board decides to open the Issue and “stock exchange” means any of the recognized stock exchanges in India on which the Equity Shares of the issuer of the same class are listed and on which the highest trading volume in such Equity Shares has been recorded during the two weeks immediately preceding the Relevant Date. Build-up of the book QIBs shall submit their Bids (including any revision thereof) through the PPD cum Application Forms, within the Bidding Period to the BRLM. Such Bids cannot be withdrawn or revised downwards after the Bid Closing Date. The book shall be maintained by the BRLM.
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Price discovery and allocation Our Company, in consultation with the BRLM, has determine the Issue Price, which is at or above the Floor Price. Our Company has offered a discount of 5% on the Floor Price in terms of Regulation 176 of the SEBI ICDR Regulations.
Method of Allocation Our Company shall determine the Allocation in consultation with the BRLM on a discretionary basis and in compliance with Chapter VI of the SEBI ICDR Regulations. All the PPD cum Application Forms received from the QIBs at or above the Issue Price shall be grouped together to determine the total demand. The Allocation to all such QIBs will be made at the Issue Price. Allocation to Mutual Funds for up to a minimum of 10% of the Issue Size shall be undertaken subject to valid Bids being received at or above the Issue Price. THE DECISION OF OUR COMPANY, IN CONSULTATION WITH THE BRLM IN RESPECT OF ALLOCATION SHALL BE FINAL AND BINDING ON ALL QIBS. QIBs MAY NOTE THAT ALLOCATION OF THE EQUITY SHARES IS AT THE SOLE AND ABSOLUTE DISCRETION OF OUR COMPANY IN CONSULTATION WITH THE BRLM, AND THE QIBs MAY NOT RECEIVE ANY ALLOCATION EVEN IF THEY HAVE SUBMITTED VALID APPLICATION FORMS AT OR ABOVE THE ISSUE PRICE. NEITHER OUR COMPANY NOR THE BRLM ARE OBLIGED TO ASSIGN ANY REASONS FOR SUCH NONALLOCATION.
Number of Allottees The minimum number of Allottees in the Issue shall not be less than: (a) (b)
two, where the Issue Size is less than or equal to ₹ 250 crore; or five, where the Issue Size is greater than ₹ 250 crore.
Provided that no single Allottee shall be Allotted more than 50 % of the Issue Size. QIBs belonging to the same group or those who are under same control shall be deemed to be a single Allottee for the purposes of the Issue. For details of what constitutes “same group” or “common control” see the “- Application Process – PPD cum Application Form” on page 143. CAN Based on PPD cum Application Forms received, our Company in consultation with the BRLM, shall decide the list of QIBs to whom the serially numbered CANs shall be sent, pursuant to which the details of the Equity Shares Allocated to them shall be notified to such QIBs. Additionally, a CAN will include probable designated date (“Designated Date”), being the date of credit of the Equity Shares to the QIB’s account, as applicable to the respective QIBs. QIBs who have been Allotted Equity Shares pursuant to the Issue would also be sent a serially numbered Placement Document either in electronic form or by physical delivery along with the serially numbered CAN. The dispatch of the serially numbered Placement Document and the CAN to a QIB shall be deemed to be a valid, binding and irrevocable contract. QIBs ARE ADVISED TO INSTRUCT THEIR DEPOSITORY PARTICIPANT TO ACCEPT THE EQUITY SHARES THAT MAY BE ALLOCATED / ALLOTTED TO THEM PURSUANT TO THE ISSUE. By submitting the PPD cum Application Form, the QIB would have deemed to have made the representations and warranties as specified “Notice to Investors” on page 3 and further that such QIB shall not undertake any trade on the - 146 -
Equity Shares credited to its Depository Participant account pursuant to the Issue until such time as the final listing and trading approval is issued by BSE and NSE. Designated Date and Allotment of Equity Shares 1.
Subject to the satisfaction of the terms and conditions of the Placement Agreement, our Company will ensure that the Allotment of the Equity Shares is completed by the Designated Date provided in the CAN.
2.
In accordance with the SEBI ICDR Regulations, Equity Shares will be issued and Allotment shall be made only in the dematerialized form to the Allottees. Allottees will have the option to re-materialize the Equity Shares, if they so desire, as per the provisions of the Companies Act, 2013 and the Depositories Act.
3.
Our Company, at its sole discretion, reserves the right to cancel the Issue at any time up to Allotment without assigning any reasons whatsoever.
4.
Following the Allotment of the Equity Shares pursuant to the Issue, our Company shall apply to the Stock Exchanges for listing approvals and post receipt of the listing approvals from the Stock Exchanges, our Company shall credit the Equity Shares into the Beneficiary Accounts of the QIBs.
5.
Following the credit of Equity Shares into the QIBs’ Beneficiary Accounts, our Company will apply for the final listing and trading approvals from the Stock Exchanges.
6.
The monies lying to the credit of the Escrow Account shall not be released until the final listing and trading approvals of the Stock Exchanges for the listing and trading of the Equity Shares issued pursuant to this Issue are received by our Company and the Company files the return of Allotment in connection with the Issue with the RoC, whichever is later.
7.
Pursuant to a circular dated March 5, 2010 issued by the SEBI (bearing reference no. SEBI/CFD/DIL/LA/1/2010/05/03), Stock Exchanges are required to make available on their websites the details of those Allottees in Issue who have been allotted more than 5% of the Equity Shares offered in the Issue, namely, names of the Allottees, and number of Equity Shares Allotted to each of them, pre and post Issue shareholding pattern of our Company along with this Placement Document.
8.
In the event that we are unable to issue and Allot the Equity Shares offered in the Issue or if the Issue is cancelled, within 60 days from the date of receipt of application monies, in accordance with Section 42 of the Companies Act, 2013, our Company shall repay the application monies within 15 days from the expiry of 60 days, failing which our Company shall repay that monies with interest at the rate of 12% p.a. from expiry of the 60 th day. The application monies to be refunded by us shall be refunded to the same bank account from which application monies was remitted by the QIBs.
Refunds In the event Bidders are not Allocated Equity Shares, for any reasons, for all or part of the Bid Amount submitted by such Bidder, or the Bidder withdraws the Bid before the Issue closing Date, or the Bidder has deposited Bid Amount higher than the Issue Price, such Bidders will be refunded the Bid Amount (or the excess Bid Amount, as applicable) paid by them. The refunds shall be made to the same bank account from which Bid Amount was remitted by the QIBs. Such QIBs to whom refunds shall be made will receive a Refund Intimation Letter from our Company providing details of the refund. Other Instructions Permanent Account Number or PAN Each QIB should mention its PAN allotted under the Income Tax Act. A copy of PAN card is required to be submitted with the Application Form. Further, PPD cum Application Forms without this information will be considered incomplete and are liable to be rejected. It is to be specifically noted that applicants should not submit the GIR number instead of the PAN as the Application Form is liable to be rejected on this ground. Right to Reject Applications - 147 -
Our Company, in consultation with the BRLM, may reject Bids, in part or in full, without assigning any reasons whatsoever. The decision of our Company and the BRLM in relation to the rejection of Bids shall be final and binding. Equity Shares in dematerialized form with NSDL or CDSL The Allotment of the Equity Shares in this Issue shall be only in dematerialized form (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). 1.
A QIB applying for Equity Shares in the Issue must have at least one Beneficiary Account prior to making the Bid.
2.
The Equity Shares Allotted to a successful QIB will be credited in electronic form directly to the beneficiary account of the QIB.
3.
Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity with NSDL and CDSL. BSE and NSE have electronic connectivity with CDSL and NSDL.
4.
The trading of the Equity Shares issued pursuant to the Issue would be in dematerialized form only for all QIBs in the demat segment of the respective Stock Exchanges.
5.
Our Company, the BRLM will not be responsible or liable for the delay in the credit of Equity Shares due to errors in the PPD cum Application Form or otherwise on the part of the QIBs.
6.
For details of our Company Secretary and Compliance Officer, see “General Information” on page 176.
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PLACEMENT The BRLM has entered into a Placement Agreement dated December 24, 2018 with our Company, pursuant to which, the BRLM has agreed, subject to certain conditions, to place the Equity Shares of our Company, on reasonable efforts basis, pursuant to Chapter VI of the SEBI ICDR Regulations and Section 42 of the Companies Act, 2013 and the rules made thereunder. The Placement Agreement contains customary representations and warranties, as well as indemnities from our Company, the BRLM and the Issue is subject to satisfaction of certain conditions and subject to termination in accordance with the terms contained therein. The BRLM and its affiliates and associates may engage in transactions with and perform services for our Company and its affiliates in the ordinary course of business and may have engaged, or may in the future engage, in commercial banking and investment banking transactions with our Company or affiliates, for which they may have received compensation and may in the future receive compensation. In terms of the Placement Agreement, our Company has also acknowledged that the BRLM or its Affiliates may, subject to applicable law, arrange to purchase for their account, Equity Shares pursuant to the Issue. Affiliates of the BRLM, which are registered as foreign portfolio investors with the SEBI, may offer, issue and sell participatory notes or other derivative instruments that are the economic equivalent of owning Equity Shares. The BRLM has acknowledged and agreed that any such participatory notes or other derivative instruments do not constitute any obligations or claim on the Company. Lock-up: Our Promoters and members of Promoter Group have agreed that, without the prior written consent of the BRLM, they shall not, and shall procure that no member of the Promoter Group, shall announce any intention to enter into any transaction whether any such transaction which is to be settled by delivery of Equity Shares, or such other securities, in cash or otherwise, during the period commencing on the date hereof and 180 days after the date of the Placement Document (both dates inclusive) directly or indirectly: (a) offer, issue, pledge, sell, encumber, contract to sell or announce the intention to sell, lend, purchase any option or contract to sell, grant or sell any option, right, contract or warrant to purchase, lend, make any short sale or otherwise transfer or dispose of any Equity Shares or any other securities of the Company substantially similar to the Equity Shares, including, but not limited to options, warrants or other securities that are convertible into, exercisable or exchangeable for, or that represent the right to receive Lock-up Shares or any such substantially similar securities, whether now owned or hereinafter acquired, (b) enter into any swap or other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequences of ownership of the Shares and the securities that are convertible into, exercisable or exchangeable for or any such substantially similar securities, whether now owned or hereinafter acquired; whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Shares or such other securities, in cash or otherwise, (c) deposit Shares with any other depositary in connection with a depositary receipt facility, (d) sell, lend, contract to sell, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares or interest in an entity which holds any Lock-up Shares,(e) enter into any transaction (including a transaction involving derivatives) having an economic effect similar to that of an issue, offer, sale or deposit of the Shares in any depository receipt facility, or (f) publicly announce its intention to enter into the transactions referred to in (a) to (d) above; nothing would restrict the inter-se transfer of any Equity Shares between Promoters/ members of the Promoter Group. In addition, our Promoters and members of Promoter Group have agreed that, without the prior written consent of the BRLM, neither one of them shall, and shall procure that no member of the Promoter Group will, during the Lock-up Period, make any demand for or exercise any right with respect to, the registration of any Shares or any other securities of the Company substantially similar to the Shares, including, but not limited to options, warrants or other securities that are convertible into, exercisable or exchangeable for, or that represent the right to receive Shares or any such substantially similar securities, whether now owned or hereinafter acquired.
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SELLING RESTRICTIONS
The distribution of this Placement Document or any offering material and the offering, sale or delivery of the Equity Shares is restricted by law in certain jurisdictions. Therefore, persons who may come into possession of this Placement Document or any offering material are advised to consult with their own legal advisors as to what restrictions may be applicable to them and to observe such restrictions.
General No action has been taken or will be taken by our Company or the BRLM that would permit a public offering of the Equity Shares to occur in any jurisdiction, or the possession, circulation or distribution of this Placement Document or any other material relating to our Company or the Equity Shares in any jurisdiction where action for such purpose is required (including filing of prospectus in India with SEBI or any other authority in connection with the Issue). Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and none of this Placement Document, any offering materials and any advertisements in connection with the offering of the Equity Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. The Issue will be made in compliance with the applicable SEBI ICDR Regulations. Each subscriber of the Equity Shares in the Issue will be deemed to have made acknowledgments and agreements as described under “Notice to Investors”, “Representations by Investors” and “Purchase and Transfer Restrictions”. India This Placement Document may not be distributed directly or indirectly in India or to residents of India and any Equity Shares offered in the Issue may not be offered or sold directly or indirectly in India to, or for the account or benefit of, any resident of India except as permitted by applicable Indian laws and regulations, under which an offer is strictly on a private and confidential basis and is limited to QIBs only and is not an offer to the public. This Placement Document is neither a public issue nor a prospectus under the Companies Act or an advertisement and should not be circulated to any person other than those to whom the offer is made. The Issue will be made in compliance with the SEBI ICDR Regulations. This Placement Document has not been and will not be registered as a prospectus with the RoC. The offering of Equity Shares pursuant to the Preliminary Placement Document and this Placement Document by issue of public advertisements or utilisation of any media, marketing or distribution channels or agents to inform the public at large about the Issue is prohibited. Australia This Placement Document is not a disclosure document within the meaning of the Corporations Act 2001 (Cth) (“Corporations Act”) and has not been lodged with the Australian Equity Shares and Investments Commission. No offer will be made under this Placement Document to investors to whom disclosure is required to be made under Chapter 6D of the Corporations Act. Investors under this Placement Document represent and warrant that they are “sophisticated investors” or “professional investors” and not “retail clients” within the meaning of those terms in the Corporations Act. No financial product advice is provided in this Placement Document and nothing in this Placement Document should be taken to constitute a recommendation or statement of opinion that is intended to influence a person or persons in making a decision to invest in the Equity Shares offered in the Issue. This Placement Document does not take into account the objectives, financial situation or needs of any particular person. Before acting on the information contained in this Placement Document, or making a decision to invest in the Equity Shares offered in the Issue, prospective investors should seek professional advice as to whether investing in the Equity Shares is appropriate in light of their own circumstances.
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Cayman Islands This Placement Document does not constitute an offer or invitation to the public in the Cayman Islands to subscribe for Equity Shares in the Issue. European Economic Area In relation to each Member State of the European Economic Area that has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is or was implemented in that Relevant Member State (the “Relevant Implementation Date”), the Equity Shares offered in the Issue may not be offered or sold to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Equity Shares that has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive (defined below) and the 2010 Amending Directive (defined below), except that the Equity Shares, with effect from and including the Relevant Implementation Date, may be offered to the public in that Relevant Member State at any time: a)
to persons or entities that are “qualified investors” as defined in the Prospectus Directive or, if that Relevant Member State has implemented the 2010 Amending Directive, as defined in the 2010 Amending Directive;
b)
to (i) fewer than 100 natural or legal persons (other than “qualified investors” as defined in the Prospectus Directive); or (ii) if that Relevant Member State has implemented the 2010 Amending Directive, fewer than 150 natural or legal persons (other than “qualified investors” as defined in the 2010 Amending Directive), in each case subject to obtaining the prior consent of the BRLM; and
c)
in any circumstances falling within Article 3(2) of the Prospectus Directive as amended (to the extent implemented in that Relevant Member State) by Article 1(3) of the 2010 Amending Directive, provided that no such offering of Equity Shares shall result in a requirement for the publication by our Company or the BRLM of a prospectus pursuant to Article 3 of the Prospectus Directive as amended (to the extent implemented in that Relevant Member State) by Article 1(3) of the 2010 Amending Directive.
For the purposes of this provision, the expression an “offer of Equity Shares to the public” in relation to any Equity Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Equity Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State and the expression “2010 Amending Directive” means Directive 2010/73/EU and includes any relevant implementing measure in each Member State. Neither our Company nor the BRLM has authorised, nor do they authorise, the making of any offer of Equity Shares through any financial intermediary on their behalf, other than offers made by our Company or the BRLM and its affiliates. Hong Kong This Placement Document has not been reviewed or approved by any regulatory authority in Hong Kong. In particular, this Placement Document has not been, and will not be, registered as a “prospectus” in Hong Kong under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“CO”) nor has it been authorised by the Securities and Futures Commission (“SFC”) in Hong Kong pursuant to the Securities and Futures Ordinance (Cap 571) (“SFO”). Recipients are advised to exercise caution in relation to the Issue. If recipients are in any doubt about any of the contents of this Placement Document, they should obtain independent professional advice. This Placement Document does not constitute an offer or invitation to the public in Hong Kong to acquire any Equity Shares nor an advertisement of the Equity Shares in Hong Kong. This Placement Document must not be issued, circulated or distributed in Hong Kong other than:
to “professional investors” within the meaning of the SFO and any rules made under that ordinance (“Professional Investors”); or
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in other circumstances which do not result in this Placement Document being a prospectus as defined in the CO nor constitute an offer to the public which requires authorisation by the SFC under the SFO.
Unless permitted by the securities laws of Hong Kong, no person may issue or have in its possession for issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Equity Shares, which is directed at, or the content of which is likely to be accessed or read by, the public of Hong Kong other than with respect to the Equity Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to Professional Investors. Any offer of the Equity Shares will be personal to the person to whom relevant offer documents are delivered, and a subscription for the Equity Shares will only be accepted from such person. No person who has received a copy of this Placement Document may issue, circulate or distribute this Placement Document in Hong Kong or make or give a copy of this Placement Document to any other person. No person allotted Equity Shares may sell, or offer to sell, such Shares to the public in Hong Kong within six months following the date of issue of such Equity Shares. Japan No securities registration statement in relation to the solicitations of the issue of the Equity Share in Japan (the “Solicitations”) has been filed or will be filed pursuant to Article 4, Paragraph 1 of the Financial Instrument and Exchange Law of Japan (the “FIEL”). Therefore, the Solicitations in Japan may be made to no more than 49 persons during the six-month period prior to the contemplated date of allotment of the Equity Shares in the Issue. Any person acquiring Equity Shares in the Issue: (a) may not, directly or indirectly, resell, assign, transfer, or otherwise dispose of the Equity Shares to any person in Japan or to or for the benefit of any resident of Japan, including any corporation or other entity organised under the laws of Japan, other than in “a lump sum” to a single person; and (b) shall deliver a notification indicating (a) and (b) herein to the transferee of the Equity Shares. Capitalised terms used above and not defined in this Placement Document have the meanings given to those terms in the FIEL Kuwait The Issue has not been approved by the Kuwait Central Bank or the Kuwait Ministry of Commerce and Industry, nor has our Company received authorisation or licensing from the Kuwait Central Bank or the Kuwait Ministry of Commerce and Industry to market or sell the Equity Shares within Kuwait. Therefore, no services relating to the Issue, including the receipt of applications and/or the allotment of Equity Shares may be rendered within Kuwait by our Company or persons representing our Company, including the BRLM and its affiliates. Mauritius In accordance with The Securities Act 2005 of Mauritius, no offer of the Equity Shares may be made to the public in Mauritius without, amongst other things, the prior approval of the Mauritius Financial Services Commission. This Placement Document has not been approved or registered by the Mauritius Financial Services Commission. Accordingly, this Placement Document does not constitute a public offering. This Placement Document is for the exclusive use of the person to whom it has been given by the BRLM and is a private concern between the sender and the recipient. Oman The Equity Shares offered under this Placement Document have not and will not be listed on any stock exchange in the Sultanate of Oman. Qatar (excluding the Qatar Finance Centre) This Placement Document does not, and is not intended to, constitute an invitation or an offer of securities in the State of Qatar and accordingly should not be construed as such. The Equity Shares offered in the Issue have not been, and shall not be, offered, sold or delivered at any time, directly or indirectly, in the State of Qatar. By receiving this Placement Document, the person or entity to whom it has been provided to understands, acknowledges and agrees that: (a) neither this Placement Document nor the Equity Shares have been registered, considered, authorised or approved by the Qatar Central Bank, the Qatar Financial Markets Authority or any other authority or agency in the State of Qatar; (b) neither our Company nor the BRLM is authorised or licensed by the Qatar Central Bank, the Qatar Financial Markets Authority or any other authority or agency in the State of Qatar, to market or sell the Equity Shares - 152 -
within the State of Qatar; (c) this Placement Document may not be provided to any person other than the original recipient and is not for general circulation in the State of Qatar; and (d) no agreement relating to the sale of the Equity Shares shall be consummated within the State of Qatar. No marketing of the Equity Shares offered in the Issue has been or will be made from within the State of Qatar and no subscription to the Equity Shares may or will be consummated within the State of Qatar. Any applications to invest in the Equity Shares shall be received from outside of Qatar. This Placement Document shall not form the basis of, or be relied on in connection with, any contract in Qatar. Neither our Company nor the BRLM is, by distributing this Placement Document, advising individuals resident in the State of Qatar as to the appropriateness of purchasing the Equity Shares. Nothing contained in this Placement Document is intended to constitute investment, legal, tax, accounting or other professional advice in, or in respect of, the State of Qatar. Qatar Financial Centre This Placement Document does not, and is not intended to, constitute an invitation or offer of Equity Shares from or within the Qatar Financial Centre (“QFC”), and accordingly should not be construed as such. This Placement Document has not been reviewed or approved by or registered with the Qatar Financial Centre Authority, the Qatar Financial Centre Regulatory Authority or any other competent legal body in the QFC. This Placement Document is strictly private and confidential, and may not be reproduced or used for any other purpose, nor provided to any person other than the recipient thereof. Our Company has not been approved or licenced by or registered with any licensing authorities within the QFC. Singapore This Placement Document has not been and will not be registered as a prospectus with the Monetary Authority of Singapore (“MAS”) under the Securities and Futures Act (Chapter 289) of Singapore (“SFA”). Accordingly, the Equity Shares offered in the Issue may not be offered or sold, or made the subject of an invitation for subscription or purchase nor may this Placement Document or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of the Equity Shares be circulated or distributed, whether directly or indirectly, in Singapore other than (i) to an “institutional investor” within the meaning of Section 274 of the SFA and in accordance with the conditions of an exemption invoked under Section 274, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) other pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the Equity Shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Equity Shares pursuant to an offer made under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights or interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for a corporation, in accordance with the conditions specified in Section 275 of the SFA; (2) where no consideration is or will be given for the transfer; or (3) where the transfer is by operation of law. South Africa The Issue does not constitute an offer for the sale of or subscription for, or the solicitation of an offer to buy and subscribe for the Equity Shares offered in the Issue to the public as defined in the Companies Act, No. 71 of 2008 (as amended). This Placement Document has not been and will not be registered as a prospectus under the Companies Act, No. 71 of 2008 (as amended). Accordingly, the Equity Shares may not be offered, sold or delivered to a person in South Africa or to a person with an address in South Africa, unless such person falls within one or more of the exemptions to the securities laws relating to offers to the public set out in Section 96 of the Companies Act, No. 71 of 2008 (as amended). The exemptions include offers made to the following persons: (i) persons whose ordinary business, or part of whose ordinary business, is to deal in securities, whether as principals or agents; (ii) the Public Investment Corporation as defined in the Public Investment Corporation Act, No. 23 of 2004 (as amended); (iii) persons regulated by the Reserve - 153 -
Bank of South Africa; (iv) authorised financial services providers as defined in the Financial Advisory and Intermediary Services Act, No. 37 of 2002 (as amended); (v) financial institutions as defined in the Financial Services Board Act, No. 97 of 1990; (vi) wholly owned subsidiaries of the persons contemplated in (iii), (iv) and (v), acting as agent in the capacity of authorised portfolio manager for a pension fund registered in terms of the Pension Funds Act, No. 24 of 1956 or as a manager for a collective investment scheme registered in terms of the Collective Investment Schemes Control Act, No. 45 of 2002; (vii) any combination of the persons contemplated in (i) to (vi); and (viii) offers made to a single addressee acting as principal where the contemplated acquisition cost of the Equity Shares is equal to or greater than R1,000,000. Switzerland This Placement Document may only be freely circulated and the Equity Shares offered in the Issue may only be freely offered, distributed or sold to regulated financial intermediaries such as banks, securities dealers, fund management companies, asset managers of collective investment schemes and central banks as well as to regulated insurance companies. Circulating this Placement Document and offering, distributing or selling the Equity Shares to other persons or entities including qualified investors as defined in the Federal Act on Collective Investment Schemes (“CISA”) and its implementing Ordinance (“CISO”) may trigger, in particular, (i) licensing/prudential supervision requirements for the distributor, (ii) a requirement to appoint a representative and paying agent in Switzerland and (iii) the necessity of a written distribution agreement between the representative in Switzerland and the distributor. Accordingly, legal advice should be sought before providing this Placement Document to and offering, distributing, selling or on-selling the Equity Shares of the Company to any other persons or entities. This Placement Document does not constitute an issuance prospectus pursuant to Articles 652a or 1156 of the Swiss Code of Obligations and may not comply with the information standards required thereunder. The Equity Shares offered in the Issue will not be listed on the SIX Swiss Exchange, and consequently, the information presented in this Placement Document does not necessarily comply with the information standards set out in the relevant listing rules. This Placement Document has not been and will not be approved by the Swiss Financial Market Supervisory Authority (“FINMA”) under the CISA. Therefore, investors do not benefit from protection under the CISA or supervision by the FINMA. This Placement Document does not constitute investment advice. United Arab Emirates (excluding the Dubai International Financial Centre) The Equity Shares offered in the Issue have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (“U.A.E.”) other than in compliance with the laws of the U.A.E. Prospective investors in the Dubai International Financial Centre should have regard to the specific notice to prospective investors in the Dubai International Financial Centre set out below. The information contained in this Placement Document does not constitute a public offer of securities in the U.A.E. in accordance with the Commercial Companies Law (Federal Law No. 8 of 1984 of the U.A.E., as amended) or otherwise and is not intended to be a public offer. Our Company and the Equity Shares have not been approved or licensed by or registered with the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or any other relevant licensing authorities or governmental agencies in the U.A.E. This Placement Document has not been approved by or filed with the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or the Dubai Financial Services Authority. This Placement Document is being issued to a limited number of selected institutional and sophisticated investors, is not for general circulation in the U.A.E. and may not be provided to any person other than the original recipient or reproduced or used for any other purpose. If you do not understand the contents of this Placement Document, you should consult an authorised financial adviser. This Placement Document is provided for the benefit of the recipient only, and should not be delivered to, or relied on by, any other person. Dubai International Financial Centre This Placement Document relates to an exempt offer (an “Exempt Offer”) in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (the “DFSA”). This Placement Document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this Placement Document nor taken steps to verify the information set out in it, and has no responsibility for it. The Equity Shares to which this Placement Document relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Equity Shares offered in the Issue should conduct their own due diligence on the Equity Shares. If you do not understand the contents of this Placement Document, you should consult an authorised financial adviser. - 154 -
United Kingdom (in addition to the European Economic Area selling restrictions above) The Equity Shares offered in the Issue cannot be promoted in the United Kingdom to the general public. The contents of this Placement Document have not been approved by an authorised person within the meaning of Financial Services and Markets Act 2000, as amended (the “FSMA”). The BRLM (a) may only communicate or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA), to persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”), or (ii) fall within any of the categories of persons described in article 49(2)(a) to (d) of the Financial Promotion Order or otherwise in circumstances in which Section 21(1) of the FSMA does not apply to our Company; and (b) have complied and will comply with all applicable provisions of the FSMA with respect to anything done by each of them in relation to the Equity Shares in, from or otherwise involving the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) in connection with, or relating to, the sale or purchase of any Equity Shares offered in the Issue, may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply. It is the responsibility of all persons under whose control or into whose possession this document comes to inform themselves about and to ensure observance of all applicable provisions of FSMA in respect of anything done in relation to an investment in Equity Shares in, from or otherwise involving, the United Kingdom. United States The Equity Shares offered in the Issue have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be offered, sold or delivered in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with any applicable state securities laws. The Equity Shares are being offered and sold in the Issue only outside the United States in accordance with Regulation S in accordance with Regulation S and the applicable laws of the jurisdictions where those offers, and sales are made. To help ensure that the offer and sale of the Equity Shares in the Issue was made in compliance with Regulation S, each purchaser of Equity Shares in the Issue will be deemed to have made the representations, warranties, acknowledgements and undertakings set forth in “Transfer Restrictions” on page 156.
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TRANSFER RESTRICTIONS
Investors are advised to consult with their legal counsel prior to purchasing any Equity Shares or making any resale, pledge or transfer of such Equity Shares. Due to the following restrictions, investors are advised to consult legal counsel prior to making any resale, pledge or transfer of the Equity Shares, except if the resale of the Equity Shares is by way of a regular sale on the Stock Exchanges. Pursuant to Chapter VI of the SEBI ICDR Regulations, successful Bidders are not permitted to sell the Equity Shares Allotted pursuant to the Issue, for a period of one year from the date of Allotment, except on the Stock Exchanges. Allotments made to FVCIs, VCFs and AIFs in the Issue are subject to the rules and regulations that are applicable to them, including in relation to lock-in requirements. Additional transfer restrictions applicable to the Equity Shares are listed below. The Equity Shares have not been and will not be registered under the U.S. Securities Act, or any state securities laws of the United States, and unless so registered may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered, sold and delivered outside the United States in offshore transactions in reliance on Regulation S and in compliance with the applicable laws of each jurisdiction where those offers and sales are made. If you purchase the Equity Shares in this Issue, by accepting delivery of this Placement Document, submitting a bid to purchase the Equity Shares and accepting delivery of the Equity Shares, you will be deemed to have represented to and agreed with our Company, the BRLM as follows:
you have received a copy of the Placement Document and such other information as you deem necessary to make an informed decision and that you are not relying on any other information or the representation concerning the Company or the Equity Shares and neither the Company nor any other person responsible for this document or any part of it or the BRLM will have any liability for any such other information or representation;
you are authorised to consummate the purchase of the Equity Shares in compliance with all applicable laws and regulations;
you will comply with all laws, regulations and restrictions (including the selling restrictions contained in this Placement Document) which may be applicable in your jurisdiction and you have obtained or will obtain any consent, approval or authorization required for you to purchase and accept delivery of the Equity Shares, and you acknowledge and agree that none of our Company, the BRLM or any of its affiliates shall have any responsibility in this regard;
you acknowledge (or if you are a broker-dealer acting on behalf of a customer, your customer has confirmed to you that such customer acknowledges) that such Equity Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority of any state of the United States, and are subject to restrictions on transfer;
you and the person, if any, for whose account or benefit you are acquiring the Equity Shares, were located outside the United States at the time the buy order for the Equity Shares was originated and continue to be located outside the United States and have not purchased the Equity Shares for the account or benefit of any person in the United States or entered into any arrangement for the transfer of the Equity Shares or any economic interest therein to any person in the United States;
you are not an affiliate (as defined in Rule 405 of the U.S. Securities Act) of our Company or a person acting on behalf of such affiliate; and you are not in the business of buying and selling securities or, if you are in such business, you did not acquire the Equity Shares from our Company or an affiliate (as defined in Rule 405 of the U.S. Securities Act) thereof in the initial distribution of the Equity Shares;
you certify that either (A) you are, or at the time the Equity Shares are purchased will be, the beneficial owner of the Equity Shares and are located outside the United States (within the meaning of Regulation S) or (B) you are a broker-dealer acting on behalf of your customer and your customer has confirmed to you that (i) such customer is, or - 156 -
at the time the Equity Shares are purchased will be, the beneficial owner of the Equity Shares, and (ii) such customer is located outside the United States (within the meaning of Regulation S);
you are aware of the restrictions on the offer and sale of the Equity Shares pursuant to Regulation S described in this Placement Document and that neither BSE nor NSE is a “designated offshore securities market” within the meaning of Regulation S of the U.S. Securities Act;
the Equity Shares have not been offered to you by means of any “directed selling efforts” as defined in Regulation S; and
you acknowledge that our Company, the BRLM and their respective affiliates (as defined in Rule 405 of the U.S. Securities Act), and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if any of such acknowledgements, representations and agreements deemed to have been made by virtue of its purchase of the Equity Shares are no longer accurate, you will promptly notify our Company, the BRLM, and if you are acquiring any of the Equity Shares as a fiduciary or agent for one or more accounts, you represent that you have sole investment discretion with respect to each such account and that you have full power to make the foregoing acknowledgements, representations and agreements on behalf of such accounts.
you acknowledge that the Equity Shares have not been and will not be registered under the U.S. Securities Act or the securities law of any state of the United States and warrant to our Company, the BRLM and its respective affiliates that it will not offer, sell, pledge or otherwise transfer the Equity Shares except in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S or pursuant to any other available exemption from registration under the U.S. Securities Act and in accordance with all applicable securities laws of the states of the United States and any other jurisdiction, including India.
you represent and warrant to our Company, the BRLM and their respective affiliates that if it acquired any of the Equity Shares as fiduciary or agent for one or more investor accounts, it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account.
the Company, the BRLM, their respective affiliates and others will rely upon the truth and accuracy of your representations, warranties, acknowledgements and undertakings set out in this document, each of which is given to (a) the BRLM on its own behalf and on behalf of the Company, and (b) to the Company, and each of which is irrevocable and, if any of such representations, warranties, acknowledgements or undertakings deemed to have been made by virtue of your purchase of the Equity Shares are no longer accurate, you will promptly notify the Company.
you and any accounts for which you are subscribing to the Equity Shares (i) are each able to bear the economic risk of the investment in the Equity Shares, (ii) will not look to the Company or the BRLM or their respective affiliates for all or part of any such loss or losses that may be suffered, (iii) are able to sustain a complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the investment in the Equity Shares, and (v) have no reason to anticipate any change in its or their circumstances, financial or otherwise, which may cause or require any sale or distribution by it or them of all or any part of the Equity Shares. You acknowledge that an investment in the Equity Shares involves a high degree of risk and that the Equity Shares are, therefore, a speculative investment. You are seeking to subscribe to the Equity Shares in this Issue for your own investment and not with a view to distribution;
you have been provided access to this Placement Document which you have read in its entirety;
you are aware of the restrictions of the offer, sale and resale of the Equity Shares pursuant to Regulation S;
you agree to indemnify and hold the Company, the BRLM and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of these representations and warranties. You will not hold any of the Company or the Lead Manager and their respective affiliates liable with respect to its investment in the Equity Shares. You agree that the indemnity set forth in this paragraph shall survive the resale of the Equity Shares; and
any resale or other transfer, or attempted resale or other transfer, of the Equity Shares made other than in compliance with the above-stated restrictions will not be recognized by our Company. - 157 -
THE SECURITIES MARKET OF INDIA The information in this section has been extracted from documents available on the websites of SEBI and the Stock Exchanges and has not been prepared or independently verified by our Company or the BRLM or any of their respective affiliates or advisors. The Indian Securities Market India has a long history of organised securities trading. In 1875, the first stock exchange was established in Mumbai. BSE and NSE hold a dominant position among the stock exchanges in terms of the number of listed companies, market capitalization and trading activity. Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the Ministry of Finance, Capital Markets Division, under the SCRA and the SCRR. On October 3, 2018, SEBI, in exercise of its powers under the SCRA and the SEBI Act, notified the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 (“SCR (SECC) Rules”), which regulate inter alia the recognition, ownership and internal governance of stock exchanges and clearing corporations in India together with providing for minimum capitalisation requirements for stock exchanges. The SCRA, the SCRR and the SCR (SECC) Rules along with various rules, bye-laws and regulations of the respective stock exchanges, regulate the recognition of stock exchanges, the qualifications for membership thereof and the manner, in which contracts are entered into, settled and enforced between members of the stock exchanges. With effect from April 1, 2003, the stock exchanges in India operate on a trading day plus two, or T+2, rolling settlement system. At the end of the T+2 period, obligations are settled with buyers of securities paying for and receiving securities, while sellers transfer and receive payment for securities. For example, trades executed on a Monday would typically be settled on a Wednesday. In order to contain the risk arising out of the transactions entered into by the members of various stock exchanges either on their own account or on behalf of their clients, the stock exchanges have designed risk management procedures, which include compulsory prescribed margins on the individual broker members, based on their outstanding exposure in the market, as well as stock-specific margins from the members. The SEBI is empowered to regulate the Indian securities markets, including stock exchanges and intermediaries in the capital markets, promote and monitor self-regulatory organisations and prohibit fraudulent and unfair trade practices. Regulations concerning minimum disclosure requirements by listed companies, rules and regulations concerning investor protection, insider trading, substantial acquisitions of shares and takeover of companies, buy-backs of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, foreign portfolio investors, credit rating agencies and other capital market participants have been notified by the relevant regulatory authority. Listing and delisting of securities The listing of securities on a recognised Indian stock exchange is regulated by the applicable Indian laws including the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines and regulations issued by the SEBI including the SEBI Listing Regulations. The governing body of each recognised stock exchange is empowered to suspend trading of or withdraw admission to dealings in a listed security for breach of or non-compliance with any conditions or breach of company’s obligations under the SEBI Listing Regulations or for any reason, subject to the issuer receiving prior written notice of the intent of the exchange and upon granting of a hearing in the matter. SEBI also has the power to amend such regulations and bye-laws of the stock exchanges in India, to overrule a stock exchange’s governing body and withdraw recognition of a recognised stock exchange. SEBI has notified the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, as amended in relation to the voluntary and compulsory delisting of equity shares from the stock exchanges. In addition, certain amendments to the SCRR have also been notified in relation to delisting. Disclosures under the SEBI Listing Regulations Public listed companies are required under the SEBI Listing Regulations to prepare and circulate to their shareholders audited annual accounts which comply with the disclosure requirements and regulations governing their manner of presentation and which include sections relating to corporate governance, related party transactions and management’s discussion and analysis as required under the SEBI Listing Regulations. In addition, a listed company is subject to continuing disclosure requirements pursuant to the terms of the SEBI Listing Regulations. - 158 -
Minimum level of public shareholding All listed companies are required to ensure a minimum public shareholding of 25%. Further, in the event that the public shareholding in a listed company falls below 25% at any time, such company is required to bring the public shareholding to 25% within a maximum period of 12 months from the date of such fall. Our Company is in compliance with this minimum public shareholding requirement. Index-based market-wide circuit breaker system In order to restrict abnormal price volatility in any particular stock, SEBI has instructed stock exchanges to apply daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The index-based market-wide circuit breaker system (equity and equity derivatives) applies at three stages of the index movement, at 10.00%, 15.00% and 20.00%. The Stock Exchanges on a daily basis translate the circuit breaker limits based on previous day’s closing level of the index. These circuit breakers, when triggered, bring about a co-ordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the SENSEX of BSE or the CNX NIFTY of NSE, whichever is breached earlier. In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise price bands of 20.00% movements either up or down. However, no price bands are applicable on scrips on which derivative products are available or scrips included in indices on which derivative products are available. The stock exchanges in India can also exercise the power to suspend trading during periods of market volatility. Margin requirements are imposed by stock exchanges that are required to be paid by the stockbrokers. BSE BSE is one of the stock exchanges in India on which our Equity Shares are listed. Established in 1875, it is the first stock exchange in India to have obtained permanent recognition in 1956 from the Government of India under the SCRA. It has evolved over the years into its present status as one of the largest stock exchange in India. Pursuant to BSE (Corporatization and Demutualization) Scheme 2005 of the SEBI, with effect from August 19, 2005, BSE was incorporated as a company under the Companies Act, 1956. BSE was listed on NSE with effect from February 3, 2017. NSE Our Equity Shares are also listed in India on NSE. NSE was established by financial institutions and banks to provide nationwide on-line satellite-linked, screen-based trading facilities to market makers, to provide electronic clearing and settlement for securities including government securities, debentures, public sector bonds and units. Deliveries for trades executed “on-market” are exchanged through the National Securities Clearing Corporation Limited. After recognition as a stock exchange under the SCRA in April 1993, NSE commenced operations in the wholesale debt market segment in June 1994, in the capital markets (equities) segment in November 1994 and operations in the derivatives segment in June 2000. Internet-based securities trading and services Internet trading takes place through order routing systems, which route client orders to exchange trading systems for execution. Stockbrokers interested in providing this service are required to apply for permission to the relevant stock exchange and also have to comply with certain minimum conditions stipulated by SEBI and other applicable laws. NSE became the first exchange to grant approval to its members for providing internet-based trading services. Internet trading is possible on both the “equities” as well as the “derivatives” segments of NSE. Trading hours Trading on both NSE and BSE occurs from Monday to Friday, between 9:15 a.m. and 3:30 p.m. IST (excluding the 15 minutes’ pre-open session from 9:00 a.m. to 9:15 a.m.). BSE and NSE are closed on public holidays. The recognised stock exchanges have been permitted to set their own trading hours (in cash and derivatives segments) subject to the condition that (i) the trading hours are between 9.00 a.m. and 5.00 p.m.; and (ii) the stock exchange has in place a risk management system and infrastructure commensurate to the trading hours.
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Trading Procedure In order to facilitate smooth transactions, BSE replaced its open outcry system with BSE On-line Trading facility (or “BOLT”) in 1995. This totally automated screen based trading in securities was put into practice nation-wide. This has enhanced transparency in dealings and has assisted considerably in smoothening settlement cycles and improving efficiency in back-office work. NSE has introduced a fully automated trading system called National Exchange for Automated Trading (“NEAT”), which operates on strict time/price priority besides enabling efficient trade. NEAT has provided depth in the market by enabling large number of members all over India to trade simultaneously, narrowing the spreads. In the year 2014, BSE introduced its new generation trading platform BOLT Plus. Takeover Regulations Disclosure and mandatory bid obligations for listed Indian companies are governed by the Takeover Regulations which provide specific regulations in relation to substantial acquisition of shares and takeover. Once the equity shares of a company are listed on a stock exchange in India, the provisions of the Takeover Regulations will apply to any acquisition of a company’s shares/voting rights/control. The Takeover Regulations prescribe certain thresholds or trigger points in the shareholding a person or entity has in the listed Indian company, which give rise to certain obligations on part of the acquirer. Acquisitions up to a certain threshold prescribed under the Takeover Regulations mandate specific disclosure requirements, while acquisitions crossing particular thresholds may result in the acquirer having to make an open offer of the shares of the target company. The Takeover Regulations also provide for the possibility of indirect acquisitions, imposing specific obligations on the acquirer in case of such indirect acquisition. Insider Trading Regulations SEBI had earlier notified the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 to prohibit and penalise insider trading in India. The regulations, among other things, prohibited an ‘insider’ from dealing in the securities of a listed company when in possession of unpublished price sensitive information (“UPSI”). The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 were notified on January 15, 2015 and came into effect on May 15, 2015, which repealed the regulations of 1992. The Insider Trading Regulations, inter alia, impose certain restrictions on the communication of information by listed companies. Under the Insider Trading Regulations, (i) no insider shall communicate, provide or allow access to any UPSI relating to such companies and securities to any person including other insiders; and (ii) no person shall procure or cause the communication by any insider of UPSI relating to such companies and securities, except in furtherance of legitimate purposes, performance of duties or discharge of legal obligations. However, UPSI may be communicated, provided or allowed access to or procured, under certain circumstances specified in the Insider Trading Regulations. The Insider Trading Regulations make it compulsory for listed companies and certain other entities that are required to handle UPSI in the course of business operations to establish an internal code of practices and procedures for fair disclosure of UPSI and to regulate, monitor and report trading by insiders. To this end, the Insider Trading Regulations provide principles of fair disclosure for purposes of code of practices and procedures for fair disclosure of UPSI and minimum standards for code of conduct to regulate, monitor and report trading by insiders. There are also initial and continuing shareholding disclosure obligations under the Insider Trading Regulations. Depositories The Depositories Act provides a legal framework for the establishment of depositories to record ownership details and effect transfer in book-entry form. Further, SEBI framed regulations in relation to the registration of such depositories, the registration of participants as well as the rights and obligations of the depositories, participants, companies and beneficial owners. The depository system has significantly improved the operation of the Indian securities markets. Derivatives (Futures and Options) Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in February 2000 and derivatives contracts were included within the term “securities”, as defined by the SCRA. Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a separate segment of an existing stock exchange. The derivatives exchange or derivatives segment of a stock exchange functions as a self-regulatory organisation under the supervision of the SEBI. - 160 -
DESCRIPTION OF THE SHARES Set forth below is certain information relating to the share capital of our Company, including a brief summary of some of the provisions of the Memorandum and Articles of Association, the Companies Act and certain related legislation of India, all as currently in effect. Prospective investors are urged to read the Memorandum and Articles of Association carefully, and consult with their advisers, as the Memorandum and Articles of Association and applicable Indian law, and not this summary, govern the rights attached to the Equity Shares. General Our Company’s authorized share capital as on the date of this Placement Document is ₹ 80 crore divided into 8,00,00,000 Equity Shares of ₹ 10 each. As on the date of this Placement Document, our Company’s issued, subscribed and paid up capital is ₹ 69, 92,72,500 divided into 6,99,27,250 Equity Shares of ₹ 10 each. Dividend Under Indian law, a company pays dividends upon a recommendation by its board of directors and approval by a majority of the shareholders at the AGM held each Fiscal. Under the Companies Act, unless the board of directors of a company recommends the payment of a dividend, the shareholders at a general meeting have no power to declare any dividend. Subject to certain conditions laid down by Section 123 of the Companies Act, 2013, no dividend can be declared or paid by a company for any Fiscal except out of the profits of the company for that year, calculated in accordance with the provisions of the Companies Act or out of the profits of the company for any previous Fiscal(s) arrived at as laid down by the Companies Act. According to the Articles of Association, the amount of dividends shall not exceed the amount recommended by the Board of Directors. However, our Company may declare a smaller dividend in the general meeting. The Equity Shares issued pursuant to the Issue shall rank pari passu with the existing Equity Shares in all respects including entitlements to any dividends declared by our Company. Capitalization of Reserves and Issue of Bonus Shares In addition to permitting dividends to be paid as described above, the Companies Act permits the board of directors, if so approved by the shareholders in a general meeting, to distribute an amount transferred in the free reserves, the securities premium account or the capital redemption reserve account to its shareholders, in the form of fully paid up bonus equity shares, which are similar to stock dividend. These bonus equity shares must be distributed to shareholders in proportion to the number of equity shares owned by them as recommended by the board of directors. No issue of bonus shares may be made by capitalising reserves created by revaluation of assets. Further, any issue of bonus shares would be subject to SEBI ICDR Regulations. As per the Articles of Association, upon resolution in the general meeting, on recommendation of the Board of Directors, our Company may capitalise and distribute amongst the shareholders any amount standing to the credit of Company’s reserve accounts and to the credit of the profit and loss account or otherwise. However, aforesaid distribution shall not be made in cash. Pre-emptive Rights and Alteration of Share Capital Subject to the provisions of the Companies Act, 2013, we can increase our share capital by issuing new shares. According to Section 62 of the Companies Act, 2013 such new shares shall be offered to existing shareholders in proportion to the amount paid up on those shares at that date. The offer shall be made by notice specifying the number of shares offered and the date (being not less than 15 days and not exceeding 30 days from the date of the offer) within which the offer, if not accepted, will be deemed to have been declined. After such date, the Board may dispose of the shares offered in respect of which no acceptance has been received in such manner as they think most beneficial to us. The offer is deemed to include a right exercisable by the person concerned to renounce the shares offered to him in favour of any other person subject to the provisions of the FEMA, if applicable. Under the provisions of Section 62(1)(c) of the Companies Act, 2013, new shares may be offered to any persons whether or not those persons include existing shareholders, either for cash of for a consideration other than cash, if the price of such shares is determined by the valuation report of a registered valuer subject to condition prescribed under the Companies (Share Capital and Debentures) Rules, 2014 and any other conditions as may be prescribed, if a special resolution to that effect is passed by our Company’s shareholders in a general meeting. - 161 -
The Articles of Association authorise it to increase its authorised capital by issuing new shares, as our Company may determine in a general meeting. Our Company may, by special resolution, also alter its share capital by converting any fully paid up shares into stock and reconverting that stock into fully paid up shares of any denomination. The Articles of Association provide that our Company, by a special resolution passed at the general meeting, from time to time, may consolidate or sub-diby its share capital and the resolution may provide that holders of shares resulting from such sub-division shall have some special advantage as regards dividend, capital or otherwise as compared with any other shares. The Articles of Association also provide that our Company may issue shares with differential rights as to dividend, voting or otherwise, subject to the compliance with requirements under the Companies Act and the rules thereto, or any other applicable law in force. General Meetings of Shareholders Pursuant to the provisions of Section 96 of the Companies Act, 2013, we must hold our annual general meeting each year, in addition to any other meetings, and within fifteen months of the previous annual general meeting, and within six months from the date of closing of the financial year. The Registrar of Companies may extend this period for not more than three months, in special circumstances at our request. The Board may convene an extraordinary general meeting of shareholders when necessary and shall convene such a meeting at the request of a shareholder or shareholders holding in the aggregate not less than 10% of our issued paid up capital (carrying a right to vote in respect of the relevant matters on the date of receipt of the requisition). Notices either in writing or through electronic mode, convening a meeting setting out the date and place of the meeting and its agenda must be given to members at least 21 clear days prior to the date of the proposed meeting and where any special business is to be transacted at the meeting, an explanatory statement must be annexed to the notice as required under the Companies Act, 2013 and the rules framed thereunder. A general meeting may be called after giving shorter notice if consent is received from all shareholders in the case of an annual general meeting and from shareholders holding not less than 95% of our paid up capital in the case of any other general meeting. The quorum requirements applicable to shareholder meetings under the Companies Act, 2013 have to be physically complied with. Any listed public company intending to pass a resolution relating to matters such as, but not limited to, amendment in the objects clause of the memorandum, the issuing of shares with different voting or dividend rights, a variation of the rights attached to a class of shares or debentures or other securities, buy-back of shares, giving loans or extending guarantees in excess of limits prescribed is required to pass the resolution by means of a postal ballot instead of transacting the business in the general meeting of the company. A notice to all the shareholders shall be sent along with a draft resolution explaining the reasons thereof and requesting them to send their assent or dissent in writing on a postal ballot within a period of 30 days from the date of posting the letter. Postal ballot includes voting by electronic mode. Voting Rights At a general meeting upon a show of hands, every member holding shares, entitled to vote and present in person has one vote. Upon a poll, the voting rights of each shareholder entitled to vote and present in person or by proxy are in the same proportion to such shareholder’s share of our paid up equity capital. Subject to the procedure laid down under Section 108 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, a company shall provide the facility to vote through electronic voting (remote e-voting), to its members. Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require that the votes cast in favour of the resolution must be at least three times the votes cast against the resolution. A shareholder may exercise his voting rights by proxy to be given in the form required by the Articles of Association. The instrument appointing a proxy is required to be lodged with us at least 48 hours before the time of the meeting. A proxy may not vote except on a poll and does not have the right to speak at meetings. Register of Shareholders and Record Dates We are obliged to maintain a register of shareholders at our registered office. We recognize as shareholders only those persons whose names appear on the register of shareholders and cannot recognize any person holding any share or part of it upon any express, implied or constructive trust, except as permitted by law. In the case of shares held in physical form, transfers of shares are registered on the register of members upon lodgment of the share transfer form duly complete in - 162 -
all respects accompanied by a share certificate or, if there is no certificate, the letter of allotment in respect of shares transferred together with duly stamped transfer forms. In respect of electronic transfers, the depository transfers shares by entering the name of the purchaser in its books as the beneficial owner of the shares. In turn, the name of the depository is entered into our records as the registered owner of the shares. The beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect to the shares held by a depository. Transfer of Shares Shares held through depositories are transferred in the form of book entries or in electronic form in accordance with applicable regulations by SEBI. These regulations provide the regime for the functioning of the depositories and their participants and set out the manner in which the records are to be kept and maintained and the safeguards to be followed in this system. Transfers of beneficial ownership of shares held through a depository are exempt from stamp duty. We have entered into an agreement for such depository services with the National Securities Depository Limited and the Central Depository Services India Limited. SEBI requires that our shares for trading and settlement purposes be in bookentry form for all investors, except for transactions that are not made on a stock exchange and transactions that are not required to be reported to the stock exchange. We shall keep a book in which every transfer or transmission of shares will be entered. Pursuant to the SEBI Listing Regulations, in the event that a transfer of shares is not affected within 15 days or where we have failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of 15 days, we are required to compensate the aggrieved party for the opportunity loss caused by the delay. Liquidation Rights In the event of our winding up, whether voluntarily or otherwise, if the assets available for distribution among the members as such shall be insufficient to repay the whole of the paid up capital, such assets shall be distributed so that as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up, on the shares held by them respectively. And if in a winding up the assets available for distribution among the members shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed amongst the members in proportion to the capital, at the commencement of the winding up, paid up or which ought to have been paid up on the shares issued upon special terms and conditions. Buy-back Our Company may buy back its own Equity Shares or other specified securities subject to the provisions of the Companies Act and any related SEBI regulations issued in connection therewith.
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STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE APPLICABLE LAWS IN INDIA
To, The Board of Directors J.K. Cement Limited Kamla Towers Kanpur Uttar Pradesh Dear Sirs, Sub: Proposed qualified institutions placement of equity shares of face value Rs 10 each (“Equity Shares”) of J.K. Cement Limited (the “Company”) under Chapter VI of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the “Issue”) 1.
We have been requested by J K Cement Limited (“the Company”), having its registered office at the abovementioned address, to certify the Statement of Possible Special Tax Benefits available to the Company and its Shareholders under the Income Tax Act, 1961 (“Act”). Accordingly, this certificate is issued in accordance with the terms of our engagement letter dated June 14, 2018.
2.
The preparation of the Statement relating to Special Tax Benefit is the responsibility of the Management of the Company including the preparation and maintenance of all accounting and other relevant supporting records and documents. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Statement of Special Tax Benefit and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.
3.
We are informed that this statement is only intended to provide general information to the investors and hence, is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue.
4.
Capitalized terms used herein, unless otherwise specifically defined, shall have the same meaning as ascribed to them in the preliminary placement document and placement document of the Company prepared in connection with the Issue to be filed with the stock exchanges on which the Equity Shares of the Company are listed (the “Stock Exchanges”) and any other authority (together the “Placement Documents”).
5.
We consent to the inclusion of the above information in the Placement Documents to be filed by the Company with the Stock Exchanges, the Securities and Exchange Board of India, and the Registrar of Companies, and any other authority and such other documents as may be prepared in connection with the Issue.
6.
We conducted our examination of the Statement in accordance with the Guidance Note on Reports or certificates for the Special Purposes issued by the ICAI. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements issued by ICAI.
7.
Based on our examination, we, the previous independent statutory auditors of the Company, hereby certify that there are no possible special tax benefits except the deductions available under section 80 available to the Company and the shareholders of the Company under the Income Tax Act, 1961 (“Act”) presently in force in India
8.
The Certificate is issued solely for the purpose of onward submission to the Securities and Exchange Board of India, Stock Exchanges and any other regulatory or statutory authority and for inclusion ofits contents in the preliminary placement document and the placement document to be filed by the Company in connection with the Issue. This certificate should not be used by any other person or forany other purpose. Accordingly, we do - 164 -
not accept or assume any liability or any duty of care for anyother purpose or to any other person to whom this certificate is shown or into whose hands it maycome without our prior consent in writing. For P.L. TANDON & CO., Chartered Accountants ICAI Firm Registration No: 000186C
P.P.SINGH Partner Membership Number: 072754 Place: KANPUR Date: 22-12-2018
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LEGAL PROCEEDINGS Our Company and its Subsidiaries are involved in various legal proceedings from time to time, mostly arising in the ordinary course of business. These legal proceedings are initiated by us and also by suppliers, regulators, and other parties. These legal proceedings are primarily in the nature of tax disputes, labour disputes, writ petitions, criminal complaints, civil suits and petitions pending before various authorities. This section discloses outstanding legal proceedings considered material in accordance with our Company’s “Policy for Determination of Materiality of Events/ Information” framed in accordance with Regulation 30 of the SEBI Listing Regulations (“Policy of Materiality”). Additionally, solely for the purpose of the Issue, our Company has also disclosed in this section, (i) all outstanding criminal proceedings involving the Company, Subsidiaries and Directors; and (ii) all other outstanding litigation involving our Company and its Subsidiaries, where the amount involved in such proceedings exceeds ₹ 5.00 crores (approximately 1.46 % of the profit after tax of our Company for Fiscal 2018 based on the audited standalone financial statements of our Company). Further, other than as disclosed in this section, (i) there are no litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against any of our Promoters during the last three years immediately preceding the year of circulation of this Placement Document and no directions have been issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action; (ii) there are no inquiries, inspections or investigations initiated or conducted under the Companies Act, 2013 or the Companies Act, 1956 in the last three years immediately preceding the year of circulation of this Placement Document involving our Company or any of its Subsidiaries nor are there any prosecutions filed (whether pending or not), fines imposed, compounding of offences in the last three years immediately preceding the year of this Placement Document involving our Company or its Subsidiaries; (iii) there are no defaults in repayment of (a) statutory dues; (b) debentures and interest thereon; (c) deposits and interests thereon and (d) any loan obtained from any bank or financial institution and interest thereon, as of the date of this Placement Document; (iv) there are no material frauds committed against us in the last three years; (v) there are no defaults in annual filing of our Company under the Companies Act, 2013 and the rules made thereunder; and (vi) there are no significant and material orders passed by the regulators, courts and tribunals impacting the going concern status of our Company and its future operations. It is clarified that for the purposes of the above, pre-litigation notices received by our Company, Subsidiaries, Directors or our Promoters shall, unless otherwise decided by our Board, not be considered as litigation until such time that our Company or any of its Subsidiaries or Directors or Promoters, as the case may be, is impleaded as a defendant in litigation proceedings before any judicial forum. Summaries of certain legal proceedings and other proceedings for the purposes of this section are set forth below: I.
Litigation involving our Company and its Subsidiaries
A. Outstanding criminal proceedings involving our Company and/or its Subsidiaries Against our Company 1.
N. Navaneeth Mohan, Senior Assistant Director of Factories, Belgaum Division – 2, Belgaum filed a criminal complaint (C.C. No. 379/15) before Judicial Magistrate First Class, Mudhol (“JMFC”) under section 200 of the Code of Criminal Procedure, 1973 against Kailash Nath Khandewal and Antriksha Kumar Jain (together, the “Company Personnel”) for alleged violation of Rule 84 of the Karnataka Factories Rules, 1969 punishable under section 92 of the Factories Act, 1948 in relation to an accident at J.K. Cement Works, Muddapur (“Factory”) that led to death of a worker. In the meanwhile, the Company Personnel filed private complaint no. 27/2015 before JMFC against Abdul Rehman Khan, the contractor at the Factory (“Contractor”) under section 101 of the Factories Act, 1948. The JMFC took cognizance of the matter and the private complaint was converted into a criminal case bearing no. 957/15. The Contractor pleaded guilty and was subsequently convicted by the JMFC. Thereafter, Antriksha Kumar Jain filed a discharge application under section 101 of the Factories Act, 1948 (“Discharge Application”). The JMFC allowed the Discharge Application by an order dated May 28, 2016 and also re-issued the summons against Kailash Nath Khandelwal. Aggrieved by this, Kailash Nath Khandelwal filed criminal petition no. 100847/2016 before the High Court of Karnataka (“High Court”) under section 482 of the Code of Criminal Procedure, 1973 against the proceeding before the JMFC, which was subsequently stayed by the High Court. The matter is currently pending in relation to Kailash Nath Khandewal.
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2.
The Labour Enforcement Officer, Ahmedabad (“Complainant”) filed a criminal complaint bearing reference number 4449/2006 (“Complaint”) dated March 23, 2006 against our Company represented by our Director, Yadupati Singhania and three others, namely Rahul Saxena, Anil Gupta and Ramesh Prasad (collectively, the “Accused”) before the Metropolitan Magistrate VI, Ahmedabad allegedly for violation of provisions of the Payment of Gratuity Act, 1972 (“Payment of Gratuity Act”) and its rules for, inter-alia, non-display of notice specifying the name of the officer with designation authorized to receive notice under the Payment of Gratuity Act and rules, and failure to pay interest on delayed payment of gratuity to an employee. Our Company filed special criminal application no. 2733/2013 (“Application”) before the High Court of Gujarat (“High Court”), seeking the High Court to quash the aforesaid Complaint and stay the proceedings of the Complaint till the final disposal of the Application. The High Court by its order dated September 12, 2013 granted ad interim relief by staying the proceedings in the Complaint. The matter is currently pending.
3.
There is one outstanding case under section 138 of the Negotiable Instruments Act, 1881 against our Company and the amount involved in this case is approximately ₹ 0.46 crore.
By our Company 1.
Our Company filed a complaint against Anil Patel and others under sections 23, 24, 34, 44, 52, 406, 415, 418, 420, 425, 463, 467, 468 and 471 of the Indian Penal Code, 1860 (“Complaint”) before Additional Chief Judicial Magistrate, Merta (“ACJM”) for supplying a poor-quality crusher machine. The Complaint was dismissed by an order dated April 15, 2017 passed by the ACJM. Aggrieved by this, our Company filed a revision petition before the Session Judge, Merta seeking quashing of the order passed by the ACJM. The matter is currently pending.
2.
Our Company filed a first information report (“FIR”) on October 28, 2013 before the Lokapur police station against Timmanna Mareguddi and Krishnappa Kencharaddi (“Accused”) under sections 447, 341, 504 and 506 of the Indian Penal Code, 1860 for allegedly trespassing into our property, and restraining and intimidating certain of our employees. Subsequently, criminal case no. 598/2014 was registered against the Accused before the Additional Civil Judge and JMFC, Mudhol. The matter is currently pending.
3.
Our Company filed a first information report (“FIR”) on January 22, 2014 before the Lokapur police station against Dundappa Venkappa Horaddi and others (“Accused”) under sections 143, 147, 341, 283 read with section 149 of the Indian Penal Code, 1860 for allegedly forming an unlawful assembly and stopping certain limestone loaded tippers with the intention of causing loss to the national exchequer. Subsequently, criminal case no. 1288/2014 was registered against the Accused before the Additional Civil Judge and JMFC, Mudhol. The matter is currently pending.
4.
Our Company has filed 81 cases under section 138 of the Negotiable Instruments Act, 1881 against various parties and the cumulative amount involved in these cases is approximately ₹ 7.81 crores.
Against our Subsidiaries As on the date of this Placement Document, there are no outstanding criminal proceedings initiated against our Subsidiaries. By our Subsidiaries As on the date of this Placement Document, there are no outstanding criminal proceedings initiated by our Subsidiaries. B. Material outstanding civil litigation involving our Company and/or its Subsidiaries Against our Company 1.
Subhash Bhatnagar, Secretary, Nirman Mazdoor Panchayat Sangam filed writ petition no. 6880 of 2012 (“Writ Petition”) before the High Court of Delhi (“High Court”) against the District Labour Commissioner West, Office of the Deputy Labour Commissioner, Government of NCT of Delhi, our Company and six other cement companies praying for, inter alia, issue of a writ of mandamus for payment of minimum wages to the workers involved in loading and unloading work of cement as per the minimum wages prescribed by the Government of Delhi, issue of directions to concerned authorities to include such workers under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and passing of orders to ensure welfare measures - 167 -
are provided to cement workers under the Unorganized Workers’ Social Security Act, 2008. The Writ Petition is currently pending before the High Court. 2.
Bhanwar Singh and others (“Petitioners”) filed a writ petition bearing reference number 6591/2011 in the nature of public interest litigation against our Company and others (“Respondents”) before the High Court of Rajasthan (“High Court”) praying for, inter-alia, a ban on mining activities within a radius of 10 kilometers from the Chittorgarh Fort in Rajasthan. The High Court by its order dated May 25, 2012 (“Impugned Order”) held, interalia, that no mining and blasting activities could take place within 10 kilometers from the Chittorgarh Fort Wall, and cancelled all mining leases within the aforesaid radius. Aggrieved by the Impugned Order, our Company has filed a special leave petition bearing reference number 23551/2012 before the Supreme Court of India (“Supreme Court”) against the Impugned Order seeking, inter-alia, to set aside the Impugned Order and to staying the operation and implementation of the Impugned Order as interim relief. The Supreme Court, subsequently stayed the operation of the Impugned Order and by its order dated July 29, 2013, permitted mining operations to be carried out beyond 2 kilometers from the Chittorgarh Fort Wall. The matter is currently pending.
By our Company 1.
Our Company filed writ petition no. 4147/2007 (“Original Petition”) before the High Court of Judicature at Rajasthan (“High Court”) challenging the constitutional validity of the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 and the rules made thereunder (together, the “Act”). The Original Petition was dismissed by the High Court by an order dated December 18, 2014 (“Impugned Order”) as the subject matter of the Original Petition was sub-judice before the Supreme Court of India (“Supreme Court”). Aggrieved by the Impugned Order, our Company filed special leave petition no. 376 of 2015 (“SLP”) before the Supreme Court. The Supreme Court took all matters relating to constitutional validity of entry tax arising from various high courts together for deciding at once in civil appeal no. 3453/2002 (“Appeal”) and consequently, the SLP was tagged with the Appeal. Thereafter, by a judgment dated November 11, 2016 (“Appeal Order”) passed in the Appeal, the constitutional validity of the entry tax was upheld by the Supreme Court. As a result thereof, the SLP was dismissed by the Supreme Court by its order dated March 22, 2017 with leave granted to our Company to approach the High Court again for adjudication of certain pending issues not decided by the Appeal Order in light of the principles enunciated therein. Subsequently, our Company filed two writ petitions (7093/2017 and 8021/2017) before the High Court against the State of Rajasthan and others for adjudication of the aforesaid pending issues and prayed for, inter alia, declaration of the Act as being discriminatory and ultra vires of the Constitution of India, 1950, quashing of demand notices issued under the Act and refund of the entry tax and interest thereon paid by the Company. Our Company has already paid a cumulative amount of ₹ 80.26 crore towards entry tax and interest thereon and the outstanding liability on the Company is ₹ 48.21 crore (“Outstanding Amount”). The High Court has granted interim protection to our Company against any coercive attempts at recovering the Outstanding Amount and the matter is currently pending.
2.
Our Company had entered into a Power Delivery Agreement with VS Lignite Power Private Limited (“VSLP”) dated March 7, 2007 (“Agreement”). VSLP subsequently failed to meet its contractual obligation to supply minimum guaranteed power under the Agreement. Aggrieved by this, our Company referred the matter to arbitration. Thereafter, an arbitral award dated June 14, 2012 (“MGP Award”) was passed whereby, VSPL was, inter alia, directed to supply power to our Company at ₹ 2.85 per Kwh for the entire period of the Agreement and to compensate for the amount spent by our Company on sourcing deficient electricity from Rajasthan Rajya Vidyut Vitran Nigam Limited (“RRVVNL”) due to short supply of minimum guaranteed power under the Agreement. VSPL then challenged the MGP award under section 34 of the Arbitration and Conciliation Act, 1996 (“Act”) before the Additional District Judge, Jaipur Metropolitan, who by its order March 16, 2013 refused to set aside the MGP award. VSPL, thereafter filed an application under section 37 of the Act before the High Court of Rajasthan in S.B Civil Misc. Appeal No. 1473/2013 which was dismissed vide an order January 12, 2017 (“Impugned Order”). Against the Impugned Order, VSPL filed a special leave petition before the Supreme Court of India which was dismissed by an order dated November 6, 2017. Since VSPL, failed to comply with the MGP Award, our Company filed an execution petition which is currently pending in the Commercial Court at Jaipur. In parallel, VSPL by its letter dated February 28, 2015 to our Company expressed its inability to supply power to our Company with effect from March 1, 2015 due to an alleged occurrence of a force majeure event in terms of the Agreement and subsequently terminated the Agreement. Aggrieved by this, our Company referred the matter to arbitration. Thereafter, an interim award dated January 11, 2017 (“Interim Award”) passed by the arbitral tribunal so constituted, rejected the contention of VSPL regarding the occurrence of a force majeure event. VSPL challenged the Interim Award under section 34 of the Act which was eventually rejected by an order dated July 10, 2017 passed by the Additional District Judge, Jaipur Metropolitan, Jaipur. Thereafter, an arbitral award dated October 29, 2017 (“Force Majeure Award”) was passed whereby, VSPL was directed to restore supply of power to our Company - 168 -
and to compensate for the amount spent by our Company on sourcing electricity from RRVVNL due to non-supply of power by VSPL. Against the Force Majeure Award, VSPL preferred an application under section 34 of the Act before the District and Session Judge, Jaipur Metropolitan (“Application”). Our Company has filed its objections to the Application. The matter is currently pending. Further, our Company by its letters dated November 19, 2017 has raised demand of ₹ 116.14 crore and ₹ 22.78 crore from VSPL towards short supply of minimum guaranteed power from April 1, 2014 to February 28, 2015 and nonsupply of power from March 1, 2015 to October 31, 2017. 3.
IDBI Bank had acquired the moveable and immoveable assets of Nihon Nirman Limited (“Nihon”) including the property situated at Bhalotia Nagar, P.O. Gotan, District Nagaur, Rajasthan (“Assets”) under the provision of section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and the rules made thereunder (together, the “Act”). The Assets were later purchased by our Company from IDBI in an open bid auction, conducted in accordance with the Act. Thereafter, the Assets were directed to be attached and auctioned off by an order passed by District Judge, Merta City, Rajasthan (“District Judge”) in a pending dispute between Unique Project Fabricators Private Limited and Nihon in civil misc. (execution) no. 3 of 2000 (“Impugned Order”). Aggrieved by the Impugned Order, our Company filed an application under Order XXI Rule 58 of the Code of Civil Procedure, 1908 before the District Judge objecting to the attachment of the Assets. Interim stay was granted in favour of our Company by an order dated February 24, 2011 passed by the District Judge. The matter is currently pending.
4.
Our Company filed a claim for refund of excess excise duty of ₹ 40.66 crores paid by our Company for the period between September 1984 and October 1991 (“Refund Amount”) before the Assistant Commissioner, Central Excise, Ajmer (“Assistant Commissioner”). The Assistant Commissioner by its order dated May 27, 2003 rejected our claim for the Refund Amount. Aggrieved by this, our Company filed an appeal before the Commissioner (Appeals) Central Excise & Customs, Jaipur (“Commissioner Appeals”) against the aforesaid order passed by the Assistant Commissioner. The Commissioner Appeals by its order April 1, 2004 upheld the order passed by the Assistant Commissioner except to the extent of allowing refund of ₹ 2.15 crores paid by our Company for the period between September 1984 to June 1985 (“Repayment Amount”). Aggrieved by the order passed by Commissioner Appeals, our Company filed an appeal before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (“CESTAT”). The CESTAT by its order April 26, 2005 dismissed our appeal and also directed the Repayment Amount to be deposited in the Consumer Welfare Fund. Aggrieved by this, our Company filed central excise appeal no. 49 of 2007 before the High Court of Rajasthan claiming the Refund Amount along with interest at the rate of 15% per annum from the respective dates of payment of such excess duty, till the date of refund thereof to our Company. The matter is currently pending.
5.
Our Company filed civil writ petition no. 2790/2013 (“First Petition”) against Ajmer Vidyut Vitaran Nigam Limited and others (“Respondents”) before the High Court of Rajasthan (“High Court”), seeking setting-aside, inter-alia, (a) the demand of electricity duty, water cess and urban cess raised by the Respondents on the units of electricity supplied by a captive generating plant at Bikaner established by V.S. Lignite Power Private Limited (“Captive Generating Plant”); and (b) a declaration that no electricity duty, water cess or urban cess is leviable on the electricity supplied by Captive Generating Plant to our Company. Our Company sought the aforesaid relief on the grounds that our Company is purchasing power from a captive power plant established by V.S. Lignite Power Private Limited and being its user-member, our Company is exempt from payment of electricity duty as per the notification dated March 8, 2006 (“Notification”) which remitted the electricity duty payable on the electricity consumed by a person generating energy for his use or consumption. The High Court by its order dated March 15, 2013 directed our Company to deposit the amount of bill except the amount of electricity duty and water conservation cess subject to the undertaking that in the event of dismissal of the First Petition, our Company would deposit the said amount within a period of fifteen days from the date of such dismissal. Meanwhile, our Company also filed civil writ petition no. 3547/2014 (“Second Petition”) against the Respondents before the High Court, seeking, inter-alia, quashing of demand/recovery of electricity duty, water conservation cess, urban cess, and cross subsidy surcharge amounting to ₹ 3.33 crore and ₹ 9.10 crore on the units of power supplied to Gotan and Nimbahera units of our Company, respectively, by the Captive Generating Plant, on similar grounds raised in the First Petition. The High Court by its order dated May 9, 2014 restrained the Respondents from taking any coercive action against our Company for not depositing the bill under the head of electricity duty, urban cess, water conservation cess and cross subsidy. Both these matters are currently pending.
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Against our Subsidiaries As on the date of this Placement Document, there are no material outstanding civil litigations initiated against our Subsidiaries. By our Subsidiaries As on the date of this Placement Document, there are no material outstanding civil litigations initiated by our Subsidiaries. C. Material outstanding tax litigation against our Company and/or its Subsidiaries Against our Company 1.
Our Company has received 11 show cause notices from the Excise Department for alleged short payment of central excise duty on cement sold in 50 kg bags to industrial/ institutional consumers cumulatively amounting to ₹ 202.12 crores for the period between July 2011 to March 2018 and contravention of Rules 4, 6 and 8 of the Central Excise Rules, 2002. These matters are currently pending.
2.
Our Company received a show cause notice dated October 3, 2008 from the Office of the Commissioner, Central Excise Commissionerate, Jaipur – II, Jaipur, Rajasthan for alleged irregular availing and utilization of inadmissible CENVAT credit of ₹ 6.61 crore during the period from October, 2007 to April, 2008 on capital goods like parts, components and accessories received in our factory at Nimbahera, Chittorgarh and subsequently, cleared for use in the captive power plant being assembled at the aforesaid factory by Thermax Instrumentation Ltd. and contravention of Rules 3(1), 3(5) and 9 of the CENVAT Credit Rules, 2004. The matter is currently pending.
3.
Deputy Commissioner of Income Tax – VI, Kanpur (“DCIT”) passed an assessment order dated December 24, 2010 (“DCIT Order”) under section 143(3) of the Income Tax Act, 1961 for assessment year 2008-09. The DCIT Order was subsequently rectified vide an order dated March 10, 2015 (“Rectification Order”) whereby, additional depreciation claimed by our Company on plant and machinery used for power generation was disallowed. Aggrieved by the Rectification Order, our Company filed an appeal to the Commissioner of Income Tax (Appeals) II, Kanpur (“CIT(A)”) which was allowed by CIT(A) by an order dated April 10, 2015 in favour of our Company. Thereafter, DCIT filed an appeal against the order of the CIT(A) before the Income Tax Appellate Tribunal, Lucknow which was dismissed by an order dated October 16, 2015 (“Impugned order”). Against the Impugned Order, Principal Commissioner of Income Tax – I, Kanpur has filed an appeal before the High Court of Judicature at Allahabad. The cumulative tax effect of this proceeding is ₹ 10.72 crore. The matter is currently pending.
4.
Deputy Commissioner of Income Tax – VI, Kanpur (“DCIT”) passed an assessment order dated February 28, 2011 (“DCIT Order”) under section 143(3) of the Income Tax Act, 1961 for assessment year 2009-10, inter alia, disallowing depreciation claimed on goodwill and adding subsidies received, expenses incurred on advertisements/publicity and certain preliminary pre-operational expenses incurred towards incorporating our Company, to the total income. Aggrieved by the DCIT Order, our Company filed an appeal to the Commissioner of Income Tax (Appeals) II, Kanpur (“CIT(A)”) which was partly allowed by an order dated January 24, 2012 in favour of our Company except in relation to the addition of advertisement/publicity expenses to the total income. Thereafter, DCIT filed an appeal against the order of the CIT(A) before the Income Tax Appellate Tribunal, Lucknow which was dismissed by an order dated October 30, 2015 (“Impugned order”). Against the Impugned Order, Principal Commissioner of Income Tax – I, Kanpur has filed income tax appeal no. 266 of 2016 before the High Court of Judicature at Allahabad. The cumulative tax effect of this proceeding is ₹ 11.11 crore. The matter is currently pending.
Against our Subsidiaries As on the date of this Placement Document, there are no material outstanding tax proceedings initiated against our Subsidiaries.
D. Material outstanding regulatory litigation involving our Company and/or its Subsidiaries Against our Company - 170 -
1.
The Competition Commission of India (“CCI”) by its order dated June 20, 2012 in case no. 29/2010 held our Company and certain other cement manufacturers guilty of, inter-alia, collusive price fixing, and limiting and controlling the production and supply of cement in the market, thereby contravening section 3(3)(a) and section 3(3)(b) of the Competition Act, 2002 (the “Competition Act”). The CCI also directed our Company to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. Furthermore, the aforesaid order of the CCI imposed a penalty of ₹ 128.54 crore on our Company under section 27(b) of the Competition Act. Aggrieved by the aforesaid order, our Company filed appeal no. 112/2012 before the Competition Appellate Tribunal (“COMPAT”) against the aforesaid order dated June 20, 2012 of the CCI. Subsequently, the COMPAT by its order dated December 11, 2015 allowed the appeal and set aside the aforesaid order of the CCI and remanded back the matter to the CCI with a direction to pass a fresh order. Subsequently, the CCI by its order dated August 31, 2016 (“Impugned Order”) passed a similar order as was passed on June 20, 2012, directing our Company to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. The Impugned Order also imposed a penalty of ₹ 128.54 crore on our Company under section 27(b) of the Competition Act. Aggrieved by the Impugned Order, our Company filed appeal no. 55/2016 (“Appeal No. 1”) before the COMPAT, seeking setting aside of the Impugned Order and also filed an interlocutory application bearing reference no. 149/2016 to stay the Impugned Order and direct that no coercive action be taken for realization of penalty amount till the final adjudication of the Appeal No.1. The COMPAT by its order dated November 21, 2016 stayed the Impugned Order subject to deposit of 10% of the penalty amount. Subsequently, the COMPAT by its order dated February 16, 2017 in I.A. No. 176/2016 (“Modified Order”) reduced the aforesaid penalty to ₹ 65.56 crore, and accordingly, modified the ad-interim order dated November 21, 2016. Our Company has deposited the requisite amount in terms of the Modified Order. In parallel, the CCI in its order dated August 31, 2016 in RTPE No. 52/2006 held our Company, Shree Cement Limited and certain other cement manufacturers guilty of, inter-alia, collusive price fixing, and limiting and controlling the production and supply in the market, thereby contravening section 3(3)(a) and section 3(3)(b) of the Competition Act. However, the CCI did not find appropriate to issue any remedies against our Company as the CCI by its separate order in case no. 29/2010 had imposed a penalty of ₹ 128.54 crore and directed our Company to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production or supply of cement in the market. Aggrieved by this, our Company filed appeal no. 72/2016 (“Appeal No. 2”) seeking to set aside the order dated August 31, 2016 in RTPE No. 52/2006. The notification dated May 26, 2017 issued by the Ministry of Finance replaced the COMPAT with the National Company Law Appellate Tribunal (“NCLAT”) with effect from May 26, 2017. Subsequently NCLAT, New Delhi by its common order dated July 25, 2018 (“NCLAT Order”) dismissed both the appeals i.e. Appeal No. 1 and Appeal No. 2 and reaffirmed the quantum of penalty. Aggrieved by the said order, our Company filed an appeal dated September 18, 2018 before the Supreme Court of India (“Supreme Court”) under section 53T of the Competition Act to set aside the NCLAT Order. The Supreme Court by an order dated October 5, 2018 admitted the appeal and stayed the operation of the NCLAT Order taking into consideration ad-interim order dated November 21, 2016 read with the Modified Order, on deposit of two fixed deposit receipts of ₹ 6.56 crore and ₹ 0.52 crore, each valid up to April 08, 2019. The matter is currently pending.
2.
The erstwhile Monopolies and Restrictive Trade Practices Commission (“MRTP Commission”) by its letter dated May 25, 2006 directed Director General of Investigation & Registration (“DGIR”) to conduct a preliminary investigation into the restrictive trade practices allegedly adopted by cement manufacturers by forming a cartel. This investigation was ordered on the basis of certain press reports. The DGIR submitted its preliminary report dated July 4, 2007 stating that our Company along with certain other cement manufacturers were engaged in restrictive trade practices by fixing prices of cement in conjunction with each other, thereby contravening section 33(1)(d) read with section 2(a) of the Monopolies and Restrictive Trade Practices Act, 1969 (“MRTP Act”) and requested the MRTP Commission to pass such orders as it may deem fit and appropriate under section 37(1) of the MRTP Act. The MRTP Commission ordered an enquiry and issued a notice of enquiry dated August 6, 2007 in RTPE No. 15/2007 to our Company for filing a reply to the notice of enquiry. Subsequently, our Company has filed its responses to the notice of enquiry. Subsequently, in view of the matters pertaining to cartelization by cement companies pending before the Supreme Court, the Competition Appellate Tribunal vide its order dated July 5, 2016 adjourned the matter with liberty to both or either party to file an application for listing of this matter after the aforesaid matters pending before the Supreme Court are disposed off. The matter is currently pending. - 171 -
3.
The Director, Supplies & Disposal, Haryana (“Informant”) filed information with the Competition Commission of India (“CCI”) under section 19(1) of the Competition Act, 2002 (“Competition Act”) against our Company and certain other cement manufacturers (“Opposite Parties”), alleging, inter-alia, that the Opposite Parties colluded with each other and attempted to rig the bid in a notice inviting tender for supply of cement issued by the Informant, thereby contravening section 3 of the Competition Act. Subsequently, the CCI by its order dated January 2, 2014 passed an order under section 26(1) of the Competition Act directing the Director General to initiate an investigation into the matter. Thereafter, reference case no. 05/2013 was registered and the CCI, by its order dated January 19, 2017 (“Impugned Order”), held the Opposite Parties in contravention of section 3(1) read with section 3(3) of the Competition Act and directed the Opposite Parties to cease and desist from indulging in the acts/conduct in contravention of the Competition Act. The Impugned Order also imposed a penalty of ₹ 9.26 crore on our Company under section 27(b) of the Competition Act. Aggrieved by this, our Company filed appeal no. 05/2017 (“Appeal”) before the Competition Appellate Tribunal (“COMPAT”) seeking, inter-alia, setting aside of the Impugned Order. Alongside, our Company also filed interlocutory application no. 20/2017 before the COMPAT seeking, inter-alia, staying the execution of the Impugned Order and a direction that no coercive action be taken for realization of penalty amount till the final adjudication of the Appeal. The Impugned Order was subsequently stayed by an order dated April 3, 2017 passed by the COMPAT. The notification dated May 26, 2017 issued by the Ministry of Finance replaced the COMPAT with the National Company Law Appellate Tribunal (“NCLAT”) with effect from May 26, 2017.The matter is currently pending before NCLAT.
4.
The erstwhile Monopolies and Restrictive Trade Practices Commission in RTPE No. 99/1990 vide its order dated December 20, 2017 (“Impugned Order”) held our Company and others guilty of indulgence in restrictive trade practices and collusive price fixing of cement, thereby contravening section 33(1)(d) of the Monopolies and Restrictive Trade Practice Act, 1969, and passed a cease and desist order and a direction to our Company to not to indulge in any arrangement directly or indirectly through the instrumentality of Cement Manufacture Association in relation to fixing the prices of cement in concert. Aggrieved by the aforesaid Impugned Order, our Company filed an appeal bearing reference no. 1092/2008 before the Supreme Court of India (“Supreme Court”), seeking, inter-alia, setting aside of the Impugned Order. This matter has been tagged with civil appeal no. 686/2008 which is pending before the Supreme Court. The Supreme Court vide its order dated February 8, 2012 granted a stay. The matter is currently pending. By our Company As on the date of this Placement Document, there are no material outstanding regulatory litigations initiated by our Company. Against our Subsidiaries As on the date of this Placement Document, there are no material outstanding regulatory litigations initiated against our Subsidiaries. By our Subsidiaries As on the date of this Placement Document, there are no material outstanding regulatory litigations initiated by our Subsidiaries.
II. Litigation involving our Directors Except as stated below and as stated in “Legal Proceedings – Litigations involving our Company and/or its Subsidiaries – Outstanding Criminal Proceedings involving our Company and/or its Subsidiaries – Against our Company – S. No. 1 and 2” on page 166, there are no other outstanding criminal proceedings involving our Directors. 1.
New Delhi Municipal Council filed criminal complaint no. 514/2004 (“Complaint”) before the Metropolitan Magistrate, New Delhi against J.K. Synthetics Limited through Yadupati Singhania and one another (collectively, the “Accused”) for alleged misuse of certain premises owned by J.K. Synthetics Limited (now, Jaykay Enterprises Limited) in violation of the provisions of the New Delhi Municipal Council Act, 1994. The Metropolitan Magistrate, New Delhi by its order dated March 1, 2004 took cognizance of the Complaint and issued summons against the accused. Aggrieved by the aforesaid order, Yadupati Singhania (“Petitioner”) filed a criminal miscellaneous application bearing reference number 5493/2005 before the High Court of Delhi (“High Court”) and sought the High Court to, inter-alia, quash the summoning order dated March 1, 2004 and - 172 -
quash the proceedings against him. The High Court by its order dated November 23, 2005 (“Impugned Order”) dismissed the petition. Subsequently, Yadupati Singhania (“Appellant”) has filed criminal appeal no. 541/2008 (“Appeal”) against the Impugned Order before the Supreme Court of India (“Supreme Court”). The Supreme Court by its order dated February 16, 2017 dismissed the Appeal as withdrawn and exempted Yadupati Singhania from personal appearance before the trial court. The matter is currently pending. 2.
The Directorate of Revenue Intelligence, Lucknow (“DRI”) issued a show cause notice dated October 1, 2008 to PGY Associates, our Directors Sushila Singhania and Yadupati Singhania in the capacity of being partners of PGY Associates, and others, for wrongful availment of drawback incentives on export of ready-made garments to Russian firms under the then existing rupees-rouble agreement. Subsequently, the Commissioner of Customs, Inland Container Depot, New Delhi issued an order dated March 31, 2012 (“Impugned Order”) directing, inter alia, disallowance and recovery of drawback incentives to the tune of ₹ 3.31 crore and imposition of a penalty amount of ₹ 1 crore on Yadupati Singhania. Aggrieved by the aforesaid Impugned Order, PGY Associates, Yadupati Singhania and Sushila Singhania have filed appeal bearing reference nos. C/2102/2012, C/2103/2012 and C/2516/2012, respectively, before the Customs, Excise and Service Tax Appellate Tribunal (“Tribunal”), New Delhi on July 19, 2012 seeking the Tribunal to set aside the Impugned Order. The Tribunal in custom appeal nos. C/2102-2106 and 2516/2012-B by its order dated December 29, 2016 recorded that the issue of jurisdiction of DRI to issue cause notice is pending before the Supreme Court and ordered to list the appeals in due course. Subsequently, the matter was disposed off on July 4, 2017. Subsequently, the Tribunal by its orders dated July 17, 2017 and July 4, 2017 set aside the Impugned Order and remanded the matter to the original adjudicating authority to decide the issue of jurisdiction after the availability of Supreme Court decision, and also ordered to maintain status quo till the final decision. The matter is currently pending.
3.
The Assistant Commissioner of Income Tax, (Circle V) Kanpur (“ACIT”) filed a criminal case (C.C. No. 108/1989) before Special Chief Judicial Magistrate, Kanpur (“SCJM”) under section 271(1)(c) read with section 274 of the Income Tax Act, 1961(“IT Act”) against M/s Plastic Products Limited together with its directors including Yadupati Singhania (“Accused”). The ACIT alleged violation of section 277 of the IT Act alleging deliberate verification by signature of false and incorrect statement in the return of income of the said company and seeking the issue of summons against the Accused. As of now, Yadupati Singhania, one of the Accused, has not received any summons.
III. Details of legal action taken by any Ministry or Department of the Government or a statutory authority against our Promoters during the last three years immediately preceding the year of circulation of this Placement Document and any direction issued by any such Ministry or Department or statutory authority upon conclusion of such litigation or legal action. Except as stated below and as stated in “Legal Proceedings – Litigations involving our Company and/or its Subsidiaries – Outstanding criminal Proceedings involving our Company and/or its Subsidiaries – Against our Company – S. No. 2” on page 166, and “Legal Proceedings – Litigations involving our Directors – S. No. 1, S. No. 2 and S. No. 3 ” on page 166, there are no litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against our Promoters during the last three years immediately preceding the year of circulation of this Placement Document and no direction has been issued by any such Ministry of Department or statutory authority upon conclusion of such litigation or legal action. Our Directors, Yadupati Singhania and Sushila Devi Singhania and certain other persons (“Applicant”), forming part of the promoter group of Jaykay Enterprises Limited, filed a suo-moto application dated January 16, 2017 with the Securities and Exchange Board of India (“SEBI”) for settling the delayed compliance which occurred in giving open offer under regulation 3(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, while acquiring certain equity shares of Jaykay Enterprises Limited. Pursuant to payment of an amount of ₹ 0.18 crore as communicated to the Applicant by SEBI vide its e-mail dated October 11, 2007 for the aforesaid default, the SEBI vide its order dated November 9, 2017 bearing reference no. SO/EFD-2/SD/174/NOV/2017 recorded that the proceedings that may be initiated for the aforesaid default are settled and no enforcement action would be initiated for the aforesaid default. IV. Inquiries, inspections or investigations under Companies Act There have been no inquiries, inspections or investigations initiated or conducted against our Company or its Subsidiaries under the Companies Act, 2013 or the Companies Act, 1956 in the last three years immediately preceding the year of circulation of this Placement Document, nor have there been any prosecutions filed (whether - 173 -
pending or not), fines imposed, compounding of offences in the last three years immediately preceding the year of this Placement Document involving our Company or its Subsidiaries. V. Details of acts of material frauds committed against our Company in the last three years, if any, and if so, the action taken by our Company There have been no frauds committed against our Company in the last three years preceding the date of this Placement Document. VI. Details of default, if any, including therein the amount involved, duration of default and present status, in repayment of statutory dues; debentures and interests thereon; deposits and interest thereon; and loan from any bank or financial institution and interest thereon As on the date of this Placement Document, our Company has no outstanding defaults in repayment of statutory dues, dues payable to holders of any debentures and interest thereon, deposits and interest thereon and loans and interest thereon from any bank or financial institution, except where there is dispute under litigation. VII. Summary of reservations, qualifications or adverse remarks of auditors in the last five Fiscal Years immediately preceding the year of circulation of this Placement Document and of their impact on the financial statements and financial position of our Company and the corrective steps taken and proposed to be taken by our Company for each of the said reservations or qualifications or adverse remark. No reservations, qualifications or adverse remarks have been given by our auditors in the last five Fiscal Years immediately preceding the year of circulation of this Placement Document. VIII. Details of defaults in annual filing of our Company under the Companies Act, 2013 and the rules made thereunder As on the date of this Placement Document, our Company has not made any default in annual filings of the Company under the Companies Act, 2013 and the rules made thereunder. IX. Details of significant and material orders passed by the regulators, courts and tribunals impacting the going concern status of the Company and its future operations. Except as stated in “Legal Proceedings – Litigations involving our Company and/or its Subsidiaries – Material outstanding regulatory litigation involving our Company and/or its Subsidiaries– Against our Company – S. No. 1” on page 170, as on the date of this Placement Document, there are no significant and material orders passed by the regulators, courts and tribunals impacting the going concern status of our Company and its future operations.
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OUR STATUTORY AUDITORS Our Company’s current Statutory Auditors, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, are independent auditors with respect to our Company as required by the Companies Act 2013 and in accordance with the guidelines prescribed by ICAI, and have been appointed as the statutory auditors of our Company, pursuant to the approval of the shareholders of our Company at the AGM held on July 29, 2017. The audited consolidated financial statements as at and for the Fiscal Year ended March 31, 2018 included in this Placement Document, have been audited by M/s. S. R. Batliboi & Co. LLP, Chartered Accountants and audited consolidated financial statements as at and for the Fiscal Years ended March 31, 2017 and March 31, 2016 included, in this Placement Document, have been audited by P.L. Tandon & Co., Chartered Accountants.
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GENERAL INFORMATION 1.
Our Company was incorporated on November 24, 1994 as J. K. Cement Limited, under the Companies Act, 1956. Our Company received the certificate for commencement of business dated December 30, 1994 from the then Registrar of Companies, Kanpur, Uttar Pradesh. The CIN of our Company is L17229UP1994PLC017199.
2.
The registered and corporate office of our Company is situated at Kamla Tower, Kanpur, Uttar Pradesh 208 001, India.
3.
The website of our Company is http://www.jkcement.com.
4.
Details of our Assistant Vice President (Legal) & Company Secretary and Compliance Officer are as follows: Shambhu Singh J. K. Cement Limited Kamla Tower, Kanpur Uttar Pradesh 208 001, India Tel: +91-512-2371478-81 Fax: +91-512-2332665/2399854 Email:
[email protected]
5.
The Equity Shares were listed on BSE on June 30, 2005 and NSE on March 14, 2006.
6.
The Issue has been approved by our Board pursuant to its resolution passed on June 28, 2018 and has been approved by our shareholders pursuant to a resolution passed on July 28, 2018.
7.
We have received in principle approvals each dated December 24, 2018 from NSE and BSE, to list the Equity Shares to be issued pursuant to the Issue under Regulation 28(1) of the SEBI Listing Regulations. We shall apply to the Stock Exchanges for the listing approvals and the final listing and trading approvals.
8.
Copies of the Memorandum of Association and Articles of Association were available for inspection between 10.00 A.M. and 1.00 P.M. on all working days (excluding Saturdays) at the Registered and Corporate Office during the Bidding period.
9.
Except as disclosed in this Placement Document, there has been no material change in our Company’s financial position since March 31, 2018, the last date of Audited Consolidated Financial Statements.
10. Except as disclosed in this Placement Document, our Company has obtained necessary consents, approvals and authorisations required in connection with the Issue. 11. Except as disclosed in this Placement Document, there are no legal or arbitration proceedings against or affecting our Company or its assets or revenues, nor is our Company aware of any pending or threatened legal or arbitration proceedings, which are, or might be, material in the context of the Issue or could have a material adverse effect on the position, business, operations, prospects or reputation of our Company. For further details, see “Legal Proceedings”on page 166. 12. The Floor Price is ₹ 732.42 per Equity Share as calculated in accordance with Regulation 176 of Chapter VI of SEBI ICDR Regulations. Our Company has offered a discount of 5% on the Floor Price in terms of Regulation 176(1) of the SEBI ICDR Regulations. 13. Our Company and the BRLM accept no responsibility for statements made otherwise than in this Placement Document and anyone placing reliance on any other source of information, including our website, would be doing it at his or her own risk. 14. As on the date of this Placement Document, our Company has not made any default in annual filings of the Company under the Companies Act, 2013 and the rules made thereunder.
- 176 -
FINANCIAL STATEMENTS Sr. no.
Particulars
1. 2.
The audited standalone and consolidated financial statements for the Fiscal Year 2016 The audited standalone and consolidated financial statements for the Fiscal Year 2017
3. 4.
The audited standalone and consolidated financial statements for the Fiscal Year 2018 The unaudited standalone financial results for the six-month period ended September 30, 2018
- 177 -
Page No. F-1 F-55 F-149 F -243
INDEPENDENT AUDITOR’S REPORT To the Members of J.K. Cement Limited
REPORT ON THE STANDALONE FINANCIAL STATEMENTS We have audited the accompanying standalone financial statements of J.K. CEMENT LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
OPINION In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and its profit and its cash flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 1.
As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub – section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.
2.
As required by Section 143 (3) of the Act, we report that:
AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on these standalone financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
F-1
a.
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b.
In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c.
The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d.
In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(i)
The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 36 to the financial statements.
e.
On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(ii)
The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
f.
g.
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
With respect to the adequacy of the internal financial control over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “EXHIBIT A”.
For P.L. TANDON and Co., Chartered Accountants Registration Number: 000186C
With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
Place : Kanpur Dated : 28th May, 2016
F-2
A.K. Agarwal Partner Membership Number: 071548
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT Re: J.K. CEMENT LIMITED
The Annexure referred to in our Independent Auditor’s Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2016, We report that:
the register maintained under section 189 of the Companies Act 2013, according to the information and explanations given to us:
i.
(a)
The Company had/has granted Unsecured Loans to one company The terms and conditions of loans are not prima facie prejudicial to the interest of the company.
(b)
There is no stipulation for the repayment of principal and payment of interest.
(c)
There is no overdue amount of such loan.
In respect of its Fixed Assets: (a)
(b)
(c)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets other than furniture and fixtures and office equipments. All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. According to the information and explanations given to us and the records examined by us and based on the examination of registered sale deed /transfer deed/ conveyance deed and other relevant records evidencing title provided to us, we report that, the title deeds, comprising all the immovable properties of land and building are held in the name of the company as at the balance sheet date, except the following: Particular of Gross Block as Net Block land at 31-03-2016 as at (` In lacs ) 31-03-2016 (` In lacs) i. Leasehold 1353.07 456.52 land (one case) ii. Freehold 225.64 225.64 land (four cases)
ii.
iv.
In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made.
v.
In our opinion and according to information and explanations given to us, the company has not accepted any deposits within the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, therefore, the provisions of paragraph 3(v) of the Companies (Auditor’s Report ) order, 2016, are not applicable to the company.
vi.
We have broadly reviewed the books of account maintained by the company, pursuant to the rules made by the Central Government, for maintenance of cost records under sub section (1) of section 148 of the Companies Act,2013 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.
Remarks
The title deeds are in the name of erstwhile company that merged with the company pursuant to a scheme of amalgamation and arrangement as approved by the Honorable High Court.
vii. According to the information and explanations given to us, in respect of statutory and other dues: (a)
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and other material Statutory dues were in arrear as at 31st March, 2016 for a period more than six months from the date they became payable.
In respect of its Inventories: As explained to us, inventories have been physically verified during the year by the management at reasonable intervals and discrepancies noticed on verification between physical stocks and the book records were not material.
iii.
The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues applicable to it.
In respect of loans, secured or unsecured, granted by the Company to Companies, firms or other parties covered in F-3
(b)
According to the records of the company, income tax, sales tax, service tax, duty of custom, duty of excise or value added tax which have not been deposited on account of any dispute, are as follows :Name of the Statute
Nature of the Dues
Finance Act 2008 (State)
Environment and Health Cess
State Sales Tax Act Central Sales Tax Act Rajasthan Entry Tax Rajasthan Entry Tax Uttar Pradesh Entry Tax Central Excise Act,1944 Finance Act, 1994 Central Excise Act,1944 Service Tax
Amount (` in Lacs)
Period to which Amount Relates
Forum where Dispute is Pending
2815.12
2008-09 to 2015-16
Sales Tax
3073.81
1991-92 onwards
Sales Tax Entry Tax Interest on Entry Tax Interest on Entry Tax Excise Duty including Interest thereon Service Tax Excise Duty including Interest Service Tax on GTA
1298.59 4512.64 3718.82 314.47 419.02
1999 Onwards July, 2006 Onwards 2002-03 Onwards 2008-09 and 2009-10 1989
Jodhpur High Court and Bangalore High Court Various Courts in Uttar Pradesh and Rajasthan Appeal with D.C.S.T Appeal with Jodhpur High Court Appeal with Jodhpur High Court Appeal with Supreme Court Supreme Court
1085.42 1732.71 228.89
June, 2007 to March, 2008 Central Excise Department July, 1999 to March, 2008 Central Excise Department Central Excise Department
company, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
viii. According to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to banks, government or dues to debenture holders. ix.
x.
xi.
xii.
In our opinion and according to the information and explanations given to us, the debentures and term loans have been applied for the purposes for which they were obtained. According to the information and explanations give to us, no material fraud by the company or on the company by its officer or employees has been noticed or reported during the year. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.
xiv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. xv.
According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into non- cash transactions with directors or persons connected with him, Therefore the provisions of paragraph 3 (xv) of the Companies (Auditor’s Report) order, 2016, are not applicable to the company.
xvi. The company is not required to be registered under section 45 – IA of the Reserve Bank of India Act, 1934.
In our opinion and according to the information and explanations given to us, the company is not a nidhi company. Therefore the provisions of paragraph 3 (xii) of the Companies (Auditor’s Report) order, 2016,are not applicable to the company.
For P.L. TANDON and Co., Chartered Accountants Registration Number: 000186C
Place : Kanpur Dated : 28th May, 2016
xiii. According to the information and explanations given to us and based on our examination of the records of the
F-4
A.K. Agarwal Partner Membership Number: 071548
EXHIBIT “A” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF J.K. CEMENT LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of J.K. CEMENT LIMITED (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal
F-5
financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial
F-6
reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For P.L. TANDON and Co., Chartered Accountants Registration Number: 000186C
Place : Kanpur Dated : 28th May, 2016
A.K. Agarwal Partner Membership Number: 071548
BALANCE SHEET as at 31st March, 2016
Note No.
As at 31-03-2016
`/Lacs As at 31-03-2015
EQUITY AND LIABILITIES Shareholders’ Funds Share Capital Reserves and Surplus
1 2
6992.72 164448.38 171441.10
6992.72 157661.34 164654.06
Non Current Liabilities Long Term Borrowings Deferred Tax Liability (Net) Other Long Term Liabilities Long Term Provisions
3 4 5 6
230787.66 32844.11 13964.53 1828.53 279424.83
215879.73 27984.55 11676.87 1659.47 257200.62
Current Liabilities Short term Borrowings Trade Payables Other Current Liabilities Short Term Provisions
7 8 9 10
19620.69 28064.66 64577.25 4771.79 117034.39 567900.32
26335.28 22925.76 58920.35 4766.56 112947.95 534802.63
348883.95 199.76 15240.46 36279.56 16250.91 416854.64
333598.56 197.51 19117.98 28400.61 15340.10 396654.76
6150.00 47424.31 16569.39 47586.88 32483.03 832.07 151045.68 567900.32
3050.00 50978.54 13940.46 40770.57 28454.29 954.01 138147.87 534802.63
Total ASSETS Non Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Non-Current Investments Long term Loans and Advances
11
12 13
Current Assets Current Investments Inventories Trade Receivables Cash and Cash Equivalents Short Term Loans and Advances Other Current Assets
14 15 16 17 18 19
Total Significant Accounting Policies Notes on Financial Statements
1-39
As per our Report attached For P.L.TANDON and Co., Chartered Accountants
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K.Agarwal Partner
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
Kanpur Dated : 28th May, 2016
SHAMBHU SINGH Company Secretary
F-7
Directors
STATEMENT OF PROFIT AND LOSS For the year ended 31st March, 2016
Note No.
2015-2016
`/Lacs 2014-2015
20 21
356032.08 4999.44 361031.52
335716.72 5135.48 340852.20
22
66579.74 151.78 828.85 23144.62 26959.06 15628.13 213426.30 346718.48 14313.04
55620.12 103.94 (94.84) 20254.24 21942.27 13659.63 213451.45 324936.81 15915.39
3060.00 (3060.00) (700.07) 4859.56 10153.55 14.52
3338.76 (3338.76) 223.00 15692.39 22.44
INCOME Revenue From Operations Other Income Total Revenue EXPENSES Cost of Materials Consumed Purchases of Stock-in-Trade Changes in inventories of finished goods work-in-progress and Stock-in-Trade Employee Benefits Expense Finance Costs Depreciation and amortization expense Other Expenses Total Expenses Profit before Tax Tax Expense: Current Tax Less: MAT Credit entitlement Earlier Years Tax Adjustments Deferred Tax Profit for the Year Earning per Equity share of `10/- each Basic and Diluted (In `) Significant Accounting Policies Notes on Financial Statements
23 24 25 26
1-39
As per our Report attached For P.L.TANDON and Co., Chartered Accountants
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K.Agarwal Partner
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
Kanpur Dated : 28th May, 2016
SHAMBHU SINGH Company Secretary
F-8
Directors
CASH FLOW STATEMENT for the year ended 31st March, 2016
A)
`/Lacs 2014-2015
14313.04
15915.39
CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax as per Profit & Loss Account Adjusted for : Depreciation Interest Interest received Dividend Income Profit on sale of Investments Net (profit)/loss on sale of assets Mines restoration Charges Govt. Grants CSR Expenses
15628.14 26606.12 (4057.82) (7.81) (165.51) (23.20) 8.02 (1199.82) 464.05
13659.63 21547.07 (3935.42) (441.74) 213.08 13.74 (222.32) 37252.17 51565.21
Operating Profit before Working Capital Changes Adjusted for : Trade & Other Receivables Inventories Trade Payable & Other Liabilities Cash Generated from Operations Adjusted for : Tax Paid (Net of TDS) Corporate Dividend Tax Dividend paid CSR Expenses
B)
2015-2016
(67.63) 3554.24 15056.55
18543.16 70108.37
(2741.17) (569.42) (2797.09) (464.05)
30834.04 46749.43 (3938.69) 3216.94 2969.24
(3122.58) (356.52) (2097.82) (6571.73) 63536.64
Net cash from operating activities CASH FLOW USED IN INVESTING ACTIVITIES Acquisition/Purchase of fixed assets including capital advances Sale of fixed assets Purchase of Investments Sale of Investments Dividend Interest Income Net cash used in investing activities
(28102.06) 176.19 (29178.95) 18373.32 3740.97
(5576.92) 43420.00 (48765.18) 294.52 (14299.95) 13241.74 3752.87
(34990.53)
F-9
2247.49 48996.92
(45776.00)
CASH FLOW STATEMENT for the year ended 31st March, 2016
`/Lacs 2014-2015
2015-2016 C)
CASH FLOW FROM FINANCING ACTIVITIES Loan to Subsidary Captial subsidy received Deferred Sales Tax / VAT Long Term Borrowings Cash Credit Accounts Repayment of Long Term Borrowings Interest Paid Security Deposits Vehicle Loans
(2750.04) 1,199.82 2525.69 25619.51 (6714.59) (17293.54) (26553.91) 2287.66 (50.40)
(1006.33) 250.77 354.69 36905.12 6484.95 (14971.33) (21654.28) 1962.01 45.68 (21729.80) 6816.31 40770.57 47586.88
Net cash used in financing activities Net increase in Cash and Cash Equivalents (a+b+c) Opening balance of Cash and Cash Equivalents Closing balance of Cash and Cash Equivalents As per our Report attached For P.L.TANDON and Co., Chartered Accountants
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K.Agarwal Partner
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
Kanpur Dated : 28th May, 2016
SHAMBHU SINGH Company Secretary
F-10
8371.28 6015.28 34755.29 40770.57
Directors
NOTES
on financial statements for the year ended 31st march, 2016
1.
As at 31-03-2016
`/Lacs As at 31-03-2015
8000.00
8000.00
8000.00
8000.00
6992.72
6992.72
6992.72
6992.72
SHARE CAPITAL Authorised 8,00,00,000 Equity Shares of ` 10/- each (8,00,00,000 Equity Shares of ` 10/- each) Issued, Subscribed & Paid Up 6,99,27,250 Equity Shares of `10/- each fully paidup (6,99,27,250 Equity Shares of ` 10/- each fully paidup)
1.1 The reconciliation of number of shares outstanding is set out below: Equity shares at the beginning of the year Equity shares at the end of the year
69927250 69927250
1.2 Details of Shareholders holding more than 5% shares. S.No. Name of the shareholder 1 2 3
Shares held on 31-03-2016 22655100 14276002 7294418
Yadu International Ltd Yadupati Singhania Juggilal Kamlapat Holding Ltd.
% 31-03-2016 32.40% 20.41% 10.43%
Shares held on 31-03-2015 22655100 14279843 7228418
`/Lacs As at 31-03-2015
As at 31-03-2016 2.
% 31-03-2015 32.40% 20.42% 10.34%
RESERVES AND SURPLUS a)
b) c)
d)
e)
Capital Reserve Govt. Subsidy As per last Balance Sheet Add: Received during the year Securities Premium Reserve As per last Balance Sheet Debenture Redemption Reserve As per last Balance Sheet Add : Transfer from Profit and Loss Account Revaluation Reserve As per last Balance Sheet Less : Deduction During the year
9579.55 -
9579.55
9551.10 28.45
25988.60 6662.50 1581.95
General Reserve As per last Balance Sheet Less: Adjustments during the year Add : Transfer from Profit and Loss Account
F-11
8244.45
25988.60 5030.00 1632.50
-
21507.30 21507.30
66501.31 3,000.00
64540.05 2038.74 4000.00
69501.31
9579.55
6662.50
66501.31
NOTES
on financial statements for the year ended 31st march, 2016
`/Lacs As at 31-03-2015
As at 31-03-2016 2.
RESERVES AND SURPLUS f) Surplus As per last Balance Sheet Balance in Statement of Profit and Loss Less: Appropriations Transfer to General Reserve Transfer to Debenture Redemption Reserve Proposed Dividend on Equity Shares Tax on Dividend
3.
48929.38 10153.55 59082.93
42236.00 15692.39 57928.39
3000.00 1581.95 2,797.09
4000.00 1632.50 2797.09
569.42 7948.46
51134.47 164448.38
569.42 8999.01
48929.38 157661.34
As at 31-03-2016
`/Lacs As at 31-03-2015
66500.00 154367.32 146.78 5541.29 226555.39
54700.00 153971.63 188.79 2879.24 211739.66
4232.27
4140.07
4232.27 230787.66
4140.07 215879.73
LONG TERM BORROWINGS a)
b)
SECURED Non Convertible Debentures Term Loan from Banks Vehicle Loans VAT Loans UNSECURED Deferred Sales Tax Liability
3.1 Non Convertible Debentures(NCDs): ` 66500.00 lacs (` 60000.00 lacs) i) Security for NCDs for ` 36500.00 lacs (` 40000 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge on the assets specified in 3.2(i)(a). ii)
3.2 (i)
Security for NCDs for ` 30000.00 lacs (` 20000 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of movable fixed assets pertaining to Company’s existing cement plant at village Muddapur Karnataka Term Loans related to Cement Plants at Rajasthan a) From Canara Bank: ` 3575.85 lacs (` 4952.79 lacs) From Export Import Bank of India: ` 5000.00 lacs (` 5000 lacs).
F-12
Secured by equitable mortgage of immovable properties and hypothecation of movable assets pertaining to undertaking of J.K. Cement Works, Gotan except current assets and vehicles. b)
From other Banks: ` 18337.46 lacs (`18683.25 lacs). Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all the movable assets of the Company both present and future save and except i) inventories, book debts, cash and bank balances and all assets pertaining to J.K. Cement Works, Gotan, J.K. Cement Works, Muddapur, Karnataka ii) properties for office and guest house including those having exclusive charge of other lenders iii) New Cement plant at Mangrol and Jharli and iv)Putty Plant at Katni, Madhya Pradesh.
NOTES
on financial statements for the year ended 31st march, 2016
ii)
Term Loans related to Cement Plant at Karnataka a) From Indian Bank (Consortium of Banks): ` 930.45 lacs (` 16495.72 lacs). Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable assets, present and future (save and except book debts) pertaining to J.K. Cement Work Muddapur subject to prior charges in favour of working capital lenders on inventories and other currect assets. b)
c)
d)
From Consortium of Banks: ` 8436.78 lacs (NIL). Secured by first pari-passu charge by way of equitable mortgage of all the immovable Properties (except mining land) and hypothecation of all movable non current assets, present and future pertaining to J.K. Cement Works and Thermal power plant, Muddapur, Karnataka. (Charge on immovable property yet to be created). From State Bank of India: ` 4360.73 lacs (` 5000.10 lacs). Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
From Allahabad Bank: ` 2421.84 lacs (` 2500 lacs). Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
iii)
Term Loans related to Cement Plant at Rajasthan and Haryana From Consortium of Banks : ` 119803.64 lacs (` 109518.42 lacs). Secured by first pari-passu charge on all immovable fixed assets (save and except mining land) and all movable fixed assets (save and except book debts) being acquired out of loan for the new cement Plants at Mangrol, Rajasthan and split Grinding Unit at Jharli, Haryana and second charge on current assets related to above plants.
iv)
Term loan related to Putty Plant at Katni, Madhya Pradesh: ` 3800.00 lacs (` 2000 lacs). Secured against exclusive charge on entire movable fixed assets (by way of hypothecation) and on immovable fixed assets related to the Wall Putty project at Katni, Madhya Pradesh(excluding current assets and mining land, if any).
v)
Term Loans related to the Properties: ` 1422.32 lacs (` 2112.83 lacs). Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.
Maturity Profile Non Convertible debentures: SERIES A -at 10.25% -at10.50% -at 11% SERIES B -at 11% SERIES C -at 10.50% -at 11% SERIES D -at 9.65% Total NCD
2017-18 1800 1800 1400
2018-19 1800 1800 1400
2019-20 2700 2700 2100
2020-21 2700 2700 2100
2021-22 -
2022-23 -
2023-24 -
2024-25 -
2025-26 -
`/Lacs Total 9000 9000 7000
2300
2300
3450
3450
-
-
-
-
-
11500
-
-
-
3300 6300
1300 1300
1950 1950
1950 1950
-
-
8500 11500
7300
7300
10950
20550
2600
2000 5900
2000 5900
3000 3000
3000 3000
10000 66500
F-13
NOTES
on financial statements for the year ended 31st march, 2016
`/Lacs TERM LOAN FROM BANK
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-2024
2024-25
2025-26
2026-27
Total
3.2 (1) a Rajasthan Plant
4036.48
4562.13
4050.56
4179.28
794.73
714.28
-
-
-
-
-
18337.46
3.2 (i) b Grey gotan
797.58
1111.12
1111.12
556.03
-
-
-
-
-
-
-
3575.85
Exim
714.28
714.28
714.28
714.28
714.28
714.28
714.32
-
-
-
-
5000.00
3.2 (ii) a Karnatka
794.16
952.56
1428.88
1746.36
2222.60
2222.67
-
-
-
-
-
9367.23
State Bank of India
560.73
600.00
600.00
600.00
600.00
600.00
800.00
-
-
-
-
4360.73
390.59
312.50
312.50
312.50
312.50
312.50
312.50
156.25
-
-
-
2421.84
Allahabad Bank Mangrole Projest
6000.00 12000.00 12000.00 12000.00 12000.00 12000.00 12000.00
Katni Project 3.2(iv) Property Loan Total Loans
12000.00 12000.00 12000.00
5803.64 119803.64
-
-
500.00
500.00
1000.00
1800.00
-
-
-
-
-
3800.00
427.93
571.43
422.96
-
-
-
-
-
-
-
-
1422.32
13721.75 20824.02 21140.30 20608.45 17644.11 18363.73 13826.82
12156.25 12000.00 12000.00
5803.64 168089.07
3.3 VAT Loan (Interest free) from Govt. of Karnataka: ` 5541.29 lacs (` 2879.24 lacs) Secured by second pari passu charge by way of equitable mortgage of land building and plant and machinery pertaining to J.K. Cement Works, Muddapur, Karnataka and bank guarantee. Second charge on assets are yet to be created. Maturity profile: Payable after Sept. 2021 onwards. 3.4 Vehicle Loans : ` 321.41 lacs (` 371.81 lacs) Secured by hypothecation of vehicles Maturity profile of Vehicle Loan:
2016-17 174.63
2017-18 113.05
`/Lacs Total 321.41
2018-19 33.73
Unsecured Loans: 3.5 Deferred Sales Tax Liability: ` 4880.61 lacs (` 5016.97 lacs) ` 86.44 lacs (`143.43) as at 31.03.2016 interest free deferred sales tax liability payable in next quarterly equitable instalments of ` 10.80 lacs (` 31.15 lacs) each. ` 4794.17 lacs (` 4873.54 lacs) Interest free deferred sales tax liability. The availment of said scheme is still continued. The payment of said scheme are as under:2016-17 605.12
4.
2017-18 488.46
2018-19 659.95
2019-20 636.71
2020-21 437.93
2021-22 942.49
2022-23 831.86
`/Lacs 2023-24 191.65
As at 31-03-2016
`/lacs As at 31-03-2015
235.44 4471.75 18140.11 22847.30
216.10 3565.84 17811.13 21593.07
55691.41 55691.41 32844.11
49577.62 49577.62 27984.55
DEFERRED TAX ASSETS AND LIABILITIES ARE AS UNDER: (a)
Deferred Tax Assets (i) Provision for Doubtful Debts (ii) Expenses deductible on payment basis (iii) Unabsorbed depreciation & Losses Sub Total (b) Deferred Tax Liabilities i) Difference between book depreciation and depreciation under Income tax Act Sub Total (c) Net Deferred Tax Liabilities (b-a)
F-14
NOTES
on financial statements for the year ended 31st march, 2016
5.
As at 31-03-2016
`/lacs As at 31-03-2015
13964.53 13964.53
11676.87 11676.87
As at 31-03-2016
`/lacs As at 31-03-2015
1652.86 175.67 1828.53
1491.82 167.65 1659.47
OTHER LONG TERM LIABILITIES Security Deposits
6.
LONG TERM PROVISIONS Provision for employees benefits Provision for Mines Restoration Charges
Provision for Mines Restoration charges: Opening Balance 167.65
7.
Provision during the year 8.02
`/lacs Closing Balance 175.67
As at 31-03-2016
`/lacs As at 31-03-2015
19620.69 19620.69
26335.28 26335.28
SHORT TERM BORROWINGS Secured Loan from Banks
7.1 Cash Credit Account : `19620.69 lacs (` 26335.28 lacs) Cash credit accounts are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders. `/lacs As at 31-03-2015
As at 31-03-2016 8.
TRADE PAYABLES Micro, Small & Medium Enterprises Other * Acceptance
940.77 25318.60
26259.37 1805.29 28064.66
681.21 19384.98
20066.19 2859.57 22925.76
*including project creditors ` 1612.86 lacs (Previous Year ` 1802.90 lacs)
8.1 Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March,2016 as per the terms of Contract.
F-15
NOTES
on financial statements for the year ended 31st march, 2016
`/lacs As at 31-03-2015
As at 31-03-2016 9.
OTHER CURRENT LIABILITIES Current maturities of long-term debt (Refer Note No.3) Non Convertible Debentures Term Loan from Bank Vehicle Loan Deferred Sales Tax Liability Interest Accrued but not due on Borrowings Interest Accrued and due on Borrowings Investor Education & Protection Fund shall be credited by following - Unclaimed Dividend - Unclaimed fraction Money Other Payable
13721.75 174.63 648.34
109.74 9.23
5300.00 12291.48 183.02 876.90
14544.72 1403.26 305.12
114.62 9.24
118.97 48205.18 64577.25
18651.40 1188.37 256.02
123.86 38700.70 58920.35
9.1 Other payable includes the liability of employees, Sales Tax/VAT dues and rebates to customer etc.
10.
As at 31-03-2016
`/lacs As at 31-03-2015
1405.28 2,797.09 569.42 4771.79
1360.05 40.00 2797.09 569.42 4766.56
SHORT TERM PROVISIONS Provision for employees benefits Provision for Wealth Tax Proposed Dividend on Equity Shares Tax on Dividend
F-16
As at
F-17
Note: (i) (ii) (iii)
38.72 38.72 31072.36 139419.37
254.48 177.73 31033.64
2017.89 1490.88 3353.45 2601.19 13308.70 3311.61 4219.58 298.13
Additions
0.00 374.16 863.10
142.78 374.16
4.82 223.89 2.67
Adjustments
0.00 -33203.81
-
-
Revaluation
742.70 1148.99 1891.69 454087.78 423389.58
3128.14 1023.79 452196.09
20336.94 10583.26 26157.21 26559.14 350038.12 4680.32 6470.20 89.43 3129.54
As at 31.03.2016 As at
742.70 912.76 1655.46 89593.51 86780.79
1200.44 680.63 87938.05
1100.48 3577.44 2090.61 77198.17 38.93 747.18 47.47 1256.70
01.04.2015
36.47 36.47 15628.13 13659.63
373.53 105.43 15591.66
321.33 1576.09 543.48 11884.17 183.67 300.45 8.19 295.32
0.00 217.57 10846.91
98.11 217.57
0.05 0.64 116.44 0.00 0.00 2.33
Adjustments
Depreciation / Amortization For the Year Deductions/
742.70 949.23 1691.93 105004.07 89593.51
1475.86 786.06 103312.14
1421.76 5152.89 2634.09 88965.90 222.60 1047.63 55.66 1549.69
Upto 31.03.2016
197.51 197.51 333796.07 16703.47 2414.51 352914.05
15240.46 0.00 364324.17
1816.00 165.43 333598.56
18319.05 7996.72 19226.32 21867.34 259755.14 1329.78 1503.44 41.96 1577.38
31.03.2015
As at
(`/Lacs)
199.76 199.76 349083.71
1652.28 237.73 348883.95
20336.94 9161.50 21004.32 23925.05 261072.22 4457.72 5422.57 33.77 1579.85
As at 31.03.2016
Net Block
Some assets discarded during the year where value of the assets are not determined, the adjustment of sale proceeds is made from historical value directly. Cost incurred by company ownership of which vest with State Electricity Boards & Indian Railways. Cost incurred by company ownership of which vest with Indian Railways.
Goodwill Computer Softwares Sub Total Intangible Asset Grand Total Previous year’s figures Capital Work-in-progress Capital Work-in-progress-Others (iii)
742.70 1110.27 1852.97 423389.58 318037.12
3016.44 846.06 421536.61
Equipments Vehicles Other Assets Sub Total Tangible Assets
Intangible Assets
18319.05 9097.20 22803.76 23957.95 336953.31 1368.71 2250.62 89.43 2834.08
01.04.2015
Freehold Land Leasehold Land Factory Buildings Non Factory Buildings Plant & Machinery Plant & Machinery-Others (ii) Railway Sidings Rolling Stock Furniture, Fixtures and Office
11. FIXED ASSETS Tangible Assets
Description
Gross Block Deductions/
NOTES
on financial statements for the year ended 31st march, 2016
NOTES
on financial statements for the year ended 31st march, 2016
(`/lacs) As at 31.03.2016 Name of the Bodies Corporate 12.
As at 31.03.2015 Units/ Book Shares Value
Face Value
Units/ Shares
Book Value
AED1000 ` 10
36538 6590070
5043.18 659.01
36538
5043.18
` 10
375000
37.50
375000
37.50
` 10 ` 10
3140101 3400
314.01 3.40
3140101 8000
314.01 8.00
AED1000
18300
2717.30
18300
2717.30
AED1000
33027
4886.70
33027
4886.70
AED1000
26534
4215.90
18362
2739.38
AED1000
26534
4269.37
25707
4119.95
AED1000
3759
668.30
3759
668.30
AED1000
15521
2626.07
10931
1852.75
AED1000
26534
4713.57
11017
1909.95
AED1000
26533
4527.75
13405
2215.68
-
0.11
-
773.43
-
1318.83
-
835.92
2785552
278.56 36279.56 36279.56
2785552
278.56 28400.61 28400.61
NON CURRENT INVESTMENTS Others Investments A) Investments in Equity Instruments i) Unquoted fully paid up 1. Subsidiary Companies - J. K. Cement (Fujairah) FZC. ** - Jaykaycem (Central) Limited 2. Joint Venture - Bander Coal Company Private Limited Others - VS Lignite Power Private Limited @ - ReNew Wind Energy AP (Pvt.) Ltd. Investments in Preference Shares Unquoted 1. Subsidiary Companies - 3% cumulative 11 years Compulsory convertible preference shares in J. K. Cement (Fujairah) FZC. # - 3% cumulative 12 years Compulsory convertible preference shares in J. K. Cement (Fujairah) FZC. # - 3% cumulative 11 years Redeemable Preference shares in J. K. Cement (Fujairah) FZC. # - 3% cumulative 12 years Redeemable Preference shares in J. K. Cement (Fujairah) FZC. # - 3% cumulative 13 years Compulsory convertible preference Share in J.K.Cement(Fujairah)FZC # - 3% cumulative 14 year Compulsory convertible preference Share in J.K.Cement(Fujairah)FZC # - 3% cumulative 13 years Redeemable preference shares in J.K.Cement (Fujairah)FZC # - 3% cumulative 14 years Redeemable preference shares in J.K.Cement (Fujairah)FZC # - Share Application Money-Redeemable preference shares in J.K.Cement (Fujairah)FZC # - Share Application Money-Compulsory convertible preference shares in J.K.Cement (Fujairah)FZC # 2. Others 0.01% cumulative Redeemable Preference shares (Fully paid up) : - VS Lignite Power Private Limited @ 3.
B)
` 10
Total Aggregate Market Value of Quoted Investments Aggregate Amount of Unquoted Investments
Notes: ** 19538 Equity Shares are pledged with IDBI. @ 3140101 Equity shares and 2785552 Preference shares are under lien with issuer company as Security towards obligations. #134508 Preference Shares are pledged with IDBI
F-18
NOTES
on financial statements for the year ended 31st march, 2016
13.
As at 31-03-2016
`/Lacs As at 31-03-2015
12737.58 2981.06 532.27 16250.91
11148.14 3639.97 551.99 15340.10
LONG TERM LOANS AND ADVANCES (Unsecured and Considered Good) Capital Advances Deposits Others
(`/lacs) As at 31.03.2015
As at 31.03.2016 Face Value
Units/ Shares
Book Value
` 1616.8561 ` 2372.9489 ` 14.3273 ` 29.59 ` 10 ` 10 ` 10 ` 10.1292 ` 11.0229 ` 30.3251 ` 30.265 ` 1495.7978
92772.634 84283.316 3489841.073 1774748.873 0.00 0.00 0.00 493622.399 2721606.837 2638078.471 1652073.352 0.00
1500.00 2000.00 500.00 500.00 0.00 0.00 0.00 50.00 300.00 800.00 500.00 0.00 6150.00 6337.78
Name of the Bodies Corporate 14.
Book Value
5000000.00 5000000.00 5000000.00 493622.3986 2721606.837 2638078.471
0.00 0.00 0.00 0.00 500.00 500.00 500.00 50.00 300.00 800.00 0.00 400.00 3050.00 3224.71
CURRENT INVESTMENTS Others Investments Investments in Mutual Funds Quoted IDBI Liquid Fund made Growth SBI Premium Liquid Fund ICICI PRUDENTIAL MUTUAL FUND HDFC Short Term Fund-Growth BOI AXA FIXED MATURITY PLAN-SERIES13(380) Baroda Pioneer FMP-372 Days HDFC FMP-SERIES 29(384DMARCH2014(1) J.P.Morgan Active Bond Fun Institutional JP morgan govt.Securities fund-regularplan Growth option SBI magnum Guilt Fund SBI magnum Guilt Fund IDBI Liquid Fund
Total Aggregate Market Value of Quoted Investments
15.
Units/ Shares
26741.654
As at 31-03-2016
`/Lacs As at 31-03-2015
5464.66 6978.10 7861.02 23.43
5785.23 9027.74 6648.71 14.95
INVENTORIES Raw Materials Work-in-Process Finished Goods Stock-in-Trade Stores, Spare parts etc. Less: Provision for Diminution in the Value of Stores,Spares Parts etc. Goods-in-Transit Raw Materials Stores, Spare parts etc.
25890.56 38.91
Note: Stock of Stores, Spare parts also includes stock of Project material aggregate to ` 156.57 lacs (`937.50 Lac).
F-19
25851.65 15.13 1230.32 47424.31
29254.48 38.91
29215.57 1.20 285.14 50978.54
NOTES
on financial statements for the year ended 31st march, 2016
16.
`/Lacs As at 31-03-2015
120.68 385.12 602.00 602.00 505.80
81.33 253.35 566.22 566.22 334.68
3281.27 12782.32 16063.59 16569.39
3097.37 10508.41 13605.78 13940.46
As at 31-03-2016
`/Lacs As at 31-03-2015
4141.79 109.74 43305.34
7207.06 114.62 33417.29
2.74 27.27 47586.88
3.57 28.03 40770.57
TRADE RECEIVABLE Trade Receivable over six months - Considered Good Secured Unsecured - Considered doubtful Less: Provision for Doubtful Debts Sub Total Other Trade Receivable - Considered Good Secured Unsecured Considered doubtful Sub Total
17.
As at 31-03-2016
CASH & CASH EQUIVALENTS Balances with Banks in: - Current Accounts - Unclaimed Dividend - Fixed Deposits Cheques and Drafts on hand Cash on hand
17.1 Fixed Deposits with banks includes deposits of `10620.91 lacs (`2155.85 lacs) with maturity more than 12 months and ` 2741.26 lacs (` 2005.68 lacs) tied up against overdraft/other commitments.
18.
As at 31-03-2016
`/Lacs As at 31-03-2015
4206.79 15.00
1456.75 15.00
10773.36 31.41 554.24 11029.37 2127.40 3776.87 32514.44 31.41 32483.03
8954.20 31.93 474.31 7269.30 473.15 9811.58 28486.22 31.93 28454.29
SHORT TERM LOANS & ADVANCES (Unsecured Considered Good unless otherwise stated) Loans and advances to related parties (Refer Note No.32) i) Loan - Jaykaycem (Central) Ltd. ii) Loan - J.K.Cement (Western) Ltd. Other Loan and Advances ; - Considered good - Doubtful Taxation(Net of Provisions) MAT Credit Entitlement Prepaid Expenses Balances with Custom & Excise Departments Sub Total Less: Provision for doubtful advances
F-20
NOTES
on financial statements for the year ended 31st march, 2016
19.
21.
832.07 832.07
954.01 954.01
2015-2016
`/Lacs 2014-2015
409780.18 56676.58 353103.60
385948.26 52216.38 333731.88
508.31 1199.82 1220.35 2928.48 356032.08
515.75 222.32 36.32 1210.45 1984.84 335716.72
2015-2016
`/Lacs 2014-2015
3058.06 999.76 23.20 165.51 7.81 745.10 4999.44
2860.75 1074.67 441.74 758.32 5135.48
2015-2016
`/Lacs 2014-2015
66579.74 66579.74
55620.12 55620.12
2015-2016
`/Lacs 2014-2015
21000.38 3032.06 7512.33 5095.44 523.14 7540.04 21876.35 66579.74
16199.63 2423.49 5853.38 5180.23 122.36 7727.90 18113.13 55620.12
REVENUE FROM OPERATIONS a)
Sale of Products Less : Excise Duty
(b)
Other Operating Revenues; Claims Realised Government Grants Exchange Rate Difference Other Opearting Income
OTHER INCOME Interest received on Fixed Deposits Interest received on Others Profit on Sale of Fixed Assets Net Gain on Sale of Current Investments Dividend on Current Investments Other Non Operating Income
22.
`/Lacs As at 31-03-2015
OTHER CURRENT ASSETS (Unsecured Considered Good) Interest Accrued on Deposit
20.
As at 31-03-2016
COST OF MATERIAL CONSUMED Cost of Raw Materials Consumed
22.1 Particulars of Material consumed: Name of Material Lime Stone Red Ochre Dairen-DA-1100 MP Vinapass-5044n Gypsum/Selenite Clay Fly Ash Others Total
F-21
NOTES
on financial statements for the year ended 31st march, 2016
23.
`/Lacs 2014-2015
6663.66 9027.74 15691.40
6390.22 9206.34 15596.56
7884.45 6978.10 14862.55 828.85
6663.66 9027.74 15691.40 (94.84)
2015-2016
`/Lacs 2014-2015
19295.20 2032.04 1817.38 23144.62
16582.20 2150.94 1521.10 20254.24
2015-2016
`/Lacs 2014-2015
CHANGES IN INVENTORIES OF FINISHED GOODS,WORK-IN-PROGRESS AND STOCK-IN-TRADE Opening Stock : Finished Goods/Stock-in-Trade Goods in Process Sub Total Closing Stock: Finished Goods/Stock-in-Trade Goods in Process Sub Total Net Sub Total
24.
2015-2016
EMPLOYEE BENEFITS EXPENSE Salaries,Wages and Bonus Contribution to Provident and Other funds Welfare Expenses
24.1 Disclosure in term of AS-15 are as under:a) Defined contribution plan Contribution to defined contribution plan recognised as expenses for the year 2015-16 are as under
b)
Employer's contribution to Provident Fund 812.56 726.65 Employer's contribution to Superannuation Fund 406.94 452.10 Employer's contribution to Family Pension Fund 429.99 333.86 Defined benefit plan The Employees Gratuity Fund Scheme managed by a Trust is a defined benefit Plan. The present value of obligation is determined based on actuarial valuation using the projected unit credit method. The obligation for leave encashment is recognised in the same manner as gratuity.
Defined benefit plans/compensated absences-As per actuarial valuation: Gratuity Funded 2014-2015 2015-2016 I
Expenses recognised in the Statement of Profit & Loss for the year ended 1 Current Service Cost 2 Interest Cost 3 Expected return on plan assets 4 Past Service Cost 5 Net Actuarial(Gains)/Losses 6 Total expenses
F-22
332.69 414.56 (419.44) (123.29) 204.52
292.64 421.85 (409.53) 164.96 469.92
`/lacs Leave encashment unfunded 2014-2015 2015-2016 339.38 133.74 (83.61) 389.51
299.44 114.8 157.51 571.75
NOTES
on financial statements for the year ended 31st march, 2016
Gratuity Funded 2014-2015 2015-2016 II
III
IV
V
25.
Net Asset/(Liability) recognised in the Balance Sheet as at 31.03.2016 1 Present value of Defined Benefit Obligation 2 Fair value of plan assets 3 Funded status[Surplus/(Deficit)] 4 Net asset/(Liability) Change in obligation during the year ended 1 Present value of Defined Benefit Obligation at beginning of the year 2 Current Service Cost 3 Interest Cost 4 Plan amendment cost 5 Actuarial(Gains)/Losses 6 Benefits Payments 7 Present value of Defined Benefit Obligation at the end of the year. Change in Assets during the year ended 1 Plan assets at the beginning of the year 2 Expected return on plan assets 3 Contributions by Employer 4 Actual benefits paid 5 Actuarial Gains/(Losses) 6 Plan assets at the end of the year Actuarial Assumptions: 1 Discount Rate 2 Expected rate of return on plan assets 3 Mortality 4 Turnover rate : Staff Worker 5 Salary escalator 6 Maximum limit
`/lacs Leave encashment unfunded 2014-2015 2015-2016
5739.12 5388.8 (350.32) (350.32)
5585.38 4970.51 (614.87) (614.87)
2014.84
1803.87
(2,014.84) (2,014.84)
(1,803.87) (1,803.87)
5585.38 332.69 414.56
5089.04 292.64 421.85
1803.87 339.98 133.74
1468.97 299.44 114.80
(52.54) (540.97) 5739.12
33.96 (252.11) 5585.38
(83.61) (178.54) 2014.84
157.51 (236.85) 1803.87
4970.51 419.44 469.07 (540.97) 70.75 5388.80
4944.09 409.53 (252.11) (131.00) 4970.51
(178.54) -
(236.85) -
7.70% 8.50%
7.80% 8.50%
7.70% -
7.80% -
5% of all ages 1% of all ages 10% ` 10.00 lacs
5% of all ages 1% of all ages 10% ` 10.00 lacs
5% of all ages 1% of all ages 10% -
5% of all ages 1% of all ages 10% -
2015-2016
`/Lacs 2014-2015
27138.20 (532.08) 236.81 116.13 26959.06
26212.13 (4665.06) 347.23 47.97 21942.27
FINANCE COST Interest Expenses Less: Interest Capitalised Other Borrowing Cost Net Loss on Foreign Currency Transactions and Translation
F-23
NOTES
on financial statements for the year ended 31st march, 2016
26.
2015-2016
`/Lacs 2014-2015
8841.48 15794.78 74079.16
8202.75 15784.81 79345.88
6842.47 1104.31 820.01 555.76 108037.97
6107.82 1080.22 647.21 516.65 111685.34
1643.63 44.19 91.29 2218.96 56.90 133.62 3.49 13.56 464.05 10301.30 14970.99
1505.60 79.38 131.28 2201.85 49.29 102.45 213.08 16.51 515.20 9216.17 14030.81
3266.74 11672.50 74744.29 733.81 90417.34 213426.30
3117.31 10521.72 73437.17 659.10 87735.30 213451.45
2015-2016
`/Lacs 2014-2015
18799.72 28.24% 47780.02 71.76% 66579.74
16090.93 28.93% 39529.19 71.07% 55620.12
502.20 2.04% 24134.04 97.96% 24636.24
1618.72 6.75% 22368.83 93.25% 23987.55
OTHER EXPENSES a)
b)
c)
Manufacturing Expenses Stores and Spares Consumed Packing Materials Consumed Power and Fuel Repairs To: Plant & Machinery Buildings Insurance Other Manufacturing Expenses Administration and Other Expenses Rent Lease Rent Rates and Taxes Travelling and Coveyance Expenses Provision for Doubtful Debts/Advances Debts and Advances written off Loss on disposal of Fixed Assets (Net) Loss on Exchange rate Fluctuation (Net) Expenses relating to Earlier Years (Net) CSR Expenses Miscellaneous Expenses Selling and Distribution Expenses Advertisement and Publicity Selling Expenses Freight and Handling Outward Sales Tax/VAT
27.1 Value of Raw Materials, Stores & Spare Parts etc. Consumed a) Raw Materials i) Imported Value % of total consumption ii) Indigenous value % of total consumption b)
Stores & Spare Parts etc. (including packing material) i) Imported Value % of total consumption ii) Indigenous value % of total consumption
F-24
NOTES
on financial statements for the year ended 31st march, 2016
27.2 VALUE OF IMPORTS ON CIF BASIS a) Stores & Spare Parts etc. (including packing material) Raw Material b) Components, Stores & Spare Parts and Packing Material & Coal 27.3 Payment to Auditors (a) Audit Fee (b) Certification and attestation fee (c) Reimbursement of Out of Pocket expenses Total 27.4 EXPENDITURE IN FOREIGN CURRENCY (on accrual basis) a) Know how/Technical Service Fee b) Others
28.
16390.36 8951.34 25341.70
14448.23 9256.65 23704.88
45.00 3.98 2.48
36.00 2.08 1.66
51.46
39.74
83.70 325.16 408.86
242.69 228.52 471.21
2015-2016
`/Lacs 2014-2015
927.86
2879.36
2015-2016
`/Lacs 2014-2015
0.48
0.36
2015-2016
`/Lacs 2014-2015
10153.55
15692.39
69927250
69927250
14.52
22.44
REMITTANCE IN FOREIGN CURRENCY Dividend
30.
`/Lacs 2014-2015
EARNING IN FOREIGN EXCHANGE Export of Goods calculated on FOB value
29.
2015-2016
UNHEDGED FOREIGN CURRENCY EXPOSURE Export Debtors: US$ 279142.60 (`178.70lacs) (US$425781.50) ` 266.79 lacs
31.
EARNING PER SHARE (EPS): a) b) c)
Net Profit available for Equity Share holders (Numerator used for calculation) Weighted average number of Equity Shares Used as denominator for calculating EPS Basic and Diluted earnings per share of `10/-
F-25
NOTES
on financial statements for the year ended 31st march, 2016
32.
RELATED PARTIES DISCLOSURES (1) (a) Parties where the control/significant influence exists:i) Juggilal Kamlapat Holding Ltd ii) Yadu International Ltd (b) Key Management Personnel & their Relatives: i) Shri Yadupati Singhania- Chairman & Managing Director ii) Smt. Sushila Devi Singhania (Relative of Chairman & Managing Director) iii) Shri Ajay Kumar Saraogi iv) Shri Shambhu Singh (c) Enterprises significantly influenced by Key Management Personnel or their Relatives. i) Jaykay Enterprises Ltd ii) J.K. Cotton Ltd. iii) Jaykaycem (Eastern) Ltd iv) J.K.Cement (Western) Ltd (d) Subsidiary Companies. i) J.K. Cement (Fujairah) FZC (Holding Company of (ii) below ii) J.K. Cement Works (Fujairah) FZC iii) Jaykaycem (Central) Ltd (e) Joint Venture i) Bander Coal Company Pvt. Ltd (f) Other Directors Shri K.N. Khandelwal Shri A. Karati Shri R.K. Lohia Shri J.N. Godbole Shri Suparas Bhandari Dr. K.B. Agarwal Shri Paul Heinz Hugentobler Shri S.L. Bansal
(Related parties relationship is as identified by the Company and relied upon by the Auditors).
(2) Following are the transactions with related parties as defined under section 188 of Companies Act 2013.
(i)
(ii)
(iii)
(iv)
Jaykay Enterprises Ltd - Services received - Rent paid - Expenses Reimbursed J.K. Cotton Ltd - Rent paid - Purchases - Sale of Products J.K. Cement(Fujairah) FZC Loan Given: Balance as at beginning Received & adjusted during the year (For Invest) Balance as at close of the year Corporate Guarantees Bander Coal Company Pvt Ltd: Corporate Guarantees
F-26
2015-2016
`/Lacs 2014-2015
34.17 43.80 50.11
37.07 43.47 46.58
45.02 1.81 -
44.41 5.80 -
7224.55 62568.51
59993.28
-
339.00
NOTES
on financial statements for the year ended 31st march, 2016
J.K. Cement (Western) Ltd Opening Advances given during the year Balance as at close of the year (vi) Jaykaycem (Central) Ltd. Opening Loan given during the year Interest Balance at close of the year Share acquired during the year (vii) Key Management Personnel and their relatives a) Shri Y.P. Singhania (Chairman & Managing Director) - Remuneration b) Smt Sushila Devi Singhania - Commission - Sitting Fees c) Shri Ajay Kumar Saraogi - Remuneration d) Shri Shambhu Singh - Remuneration e) Other Directors - Commission - Sitting Fees
2015-2016
`/Lacs 2014-2015
15.00 15.00
15.00 15.00
1456.75 2495.27 254.77 4206.79 659.01
377.12 1006.33 73.30 1456.75 -
726.85
757.96
7.00 3.91
6.50 3.20
171.91
151.02
31.82
26.23
49.00 24.33
46.22 21.22
(v)
` 110.97 lacs (` 46.94 lacs) paid to other Director Mr. Paul Heinz Hugentobler on professional capacity.
(3). DETAILS OF LOANS GIVEN, INVESTMENT MADE AND GUARANTEE GIVEN COVERED U/S 186(4) OF THE COMPANIES ACT, 2013
Loans given and investments made are given under the respective heads. a) Loans given by the Company as at 31st March, 2016: Jaykaycem (Central) Ltd. Opening Add:Loan given during the year Add: Interest (Net of TDS) Balance at close of the year b) Corporate Guarantees given by the Company in respect of loans as at 31st March, 2016 J.K. Cement (Fujairah) FZC Bander Coal Company Pvt. Ltd. c) Investments made by the Company as at 31st March, 2016 J.K. Cement (Fujairah) FZC Jaykaycem (Central) Ltd. Bander Coal Company Pvt. Ltd.
2015-2016
`/Lacs 2014-2015
1456.75 2495.27 254.77 4206.79
377.12 1006.33 73.30 1456.75
62568.51 -
59993.28 339.00
34987.08 659.01 37.50
27762.54 37.50
33. DISCLOSURE OF COMPANY’S INTEREST IN JOINT VENTURE. Details of the Company’s interest in its Joint Venture, having Joint Control, as per the requirement of Accounting Standard(AS)-27 on “Financial Reporting of Interests in Joint Ventures”, are as under based on unaudited Annual Accounts for the year ended 31.03.2016. Sl. No. Particulars % Share held (a) Assets (b) Liabilities (c) Income (d) Expenses (after adjustment of last year audited)
Bander Coal Company Pvt. Ltd. 37.50% 14.90 0.01 1.15 0.75
F-27
NOTES
on financial statements for the year ended 31st march, 2016
34. Board of Directors have proposed dividend of ` 4.00 per equity share of face value of ` 10/- each. 35. The Company is engaged only in cementious materials and there are no separate reportable segments as per AS-17. 36. CONTINGENT LIABILITIES AND COMMITMENTS.
1.
(A)
(B)
Contingent Liabilities (i) In respect of claims not acknowledged as debts by the Company (ii) In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts – no provision has been considered necessary by the Management a) Excise duty b) Sales tax c) Service tax (iii) In respect of interest on “Cement Retention Price” realised in earlier years (iv) In respect of interest of Rajasthan Entry Tax (v) In respect of penalty of non lifting of fly Ash (vi) The Competition Commission of India(CCI) has upheld the Complaint of Builders Association of India alleging cartelisation by some Cement Manufacturing Companies including us and imposed a penalty of ` 12854 lacs on the Company. In an appeal filed by the company, the Competition Appellate Tribunal (COMPAT) has, by its order dated 11th December,2015, set aside order dated 20the June,2012 passed by the Competition Commission of India (CCI). COMPAT remitted the matter to CCI for fresh adjudiction. Further, in terms of the order, the Company has received refund of ` 1285 lacs, being 10% amount of penalty, alongwith accumulated interest deposited with COMPAT. (vii) Corporate guarantees given to Banks for finance provided to subsidiary Companies. (viii) Other Financial Guarantees including of Joint Ventures. Commitments Capital Commitments Estimated amount of contracts remaining to be executed on capital accounts and not provided for
As at 31-03-2016
`/Lacs As at 31-03-2015
17519.27
15596.90
1732.71 3159.88 1085.42 1210.68 3718.82 805.02 -
1636.40 3057.80 1085.42 1190.30 3272.60 521.03 12854.00
62568.51
59993.28
613.89
952.89
3988.13
5679.22
37. OPERATING LEASE The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.
38. The Company has incurred ` 464.05 lacs Towards Social Responsibility activities. Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis. The amount required to be spent under section 135 of the Companies Act, 2013 for the year 2015-2016 is ` 449.50 lacs i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act,2013.
39. Previous year figures have been regrouped and recasted wherever necessary to conform to the classification for the year.
F-28
SIGNIFICANT ACCOUNTING POLICIES 1.
ACCOUNTING CONCEPTS
6. IMPAIRMENT OF ASSETS
The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the applicable mandatory Accounting Standards.
2.
USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of Financial Statements and the results of operation during the reporting period end. Although these estimates are based upon management’s best knowledge of current event and actions, actual results could differ from these estimates.
3.
FIXED ASSETS Fixed assets are stated at cost. Cost comprises the purchase price and attributable cost of bringing the asset to its working condition for its intended use.
4.
After impairment depreciation is provided in the revised carrying amount of the assets over remaining useful life.
7.
8.
9.
Depreciation is provided on straight line method based on useful life specified in Schedule II to the Companies Act,2013.
ii)
Depreciation on additions/deductions to fixed assets is being provided on pro-rata basis from the month of acquisition.
iii)
iv) II)
Depreciation on Fixed Assets constructed by the Company but ownership of which vests with State Electricity Boards/Indian Railways is provided on useful life specified in Schedule II to the Companies Act,2013.
10. SALES Sale of goods is recognized at the point of sale to customer. Sale includes excise duty. In order to comply with the accounting interpretation(ASI-14) issued by the Institute of Chartered Accountants of India, sales(including excise duty) and net sales(excluding excise duty) is disclosed in Profit & Loss Account.
11. BORROWING COST Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalized upto the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.
Leasehold land is amortised over the period of lease.
Intangible Assets
i)
INVENTORIES Inventories are valued at “cost or net realizable value, whichever is lower”. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a moving weighted average basis(Store Spare parts etc and Raw materials). In respect of work in process and finished goods cost is determined on a monthly moving weighted average basis.
Tangible Assets
i)
INVESTMENTS Current investments are stated at lower of cost or fair market value. Long term investments are stated at cost after deducting provisions made for other than temporary diminution in the value, if any.
DEPRECIATION AND AMORTIZATION I)
GOVERNMENT SUBSIDIES Government grants/subsidies are accounted for only when there is a certainty of receipt.
EXPENDITURE DURING CONSTRUCTION PERIOD Expenditure/Income, during construction period (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed assets) is included under Capital Work-in-Progress and the same is allocated to the respective fixed assets on the completion of their construction.
5.
The carrying amount of assets is reviewed at each balancesheet date. If there is any indication of impairment based on internal and external factors, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value the estimated future cash flows are discounted to their present value at the weighted average cost of capital. For the purpose of accounting of impairment due consideration is given to revaluation of reserves, if any.
Computer Software cost is amortised over a period of three years.
F-29
SIGNIFICANT ACCOUNTING POLICIES 12. RETIREMENT BENEFITS
17. PROVISION/CONTINGENCY
The Company’s contributions to Provident Fund and Superannuation Fund are charged to Profit & Loss Account. Contributions to Gratuity Fund are made on actuarial valuation and Provision for Leave encashment are made on the basis of actuarial valuation and charged to Profit & Loss Account.
13. FOREIGN EXCHANGE TRANSACTIONS Foreign currency transactions are accounted at equivalent rupee value earned/incurred. Year end balance in current assets/liabilities is accounted at applicable rates. Exchange difference arising on account of fluctuation in the rate of exchange is recognized in the Profit & Loss Account. Investment in subsidiary company is expressed in Indian Rupees at the rate of exchange prevailing at the date of investment.
14. PROVISION FOR CURRENT AND DEFERRED TAX Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act, 1961. Deferred tax resulting from “timing difference” between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future. Permanent timing difference adjustments are not accounted for in provisions.
15. MINES RESTORATION EXPENDITURE
A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. These are reviewed at each Balance-sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are disclosed.
18. EARNINGS PER SHARE The basic Earnings Per share(EPS) is computed by dividing the net profit/(loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit/(loss) after tax for the year attributable to the equity shareholders divided by the weighted average number of equity shares outstanding during the year after adjusting for the effects of all dilutive potential equity shares.
19. CLASSIFICATION OF ASSETS AND LIABILITIES INTO CURRENT/NON CURRENT All asssets and liabilities are presented as Current or Noncurrent as per the Company’s normal operating cycle and other criteria set out in the Schedule III of the Companies Act,2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non current classification of assets and liabilities.
20. CASH AND CASH EQUIVALENTS
The expenditure on restoration of the mines based on technical estimates by Internal/External specialists is recognized in the accounts. The total estimated restoration expenditure is apportioned over the estimated quantity of mineral resources (likely to be made available) and provision is made in the accounts based on minerals mined during the year.
16. OPERATING LEASES Leases where significant portion of risk and reward of ownership are retained by the lessor are classified as operating leases and lease rentals thereon are charged to the Profit & Loss Account.
F-30
Cash and cash equivalents for the purpose of Cash Flow Statement includes Cash in hand, Balances with Banks and Fixed deposits with Banks.
FORM AOC-1 (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures Part “A”: Subsidiaries (Information in respect of each subsidiary to be presented with amounts in ` In Lacs) Sl. No. Particulars 1. Name of the subsidiary
Details J.K.Cement (Fujairah) FZC
2.
Reporting period for the subsidiary concerned, if different from the holding company’s reporting period
1st Jan’15 to 31st Dec’15
1st Jan’15 to 31st Dec’15
-
3.
Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries
AED `18.0582/AED
AED `18.0582/AED
NA
4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.
Share capital Reserves & surplus Total assets Total Liabilities Investments Turnover Profit before taxation Provision for taxation Profit after taxation Proposed Dividend % of shareholding of holding company
38,514.65 (166.42) 38,360.29 12.06 38,343.64 (8.90) (8.90) 100%
40,333.11 (10,140.07) 1,01,598.01 71,404.97 23,211.85 (4,089.41) (4,089.41) 90%
659.01 (2.18) 4,910.72 4,253.89 (0.12) (0.12) 100%
J.K.Cement Works Jaykaycem (Central) (Fujairah) FZC Ltd.* (Fellow Subsidiary)
* Jaykaycem (Central) Ltd. is yet to commence operations.
Part “B”: Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures Sl. No. Name of associates/Joint Ventures 1 Latest audited Balance Sheet Date 2 Shares of Associate/Joint Ventures held by the company on the year end No. Amount of Investment in Associates/Joint Venture Extend of Holding % 3 Description of how there is significant influence 4 Reason why the associate/joint venture is not consolidated 5 Net worth attributable to shareholding as per latest audited Balance Sheet 6 Profit/Loss for the year i. Considered in Consolidation ii. Not Considered in Consolidation
Kanpur Dated : 28th May, 2016
Bander Coal Company Pvt. Ltd 31.03.2015 375000 37.50 37.50% Share holding 14.49 (16.55) -
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
SHAMBHU SINGH Company Secretary
F-31
Directors
INDEPENDENT AUDITOR’S REPORT To the Members of J.K. Cement Limited
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS We have audited the accompanying consolidated financial statements of J.K. CEMENT LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and a jointly controlled entity, comprising of the Consolidated Balance Sheet as at 31st March, 2016 the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”)that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its Jointly controlled entity in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group and of its jointly controlled entity are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
OPINION In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group and its jointly controlled entity as at 31st March, 2016 and their consolidated profit and their consolidated cash flows for the year ended on that date.
OTHER MATTERS (a)
AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
F-32
We did not audit the financial statements of three subsidiaries whose financial statements reflect total assets of ` 63565.86 lacs as at 31st December, 2015, total revenues of ` 23012.41 lacs and net cash flows amounting to ` (458.67) lacs for the year ended on that date, as considered in the consolidated financial statements.
These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of the other auditors. (b)
We did not audit the financial statements of a jointly controlled entity, whose financial statements reflect total assets of ` 14.90 lacs as at 31st March, 2016 total revenues of ` 1.15 lacs and net cash flows amounting to ` 0.33 lacs for the year ended on that date, as considered in the consolidated financial statements. These financial statements are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of this jointly controlled entity, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act in so far as it relates to the aforesaid jointly controlled entity, is based solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us by the Management, these financial statements are not material to the Group.
with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. (d)
In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e)
On the basis of the written representations received from the directors of the holding company as on 31st March, 2016 taken on record by the board of directors of the holding company and reports of the statutory auditors of its subsidiary company incorporated in India, none of the directors of the group companies is disqualified as on 31st March, 2016 from being appointed as a director in terms of section 164 (2) of the Act.
(f)
With respect to the adequacy of the internal financial control over financial reporting of the group and the operating effectiveness of such controls, refer to our separate report in “EXHIBIT A” and
(g)
With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements certified by the Management.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
i.
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its jointly controlled company – Refer Note “30” to the consolidated financial statements.
ii.
The Group, and its jointly controlled entity did not have any material foreseeable losses on long-term contracts including derivative contracts.
iii.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company.
As required by Section 143(3) of the Act, we report, to the extent applicable, that: (a)
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
(b)
In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
(c)
For P.L. TANDON and Co., Chartered Accountants Registration Number: 000186C
Place : Kanpur Dated : 28th May, 2016
The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement dealt with by this Report are in agreement
F-33
A.K. Agarwal Partner Membership Number: 071548
EXHIBIT “A” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF J.K. CEMENT LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of the company as of and for the year ended 31st March, 2016, we have audited the internal financial controls over financial reporting of J.K. CEMENT LIMITED (“the Holding Company”) and its subsidiary which is incorporated in India as of that date.
MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Respective Board of Directors of the Holding Company and its subsidiary, which is company incorporated in India are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. F-34
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Holding Company and its subsidiary which is incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For P.L. TANDON and Co., Chartered Accountants Registration Number: 000186C
Place : Kanpur Dated : 28th May, 2016
A.K. Agarwal Partner Membership Number: 071548
CONSOLIDATED BALANCE SHEET as at 31st March, 2016
`/Lacs Note No.
As at 31-03-2016
As at 31-03-2015
EQUITY AND LIABILITIES Shareholders’ Funds Share Capital Reserves and Surplus
1 2
Minority Interest Non Current Liabilities Long Term Borrowing Deferred Tax Liability (Net) Other Long Term Liabilities Long Term provisions
6992.72 155557.81 162550.53 975.46
6992.72 154703.86 161696.58 1277.33
3 4 5 6
287668.12 32844.11 13964.53 2022.71 336499.47
273008.71 27983.75 11676.87 1800.42 314469.75
Current Liabilities Short term Borrowings Trade Payables Other Current Liabilities Short Term Provisions
7 8 9 10
25056.84 30469.10 70845.20 5046.99 131418.13 631443.59
30070.85 30711.18 61856.64 4929.77 127568.44 605012.10
420159.59 2021.88 32108.64 1914.79 16510.52 472715.42
405297.03 2065.46 33714.47 16.16 600.57 15485.02 457178.71
6150.00 53841.80 21134.75 48071.74 28697.49 832.39 158728.17 631443.59
3050.00 54147.60 17708.01 41713.77 30259.90 954.11 147833.39 605012.10
Total ASSETS Non Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Intangible Assets under Development Non-Current Investments Long Term Loans and Advances
11
12 13
Current Assets Current Investments Inventories Trade Receivables Cash and Cash Equivalents Short Term Loans and Advances Other Current Assets
14 15 16 17 18 19
Total Significant Accounting Policies Notes on Financial Statements
1-32
As per our Report attached For P.L.TANDON and Co., Chartered Accountants
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K.Agarwal Partner
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
Kanpur Dated : 28th May, 2016
SHAMBHU SINGH Company Secretary
F-35
Directors
CONSOLIDATED STATEMENT OF PROFIT AND LOSS For the year ended 31st March, 2016
Note No.
2015-2016
`/Lacs 2014-2015
20 21
379043.45 5001.63 384045.08
340722.44 5145.42 345867.86
22
70947.77 151.78 (1418.38) 26533.39 30376.94 18956.08 228301.51 373849.09 10195.99 10195.99
58249.78 103.94 (1,070.37) 21026.38 22910.81 14606.77 217346.76 333174.07 12693.79 (1,721.04) 14414.83
3060.00 (3,060.00) (700.07) 4859.56 6036.50 301.86 6338.36 9.06
3338.76 (3,338.76) 223.00 14191.83 172.19 14364.02 20.54
INCOME Revenue From Operations Other Income Total Revenue EXPENSES Cost of Materials Consumed Purchase of Stock-in-Trade Changes in inventories of finished goods, work-in-progress and Stock-in-Trade Employee Benefits Expense Finance Costs Depreciation and amortization expense Other Expenses Total Expenses Profit before exceptional items and extraordinary items and tax Exceptional Item Profit before Tax Tax Expense: Current Tax Less: MAT Credit entitlement Earlier Years Tax Deferred Tax Profit for the Year Add: Share of Loss trasferred to Minority Interest Profit after Tax & Minority Interest Earning per Equity share of `10/- each. Basic and Diluted (In `) Significant Accounting Policies Notes on Financial Statements
23 24 25 26
1-32
As per our Report attached For P.L.TANDON and Co., Chartered Accountants
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K.Agarwal Partner
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
Kanpur Dated : 28th May, 2016
SHAMBHU SINGH Company Secretary
F-36
Directors
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2016
A)
`/Lacs 2014-2015
10,195.99
14,414.83
CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax as per Profit & Loss Account Adjusted for : Depreciation Assets Written off Interest Interest received Dividend Income Profit on sale of Investments Net (profit)/loss on sale of assets Mines restoration Charges CSR Exp.debited to P&L Govt. Grants
18,956.09 16.29 30,256.62 (4,059.33) (7.81) (165.51) (26.21) 8.02 464.05 (1,199.82)
14,606.77 22,442.94 (3,944.81) (441.74) 213.08 13.74 515.20 44,242.39 54,438.38
Operating Profit before Working Capital Changes Adjusted for : Trade & Other Receivables Inventories Trade Payable & Other Liabilities Cash Generated from Operations Adjusted for : CSR Exp.Paid Tax Paid Corporate Dividend Tax Dividend paid
B)
2015-2016
2,010.49 305.81 9,574.24
11,890.54 66,328.92
(464.05) (2,740.39) (569.42) (2,797.09)
33,405.18 47,820.01 (9,395.43) 47.88 (6,760.90)
(515.20) (3,122.37) (356.52) (2,097.82) (6,570.95) 59,757.97
Net cash from operating activities CASH FLOW USED IN INVESTING ACTIVITIES Acquisition/Purchase of fixed assets including capital advances Sale of fixed assets Purchase of Investments Sale of Investments Exchange Rate Fluctuation Reserve on Conversion Interest Income Net cash used in investing activities
(34,650.55) 228.64 (22,614.23) 18,373.32 (1,858.70) 3,742.26
(6,091.91) 25,619.65 (55,019.25) 294.52 (9,700.00) 13,241.74 (398.69) 3,780.61
(36,779.26)
F-37
(16,108.45) 31,711.56
(47,801.07)
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2016
`/Lacs 2014-2015
2015-2016 C)
CASH FLOW FROM FINANCING ACTIVITIES Loan to Associates Captial subsidy received Deferred Sales Tax / VAT Long Term Borrowings Cash Credit Accounts/OD Accounts Repayment of Long Term Borrowings Interest Paid Security Deposits Vehicle Loans
1,199.82 2,525.69 29,913.24 (5,014.01) (17,293.54) (30,171.17) 2,287.66 (68.43)
(1,006.33) 28.45 355.35 49,706.36 9,469.67 (14,971.33) (22,541.97) 1,962.01 28.50 (16,620.74) 6,357.97 41,713.77 48,071.74
Net cash used in financing activities Net increase in Cash and Cash Equivalents (a+b+c) Opening balance of Cash and Cash Equivalents Closing balance of Cash & Cash Equivalents As per our Report attached For P.L.TANDON and Co., Chartered Accountants
SMT.SUSHILA DEVI SINGHANIA Director
YADUPATI SINGHANIA Chairman & Managing Director
A.K.Agarwal Partner
A.K. SARAOGI President (Corp.Affairs) & CFO
ACHINTYA KARATI JAYANT NARAYAN GODBOLE KAILASH NATH KHANDELWAL KRISHNA BEHARI AGARWAL RAJ KUMAR LOHIA SHYAM LAL BANSAL SUPARAS BHANDARI
Kanpur Dated : 28th May, 2016
SHAMBHU SINGH Company Secretary
F-38
23,030.71 849.29 40,864.48 41,713.77
Directors
NOTES
on consolidated financial statements for the year ended 31st march, 2016
1.
As at 31-03-2016
`/Lacs As at 31-03-2015
8000.00
8000.00
8000.00
8000.00
6992.72
6992.72
6992.72
6992.72
SHARE CAPITAL Authorised 8,00,00,000 Equity Shares of ` 10/- each (8,00,00,000 Equity Shares of ` 10/- each) Issued, Subscribed & Paid Up 6,99,27,250 Equity Shares of `10/- each fully paidup (6,99,27,250 Equity Shares of ` 10/- each fully paidup)
1.1 The reconciliation of number of shares outstanding is set out below: Equity shares at the beginning of the year Equity shares at the end of the year
69927250 69927250
1.2 Details of Shareholders holding more than 5% shares. S.No. Name of the shareholder 1 2 3
Shares held on 31-03-2016 22655100 14276002 7294418
Yadu International Ltd Yadupati Singhania Juggilal Kamlapat Holding Ltd.
% 31-03-2016 32.40% 20.42% 10.43%
Shares held on 31-03-2015 22655100 14279843 7228418
`/Lacs As at 31-03-2015
As at 31-03-2016 2.
% 31-03-2015 32.40% 20.42% 10.34%
RESERVES AND SURPLUS a)
b) c)
d)
e)
f)
Capital Reserve Govt. Subsidy As per last Balance Sheet Add: Received during the year Securities Premium Reserve As per last Balance Sheet Debenture Redemption Reserve As per last Balance Sheet Add : Transfer from Profit and Loss Account Revaluation Reserve As per last Balance Sheet Less : Deduction During the year General Reserve As per last Balance Sheet Less: Adjustments during the year Add : Transfer from Profit and Loss Account Foreign Currency Translation Reserve As per last Balance Sheet Adjustment during the year
9579.55 9579.55
9551.10 28.45
25988.60 6662.50 1581.95
F-39
9579.55 25988.60
5030.00 1632.50
6662.50
-
21507.30 21507.30
-
66501.31 3000.00
69501.31
64540.05 2038.74 4000.00
66501.31
1285.00 (2117.90)
(832.90)
1683.69 (398.69)
1285.00
8244.45
NOTES
on consolidated financial statements for the year ended 31st march, 2016
`/Lacs As at 31-03-2015
As at 31-03-2016 2.
RESERVES AND SURPLUS g) Surplus As per last Balance Sheet Balance in Statement of Profit and Loss A/c Less: Appropriations Transfer to General Reserve Transfer to Debenture Redemption Reserve Proposed Dividend on Equity Shares Tax on Dividend
44686.90 6338.36 51025.26
39321.89 14364.02 53685.91
3000.00 1581.95 2,797.09 569.42
4000.00 1632.50 2797.09 569.42
7948.46
3.
43076.80 155557.81
8999.01
44686.90 154703.86
As at 31-03-2016
`/Lacs As at 31-03-2015
66500.00 211247.78 146.78 5541.29 283435.85
54700.00 211083.15 206.25 2879.24 268868.64
4232.27 4232.27 287668.12
4140.07 4140.07 273008.71
LONG TERM BORROWINGS a)
b)
SECURED Non Convertible Debentures Term Loan from Banks Vehicle Loans VAT Loans UNSECURED Deferred Sales Tax Liability
3.1 Non Convertible Debentures (NCDs): ` 66500.00 lacs (` 60000.00 lacs) Security for NCDs for ` 36500 lacs (` 40000 lacs) i) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge on the assets specified below in 3.2(i)(a). Security for NCDs for ` 30000 lacs (` 20000 lacs) ii) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of all movable fixed assets, present and future pertaining to Company’s existing cement plant at village Muddapur, Karnataka 3.2 (i)
Term Loans related to Cement Plants at Rajasthan a) From Canara Bank: ` 3575.85 lacs (` 4952.79 lacs) and From Export Import Bank of India: ` 5000 lacs (` 5000 lacs).
F-40
Secured by equitable mortgage of immovable properties and hypothecation of movable assets pertaining to undertaking of J.K. Cement Works, Gotan except current assets and vehicles b)
From Banks: ` 18337.46 lacs (` 18683.25 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all the movable assets of the Company both present and future save and except i) inventories, book debts, cash and bank balances and all assets pertaining to J.K. Cement Works, Gotan, J.K. Cement Works, Muddapur, Karnataka ii) properties for office and guest house including those having exclusive charge of other lenders and iii) New Cement plant at Mangrol and Jharli and iv) Putty Plant at Katni, Madhya Pradesh.
NOTES
on consolidated financial statements for the year ended 31st march, 2016
(iii) Term Loans related to New Cement Plants at Rajasthan and Haryana From Consortium of Banks : ` 119803.64 lacs (`109518.42 lacs) Secured by first pari-passu charge on all immovable fixed assets (save and except mining land) and all movable fixed assets (save and except book debts) being acquired out of loan for the new cement Plants at Mangrol, Rajasthan and split Grinding Unit at Jharli, Haryana and second charge on current assets related to the above plants.
(ii) Term Loans related to Cement Plant at Karnataka a) From Indian Bank (Consortium of Banks): ` 930.45 lacs (` 16495.72 lacs). Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable assets, present and future (save and except book debts) pertaining to J.K. Cement Works, Muddapur, Karnataka subject to prior charges in favour of working capital lenders on inventories and other current assets. b)
From Consortium of Banks: ` 8436.78 lacs (NIL) Secured by first pari-passu charge by way of equitable mortgage of all the immovable Properties (except mining land) and hypothecation of all movable non current assets, present and future pertaining to J.K. Cement Works and Thermal power Plant Muddapur, Karnataka. (Charge on immovable property yet to be created).
c)
From State Bank of India: ` 4360.73 lacs (` 5000.10 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
d)
(iv) Term Loan related to Putty Plant at Katni, Madhya Pradesh : ` 3800.00 lacs (` 2000.00 lacs) Secured against exclusive charge on entire movable fixed assets (by way of hypothecation) and on immovable fixed assets related to the Wall Putty project at Katni, Madhya Pradesh(excluding current assets and mining land, if any).
From Allahabad Bank : ` 2421.84 lacs (` 2500.00 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
v)
Term Loans related to the Properties: ` 1422.32 lacs (` 2112.83 lacs) Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.
vi)
Term Loans related to Cement Plant at Fujairah: ` 62555.15 lacs (` 58261.42 lacs) First pari-passu charge on the entire movable and immovable fixed assets pertaining to J.K. Cement Works (Fujairah)FZC, UAE, as per prevalent local laws in UAE. Assignment of the rights in respect of lease hold land. Pledged of 51% of J.K. Cement Ltd. Shareholding in J.K. Cement (Fujairah)FZC on pari-passu basis. Pledged of 51% of J.K. Cement Ltd. (Fujairah)FZC shareholding held in J.K. Cement Works (Fujairah) FZC on pari-passu basis and non-disposal undertaking from J.K. Cement (Fujairah) FZC for the balance 49% of its shareholding.
F-41
NOTES
on consolidated financial statements for the year ended 31st march, 2016
Maturity Profile Non Convertible debentures: SERIES A -at 10.25% -at10.50% -at 11% SERIES B -at 11% SERIES C -at 10.50% -at 11% SERIES D -at 9.65% Total NCD
2017-18 1800 1800 1400
2018-19 1800 1800 1400
2019-20 2700 2700 2100
2020-21 2700 2700 2100
2021-22 -
2022-23 -
2023-24 -
2024-25 -
2025-26 -
`/Lacs Total 9000 9000 7000
2300
2300
3450
3450
-
-
-
-
-
11500
-
-
-
3300 6300
1300 1300
1950 1950
1950 1950
-
-
8500 11500
2000 5900
2000 5900
3000 3000
3000 3000
10000 66500
-
-
-
-
-
7300
7300
10950
20550
2600
`/Lacs TERM LOAN FROM BANK
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
3.2 (i) (a) Rajasthan Plant
4036.48
4562.13
4050.56
4179.28
794.73
714.28
3.2 (i) (b) Grey gotan
797.58
1111.12
1111.12
556.03
-
Exim
714.28
714.28
714.28
714.28
714.28
3.2 (ii) (a) Karnataka
794.16
952.56
1428.88
1746.36
2222.60
3.2 (ii) (b) State Bank of India
560.73
600.00
600.00
600.00
3.2 (ii) (c) Allahabad Bank
390.59
312.50
312.50
312.50
3.2 (iii) Mangrol Project
6000.00
2022-23 2023-2024
2024-25
2025-26
2026-27
Total
-
-
-
-
-
18337.46
-
-
-
-
-
-
3575.85
714.28
714.32
-
-
-
-
5000.00
2222.67
-
-
-
-
-
9367.23
600.00
600.00
800.00
-
-
-
-
4360.73
312.50
312.50
312.50
156.25
-
-
-
2421.84
12000.00 12000.00 12000.00
5803.64
119803.64
12000.00 12000.00 12000.00 12000.00 12000.00 12000.00
3.2 (iv) Katni Project
-
-
500.00
500.00
1000.00
1800.00
-
-
-
-
-
3800.00
3.2(v) Property Loan
427.93
571.43
422.96
-
-
-
-
-
-
-
-
1422.32
5674.69
8125.78
9750.94 10563.51 11376.09 11376.09
5688.05
-
-
-
-
62555.15
3.2(vi) Fujairah Loans Total Loans
19396.44 28949.80 30891.24 31171.96 29020.20 29739.82 19514.87
12156.25 12000.00 12000.00
5803.64 230644.22
3.3 VAT Loan (Interest free) from Govt. Of Karnataka: ` 5541.29 lacs (` 2879.24 lacs) Secured by second pari passu charge by way of equitable mortgage of land, building and plant and machinery pertaining to J.K. Cement Works, Muddapur, Karnataka and bank guarantee. Second charge on assets are yet to be created. 3.4 Vehicle Loans : ` 339.84 lacs (` 371.81 lacs) Secured by hypothecation of vehicles Maturity profile of Vehicle Loan: 2016-2017 193.06
2017-2018 113.05
2018-2019 33.73
`/Lacs TOTAL 339.84
2019-2020 0
3.5 Deferred Sales Tax Liability: ` 4880.61 lacs (` 5016.97 lacs) ` 86.44 lacs (`143.43) as at 31.03.2016 interest free deferred sales tax liability payable in next quarterly equitable instalments of ` 10.80 lacs (`31.15 lacs) each. ` 4794.17 lacs (` 4873.54 lacs) Interest free deferred sales tax liability. The availment of said scheme is still continued. The payment of said scheme are as under:2016-17 605.12
2017-18 488.46
2018-19 659.95
2019-20 636.71
F-42
2020-21 437.93
2021-22 942.49
2022-23 831.86
`/Lacs 2023-24 191.65
NOTES
on consolidated financial statements for the year ended 31st march, 2016
4.
5.
6.
As at 31-03-2016
`/lacs As at 31-03-2015
235.44 4471.75 18140.11 22847.30
216.10 3565.84 0.80 17811.13 21593.87
55691.41 32844.11
49577.62 27983.75
As at 31-03-2016
`/lacs As at 31-03-2015
13964.53 13964.53
11676.87 11676.87
As at 31-03-2016
`/lacs As at 31-03-2015
1847.04 175.67 2022.71
1632.77 167.65 1800.42
DEFERRED TAX ASSETS AND LIABILITIES ARE AS UNDER: (a) Deferred Tax Assets (i) Provision for Doubtful Debts (ii) Expenses deductible on payment basis (iii) Unabosrbed loss (iv) Unabsorbed Depreciation Sub Total (b) Deferred Tax Liabilities i) Difference between book depreciation and depreciation under Income tax Act (c) Net Deferred Tax Liabilities (b-a)
OTHER LONG TERM LIABILITIES Security Deposits
LONG TERM PROVISIONS Provision for employees benefits Provision for Mines Restoration Charges
Provision for Mines Restoration charges: `/lacs Opening Balance 167.65
7.
Provision during the year 8.02
Closing Balance 175.67
As at 31-03-2016
`/lacs As at 31-03-2015
25056.84 25056.84
30070.85 30070.85
SHORT TERM BORROWINGS Secured Loan from Banks
7.1 Cash Credit Account : ` 19620.69 lacs (` 26335.28 lacs) Cash credit accounts are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders. 7.2 Short Term Loan / Over Draft Account : ` 5436.15 lacs (` 3735.57 lacs) Working Capital facilities are secured by first charge on current assets of the Company namely inventories, book debts, etc. and undated cheques covering the exposure. `/lacs As at 31-03-2015
As at 31-03-2016 8.
TRADE PAYABLES Micro, Small and Medium Enterprises Other Trade Payables* Acceptance
940.77 27310.25
*including project creditors ` 1776.10 lacs (Prev.Year ` 4437.41 lacs)
F-43
28251.02 2218.08 30469.10
681.21 22582.06
23263.27 7447.91 30711.18
NOTES
on consolidated financial statements for the year ended 31st march, 2016
8.1 Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act, 2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March, 2016 as per the terms of contract. `/lacs As at 31-03-2015
As at 31-03-2016 9.
OTHER CURRENT LIABILITIES Current maturities of long-term debt Non Convertible Debentures Term Loan from Bank Vehicle Loan Deferred Sales Tax Liability Interest Accrued but not due on Borrowings Interest Accrued and due on Borrowings Investor Education and Protection Fund shall be credited by following - Unclaimed Dividend - Unclaimed fraction Money Other Payable
19396.44 193.06 648.34
109.74 9.23
5,300.00 13441.38 202.02 876.90
20237.84 1403.26 346.54
114.62 9.24
118.97 48738.59 70845.20
19820.30 1188.37 264.20
123.86 40459.91 61856.64
9.1 Other payable includes the liability of employees, sales tax/VAT dues and rebates to customer etc. As at 31-03-2016 10.
`/lacs As at 31-03-2015
SHORT TERM PROVISIONS Provision for employee benefits Provision for Wealth Tax Proposed Dividend on Equity Shares Tax on Dividend
1680.48 2,797.09 569.42 5046.99
F-44
1523.26 40.00 2797.09 569.42 4929.77
As at
13610.02
63772.20
392174.24
Buildings
F-45
(3.32) (3.32) 26.16 10850.62
29.48 742.70 949.22 55.26 1747.18 109643.43 90713.51
107896.25
813.40
1599.12
1606.87
55.66
1047.65
222.60
92210.60
8918.58
32108.64
199.76 1822.12 2021.88 422181.47
420159.59
277.41
1766.57
1618.29
33.77
5422.55
4457.72
312498.64
60810.87
9161.49
24112.28
Note: (i) (ii) (iii)
Some assets discarded during the year where value of the assets are not determined, the adjustment of sale proceeds is made from historical value directly. Cost incurred by company ownership of which vest with State Electricity Boards & Indian Railways. Cost incurred by company ownership of which vest with Indian Railways.
2414.51
31299.96
197.51 1867.95 2065.46 407362.49
405297.03
180.82
2018.26
1782.55
41.96
1503.42
1329.78
314265.35
57859.13
7996.71
18319.05
16.16
36.47 42.51 78.98 18956.08 14606.77
18877.10
(10.45)
114.64
21.03
-
-
-
(32.27)
(63.52)
1421.77
441093.12
742.70 912.75 9.43 1664.88 90713.51 86957.36
89048.63
114.91
421.89
315.23
8.19
300.45
183.67
14269.44
2941.99
0.05
As at 31.03.2015
454290.11
0.00 (33203.81)
742.70 1148.98 1877.38 3769.06 531824.90 498076.00
528055.84
688.04
1291.87
1312.67
47.47
747.20
38.93
77908.89
5913.07
321.33
Upto As at 31.03.2016 31.03.2016
-
1450.77 871.27
0.00
1090.81
3365.69
3225.16
89.43
6470.20
4680.32
404709.24
69729.45
1100.49
Adjustments
(`/Lacs)
Intangible Asset under Development
38.72 38.72 35199.67 212506.78
1450.77
(40.37)
229.36
181.94
-
-
-
1075.02
-
24112.28 10583.26
As at 01.04.2015
Net Block
-
742.70 1110.26 1877.38 3730.34 498076.00 319644.30
35160.95
4.82
As at 31.03.2016
Depreciation / Amortization For the Year Deductions/
Capital Work-in-progress-Others (iii)
Goodwill Computer Softwares Mining rights Sub Total Intangible Asset Grand Total Previous year figures Capital Work-in-progress
Intangible Assets
494345.66
868.86
Sub Total Tangible Assets
284.92
3310.13
Vehicles
Other Assets
181.58
311.88
-
4219.58
3311.61
3095.22
Furniture, Fixtures and Office Equipments
89.43
2250.62
Railway Sidings
Rolling Stock
1368.71
Plant & Machinery-Others (ii)
Plant & Machinery
5957.25
9097.20
1490.88
18319.05
5793.23
Adjustments Adjustments
Freehold Land
01.04.2015
Leasehold Land
11. FIXED ASSETS Tangible Assets
Description
Gross Block Additions/ Deductions/ Revaluation
NOTES
on consolidated financial statements for the year ended 31st march, 2016
NOTES
on consolidated financial statements for the year ended 31st march, 2016
As at 31.03.2016 Face Units/ Value Shares
Name of the Bodies Corporate 12.
(`/lacs) As at 31.03.2015 Units/ Book Shares Value
Book Value
NON CURRENT INVESTMENTS
Others Investments A) Investments in Equity Instruments i) Unquoted fully paid up - VS Lignite Power Private Limited @ - ReNew Wind Energy AP (Pvt.) Ltd. B) Investments in Preference Shares Unquoted 1. Subsidiary Companies - Share Application Money-Compulsory convertible preference shares in J.K.Cement (Fujairah)FZC 2. Others 0.01% cumulative redeemable Preference shares (Fully paid up) : - VS Lignite Power Private Limited @ Total Aggregate Market Value of Quoted Investments Aggregate Amount of Unquoted Investments
` 10 ` 10
3140101 3400
314.01 3.40
3140101 8000
1318.82
` 10
2785552
314.01 8.00
-
278.56 1914.79 1914.79
2785552 -
278.56 600.57 600.57
Notes: @3140101 Equity shares and 2785552 Preference shares are under lien with issuer as Security towards obligations.
13.
As at 31.03.2016
`/Lacs As at 31.03.2015
12933.09 3045.16 532.27 16510.52
11194.16 3711.14 579.72 15485.02
LONG TERM LOANS AND ADVANCES (Unsecured and Considered Good) Capital Advances Deposits Others
(`/lacs) As at 31.03.2015
As at 31.03.2016 Name of the Bodies Corporate 14.
Face Value
Units/ Shares
Book Value
` 1616.8561 ` 2372.9489 ` 14.3273 `29.59 ` 10 ` 10 ` 10 ` 10.1292 ` 11.0229 ` 30.3251 ` 30.265 ` 1495.7978
92772.634 84283.316 3489841.073 1774748.873 0 0 0 493622.3986 2721606.837 2638078.471 1652073.352 -
1500.00 2000.00 500.00 500.00 50.00 300.00 800.00 500.00 6150.00 6337.78
Units/ Shares
Book Value
5000000.000 5000000.000 5000000.000 493622.3986 2721606.837 2638078.471
500.00 500.00 500.00 50.00 300.00 800.00 400.00 3050.00 3,224.71
CURRENT INVESTMENTS Others Investments Investments in Mutual Funds Quoted IDBI Liquid Fund made Growth SBI Premium Liquid Fund ICICI PRUDENTIAL MUTUAL FUND HDFC Short Term Fund-Growth BOI AXA FIXED MATURITY PLAN-SERIES13(380) Baroda Pioneer FMP-372 Days HDFC FMP-SERIES 29(384DMARCH2014(1) J.P.Morgan Active Bond Fun Institutional JP morgan govt.Securities fund-regularplan Growth option SBI magnum Guilt Fund SBI magnum Guilt Fund IDBI Liquid Fund
Total Aggregate Market Value of Quoted Investments
F-46
26741.654
NOTES
on consolidated financial statements for the year ended 31st march, 2016
15.
As at 31-03-2016
`/Lacs As at 31-03-2015
6347.46 9801.12 8260.76 23.43
6897.74 9815.70 6836.28 14.95
INVENTORIES Raw Materials Work-in-Process Finished Goods Stock-in-Trade Stores, Spare parts etc. Less: Provision for Diminution in the Value of Stores,Spares Parts etc. Goods-in-Transit Raw Materials Stores, Spare parts etc.
28202.49 38.91
28163.58
30257.68 38.91
30296.59
15.13 1230.32 53841.80
1.20 285.14 54147.60
As at 31-03-2016
`/Lacs As at 31-03-2015
120.68 385.12 602.00 602.00 505.80
81.33 253.35 566.22 566.22 334.68
7846.63 12782.32 -
6864.92 10508.41 -
20628.95 21134.75
17373.33 17708.01
As at 31-03-2016
`/Lacs As at 31-03-2015
4600.65 109.74 43322.87 2.74 35.74 48071.74
8132.12 114.62 33430.42 3.57 33.04 41713.77
Note: Stock of Stores, Spare parts also includes stock of Project material aggregate to ` 156.57 lacs (`937.50 Lac).
16.
TRADE RECEIVABLE Trade Receivable over six months - Considered Good Secured Unsecured - Considered doubtful Less: Provision for Doubtful Debts Sub Total Other Trade Receivable - Considered Good Secured Unsecured - Considered doubtful Sub Total
17.
CASH & CASH EQUIVALENTS Balances with Banks in: - Current Accounts - Unclaimed Dividend - Fixed Deposits Cheques and Drafts on hand Cash on hand
17.1 Fixed Deposits with banks includes deposits of ` 10620.91 lacs (` 2155.85 lacs) with maturity more than 12 months and ` 2741.26 lacs (` 2005.68 lacs) tied up against overdraft/other commitments
F-47
NOTES
on consolidated financial statements for the year ended 31st march, 2016
18.
21.
15.00
1456.75 15.00
11037.79 31.41 554.35 11029.37 2284.11 3776.87 28728.90 31.41 28697.49
10623.40 31.93 474.40 7269.30 608.34 9812.71 30291.83 31.93 30259.90
As at 31-03-2016
`/Lacs As at 31-03-2015
832.39 832.39
954.11 954.11
2015-2016
`/Lacs 2014-2015
432992.03 57423.57 375568.46
391052.85 52316.94 338735.91
508.31 1199.82 1766.86 3474.99 379043.45
515.75 222.32 36.32 1212.14 1986.53 340722.44
2015-2016
`/Lacs 2014-2015
OTHER CURRENT ASSETS (Unsecured Considered Good) Interest Accrued on Deposit
20.
`/Lacs As at 31-03-2015
SHORT TERM LOANS & ADVANCES (Considered Good unless otherwise stated) Unsecured Loans and advances to related parties (Refer Note No. 29) i) Loan - Jaykaycem (Central) Ltd. ii) Loan - J.K.Cement (Western) Ltd. Other Loan and Advances ; - Considered good - Doubtful Taxation(Net of Provisions) MAT Credit Entitlement Prepaid Expenses Balances with Custom & Excise Departments Sub Total Less: Provision for doubtful advances
19.
As at 31-03-2016
REVENUE FROM OPERATIONS a)
Sale of Products Less : Excise Duty/Custom Duty
(b)
Other Operating Revenues; Claims Realised Government Grants Exchange Rate Difference Other Operating Income
OTHER INCOME Interest received on Fixed Deposits Interest received on Others Profit on Sale of Fixed Assets Net Gain on Sale of Current Investments Dividend on Current Investments Other Non Operating Income
3059.57 999.76 23.20 165.51 7.81 745.78 5001.63
F-48
2870.14 1074.67 441.74 758.87 5145.42
NOTES
on consolidated financial statements for the year ended 31st march, 2016
22.
22.1 Particulars of Material consumed: Name of Material Lime Stone Red Ochre Dairen-DA-1100 MP Vinapas-5044N Gypsum/Selenite Clay Fly Ash Others Total
58249.78 58249.78
2015-2016
`/Lacs 2014-2015
22256.63 3032.06 7512.33 5177.75 2225.59 7540.04 23203.37 70947.77
16452.66 2423.49 5853.38 5197.76 543.49 7727.90 20051.10 58249.78
2015-2016
`/Lacs 2014-2015
6851.23 9815.70 16666.93
6390.22 9206.34 15596.56
8284.19 9801.12 18085.31 (1418.38)
6851.23 9815.70 16666.93 (1070.37)
2015-2016
`/Lacs 2014-2015
22573.68 2048.68 1911.03 26533.39
17332.87 2169.42 1524.09 21026.38
2015-2016
`/Lacs 2014-2015
30788.70 (532.08) 254.63 (134.31) 30376.94
29265.38 (6822.44) 375.50 92.37 22910.81
EMPLOYEE BENEFITS EXPENSE Salaries,Wages and Bonus Contribution to Provident and Other funds Welfare Expenses
25.
70947.77 70947.77
CHANGE IN INVENTORIES OF FINISHED GOODS,WORK-IN-PROGRESS AND STOCK-IN-TRADE Opening Stock : Finished Goods/Stock-in-Trade Goods in Process Sub Total Closing Stock: Finished Goods/Stock-in-Trade Goods in Process Sub Total Net Sub Total
24.
`/Lacs 2014-2015
COST OF MATERIAL CONSUMED Cost of Raw Materials Consumed
23.
2015-2016
FINANCE COST Interest Expenses Less: Interest Capitalised Other Borrowing Cost Net Loss on Foreign Currency Transactions and Translation
F-49
NOTES
on consolidated financial statements for the year ended 31st march, 2016
26.
`/Lacs 2014-2015
9205.65 16835.97 82588.73
8321.71 15915.93 81417.30
7037.29 1142.19 970.18 940.06 118720.07
6156.73 1087.34 681.21 580.61 114160.83
1759.57 54.55 270.80 2366.17 56.90 133.62 -
1524.82 383.04 136.59 2231.20 49.29 102.45 213.08 -
OTHER EXPENSES a)
b)
c)
27.
2015-2016 Manufacturing Expenses Stores and Spares Consumed Packing Materials Consumed Power and Fuel Repairs To: Plant and Machinery Buildings Insurance Other Manufacturing Expenses Administration and Other Expenses Rent Lease Rent Rates and Taxes Travelling and Coveyance Expenses Provision for Doubtful Debts/Advances Debts and Advances written off Loss on disposal of Fixed Assets (Net) Loss on Exchange rate Fluctuation (Net) Expenses relating to Earlier years CSR Expenses Miscellaneous Expenses Selling and Distribution Expenses Advertisement and Publicity Selling Expenses Freight and Handling Outward Sales Tax/VAT
3.49 13.56 464.05 11281.54 16404.25
16.51 515.20 9405.84 14578.02
3274.21 11700.19 77468.98 733.81 93177.19 228301.51
3131.73 10714.10 74102.98 659.10 88607.91 217346.76
2015-2016
`/Lacs 2014-2015
6338.36
14364.02
69927250
69927250
9.06
20.54
UNHEDGED FOREIGN CURRENCY EXPOSURE Export Debtors: US$ 279142.60(` 178.70lacs) (US$425781.50) ` 266.79 lacs
28.
EARNING PER SHARE (EPS): a) b) c)
Net Profit available for Equity Share holders (Numerator used for calculation) Weighted average number of Equity Shares Used as denominator for calculating EPS Basic and Diluted earnings per share of ` 10/-
F-50
NOTES
on consolidated financial statements for the year ended 31st march, 2016
29.
A. (1)
RELATED PARTIES DISCLOSURES (a) Parties where the control/significant influence exists:i) Juggilal Kamlapat Holding Ltd ii) Yadu International Ltd (b) Key Management Personnel & their Relatives: i) Shri Yadupati Singhania- Chairman & Managing Director ii) Smt. Sushila Devi Singhania (Relative of Chairman & Managing Director) iii) Shri Ajay Kumar Saraogi iv) Shri Shambhu Singh (c) Enterprises significantly influenced by Key Management Personnel or their Relatives. i) Jaykay Enterprises Ltd ii) J.K. Cotton Ltd. iii) Jaykaycem (Eastern) Ltd iv) J.K. Cement (Western) Ltd (d) Other Directors Shri K.N. Khandelwal Shri A. Karati Shri R.K. Lohia Shri J.N. Godbole Shri Suparas Bhandari Dr. K.B. Agarwal Shri Paul Heinz Hugentobler Shri S. L. Bansal
(Related parties relationship is as identified by the Company and relied upon by the Auditors).
(2) a)
Following are the transactions with related parties as defined under section 188 of Companies Act 2013
Jaykay Enterprises Ltd - Services received - Rent paid - Expenses Reimbursed (ii) J.K. Cotton Ltd - Rent paid - Purchases - Sale of Products (iii) J.K. Cement (Fujairah) FZC - Share Application Money-Compulsory convertible preference shares (From 01-012016 to 31-03-2016)
2015-2016
`/Lacs 2014-2015
34.17 43.80 50.11
37.07 43.47 46.58
45.02 1.81 -
44.41 5.80 -
1318.82
-
15.00 15.00
15.00 15.00
726.85
757.96
7.00 3.91
6.50 3.20
(i)
(iv)
(v)
J.K. Cement (Western) Ltd Opening Advances given during the year Balance as at close of the year Key Management Personnel and their relatives a) Shri Y.P. Singhania (Chairman & Managing Director) - Remuneration b)
Smt Sushila Devi Singhania - Commission - Sitting Fees
F-51
NOTES
on consolidated financial statements for the year ended 31st march, 2016
c) d) e)
f)
2015-2016
`/Lacs 2014-2015
171.91
151.02
31.82
26.23
49.00 24.33
46.22 21.22
Shri Ajay Kumar Saraogi - Remuneration Shri Shambhu Singh - Remuneration Other Directors - Commission - Sitting Fees Payment made by subsidiary company i) Shri Yadupati Singhania-Chairman & Managing Director ii) Shri Ajay Kumar Saraogi iii)
19.87 10.38
Shri Paul Heinz Hugentobler
9.03
` 110.97 lacs (46.94 lacs) paid to other Director Mr. Paul Heinz Hugentobler on professional capacity.
29 B(1) Additional informations, as required under Schedule III of the Companies Act,2013 of Enterprises consolidated as Subsidiary/Associates/JointVentures `/Lacs Net Assets i.e. (Total Assets-Total Liabilites) Name of Enterprise
Parent J.K.Cement Ltd. Subsidiary (Indian) Jaykaycem (Central) Ltd. Subsidiary including Fellow Subsidiary (Foreign) J.K.Cement (Fujairah) FZC & J.K.Cement Works (Fujairah) FZC Minority Interest in Subsidiary Joint Venture Bander Coal Company Pvt. Ltd Total
Share in Profit or Loss
As % of Consolidated Assets
Amount (` in lacs)
As % of Consolidated Profit
Amount (` in lacs)
81.39%
135047.67
160.19%
10153.55
0.40%
656.83
(0.03%)
(2.18)
18.79% (0.59%)
31173.10 (975.46)
(64.66%) 4.76%
(4098.32) 301.86
0.01% 100.00%
14.9 165917.04
(0.26%) 100.00%
(16.55) 6338.36
29 B(2) Salient Features Of Financial Statements Of Subsidiaries (Part-A) Name of the Subsidiary Company/Joint Venture
J.K.Cement (Fujairah) FZC * J.K.Cement Works (Fujairah) FZC * (Fellow Subsidiary) Jaykaycem (Central) Ltd
Reporting Closing Currency # Exchange Rate adopted on 31.12.2015 `/AED AED AED
NA
Share Reserves & Total Assets Capital Surplus
Total Liabilites
18.06 38,514.65 (166.42) 38,360.29 18.06 40,333.11 (10,140.07) 1,01,598.01
12.06 71,404.97
-
659.01
(2.18)
4,910.72
# Exchange Rate adopted for consolidation `18.06 for 1 AED * Company having 31st December as a reporting date.
F-52
4,253.89
Investment
Total Profit/(Loss) Provision Profit/(Loss) Proposed Income before Tax for Tax after Tax Dividend
38,343.64 - 23,211.85
-
-
`/Lacs % of Holding
(8.90) (4,089.41)
-
(8.90) (4,089.41)
-
100% 90%
(0.12)
-
(0.12)
-
100%
NOTES
on consolidated financial statements for the year ended 31st march, 2016
29 B(3) Salient Features of Financial Statements of Joint Ventures (Part-B) `/Lacs S.No.
Name of Joint Venture
1
Bander Coal Company Pvt. Ltd
Latest Audited Balance Sheet Date
Shares of Joint Ventures held by Description Reason why Networth Profit/(Loss) for the company on the year end of how there the Joint attributable to the year** is significant ventre is not Shareholding as Nos. Amount of Extent of Considered in Not Conisdered influence consolidated per latest audited Investment in Holding Consolidation in Consolidation Balance Sheet Joint Venture 31-03-2015 375000 37.50 37.50% Consolidated 14.49 (16.55) -
30. CONTINGENT LIABILITIES AND COMMITMENTS.
1.
(A)
Contingent Liabilities (i) In respect of claims not acknowledged as debts by the Company (ii) In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts – no provision has been considered necessary by the Management
(iii) (iv) (v) (vi)
a) Excise duty b) Sales tax c) Service tax In respect of interest on “Cement Retention Price” realised in earlier years In respect of interest of Rajasthan Entry Tax In respect of penalty of non lifting of fly Ash The Competition Commission of India(CCI) has upheld the Complaint of Builders Association of India alleging cartelisation by some Cement Manufacturing Companies including us and imposed a penalty of ` 12854 lacs on the Company. In an appeal filed by the company, the Competition Appellate Tribunal (COMPAT) has, by its order dated 11th December,2015, set aside order dated 20the June,2012 passed the Competition Commission of India (CCI). COMPAT remitted the matter to CCI for fresh adjudiction. Further, in terms of the order, the Company has received refund of ` 1285 lacs, being 10% amount of penalty, alongwith accumulated interest deposited with COMPAT.
(vii)
(B)
Other Financial Guarantees Guarantee issued by bankers on behalf of the company Dividend on preference shares Commitments Capital Commitments i) Estimated amount of contracts remaining to be executed on capital accounts and not provided for ii)
Contractual Commitments for Lease
As at 31-03-2016
`/Lacs As at 31-03-2015
17519.27
15596.90
1732.71 3159.88 1085.42 1210.68 3718.82 805.02 -
1636.40 3057.80 1085.42 1190.30 3272.60 521.03 12854.00
613.89 412.98 143.95
613.89 383.40 66.54
7562.87
11132.05
2713.51
-
31.
The Company is engaged only in cementious materials and there are no separate reportable segments as per AS-17.
32.
Previous year figures have been regrouped and recasted wherever necessary to conform to the classification for the year.
F-53
SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS PRINCIPLES OF CONSOLIDATION 1.
(a)
(b)
(c)
2.
rate prevailing on the date of transactions. All assets and liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognized in Foreign Currency translation reserve.
The consolidated financial statements of the Group have been prepared on the following basis: The consolidated financial statements of the Group are prepared in accordance with Accounting Standard-21 “ Consolidated Financial Statements” issued by ICAI.
(d)
The financial statements of the Company, its Subsidiary Company and Joint Venture Company have been consolidated on a line-by-line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances.
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as the Company’s separate financial statements.
(e)
Calendar year as accounting year is adopted by J.K. Cement (Fujairah) FZC and J.K. Cement Works (Fujairah) FZC and the books are being prepared on year ending 31.12.2015.
Foreign Subsidiaries, being non integral foreign operations, revenue items are consolidated at the
The Companies considered in the consolidated financial statements are: Name of the Company J.K. Cement (Fujairah) FZC J.K. Cement Works (Fujairah) FZC Bander Coal Company Pvt Ltd Jaykaycem (Central) Ltd
Nature of Company Country of Incorporation Holding as on31.03.2016 Date of period consolidation Subsidiary U.A.E. 100% Calender year 2015 Fellow Subsidiary U.A.E. 90% Calendar year 2015 Joint Venture India 37.5% FY 2015-2016 Subsidiary w.e.f. 16.07.2015 India 100% FY 2015-2016
3.
Investement in subsidiary company is expressed in Indian Rupees at the rate of exchange prevailing at the date of investment.
4.
Other Significant Accounting Policies: These are set out under ‘Significant Accounting Policies’ as given in the Standalone Financial Statements of J.K. Cement Ltd.
5.
The Subsidiary Companies incorporated in UAE have prepared the Financial Statements in accordance with International Financial Reporting Standards for Small and Medium Enterprises (IFRS for SME’s)
6.
Additional information required to be disclosed in terms of Schedule III of the Companies Act 2013; Name of Entity
Net Assets As a % of consolidated net assets
J.K. Cement (Fujairah) FZC & J.K. Cement Works (Fujairah) FZC Jaykaycem (Central) Ltd Bander Coal Company Pvt Ltd
18.79% 0.40% 0.01%
F-54
Share in profit or loss Amount As a % of consolidated Amount (`/lacs) profit or loss (`/lacs) 31173.10 656.83 14.9
(64.66%) (0.03%) (0.26%)
(4098.32) (2.18) (16.55)
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE To, The Members of J.K. Cement Limited We have examined the compliance of conditions of Corporate Governance by J.K.Cement Limited (‘the Company’) for the year ended 31 March, 2017, as per regulations 17-27, clauses (b) to (i) of regulation 46(2) and paragraphs C,D and E of schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’). The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. We conduct our examination in accordance with the guidance note on reports or certificates for special purpose (Revised 2016 ) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, Other Assurance and Related Services Engagements. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above -mentioned Listing Agreement / Listing Regulations, as applicable. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.
For- P.L.Tandon & Co. Chartered Accountants Firm Registration No 000186C P.P. Singh (Partner) Membership Number 072754
Place : Kanpur Date : 13th May, 2017
F-55
INDEPENDENT AUDITOR’S REPORT To The Members of J.K.CEMENT LIMITED
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of J.K. Cement Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
EMPHASIS OF MATTER
We draw attention to Note No 36 (A)(6)of the statement which describes the following matters: (a)
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and
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In terms of order dated 31st August 2016, the Competition Commission of India (‘CCI’ ) has imposed penalty of ` 128.54 crore for alleged contravention of the provisions of the Competition Act, 2002 by the Company. The Company had filed an appeal against CCI Order before the Competition Appellate Tribunal (‘COMPAT’). COMPAT has granted stay on the CCI Order on the condition that the Company deposits penalty amounting to ` 6.56 crore which has since been deposited. Based on a legal opinion and considering the uncertainty relating to the outcome of this matter, no
appointed as a director in terms of Section 164(2) of the Act.
provision has been made. Our opinion is not modified in respect of this matter. (b)
In terms of order dated 19th January 2017, the CCI has imposed penalty of ` 9.28 crore pursuant to a reference filed by the Government of Haryana for alleged contravention of the provisions of the Competition Act, 2002 in August 2012 by the Company. The Company has filed an appeal before COMPAT. The Company believes it has a good case and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 1-
2-
As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.
(f)
With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
(g)
With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: I.
The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; (Refer Note No.36)
II.
The company does not have any long- term contracts including derivative contracts for which there were any material foreseeable losses.
As required by Section 143(3) of the Act, we report that: (a)
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our Audit.
III.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund.
(b)
In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
IV.
(c)
The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d)
In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
The company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016.Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the company and as produced to us by the management (Refer Note No10 (iv)).
(e)
On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being
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For P.L. TANDON & Co. Chartered Accountants Registration Number: 000186C
Place : KANPUR Date : 13th May, 2017
P.P.SINGH (PARTNER) Membership Number: 072754
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT Re: J.K. CEMENT LIMITED
The Annexure referred to in our Independent Auditor’s Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2017, We report that: i.
In respect of its Fixed Assets:
In respect of loans, secured or unsecured, granted by the Company to Companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013, according to the information and explanations given to us :
(a)
The Company has maintained proper records showing full particulars, including Quantitative details and situation of fixed assets other than furniture and fixtures and office equipments.
(a)
(b)
All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c)
According to the information and explanations given to us and the records examined by us and based on the examination of registered sale deed /transfer deed/ conveyance deed and other relevant records evidencing title provided to us, we report that, the title deeds, comprising all the immovable properties of land and building are held in the name of the company as at the balance sheet date, except the following:
Particular of land i. Leasehold land (one case) ii. Freehold land (Four cases )
ii.
Gross Block as at 31-03-2017 (` In lacs)
Net Block as at 31-03-2017 (` In lacs)
1353.07
306.36
225.64
225.64
iii.
iv.
In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made.
v.
In our opinion and according to information and explanations given to us, the company has not accepted any deposits within the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, therefore, the provisions of paragraph 3(v) of the Companies (Auditor’s Report ) order, 2016, are not applicable to the company.
vi.
We have broadly reviewed the books of account maintained by the company, pursuant to the rules made by the Central Government, for maintenance of cost records under sub section (1) of section 148 of the Companies Act,2013 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.
Remarks The title deeds are in the name of erstwhile company that merged with the company pursuant to a scheme of amalgamation and arrangement as approved by the honorable High Court.
The Company had granted Unsecured Loans to one company the terms and conditions of loans are not prima-facie prejudicial to the interest of the company. The company had repaid the loan during the year therefore other clauses are not applicable.
vii. According to the information and explanations given to us, in respect of statutory and other dues: (a)
The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and other material Statutory dues were in arrear as at 31st March, 2017 for a period more than six months from the date they became payable.
In respect of its Inventories: As explained to us, inventories have been physically verified during the year by the management at reasonable intervals and discrepancies noticed on verification between physical stocks and the book records were not material.
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(b)
According to the records of the company, income tax, sales tax, service tax, duty of custom, duty of excise or value added tax which have not been deposited on account of any dispute, are as follows :Amount (` in Lacs)
Nature of the Dues
Finance Act 2008 (State)
Environment and Health Cess
3239.34
2008-09 to 2015-16
Jodhpur High Court and Bangalore High Court
State Sales Tax Act
Sales Tax
887.72
1991-92 onwards
Various Court in Uttar Pradesh and Rajasthan
Rajasthan Entry Tax Rajasthan Entry Tax Uttar Pradesh Entry Tax Central Excise Act,1944
Entry Tax Interest on Entry Tax Interest on Entry Tax Excise Duty including Interest thereon
2392.49 2737.76 314.47 419.02
July, 2006 Onwards 2002-03 Onwards 2008-09 and 2009-10 1989
Appeal with Jodhpur High Court Appeal with Jodhpur High Court Appeal with Supreme Court Supreme Court
Finance Act, 1994 Central Excise Act,1944 Service Tax
Service Tax Excise Duty including Interest Service Tax on GTA
1085.42 1662.53 228.89
June, 2007 to March, 2008 Central Excise Department July, 1999 to March, 2008 Central Excise Department Central Excise Department
x.
xi.
xii.
Forum where Dispute is Pending
company, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
viii. According to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to banks, government or dues to debenture holder. ix.
Period to which Amount Relates
Name of the Statute
In our opinion and according to the information and explanations given to us, the debentures and term loans have been applied for the purposes for which they were obtained. According to the information and explanations give to us, no material fraud by the company or on the company by its officer or employees has been noticed or reported during the year. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.
xiv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. xv.
According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into non- cash transactions with directors or persons connected with him, Therefore the provisions of paragraph 3 (xv) of the Companies (Auditor’s Report ) order, 2016, are not applicable to the company.
xvi. The company is not required to be registered under section 45 – IA of the Reserve Bank of India Act, 1934.
In our opinion and according to the information and explanations given to us, the company is not a nidhi company. Therefore the provisions of paragraph 3 (xii) of the Companies (Auditor’s Report ) order, 2016,are not applicable to the company.
xiii. According to the information and explanations given to us and based on our examination of the records of the
For P.L. TANDON & Co. Chartered Accountants Registration Number: 000186C
Place; KANPUR Date : 13th May, 2017
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P.P.SINGH (PARTNER) Membership Number: 072754
ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF J.K. CEMENT LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of J.K. CEMENT LIMITED (“the Company”) as of 31st March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORS’ RESPONSIBILITY
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal
F-60
financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial
F-61
reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For P.L. TANDON & Co. Chartered Accountants Registration Number: 000186C
Place; KANPUR Date : 13th May, 2017
P.P.SINGH (PARTNER) Membership Number: 072754
BALANCE SHEET as at 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
3,67,445.95 10,482.45 556.98
3,52,056.03 15,240.46 199.76
3,32,975.22 19,117.98 197.51
4 5 6
47,037.88 14,243.27 8,907.44 4,48,673.97
37,326.62 13,730.62 12,785.10 4,31,338.59
28,715.68 6,019.46 11,215.52 3,98,241.37
7
49,806.98
42,893.12
50,978.54
8 9 10 11 12 13 14
6,526.00 14,813.42 41,785.02 99.20 4,521.82 17,419.33 1,34,971.77 5,83,645.74
6,337.79 16,569.39 36,734.94 109.74 5,687.22 547.36 16,161.84 1,25,041.40 5,56,379.99
3,224.71 13,940.46 38,354.13 114.62 3,145.97 467.43 18,686.34 1,28,912.20 5,27,153.57
15 16
6,992.72 1,85,038.76 1,92,031.48
6,992.72 1,62,036.70 1,69,029.42
6,992.72 1,54,863.67 1,61,856.39
17 18 19 20 21
2,31,845.63 17,671.71 2,237.99 21,401.44 5,271.37 2,78,428.14
2,30,226.15 13,974.70 1,828.53 21,652.25 5,652.69 2,73,334.32
2,15,218.86 11,687.35 1,659.47 20,747.20 6,051.88 2,55,364.76
22 23 24 25 26 13
16,577.24 20,517.96 65,996.85 8,335.82 1,601.60 156.65 1,13,186.12 3,91,614.26 5,83,645.74
19,499.40 28,064.66 57,994.83 7,052.08 1,405.28 1,14,016.25 3,87,350.57 5,56,379.99
26,189.31 22,925.76 53,519.57 5,897.73 1,400.05 1,09,932.42 3,65,297.18 5,27,153.57
Note
ASSETS
Non-current assets Property, plant and equipment Capital work-in-progress Other intangible assets Financial assets (i) Investments (ii) Other Other non-current assets Total non-current assets Current assets Inventories Financial assets (i) Current investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (iii) above (v) current financial assets Current tax assets (net) Other current assets Total current assets Total assets
2 3
EQUITY AND LIABILITIES
Equity Equity share capital Other equity Total equity Liabilities Non-current liabilities Financial liabilities (i) Borrowings (ii) Other financial liabilities Long-term provisions Deferred tax liabilities (net) Other non-current liabilities Total non-current liabilities Current liabilities Financial liabilities (i) Borrowings (ii) Trade payables (iii) Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Total Current liabilities Total liabilities Total equity and liabilities
The accompanying notes to the financial statements This is the Balance Sheet referred to in our report of even date For P.L.Tandon and Co., For and on behalf of the Board of Directors of Chartered Accountants J K Cement Limited ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
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Directors
STATEMENT OF PROFIT AND LOSS For the year ended 31st March, 2017
`/Lacs
27 28
4,42,070.71 5,118.68 4,47,189.39
For the year ended 31 March 2016 4,13,119.44 5,710.59 4,18,830.03
29
69,552.72 92.50 (325.67) 27,545.54 26,564.75 17,609.58 2,71,775.18 4,12,814.60 34,374.79 1,931.62 32,443.17
66,579.74 151.78 828.86 23,485.88 27,074.71 16,411.62 2,70,084.20 4,04,616.79 14,213.24 14,213.24
7,047.08 (7,047.08) (2.75) 6,488.28 25,957.64
3,060.00 (3,060.00) (700.07) 4,580.81 10,332.50
48.17 (16.67) 31.50 25,989.14
243.61 (84.31) 159.30 10,491.80
37.12 37.12
14.78 14.78
Note Revenue from operations Other income Total income
For the year ended 31 March 2017
EXPENSES Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods, stock-in-Trade and work-in-progress Employee benefits expense Finance costs Depreciation and amortisation expense Other expenses Total Expenses Profit/(loss) before tax & Exceptional items Exceptional Items Profit/(loss) before tax & after exceptional items Tax expense: Current tax MAT Credit entitlement Earlier Years Tax Adjustments Deferred tax Profit/ (loss) for the year Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans Income tax relating to remeasurement of defined benefit plans Total comprehensive income for the year Earnings per equity share (`) Basic Diluted
30 31 32 33 34
35
The accompanying notes to the financial statements This is the Statement of Profit & Loss referred to in our report of even date For P.L.Tandon and Co., For and on behalf of the Board of Directors of Chartered Accountants J K Cement Limited ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
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Directors
STATEMENT OF CASH FLOW for the year ended 31st March, 2017
`/Lacs
A.
For the year ended 31 March 2016
32,443.17
14,213.24
17,609.58 2,708.67 379.43 31.50 26,764.59 (4,015.82) (239.67) (148.80) (4,811.31) 21.48 70,742.82
16,411.62 16.20 47.74 159.30 26,721.77 (4,084.72) (165.51) (745.07) (1,615.30) 7.72 (7.81) 50,959.18
(7,546.70) 11,853.68 5,713.73 584.30 (6,913.86) 1,774.19 2,709.07 2,620.17 81,537.40 (6,032.33) 75,505.07
5,138.90 6,511.81 2,370.47 166.57 8,085.42 (2,628.93) (9,629.28) 954.92 61,929.06 (3,055.62) 58,873.44
10.54 (188.21) (9,471.59) 2,090.09 (31,307.38) (38,866.55)
4.88 (3,113.08) (8,445.43) 4,206.66 7.81 (31,633.36) (38,972.52)
CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax Adjustment for :Depreciation Loss on the sale of fixed assets Ind(AS) adjustment OCI adjustment Interest paid Interest received Profit on sale of current Investment Net fair value gain on financial assets measured at fair value through profit or loss Government grant Mines restoration charges Dividend Income Operating Profit Before Working Capital Changes Movements in working capital :Increase / (Decrease) in Trade Payables Increase / (Decrease) in Other financial liabilities Increase / (Decrease) in Other liabilities Increase / (Decrease) in provisions (Increase )/ Decrease in Inventories (Increase)/ Decrease in Trade receivables (Increase)/ Decrease in Other financial assets (Increase)/ Decrease in Other assets Cash Generated From Operations Less : Income Tax Paid (inclusive of tax deducted at source) Net Cash From Operating Activities
B.
For the year ended 31 March 2017
CASH USED IN INVESTING ACTIVITIES Movement in fixed deposit Net (purchase) of current Investment Net (purchase) of Investment Interest received Dividend Received Net (purchase) of Fixed Asset Net Cash Used In Investing Activities
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STATEMENT OF CASH FLOW for the year ended 31st March, 2017
`/Lacs
C.
For the year ended 31 March 2017
For the year ended 31 March 2016
1,619.48 (2,922.16) (26,919.25) (3,366.51) (31,588.44) 5,050.08 36,734.94 41,785.02 5,050.08
15,007.29 (6,689.91) (26,470.98) (3,366.51) (21,520.11) (1,619.19) 38,354.13 36,734.94 (1,619.19)
CASH USED IN FINANCING ACTIVITIES Net proceeds from Long Term Borrowings Net (Repayment) of Short Term Borrowings Interest Expense Paid (inclusive of tax deducted at source) Dividend paid Net Cash Used in Financing Activities Net Increase/( Decrease ) in Cash and Cash Equivalents Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year
Notes : 1. Cash and cash equivalents includes cash in hand and bank balances including Fixed Deposits. As per our report of even date attached For P.L.Tandon and Co., Chartered Accountants ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
For and on behalf of the Board of Directors of J K Cement Limited Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
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Directors
STATEMENT OF CHANGE IN EQUITY for the year ended 31st March, 2017
(A) EQUITY SHARE CAPITAL As at 31 March 2017 No. of Shares Amount 6,99,27,250.00 6,992.72 6,99,27,250.00 6,992.72
Balance at the beginning of the year Changes in equity share capital during the year Balance at the end of the reporting period
`/Lacs As at 31 March 2016 No. of Shares Amount 6,99,27,250.00 6,992.72 6,99,27,250.00 6,992.72
(B) OTHER EQUITY `/Lacs Reserves and Surplus
Remeasurement of defined benefit plans(Other Comprehensive Income)
Securities premium account
Debenture redemption reserve
General reserve
Retained earnings
Balance at 1st April 2015 Impacts due to Ind AS Adjustments Restated balance at 1st April 2015
25,988.60 25,988.60
6,662.50 6,662.50
66,501.31 66,501.31
55,711.26 47.74 55,759.00
Profit for the year Other comprehensive income/ (loss) for the year Total comprehensive income for the year Transfer to general reserve Transfer to debenture redemption reserve Dividend paid Dividend distribution tax Balance at 31st March 2016 Restated balance at the beginning of the reporting period
25,988.60 25,988.60
1,581.95 8,244.45 8,244.45
3,000.00 69,501.31 69,501.31
10,332.50 10,332.50 (3,000.00) (1,581.95) (2,797.09) (569.42) 58,143.04 58,143.04
-
555.72 25,957.64
-
26,513.36
31.50 31.50
(5,000.00) (1,710.65) (2,797.09) (569.42) 74,579.24
-
Impacts of Ind AS Adjustments of earlier year Profit for the year Add: Transfer from Profit & Loss Account Other comprehensive income for the year Total comprehensive income for the year Adjustment during the year Transfer to/(from) general reserve Transfer to debenture redemption reserve Dividend paid Dividend distribution tax Balance at 31st March 2017
-
1,710.65 1,710.65
-
-
(176.29) 5,000.00 -
25,988.60
9,955.10
74,325.02
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Total
- 1,54,863.67 47.74 - 1,54,911.41 10,332.50 159.30 159.30 159.30 10,491.80 (2,797.09) (569.42) 159.30 1,62,036.70 159.30 1,62,036.70
190.80
555.72 25,957.64 1,710.65 31.50 28,255.51 (176.29) (1,710.65) (2,797.09) (569.42) 1,85,038.76
NOTES
to the financial statements for the year ended 31st March, 2017
I.
SIGNIFICANT ACCOUNTING POLICIES
I
II
1.
Reporting Entity J K Cement Limited (“J K Cement Limited” or “the Company”) is a public limited company domiciled in India and has its registered office at Kamla Tower, Kanpur, Uttar Pradesh – 208 001. J K Cement Limited’s equity shares are listed on National Stock Exchange and Bombay Stock Exchange in India. Significant Accounting Policies The Company has consistently applied the following accounting policies to all periods presented in the financial statements.
Basis of preparation These financial statements have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard (‘Ind AS’) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (‘the Act’) and other relevant provisions of the Act. The financial statement up to year ended 31 March, 2016 were prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the applicable accounting standards prescribed in the Companies (Accounting Standards) Rules, 2014 issued by the Central Government and as per relevant provisions of the Companies Act, 2013 read together with Paragraph 7 of The Companies (Accounts) Rules, 2014. The financial statements for the year ended 31 March, 2017 are the first financial statements of the Company prepared under Ind AS. An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company is provided in note 42. These financial statements were authorised for issue by the Board of Directors on 13.05.2017.
2.
Basis of measurement The financial statements have been prepared on a historical cost basis except the following items, which are measured on alternative basis on each reporting date: -
Certain financial assets and liabilities that is measured at fair value (Refer Note 41)
-
Defined benefit liability/(assets): fair value of plan assets less present value of defined benefit obligation(Refer Note 38) F-67
3.
Functional and presentation currency These financial statements are presented in Indian National Rupee (‘INR’), which is the Company’s functional currency. All amounts have been rounded to the nearest lacs unless otherwise indicated.
4.
Use of judgements and estimates In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. A. Judgements Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below: -
Classification of leases into finance and operating lease
-
Classification of financial assets: assessment of business model within which the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding.
B. Assumptions and estimation uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the financial statements for the year ended 31 March 2017 is included below: -
Measurement of defined benefit obligations: key actuarial assumptions
-
Recognition of deferred tax assets: availability of future taxable profit against which carry-forward tax losses can be used;
-
Impairment test: key assumptions underlying recoverable amounts, including the recoverability of development costs;
NOTES
to the financial statements for the year ended 31st March, 2017
5.
-
Useful life and residual value of fixed assets
-
Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources
-
Impairment of financial assets: key assumptions used in estimating recoverable cash flows
6.
Classification of Assets and Liabilities as Current and Non-Current The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: -
Expected to be realised or intended to be sold or consumed in normal operating cycle.
-
Held primarily for the purpose of trading
-
Expected to be realised within twelve months after the reporting period, or
-
Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as a separate items (major components) of property, plant and equipment. Any gain on disposal of property, plant and equipment is recognised in Profit and loss account. Transition to Ind AS On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognised as at 1 April 2015 measured as per the previous GAAP and use that carrying value as the cost of the property, plant and equipment. Subsequent Measurement Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company.
All other assets are classified as non-current. An liability is treated as current when: -
It is expected to be settled in normal operating cycle.
-
It is held primarily for the purpose of trading
-
It is due to be settled within twelve months after the reporting period, or
-
Property, plant and equipment Recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred upto the date when the assets are ready to use. Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed.
Depreciation Depreciation on fixed assets is calculated on Straight Line Method using the rates arrived at based on the estimated useful lives given in Schedule II of the Companies Act, 2013. Depreciation on additions due to machinery spares is provided retrospectively from the date the related assets are put to use. Depreciation on additions to or on disposal of assets is calculated on pro-rata basis. Leasehold land is being amortised over the period of lease tenure.
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current. Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes, if any, are accounted for prospectively.
Deferred tax liabilities are classified as non-current liabilities. The operating cycle is the time between the acquisition of the assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
7.
F-68
Intangible assets Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Intangible assets
NOTES
to the financial statements for the year ended 31st March, 2017
are amortized on straight line method basis over the estimated useful life. Estimated useful life of the Software and designing rights is considered as 3 years.
Debt instruments at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met:
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company.
-
it is held within a business model whose objective is to hold assets in order to collect contractual cash flows.
-
the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.
Amortisation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively. An intangible asset with an indefinite useful life is not amortised but is tested for impairment at each reporting date. 8.
Financial instruments A financial instrument is any contract that gives rise to asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency, foreign exchange forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract. Financial Assets Initial recognition and measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the company commits to purchase or sell the asset. Classifications The company classifies its financial assets as subsequently measured at either amortised cost or fair value depending on the company’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Business model assessment The company makes an assessment of the objective of a business model in which an asset is held at an instrument level because this best reflects the way the business is managed and information is provided to management.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (‘EIR’) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. Debt instrument at fair value through Other Comprehensive Income (FVOCI) Debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI. Debt instrument at fair value through profit and loss (FVTPL) Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. In addition, the company may elect to classify a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. Equity Instruments All equity instruments in scope of Ind AS 109 are measured at fair value. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis.
F-69
NOTES
to the financial statements for the year ended 31st March, 2017
All other Financial Instruments are classified as measured at FVTPL.
impairment methodology applied depends on whether there has been a significant increase in credit risk.
Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the company’s balance sheet) when:
With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables.
-
The rights to receive cash flows from the asset have expired, or
-
The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below:
When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company’s continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.
Financial Liabilities measured at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own
Impairment of financial assets The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The F-70
NOTES
to the financial statements for the year ended 31st March, 2017
credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.
completion and to make the sale. ii)
Work-in-progress, finished goods and traded goods have been valued as per the principles and basis consistently followed.
Derecognition of financial liabilities The company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
iii)
Provision for obsolete/ old inventories is made, wherever required.
iv)
Inter unit transfers of material for further processing is being made at market rate prevailing at the time of such transfers and inventories of such “transfers” could not be identified separately. Therefore for the purpose of determining weighted average cost, transfer price has been considered. In the opinion of the management such valuation have no material impact on inventory valuation and such stock at the year-end are shown as part of raw materials inventory.
Reclassification of financial assets The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The company’s senior management determines change in the business model as a result of external or internal changes which are significant to the company’s operations. Such changes are evident to external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest. 9.
Inventories i) Inventories are valued as follows: Raw materials, packing Lower of cost and net realisable value. materials, stores and Cost is determined on a moving weighted spares average basis. Materials and other items held for use in the production of inventories are at cost not written down below costs, if finished goods in which they will be incorporated are expected to be sold at or above cost. Work-in-progress, Lower of cost and net realisable value. finished goods and Cost includes direct materials, labour traded goods and a proportion of manufacturing overheads. Cost of finished goods includes excise duty, wherever applicable. Waste
At net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of F-71
10. Provisions Contingent Liabilities and Assets Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurance or nonoccurrence of one or more future uncertain events not wholly within the control of the company, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. Contingent Assets are not recognized in the financial statements. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
NOTES
to the financial statements for the year ended 31st March, 2017
Mines Restoration Expenditure The expenditure on restoration of the mines based on technical estimates by Internal/External specialists is recognized in the accounts. The total estimated restoration expenditure is apportioned over the estimated quantity of mineral resources (likely to be made available) and provision is made in the accounts based on minerals mined during the year. 11. Revenue Recognition (a) Sale of goods Revenue is recognised when the significant risk and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade discounts and volume rebates.
Government grants that compensate the Company for expenses incurred are recognised in profit or loss as income on a systematic basis in the periods in which the expense is recognised. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income. 13. Employee benefits (i) Short term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (ii)
(b) Revenue (other than sale) is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. (c)
Interest income is recognized using the EIR method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate.
Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. The company has following defined contribution plans: a) b)
Provident fund Superannuation scheme
(iii) Defined benefit plans The company net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
(d) Insurance Claims: Claims lodged with the insurance Companies are accounting on accrual basis to the extent these are measurable and ultimate collection is reasonably certain. 12. Government Grants and Subsidies Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense
F-72
NOTES
to the financial statements for the year ended 31st March, 2017
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Nonmonetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.
(income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The company has following defined benefit plans: a)
Gratuity The company provides for its gratuity liability based on actuarial valuation of the gratuity liability as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary and contributes to the gratuity fund formed by the Company. The contributions made are recognized as plan assets. The defined benefit obligation as reduced by fair value of plan assets is recognized in the Balance Sheet. Re-measurements are recognized in the Other Comprehensive Income, net of tax in the year in which they arise.
(iv) Other long-term employee benefits The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise. The company has following long term employment benefit plans: a)
Leave encashment Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment, which is a defined benefit scheme, is provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary.
14. Foreign currency transactions Transactions in foreign currencies are translated into the Company’s functional currency at the exchange rates at the dates of the transactions.
F-73
15. Borrowing Cost General and specific borrowing costs that are directly attributable to the acquisition, construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred. 16. Income tax Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income i)
Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company: a)
Has a legally enforceable right to set off the recognised amounts; and
b)
Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
NOTES
to the financial statements for the year ended 31st March, 2017
ii)
Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (‘CGUs’). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if: a)
The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b)
The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
17. Impairment of non-financial assets At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 18. Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors of the Company has been identified as being the chief operating decision maker by the Management of the company. Refer note 37 for segment information presented. 19. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 20. Leases Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. F-74
NOTES
to the financial statements for the year ended 31st March, 2017
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. 21. Non Current Assets held for sale The company classifies non current assets and (or disposal groups) as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the sale expected within one year from the date of classification. For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded met only when the assets or disposal group is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets (or disposal group), its sale is highly probable; and it will genuinely be sold, not abandoned. The group treats sale of the asset or disposal group to be highly probable when: •
The appropriate level of management is committed to a plan to sell the asset (or disposal group),
•
An active programme to locate a buyer and complete the plan has been initiated
•
The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value,
22. Investment Property (Property Held For Earning Income Eg Rent) Property (land or a building or part of a building or both) held to earn rentals or for capital appreciation or both, rather than for, use in the production or supply of goods or services or for administrative purposes; or sale in the ordinary course of businesses are classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Investment properties are depreciated using the straight-line method over their estimated useful lives. 23. EPS Basic earnings per share are computed by dividing the profit for the year by the weighted average number of equity shares outstanding during the period. Diluted earnings per shares is computed by dividing the profit for the year by the weighted average number of equity shares considered for deriving basic earnings per shares and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dividend Income from investments is recognized when the right to receive payment is established. The company reports separately both assets and liabilities, and income and expenses. Offsetting in the statements of profit and loss or balance sheet, except when offsetting reflects the substance of the transaction or other event, detracts from the ability of users both to understand the transactions, other events and conditions that have occurred and to assess the entity’s future cash flows. The company presents income, by netting the income with related expenses arising on the same transaction. The company presents on a net basis gains and losses arising from a group of similar transactions. However the company presents such gains and losses separately if they are material. Abbreviation Used
•
The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and
•
Actions required to complete the plan indicate that it is unlikely those significant changes to the plan will be made or that the plan will be withdrawn.
F-75
II.
a. b. c.
CGU OCI FVOCI
d. e.
FVTPL EIR
REPORTING ENTITY
Cash Generating Unit Other Comprehensive Income Fair Value through Other Comprehensive Income Fair Value through Profit & Loss Effective Interest rate
J K Cement Limited (“J K Cement Limited” or “the Company”) is a public limited company domiciled in India and has its registered office at Kamla Tower, Kanpur, Uttar Pradesh – 208 001. J K Cement Limited’s equity shares are listed on National Stock Exchange and Bombay Stock Exchange in India.
23,957.95
3,36,953.34
Non factory buildings
Plant and equipment
15,236.60
F-76
1,490.88
177.73
-
4,219.58
298.13
254.48
3,311.61
-
36,791.40
2,649.46 36,791.40
-
265.93
-
556.82
369.78
660.80
348.81
15,130.30
4,448.36
4,390.49
7,970.65
26,559.14
26,157.21
17,254.49
As at 31 March 2016
3,128.14
13,665.70
-
1,023.79
89.43
6,470.20
3,129.54
15,240.46
-
1,04,671.26
786.06
1,289.72
-
-
1,04,671.26
2,054.80 1,04,671.26
-
786.06
55.66
1,047.63
1,549.69
1,475.86
222.60
89,691.98
2,634.09
5,152.89
543.48
1,576.09
-
Additions as per Ind As
378.76
17,431.15
516.24 17,431.15
-
166.37
8.19
628.53
302.87
371.97
296.04
12,821.25
708.93
1,610.76
-
-
Ind AS Adj
Depreciation
2,054.80
-
786.06
55.66
1,047.63
1,549.69
1,475.86
222.60
89,691.98
2,634.09
5,152.89
-
As at 31 March 2016
-
-
17,431.15
516.24 17,431.15
-
166.37
8.19
628.53
302.87
371.97
296.04
12,821.25
708.93
1,610.76
3,343.02
6,562.82
-
As at 31 March 2017
518.64
-
952.43
63.85
1,813.81
1,847.98
1,615.56
(176.29) 2,747.33 2,614.68 1,19,487.73 2,614.68 1,19,487.73
-
-
-
(137.65)
4.58
232.27
2,490.94 1,00,022.29
-
200.83
Disposal
265.30 1,04,671.26
-
265.30 1,04,671.26
47.78
-
-
-
-
2.33
98.11
116.44
-
0.64
Disposal
Additions as per Ind As
783.49 16,375.15
783.49 16,375.15
57.43
-
105.43
8.19
300.45
295.32
373.53
183.67
726.06 12,610.23
Ind AS Opening as Additions Adj per Ind AS
-
55.66
89.43
321.33
-
105.43
8.19
300.45
295.32
373.53
183.67
623.34 88,561.41 15,591.66
2,054.80 1,04,671.26
1,047.63
10,297.52
-
680.63
47.47
747.18
1,723.82
49.48 16,265.68 6,585.01 4,86,933.68 4,758.01 10,482.45 11,343.02 4,97,416.13
1,549.69
3,491.63
1,200.44
38.93
1,256.70
-
222.60
543.48
77,198.19 11,884.17
2,090.61
1,576.09
623.34 88,561.41 15,591.66
623.34
3,577.44
Ind AS Adj
Depreciation Opening Ind AS as per Ind Additions Adj AS
-
-
-
-
(3,270.50)
7.69
380.33
1,475.86
89,691.98
8,870.32 3,60,829.31 3,408.61
2,634.09
31,006.34
1.16 5,029.13
-
525.63
5,152.89
As at 31 March 2016
30,022.07
As at 31 March 2017
87,938.07
-
87,938.07
1,100.48
-
680.63
47.47
747.18
1,256.70
1,200.44
38.93
77,198.19
2,090.61
3,577.44
-
As at 1 April 2015
25,204.24
20.90
Disposal
4,251.68 4,71,967.75
3,877.52
374.16 4,56,727.29
4.82
-
-
-
2.67
142.78
4,680.32
223.89 3,54,569.33
-
-
-
Disposal
* Cost incurred by company ownership of which vest with State Electricity Boards & Indian Railways.
-
13,665.70 4,56,727.29 15,240.46 4,71,967.75
1,023.79
89.43
6,470.20
3,129.54
3,128.14
4,680.32
3,54,569.33
26,559.14
26,157.21
17,254.49
Opening as Additions per Ind AS
Leasehold land Total Capital work-in-progress Total
-
Ind AS Adj
Gross Block
- 4,40,654.61 35,564.82
19,117.98
-
13,665.70 4,56,727.29 15,240.46 4,71,967.75
2,601.19
- 4,21,536.63 35,564.82
Assets under Finance Lease
1,023.79
Other assets
6,470.20
Railway sidings #
89.43
3,129.54
Furniture and fixtures
Rolling stock
3,128.14
3,54,569.33
Plant and equipment
4,680.32
26,559.14
Non factory buildings
Plant & equipment-Others #
26,157.21
Vehicles
17,254.49
Factory building
As at 31 March 2016
4,40,654.61
19,117.98
Freehold land
Tangible Assets
Particulars
Total
Capital work-inprogress
9,097.20
4,21,536.63
12,179.64
Total
Leasehold land
846.06
-
846.06
Other assets
89.43
2,250.62
Assets under Finance Lease
89.43
2,250.62
Railway sidings #
Rolling stock
2,834.08
3,016.44
3,016.44
2,834.08
Vehicles
1,368.71
Furniture and fixtures
2,017.89
3,353.45
3,36,953.34 17,839.88
23,957.95
22,803.76
1,368.71
3,082.44
18,319.04 (3,082.44)
22,803.76
Plant & equipmentOthers #
Gross Block
Ind AS Opening as Additions Adj per Ind AS
Freehold land
As at 1 April 2015
Factory building
Tangible Assets
Particulars
2. PROPERTY, PLANT AND EQUIPMENT
23,925.05
21,004.32
17,254.49
As at 31 March 2016
`/Lacs
11,610.90
-
237.73
33.77
5,422.57
1,579.85
1,652.28
4,457.72
15,240.46
As at 31 March 2017
11,610.90 3,52,056.03 15,240.46 3,67,296.49
-
237.73
33.77
5,422.57
1,579.85
1,652.28
4,457.72
13,518.35 3,67,445.95 10,482.45 3,77,928.40
-
337.29
25.58
8,483.71
1,643.65
1,793.05
4,510.49
2,64,877.35 2,60,807.02
23,925.05 27,663.32
21,004.32 23,459.25
17,254.49 25,204.24
As at 31 March 2016
Net Block
`/Lacs
3,52,093.20 3,67,296.49
19,117.98
3,32,975.22 3,52,056.03
10,455.82
-
165.43
41.96
1,503.44
1,577.38
1,816.00
1,329.78
2,59,755.15 2,64,877.35
21,867.34
19,226.32
15,236.60
As at 1 April 2015
Net Block
NOTES
to the financial statements for the year ended 31st March, 2017
Total
Goodwill
Computer Software
Intangible Assets
1,891.69
742.70
1,148.99
As at 31 March 2016
1,852.97
Total
Particulars
1,110.27
742.70
Goodwill
As at 1 April 2015
Computer Software
Intangible Assets
Particulars
3. OTHER INTANGIBLE ASSETS
-
Ind AS Adj
Ind AS Adj
-
38.72
38.72 1,891.69
1,891.69
742.70
1,148.99
Opening
535.65
535.65 -
1,691.93
742.70
2,427.34
949.23
742.70
As at 31 March 2016
1,655.46
742.70
912.76
As at 1 April 2015
1,684.64
As at as per Deletions 31 March Additions / Adj 2017 Ind AS
-
742.70
1,148.99
As at Additions Disposal 31 March 2016
Gross Block
1,852.97
742.70
1,110.27
Opening
as per Ind AS
Gross Block
-
-
Ind AS Adj
Ind AS Adj
1,691.93
742.70
949.23 178.43
178.43
-
-
Ind AS Adj
Depreciation
36.47
36.47
Ind AS Additions Adj
as per Additions Ind AS
Opening
1,655.46
742.70
912.76
Opening
as per Ind AS
Depreciation
-
949.23 1,691.93
742.70
178.43
-
178.43 -
1,870.36
742.70
1,127.66
Additions As at as per Deletions 31 March Ind As / Adj 2017
36.47
-
36.47
Additions As at as per Disposal 31 March Ind As 2016
`/Lacs
`/Lacs
199.76
-
199.76
As at 31 March 2016
199.76
-
199.76
556.98
-
556.98
As at As at 31 March 31 March 2016 2017
Net Block
197.51
-
197.51
As at 1 April 2015
Net Block
NOTES
to the financial statements for the year ended 31st March, 2017
F-77
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
5,043.18
5,043.18
5,043.18
659.01
659.01
-
5.20
3.40
8.00
-
107.71
107.71
37.50
37.50
37.50
2,717.30
2,717.30
2,717.30
- 33027 (31st March 2016 : 33027, 1st April 2015 : 33027) 3% cumulative 12 years compulsory convertible (Face value AED 1000) preference shares in J. K. Cement (Fujairah) FZC.#
4,886.70
4,886.70
4,886.70
- 34370(31st March 2016 : 26534, 1st April 2015 : 18362) 3% cumulative 11 years redeemable (Face value AED1000) preference shares in J. K. Cement (Fujairah) FZC.#
6,074.73
4,790.79
3,133.84
- 34370 (31st March 2016 : 26534, 1st April 2015 : 25707) 3% cumulative 12 years redeemable (Face value AED1000) preference shares in J. K. Cement (Fujairah) FZC.#
6,074.73
4,790.79
4,387.41
- 3759 (31st March 2016 : 3759, 1st April 2015 : 3759) 3% cumulative 13 years compulsory convertible (Face value AED1000) preference Share in J.K.Cement(Fujairah) FZC#
668.30
668.30
668.30
- 15521 (31st March 2016 : 15521, 1st April 2015 : 10931) 3% cumulative 14 year compulsory convertible (Face value AED1000) preference Share in J.K.Cement(Fujairah) FZC#
2,626.07
2,626.07
1,852.75
- 34370 (31st March 2016 : 26534, 1st April 2015 : 11017) 3% cumulative 13 years Redeemable (Face value AED1000) preference shares in J.K.Cement (Fujairah)FZC#
6,074.72
4,790.79
1,880.27
- 34370 (31st March 2016 : 26533, 1st April 2015 : 13405) 3% cumulative 14 years Redeemable (Face value AED1000) preference shares in J.K.Cement (Fujairah)FZC#
6,074.72
4,790.60
2,287.83
0.08 -
0.11 1,318.83
773.43 835.92
4.
INVESTMENTS
A.
Investment in equity instruments (fully paid-up) Unquoted Subsidiary Companies -36538 (31st March 2016 : 36538, 1st April 2015 : 36538) equity shares of J. K. Cement (fujairah) FZC.** (Face value AED1000) - 6590070 (31st March 2016 : 6590070, 1st April 2015 : nil) equity shares of Jaykaycem Central Limited Others - 5200 (31st March 2016 : 3400, 1st April 2015 : 8000) equity shares of ReNew Wind Energy AP (Pvt.) Ltd. (Face value ` 10) - 3140101 (31st March 2016 : 3140101, 1st April 2015 : 3140101) equity shares of VS Legnite Power Pvt. Ltd. (Face value ` 10) at FVTPL - 375000 (31st March 2016 : 375000 1st April 2015 : 375000) equity shares of Bander Coal Company Pvt. Ltd.(Face Value ` 10)- joint operation
B.
Investment in preference shares (fully paid up) Unquoted Subsidiary Companies - 18300 (31st March 2016 : 18300, 1st April 2015 : 18300) 3% cumulative 11 years compulsory convertible (Face value AED1000) preference shares in J. K. Cement (Fujairah) FZC.#
- Share Application Money-Redeemable preference Shares - Share Application Money-Redeemable preference Shares
F-78
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs
4.
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
-
95.54
95.54
4,600.00
-
-
500.00
-
-
500.00
-
-
495.64
-
-
47,037.88 45,542.24
37,326.62 37,326.62
28,715.68 28,715.68
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10,394.66 130.93 12.03 3,705.65 14,243.27
10,620.91 89.01 82.55 2,938.15 13,730.62
2,155.85 129.69 150.61 3,583.31 6,019.46
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
8,854.83 26.92 25.69 8,907.44
12,737.58 26.36 21.16 12,785.10
11,148.14 41.51 25.87 11,215.52
INVESTMENTS (CONTD.) Others at FVTPL - 2785552 (31st March 2016 : 2785552, 1st April 2015 : 2785552) 0.01% cumulative redeemable Preference shares in VS Legnite Power Pvt. Ltd. (Face value ` 10) Investment In Debenture (Jaykaycem (Central) Ltd) Unquoted Investments 46000000 Zero Percent Unsecured Compulsorily convertible Debenture Of ` 10 each Investment In Mutual Fund 5000000 HDFC fmp 1302D Sep2016(1)Regular-Growth -Series-37 Maturity date2020 5000000 HDFC fmp 1188D Mar-2017(1)-Regular-Growth-Series38Maturity date-29-6-2020 Investments in Bonds 50 State bank of India SR-111 8.39 BD perpetual Bonds Face value per Bonds ` 1000000 purchased @991285 Aggregate amount of unquoted investment
Notes: ** 19538 Equity Shares are pledged with IDBI. #199149 Preference Shares are pledged with IDBI.
`/Lacs
5.
OTHER NON-CURRENT FINANCIAL ASSETS
Fixed Deposits Advance to Employees Vehicle Loan Recoverable Security Deposits
`/Lacs
6.
OTHER NON-CURRENT ASSETS
Capital Advances Prepaid Rent Deferred Employee Compensation
F-79
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs
7.
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
7,206.33 7,395.02 7,776.74 16.45 26,074.18
5,464.66 6,978.10 7,861.01 23.43 21,320.47
5,785.26 9,027.74 6,648.71 14.95 29,215.54
1,338.26 49,806.98
1.91 1,243.54 42,893.12
1.20 285.14 50,978.54
INVENTORIES
(Valued at lower or/and cost or net realisable value ) Raw Materials Work-in-Process Finished goods Stock-in-Trade Consumable Stores and Spares Goods in transit : - Raw Materials - Consumable Stores and Spares
Stock of Stores, Spare parts also includes stock of Project material aggregate to ` Nil (31 March 2016 is ` 156.57 lacs and 1st April 2015 ` 937.50 Lacs).
`/Lacs
8.
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
-
1,501.48
-
-
2,002.64
-
1,076.47
522.57
-
575.19
525.15
-
-
-
548.52
-
-
545.45
372.44
67.09
546.68 62.71
-
339.27
320.03
-
848.33
801.04
-
531.26
-
500.81 1,000.28 1,500.46 1,500.35
-
400.28 -
6,526.00 6,526.00
6,337.79 6,337.79
3,224.71 3,224.71
CURRENT INVESTMENTS
Investment in Mutual Funds at FVTPL Quoted - Nil ( 31st March 2016 : 92772.634, 1st April 2015 : nil) units in IDBI Liquid Fund made Growth - Nil (31st March 2016 : 84283.316, 1st April 2015 : nil) units in SBI Premium Liquid Fund -6568620.89 (31st March 2016 : 3489841.073, 1st April 2015 : nil) units in ICICI Prudential Regular Income - 1774748.873 (31st March 2016 : 1774748.873, 1st April 2015 : nil) units in HDFC Short Term Fund-Growth - Nil(31st March 2016 : nil, 1st April 2015 : 50000000) units in BOI AXA FIXED MATURITY PLAN-SERIES13(380) - Nil( 31st March 2016 : nil, 1st April 2015 : 5000000) units in Baroda Pioneer FMP-372 Days - Nil(31st March 2016 : nil, 1st April 2015 : 5000000) units in HDFC FMP-SERIES 29 - 2721606.837(31st March 2016 : 493622.399, 1st April 2015 : 493622.3986) units in Edelweiss Erstwhile J.P.Morgan Active Bond Fund Institutional - Nil(3 1st March 2016 : 2721606.837, 1st April 2015 : 2721606.837) units in JP morgan govt. Securities fund-regular plan Growth option -Nil( 31st March 2016 : 2638078.471, 1st April 2015 : 2638078.471) units in SBI magnum Guilt Fund - Nil (31st March 2016 : 1652073.352, 1st April 2015 : nil) units in SBI magnum Guilt Fund -Nil (31st March 2016 : nil, 1st April 2015 : 26741.654) units in IDBI Liquid Fund - 3180661.58(31st March 2016 : nil, 1st April 2015 : nil) units in Axis Mutual Fund - 39292.91(31st March 2016 : nil, 1st April 2015 : nil) units in SBI Premier Liquid fund -46894.59 (31st March 2016 : nil, 1st April 2015 : nil) units in HDFC Liquid Fund Growth -86538.37( 31st March 2016 : nil,1st April 2015 : nil) units in IDBI Liquid Fund -Regular Plan-Growth Aggregate Amount of quoted investments
F-80
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs
9.
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
6,224.79
3,401.95
3,178.70
8,588.63 739.12 739.12 14,813.42
13,167.44 602.00 602.00 16,569.39
10,761.76 566.22 566.22 13,940.46
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
3,173.20
4,141.79
7,207.06
8,288.98 30,421.23 (151.93) 28.31 25.23 41,785.02
2,919.59 29,764.84 (121.29) 27.27 2.74 36,734.94
2,507.83 28,753.61 (145.97) 28.03 3.57 38,354.13
Specified Denomination Notes
Other Denomination Notes
Total
36.43
6.86 84.06 60.22 0.10 30.60
43.29 84.06 60.22 36.53 30.60
TRADE RECEIVABLES
Secured Considered good Unsecured Considered good Considered doubtful Less: Provision for doubtful balances
`/Lacs
10. CASH AND CASH EQUIVALENTS i.
ii. iii.
Balance with banks: - In current accounts - In Fixed Deposits a) Upto 3 months b) more than 3 months & upto one year Less: Overdraft against Fixed Deposits Cash on hand Cheques in hand
iv.
Disclosures as required by notification no. 244 dated 30.03.2017 issued by Government of India.
Particulars Closing cash in hand as on 08.11.2016 (+) Permitted receipts (-) Permitted payments (-) Amount deposited in Banks Closing cash in hand as on 30.12.2016
36.43
`/Lacs As at 31 March 2016
As at 1 April 2015
99.20
109.74
99.20
109.74
114.62 114.62
As at 31 March 2017
11. OTHER BANK BALANCES Earmarked balances with banks: Bank balances other than mentioned in Note No 10
F-81
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs
12. OTHER CURRENT FINANCIAL ASSETS Other Loans and Advances - Doubtful Provision for doubtful advances Loans and Advances to Related Parties* Other Loans and Advances** Advance to Employees Interest Accrued Others
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
49.63 (49.63) 1,585.59 170.79 2,757.80 7.64 4,521.82
31.41 (31.41) 4,221.79 368.35 258.13 832.07 6.88 5,687.22
31.93 (31.93) 1,471.75 391.11 322.22 954.01 6.88 3,145.97
* Pertains to Jaykaycem (Central) Ltd. ` NIL (31 March 2016 ` 4206.79 Lacs and 1 April 2015 is ` 1456.75 Lacs) and Loan - J.K.Cement (Western) Ltd. ` NIL (31 March 2016 is ` 15 Lacs and 1 April 2015 is ` 15 Lacs ) **Includes Government Subsidy of ` 1403.11 Lacs (31 March 2016 is NIL).
`/Lacs
13. CURRENT TAX (NET) Advance tax (Net of provision for income tax of ` 7047.08 Lacs)
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
(156.65)
547.36
(156.65)
547.36
467.43 467.43
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
5,806.66
5,273.86
10,886.66
18.85 2,368.01 7,871.93 15.45 1,338.43 17,419.33
15.15 2,127.40 6,954.80 13.59 1,777.04 16,161.84
15.15 473.15 5,237.38 13.59 2,060.41 18,686.34
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
6,992.72
6,992.72
6,992.72
6,992.72
6,992.72
6,992.72
`/Lacs
14. OTHER CURRENT ASSETS Balances with excise and custom department Prepayments - Rent - Expenses Advances recoverable in cash or in kind Deferred employee compensation Others
`/Lacs
15. SHARE CAPITAL Authorised: 8,00,00,000 (As at 31 March 2016 and 1 April 2015 - 8,00,00,000) equity shares of ` 10/- each Issued, subscribed & fully paid up: 6,99,27,250 (As at 31 March 2016 and 1 April 2015 - 6,99,27,250) equity Shares of ` 10/- each
F-82
NOTES
to the financial statements for the year ended 31st March, 2017
a.
Terms and rights attached to equity shares Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However, same is subject to the approval of the shareholders in the Annual General Meeting.
b.
Reconciliation of number of shares outstanding at the beginning and end of the year : `/Lacs
c.
Outstanding at the 1 April 2015
Number of Shares 6,99,27,250
Amount 6,992.72
Equity Shares issued during the year in consideration for cash Outstanding at the 31 March 2016 Equity Shares issued during the year in consideration for cash Outstanding at the 31 March 2017
6,99,27,250 6,99,27,250
6,992.72 6,992.72
Shareholders holding more than 5% shares in the company `/Lacs As at 31 March 2017 No. of Shares
Percentage
As at 31 March 2016 No. of Shares
As at 1 April 2015
Percentage
No. of Shares
Percentage
2,26,55,100 1,42,79,843 72,28,418
32.40% 20.42% 10.34%
Yadu International Ltd
2,99,49,518
42.83%
2,26,55,100
32.40%
Yadupati Singhania Juggilal Kamlapat Holding Ltd.
1,22,84,198 -
17.57% -
1,42,76,002 72,94,418
20.41% 10.43%
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
25,988.60 25,988.60
25,988.60 25,988.60
25,988.60 25,988.60
8,244.45 1,710.65 9,955.10
6,662.50 1,581.95 8,244.45
5,030.00 1,632.50 6,662.50
69,501.31 176.29 5,000.00 74,325.02
66,501.31
64,540.05 2,038.74 4,000.00 66,501.31
16. OTHER EQUITY a.
b.
c.
Securities premium reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year Debenture redemption reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year General reserve Balance at the beginning of the year Less :Adjustment during the year Add: Transfer from retained earnings Balance at the end of the year
F-83
3,000.00 69,501.31
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
58,143.04 555.72 25,957.64 5,000.00 1,710.65 2,797.09 569.42 74,579.24
55,711.26 47.74 10,332.50 3,000.00 1,581.95 2,797.09 569.42 58,143.04
42,236.00 6,781.88 15,692.39 4,000.00 1,632.50 2,797.09 569.42 55,711.26
159.30 31.50 190.80 1,85,038.76
159.30 159.30 1,62,036.70
1,54,863.67
16. OTHER EQUITY (CONTD.) d.
Retained earnings Balance at the beginning of the year Add: Impacts of Ind AS Adjustments of earlier year Add: Net profit for the year Less: Transfer to general reserve Less: Transfer to debenture redemption reserve Less: Dividend on equity shares Less: Dividend distribution tax on equity shares
e.
Remeasurement of defined benefit plans Balance at the beginning of the year Addition during the year Balance at the end of the year
Nature and purpose of other reserves/ other equity General reserve The Company appropriates a portion to general reserves out of the profits either as per the requirements of the Companies Act 2013 (‘Act’) or voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act Remeasurement of defined benefit plans “Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits: (a) actuarial gains and losses (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset)” Dividend The following dividends were paid by the Company for the year. `/Lacs Final dividend for the year ended 31 March 2016 ` 4 per share (31 March 2015: ` 4 per share) Dividend Distribution tax on final dividend
F-84
31 March 2017 2,797.09 569.42 3,366.51
31 March 2016 2,797.09 569.42 3,366.51
NOTES
to the financial statements for the year ended 31st March, 2017
After the reporting date, the following dividends were proposed by the board of directors. The dividends have not been recognised as liabilities and there are no tax consequences. `/Lacs Proposed dividend for the year ended 31 March 2017 ` 8 per share (31 March 2016: ` 4 per share) Dividend Distribution tax on final dividend
31 March 2017 5,594.18 1,138.84 6,733.02
31 March 2016 2,797.09 569.42 3,366.51
Capital management The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company’s target is to achieve a return on capital above 13.45%; in previous year the return was 7.26%. The weighted-average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 9.93% (Previous year: 10.06%). The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity. `/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
66,197.39
66,100.23
59,491.94
7,300.00
-
5,300.00
1,72,103.32 11,246.98 539.29 239.79 7,318.54
1,67,931.60 13,721.75 321.41 174.63 5,537.02
1,66,110.30 12,291.48 371.81 183.02 2,879.24
5,005.54 531.68 2,31,845.63
4,880.61 648.34 2,30,226.15
5,016.97 876.90 2,15,218.86
17. BORROWINGS Secured Non convertible debentures Less: Current maturities of non convertible debentures (Refer note 24) Term loans (Secured) - From banks Less: Current maturities of term loans (Refer note 24) - Vehicle loans Less: Current maturities of Vehicle loans (Refer note 24) - VAT loans from Government Unsecured Deferred sales tax liabilities Less: Current maturities of Deferred sales tax liabilities (Refer note 24)
F-85
NOTES
to the financial statements for the year ended 31st March, 2017
a. Securities (1) NCD as shown above includes ` 302.61 Lacs, 31 March 2016 ` 399.82,1 April 2015 ` 483.51 Lacs towards amortised expenses. i)
Non Convertible Debentures(NCDs): ` 66500.00 lacs (` 66500.00 lacs)
ii)
Security for NCDs for ` 36500.00 lacs ( ` 36500.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge on the assets specified in (2)(i)(b) below.
iii)
Security for NCDs for ` 30000.00 lacs (` 30000.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of movable fixed assets pertaining to Company’s existing cement plant at village Muddapur Karnataka.
(2) Term Loan as shown above includes ` 344.92 Lacs, 31 March 2016 ` 157.47,1 April 2015 ` 152.82 Lacs towards amortised expenses. (i) a)
Term Loans secured against Cement Plants at Rajasthan From Canara Bank: ` 2475.56 lacs (` 3575.85 lacs) & From Export Import Bank of India: ` 4464.75 lacs (` 5000 lacs) Secured by equitable mortgage of immovable properties and hypothecation of movable assets pertaining to undertaking of J.K. Cement Works, Gotan except current assets and vehicles.
b)
From other Banks: ` 20256.25 lacs (` 18337.46 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable properties and hypothecation of all the movable assets of the Company both present and future save and except i) inventories, book debts, cash and bank balances and all assets pertaining to J.K. Cement Works, Gotan, J.K. Cement Works, Muddapur, Karnataka ii) properties for office and guest house including those having exclusive charge of other lenders iii) New Cement plant at Mangrol and Jharli and iv) Putty Plant at Katni, Madhya Pradesh.
(ii)
Term Loans secured against Cement Plant at Karnataka a) From Indian Bank( Consortium of Banks) : ` NIL (` 930.45 lacs)
b) From Consortium of Banks: ` 8619.78 lacs (8436.78 lacs) Secured by First Pari-passu charge by way of equitable mortgage of all the immovable Properties (except mining land) and hypothecation of all moveable non current assets, present and future pertaining to J.K. Cement Works and Thermal power plant, Muddapur, Karnataka. c)From State Bank of India: ` 3815.13 lacs(` 4360.73 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka. d)From Allahabad Bank: ` 2031.21 lacs ( ` 2421.84 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka. (iii) Term Loans secured against Cement Plant at Rajasthan and Haryana From Consortium of Banks : ` 119092.56 lacs (` 119803.64 lacs) Secured by First charge by way of mortgage, on all the immovable properties, both present and future, of the new cement Plants at Mangrol, Rajasthan including captive power plant of 25 MW and waste heat recovery based power plant of 10 MW and split Grinding Unit at Jharli, Haryana (save and except mining land) and hypothecation of all the movable fixed assets of the above plants (save and except Current Assets), both present and future and second charge on all current assets, present and future, pertaining to the above plants (subject to prior charge created or to be created on the Current Assets in favour of the Working Capital Lenders for securing the Working Capital Facilities). (iv) Term loan secured against Putty Plant at Katni, Madhya Pradesh: Rs.9300.00 lacs (` 3800.00 lacs) Secured against exclusive charge on entire movable fixed assets ( by way of hypothecation) and on immovable fixed assets related to the Wall Putty project at Katni, Madhya Pradesh(excluding current assets and mining land, if any). (v) Term Loans secured against the Properties: ` 2392.98 lacs (` 1422.32 lacs) Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.
F-86
NOTES
to the financial statements for the year ended 31st March, 2017
b.
Term of repayment and interest are as follows : Carrying Amount
Loan From Term Loan - Mangrol / Jharli Plant - IDBI Bank Ltd. - Allahabad - Andhra Bank - Axis Bank - Canara Bank - Dena Bank - Exim Bank - Indian Bank - Indian Overseas Bank - Jammu & Kashmir Bank - Oriental Bank of Commerce - State Bank of India - Union Bank of India - United Bank of India Refinanced Loan - Karnataka Plant - State Bank of India - Andhra Bank - Indian Bank - Indian Overseas Bank Term Loan 1 - Karnataka Plant - IDBI Bank Ltd. - Andhra Bank - Canara Bank - Dena Bank - Exim Bank - Indian Bank - Indian Overseas Bank - Jammu & Kashmir Bank - United Bank of India Term Loan 2 - Karnataka Plant - IDBI Bank Ltd. - Andhra Bank - Dena Bank - Indian Bank - Jammu & Kashmir Bank - United Bank of India Loan for Promoter’s Cont. for Fujairah -Dena Bank -Exim Bank -State Bank of India Misc. Capex/Gen Corp Loan - 1 - IDBI Bank Ltd. - Allahabad Bank - State Bank of India
Repayment Frequency
Year of Maturity
Rate of Interest p.a.
Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly
2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31
Quarterly Quarterly Quarterly
2021-22 2021-22 2021-22
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
12870.00 9900.00 9899.64 12543.13 7425.00 7487.38 17325.00 9899.08 4826.25 5568.75 7488.33 6435.00 7425.00
13500.00 12499.94 12390.27 9912.95 10000.16 10001.51 10005.91 6501.63 7498.26 9993.79 7500.00 9999.23
12825.00 11875.22 11875.00 9500.00 8900.00 8900.00 8900.00 5785.04 6675.00 8900.18 6675.00 8900.00
8.50% 9.75% 9.75%
7279.83 488.37 851.58 -
7895.65 540.82 930.45 0.34
-
-
-
2343.60 1241.40 1624.92 876.46 714.10 1750.00 1560.00 1124.95 1750.00
-
-
627.86 396.65 590.05 785.70 589.27 535.72
Quarterly Quarterly Quarterly
2021-22 2019-20 2019-20
10.45% 9.75% 8.75%
3570.69 1134.32 4262.64
4463.59 1625.00 5301.35
5000.00 2125.00 6427.45
Quarterly Quarterly Quarterly
2018-19 2018-19 2017-18
9.60% 10.70% 9.00%
857.14 714.18 248.07
1285.71 1607.10 573.74
1714.28 2500.00 916.52
F-87
NOTES
to the financial statements for the year ended 31st March, 2017
Carrying Amount Loan From Misc. Capex/Gen Corp Loan - 2 - Allahabad Bank - State Bank of India Misc. Capex/Gen Corp Loan - 3 - Canara Bank - Exim Bank SBI Corporate Loan Property Loans -Indian Bank -Indian Bank -ING Vysya Bank Term Loan - New Putty Plant -Exim - Putty, Katni Non Convertible Debentures Series - A - at 10.25% - at 10.50% - at 11.00% Series - B - at 11.00% Series - C - at 10.50% - at 11.00% Series - D - at 9.65%
Repayment Frequency
Year of Maturity
Rate of Interest p.a.
Quarterly Quarterly
2023-24 2022-23
Quarterly Quarterly Quarterly
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10.20% 8.50%
2031.21 3815.13
2421.84 4360.73
2500.00 5000.10
2019-20 2022-23 2023-24
10.25% 9.75% 8.50%
2475.58 4464.75 9469.21
3575.85 5000.00 3480.98
4722.22 5000.00 -
Quarterly Quarterly
2018-19 2020-21
10.40% 9.25%
850.98 1542.00 0.00
1422.32 -
1994.38 117.50
Quarterly
2023-24
9.75%
9300.00
3800.00
2000.00
Annual Annual Annual
2020-21 2020-21 2020-21
10.25% 10.50% 11.00%
9000.00 9000.00 7000.00
9000.00 9000.00 7000.00
9000.00 9000.00 7000.00
Annual
2020-21
11.00%
11500.00
11500.00
15000.00
Annual Annual
2023-24 2023-24
10.50% 11.00%
8500.00 11500.00
8500.00 11500.00
8500.00 11500.00
Annual
2025-26
9.65%
10000.00 238948.24 18,546.98
10000.00 234589.12 13,721.75
226238.57 17,591.48
2,20,401.26
2,20,867.37
2,08,647.09
Less : Shown in current maturities of long term debt Balance shown as above
`/Lacs As at 31 March 2017
18. OTHER NON-CURRENT FINANCIAL LIABILITIES Security Deposits
As at 31 March 2016
As at 1 April 2015 11,687.35 11,687.35
17,671.71
13,974.70
17,671.71
13,974.70
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10.00 2,030.84 197.15 2,237.99
10.00 1,642.86 175.67 1,828.53
10.00 1,481.82 167.65 1,659.47
`/Lacs
19. LONG-TERM PROVISIONS Provision for employee benefits (Refer note 40) - Gratuity - Leave encashment Provision for Mines Restoration Charges*
F-88
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
175.67 21.48 197.15
167.65 8.02 175.67
153.91 13.74 167.65
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
58,450.60
55,691.41
49,577.62
14,859.37 840.64 272.97 3,021.94 (25.02) 18,079.26 21,401.44
18,140.11 700.75 235.44 3,771.44 162.05 11,029.37 21,652.25
17,811.13 616.53 216.10 2,949.31 (31.95) 7,269.30 20,747.20
* Provision for Mines Restoration charges: Opening Balance Addition during the year Closing Balance
`/Lacs
20. DEFERRED TAX LIABILITIES (NET) A. The balance comprises temporary differences attributable to: Deferred tax liabilities Property, plant and equipment Deferred tax assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on payment basis Ind-AS adjustments MAT Credit adjustment
`/Lacs
B. Movement in deferred tax balances Deferred Tax Assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on expenses Ind-AS adjustments MAT Credit Entitlement Sub- Total (a) Deferred Tax Liabilities Property, plant and equipment Sub- Total (b) Net Deferred Tax Liability (b)-(a)
F-89
As at 31 March 2016
Recognized in P&L
Recognized in OCI
As at 31 March 2017
18,140.11 700.75 235.44 3,771.44 162.05 11,029.37 34,039.16
(3,280.74) 139.89 37.53 (749.50) (187.07) 7,049.89 3,010.00
-
14,859.37 840.64 272.97 3,021.94 (25.02) 18,079.26 37,049.16
55,691.41 55,691.41 21,652.25
2,759.19 2,759.19 (250.81)
-
58,450.60 58,450.60 21,401.44
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 1 April 2015
Recognized in P&L
Recognized in OCI
As at 31 March 2016
Deferred Tax Assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on expenses Ind-AS adjustments MAT Credit Entitlement Sub- Total (a) Deferred Tax Liabilities
17,811.13 616.53 216.10 2,949.31 7,269.30 28,862.37
328.98 84.22 19.34 822.13 3,760.07 5,014.74
-
18,140.11 700.75 235.44 3,771.44 11,029.37 33,877.11
Property, plant and equipment Ind-AS adjustments Sub- Total (b) Net Deferred Tax Liability (b)-(a)
49,577.62 31.95 49,609.57 20,747.20
6,113.79 (194.00) 5,919.79 905.05
-
55,691.41 (162.05) 55,529.36 21,652.25 `/Lacs
For the year ended 31 March 2017
For the year ended 31 March 2016
NIL
NIL
-
-
6,488.28 (2.75) 6,485.53 6,485.53
4,580.81 (700.07) 3,880.74 3,880.74
C. Amounts recognised in profit or loss Current tax expense Current year Deferred tax expense Origination and reversal of temporary differences Earlier year Tax Adjustment Total Tax Expense
`/Lacs For the year ended 31 March 2017 Before tax Tax (Expense)/ Income
For the year ended 31 March 2016 Before tax Tax (Expense)/ Income
Net of tax
Net of tax
D. Amounts recognised in Other Comprehensive Income Remeasurements of defined benefit liability
48.17 48.17
16.67 16.67
31.50 31.50
243.61 243.61
(84.31) (84.31)
159.30 159.30 `/Lacs
For the year ended 31 March 2016
For the year ended 31 March 2017 E. Reconciliation of effective tax rate Profit before tax from continuing operations Tax using the Company’s domestic tax rate Reduction in tax rate Tax effect of: Non-deductible expenses
F-90
Rate
Amount
34.61
32,443.17 11,227.93
14,213.24 4,918.92
1,344.28
123.41
Rate
Amount
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs For the year ended 31 March 2016
For the year ended 31 March 2017 Rate Tax-exempt income & incentives Tax incentives Current-year losses for which no deferred tax asset is recognised Recognition of tax effect of previously unrecognised tax losses Change in recognised deductible temporary differences Changes in estimates related to prior years Others
Amount (6,282.06)
Rate
Amount (1,508.99)
187.92 10.21 6,488.28
216.36 658.17 172.94 4,580.81
F. Tax losses carried forward
Unrecognised tax losses carried forward expire as follows.
Never expire
31 March 2017 Amount Expiry date 44,311.94 -
31 March 2016 Amount Expiry date 52,394.95 -
`/Lacs 1 April 2015 Amount Expiry date -
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
5,271.37 5,271.37
5,652.69 5,652.69
6,051.88 6,051.88
21. OTHER NON-CURRENT LIABILITIES Deferred government subsidies - Capital subsidy sanctioned by Rajasthan government on fixed assets
Government grants have been received against the purchase of certain items of property, plant and equipment. There are no unfulfilled conditions or contingencies attached to these grants. `/Lacs
As at 1 April Current Non Current Received during the year Released to statement of profit or loss As at 31 March Current Non Current
F-91
As at 31 March 2017
As at 31 March 2016
399.19 5,652.69 6,051.88 185.93 606.88
399.19 6,051.88 6,451.07 399.19
359.56 5,271.37 5,630.93
399.19 5,652.69 6,051.88
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
16,729.17 (151.93) 16,577.24
19,620.69 (121.29) 19,499.40
26,335.28 (145.97) 26,189.31
CURRENT LIABILITIES
22. SHORT TERM BORROWINGS Loan repayable on demand (Secured)* - From banks Less: Overdraft against Fixed Deposits
* Working Capital Facilities from banks are secured/to be secured by hypothecation of moveable’s including book debts, both present and future, of the unit, ranking paripassu inter se. * Cash credit account : ` 16729.17 (31 March 2016 is ` 19620.69 and 1 April 2015 is ` 26335.28 ) Cash credit accounts are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders.
`/Lacs
23. TRADE PAYABLE Micro,Small and Medium Enterprises Other Trade Payables Acceptances
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
403.57 20,114.39 20,517.96
940.77 25,318.60 1,805.29 28,064.66
681.21 19,384.98 2,859.57 22,925.76
Trade Payable includes project creditors ` 558.04 Lacs (31 March 2016 is ` 1612.86 Lacs and 1 April 2015 is ` 1802.90 lacs) Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March,2017 as per the terms of Contract. `/Lacs
24. OTHER FINANCIAL LIABILITIES Current maturities of long-term debt Employee payable Interest accrued but not due on borrowings Interest accrued and due on borrowings Unpaid dividends Unclaimed fraction money Security deposits Expenses & GRR payable Others
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
19,318.45 1,391.60 1,463.51 90.22 99.20 9.23 843.12 17,390.35 25,391.17 65,996.85
14,544.72 1,310.62 1,496.60 211.79 109.74 9.23 801.27 14,431.16 25,079.70 57,994.83
18,651.40 520.78 1,201.57 256.01 114.62 9.24 663.22 10,300.02 21,802.71 53,519.57
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
7,178.34 1,157.48 8,335.82
6,126.08 926.00 7,052.08
5,036.80 860.93 5,897.73
`/Lacs
25. OTHER CURRENT LIABILITIES Advance From Customer Others
F-92
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
318.13 895.27 388.20 1,601.60
204.16 829.15 371.97 1,405.28
469.07 568.94 322.04 40.00 1,400.05
26. SHORT-TERM PROVISIONS Employee benefits - Gratuity [Refer note 38] - Bonus & Superannuation - Leave Encashment Others - Wealth Tax
`/Lacs
27. REVENUE FROM OPERATIONS Sale of products (including excise duty) Total (i) Other operating revenue Claims realised Government grants Miscellaneous income Total (ii) Revenue from operations [(i) + (ii)]
For the year ended 31 March 2017
For the year ended 31 March 2016
4,32,784.00 4,32,784.00
4,09,698.45 4,09,698.45
511.69 4,811.31 3,963.71 9,286.71 4,42,070.71
508.31 1,615.30 1,297.38 3,420.99 4,13,119.44
For the year ended 31 March 2017
For the year ended 31 March 2016
3,267.94 1,620.41 (723.73) 239.67 714.39
3,058.06 1,026.66 7.81 745.07 165.51 707.48
5,118.68
5,710.59
For the year ended 31 March 2017
For the year ended 31 March 2016
`/Lacs
28. OTHER INCOME Interest income from financial assets measured at amortised cost - from bank deposits - from others Dividend income from investments measured at fair value through profit or loss Net fair value gain on financial assets measured at fair value through profit or loss Profit on sale of current investment (net) Miscellaneous income
`/Lacs
29. COST OF MATERIALS CONSUMED Raw material Consumed
F-93
69,552.72
66,579.74
69,552.72
66,579.74
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs For the year ended 31 March 2017
For the year ended 31 March 2016
(7,395.02) (7,776.74) (16.45) (15,188.21)
(6,978.10) (7,861.01) (23.43) (14,862.54)
6,978.10 7,861.01 23.43 14,862.54
9,027.74 6,648.71 14.95 15,691.40
(325.67)
828.86
For the year ended 31 March 2017
For the year ended 31 March 2016
23,099.86 2,376.38 2,069.30
19,295.20 2,275.65 1,915.03
27,545.54
23,485.88
For the year ended 31 March 2017
For the year ended 31 March 2016
26,764.59 517.74 (717.58)
26,721.77 236.81 116.13
26,564.75
27,074.71
For the year ended 31 March 2017
For the year ended 31 March 2016
17,431.15 178.43 17,609.58
16,375.15 36.47 16,411.62
30. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND TRADED GOODS Closing Inventory Work-in-Progress Finished Goods Traded Goods Total (A) Opening Inventory Work-in-Progress Finished Goods Traded Goods Total (B) Total (A-B)
`/Lacs
31. EMPLOYEE BENEFITS EXPENSE Salaries and wages Contribution to provident and other funds Staff welfare expenses
`/Lacs
32. FINANCE COST Interest expenses Other Borrowing Costs (includes bank charges, etc.) Exchange differences regarded as an adjustment to borrowing costs
`/Lacs
33. DEPRECIATION AND AMORTISATION EXPENSE Depreciation on tangible assets Amortisation on intangible assets
F-94
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs
34. OTHER EXPENSES Packing material consumed Stores and spares consumed Repairs and maintenance: - Buildings - Plant and machinery - Other Assets Other manufacturing expenses Power and fuel Freight and forwarding Selling and promotion expenses Advertisement and publicity Rent Rates and taxes Insurance Lease rent and hire charges Travelling and conveyance # CSR expenses Bad trade receivables / advances / deposits written off Provision for doubtful trade receivables / advances / deposits Net Loss on foreign currency transactions Sales tax/VAT Excise Duty Loss on disposal of Fixed Assets Miscellaneous expenses #
# Details of payments to auditors As auditor: Audit fees For other services Certification fees and other matters Re-imbursement of expenses
For the year ended 31 March 2017
For the year ended 31 March 2016
15,822.98 10,517.04
15,794.78 8,841.48
1,241.63 8,153.24 134.41 728.97 62,526.27 72,829.14 11,741.76 3,257.70 1,921.10 461.03 804.85 51.22 2,540.92 322.69 1,000.00 172.25 0.03 1,089.70 62,428.74 25.61 14,003.90 2,71,775.18
1,104.31 6,842.47 141.44 555.76 74,354.43 75,246.56 10,445.34 3,266.74 1,658.79 91.29 642.64 44.19 2,218.96 464.05 133.62 56.90 3.49 683.76 57,578.84 16.20 9,898.16 2,70,084.20
54.00 4.24 1.39 59.63
45.00 3.98 2.48 51.46
For the year ended 31 March 2017
For the year ended 31 March 2016
25,957.64 699.27 37.12
10,332.50 699.27 14.78
`/Lacs
35. EARNING PER SHARE Total profit/ (loss) for the year Weighted average number of equity shares of ` 10/- each (In lacs) EPS - Basic and Diluted (`)
F-95
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
19,709.99
17,519.27
15,596.90
1,662.53 887.72 1,085.42 1,231.06 4,150.61 839.29 13,782.00
1,732.71 3,159.88 1,085.42 1,210.68 3,718.82 805.02 -
1,636.40 3,057.80 1,085.42 1,190.30 3,272.60 521.03 12,854.00
560.17
-
-
58,168.57
62,568.51
59,993.28
613.89
613.89
952.89
1,319.83
3,988.13
5,679.22
1,228.41
-
-
36. CONTINGENT LIABILITIES, CONTINGENT ASSETS AND COMMITMENTS A.
B.
C.
Contingent liabilities (not provided for) in respect of: 1. Claim against the Company not acknowledged as debts: Other money for which the Company is contingently liable 2. In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts – no provision has been considered necessary by the Management a) Excise duty b) Sales Tax c) Service Tax 3. In respect of interest on “Cement Retention Price” realised in earlier years 4. In respect of interest of Rajasthan Entry Tax 5. In respect of penalty of non lifting of fly Ash 6 The Competition commission of India (CCI) has imposted penalty of ` 128.54 crores and ` 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders. COMPAT has stayed the CCI order in first matter on deposit of ` 6.56 crores and Appeal is being heard. In second matter stayed demand and appeal are yet to be heard.The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts. 7 In respect of demand made by Revenue Department, Karnataka for conversion of agricultural land into non agricultural land for mining purpose Financial Guarantees 8 Corporate guarantees given to Banks for finance provided to subsidiary Companies. 9 Other Financial Guarantees including of Joint Ventures. Commitments Capital commitments a) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Contingent assets a) Insurance Claims
37. SEGMENT INFORMATION
Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure. Operating Segments The Company’s Board of Directors have been identified as the Chief Operating Decision Maker (‘CODM’), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility. Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is “Cement”, hence no specific disclosures have been made.
F-96
NOTES
to the financial statements for the year ended 31st March, 2017
Entity wide disclosures `/Lacs For the year ended 31 March 2017
For the year ended 31 March 2016
2,91,274.10 1,39,978.30
2,81,362.59 1,23,332.20
A. Information about product revenue Grey Cement White and allied products
Present values have been taken as per Companies Act and grouped into Cement. B.
Information about geographical areas Non-current assets (Property, plant and equipment, Intangible assets and other non-current assets ) are in India
C.
Information about major customers (from external customers) The Company has not derives revenues from the customers which amount to 10 per cent or more of an entity’s revenues.
38. EMPLOYEE BENEFITS
The Company contributes to the following post-employment defined benefit plans in India.
(i)
Defined Contribution Plans: The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. `/Lacs For the year ended 31 March 2017 942.09 398.25 444.72
Contribution to government Provident Fund Contribution to Superannuation Scheme Contribution to Family Pension Fund
For the year ended 31 March 2016 812.56 406.94 429.99
(ii) Defined Benefit Plan: The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity cum Life Assurance Schemes administered by the LIC of India. The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2017. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method. A.
Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date: `/Lacs 31 March 2017 6,061.68
Net defined benefit obligation
F-97
31 March 2016 5,739.12
1 April 2015 5,585.38
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs Total employee benefit asset Net defined benefit liability Total employee benefit liabilities Non-current Current
B.
31 March 2017 5,596.87 464.81
31 March 2016 5,388.80 350.32
1 April 2015 4,970.51 614.87
562.08 5,499.60
557.55 5,181.57
540.97 5,044.41
Movement in net defined benefit (asset) liability - Gratuity (Funded) The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components: `/Lacs 31 March 2017
Balance as at 1 April Included in profit or loss Current service cost Past service credit Interest cost (income) Included in OCI Remeasurements loss (gain) – Actuarial loss (gain) arising from: - demographic assumptions - financial assumptions - experience adjustment – Return on plan assets excluding interest income Other Contributions paid by the employer Benefits paid Balance as at 31 March
31 March 2016
Defined benefit obligation
Fair value of plan assets
Net defined benefit (asset)/ liability
Defined benefit obligation
Fair value of plan assets
Net defined benefit (asset)/ liability
5,739.12
5,388.80
350.32
5,585.38
4,970.51
614.87
401.33 401.33
347.70 19.12 366.82
332.69 414.56 747.25
384.90 384.90
332.69 29.66 362.35
35.24 (87.78)
-
160.13
309.49 (37.40)
105.29
35.24 (87.78) (105.29)
347.70 420.45 768.15
309.49 (197.53)
111.96
160.13
272.09
(52.54)
105.29
(157.83)
(557.55) (557.55) 6,061.68
204.16 (557.55) (353.39) 5,596.87
(204.16) (204.16) 785.07
(540.97) (540.97) 5,739.12
469.07 (540.97) (71.90) 5,388.80
(469.07) (469.07) 350.32
F-98
NOTES
to the financial statements for the year ended 31st March, 2017
C.
Movement in net defined benefit (asset) liability - Leave Encashment (Unfunded) The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components: `/Lacs 31 March 2017
Balance as at 1 April Included in profit or loss Current service cost Past service credit Interest cost (income) Included in OCI Remeasurements loss (gain) – Actuarial loss (gain) arising from: - demographic assumptions - financial assumptions - experience adjustment – Return on plan assets excluding interest income Other Contributions paid by the employer Benefits paid Balance as at 31 March
31 March 2016
Defined benefit obligation
Fair value of plan assets
Net defined benefit (asset)/ liability
Defined benefit obligation
Fair value of plan assets
Net defined benefit (asset)/ liability
(2,014.84)
-
(2,014.84)
(1,803.87)
-
(1,803.87)
(382.01) (141.55) (523.56)
-
(382.01) (141.55) (523.56)
(339.38) (133.74) (473.12)
-
(339.38) (133.74) (473.12)
(154.870) (78.82)
-
(154.87) (78.82) -
83.61 -
-
83.61 -
(233.69)
-
(233.69)
83.61
-
83.61
353.04 353.04 (2,419.05)
-
353.04 353.04 (2,419.05)
178.54 178.54 (2,014.84)
-
178.54 178.54 (2,014.84)
D.
Plan assets The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted with the Life Insurance Corporation of India, HDFC Standard Life Insurance Company Ltd. and Kotak Mahindra Old Mutual Life Insurance Ltd., whose pattern of investment is not available with the Company.
E.
Actuarial assumptions The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages). `/Lacs Discount rate Expected rate of return on plan assets Mortality Turnover rate : Staff Turnover rate : Worker Expected rate of future salary increase
31 March 2017 6.90%
31 March 2016 7.70%
1 April 2015 7.70%
8.50%
8.50%
8.50%
5% of all ages 1% of all ages 10%
5% of all ages 1% of all ages 10%
5% of all ages 1% of all ages 10%
Assumptions regarding future mortality have been based on published statistics and mortality tables. At 31 March 2017, the weighted-average duration of the defined benefit obligation was 6 years (as at 31 March 2016: 6 years and as at 1 April 2015 6 years).
F-99
NOTES
to the financial statements for the year ended 31st March, 2017
F.
Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below. Gratuity `/Lacs
Discount rate (1% movement) Expected rate of future salary increase (1% movement)
As at 31 March 2017
As at 31 March 2016
Increase
Decrease
Increase
Decrease
(381.71) 285.84
439.89 (280.87)
(332.81) 261.55
379.71 (254.04)
105.08 12.48
(95.87)
159.02
(71.26)
125.67
117.56
As at 1 April 2015 Increase
Decrease
Mortality (1% movement)
Leave Encashment `/Lacs
Discount rate (1% movement) Expected rate of future salary increase (1% movement)
As at 31 March 2017
As at 31 March 2016
Increase
Decrease
Increase
Decrease
(190.45) 217.45
226.31 (187.25)
(144.25) 164.76
170.05 (142.81)
As at 1 April 2015 Increase
Decrease
Mortality (1% movement)
increases result in higher sensitivity to changes in life expectancy.
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown. G.
The company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the group’s ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The company has not changed the processes used to manage its risks from previous periods. The company uses derivatives to manage some of its risk. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets in 2017 consists of government and corporate bonds, although the group also invests in equities, cash and mutual funds. The group believes that equities offer the best returns over the long term with an acceptable level of risk.
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme’s bond holdings. Life expectancy: The pension and medical plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary
F-100
NOTES
to the financial statements for the year ended 31st March, 2017
39. RELATED PARTIES (1) (a) Parties where the control/significant influence exists. i) Yadu International Ltd (b) Key Management Personnel & their Relatives: i) Shri Yadupati Singhania Chairman & Managing Director ii) Smt. Shushila Devi Singhania Relative of Chairman & Managing Director iii) Shri Ajay Kumar Saraogi President (Corp.Affairs) & CFO iv) Shri Shambhu Singh Company Secretary v) Shri Achintya Karati Non Executive Independent vi) Shri Jayant Narayan Godbole Non Executive Independent vii) Dr. Krishna Behari Agarwal Non Executive Independent viii) Shri K.N.Khandelwal Non Executive Non Independent ix) Shri Raj Kumar Lohia Non Executive Independent x) Shri Suparas Bhandari Non Executive Independent xi) Mr. Paul Heinz Hugentobler Non Executive Non Independent xii) Shri Shyam Lal Bansal Non Executive Independent (c) Enterprises significantly influenced by Key Management Personnel or their Relatives. i) Jaykay Enterprises Ltd ii) J.K. Cotton Ltd. iii) Jaykaycem (Eastern) Ltd iv) J.K.Cement(Western) Ltd (d) Subsidiary Companies. i) J.K. Cement (Fujairah) FZC (Holding Company of ( ii) below) ii) J.K. Cement Works(Fujairah) FZC iii) Jaykaycem(Central) Ltd (e) Joint Venture i) Bander Coal Company Pvt. Ltd
(Related parties relationship is as identified by the Company and relied upon by the Auditors). (2)a) Following are the transactions with related parties as defined under section 188 of Companies Act 2013. `/Lacs For the year ended 31 March 2017 31 March 2016 (i)
(ii)
(iii)
Jaykay Enterprises Ltd - Services received - Rent paid - Expenses Reimbursed J.K. Cotton Ltd - Rent paid - Purchases J.K. Cement (Fujairah) FZC Loan Given: Balance as at beginning Amount paid against preference shares Received & adjusted during the year (for Invest) Balance as at close of the year
34.47 47.71 50.60
34.17 43.80 50.11
45.42 0.21
45.02 1.81
4,375.74 4375.74
7224.55
58168.57 1499.95
Corporate Guarantees Interest recoverabe on Redeemable Pref Shares
F-101
62568.51
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs For the year ended 31 March 2017 31 March 2016 (iv) (v)
(vi)
Bander Coal Company Pvt Ltd Corporate Guarantees J.K. Cement(Western) Ltd Opening Advances given during the year Received during the year Balance as at close of the year Jaykaycem (Central) Ltd. Opening
Loan given during the year Interest Amount received against loan and interest Balance at close of the year Share acquired during the year Debenture acquired during the year Amount given in current deposit Amount received in current account (vii) Key Management Personnel and their relatives a) Shri Y.P. Singhania (Chairman & Managing Director) -Remuneration b) Smt Sushila Devi Singhania - Commission - Sitting Fees c) Shri Ajay Kumar Saraogi -Remuneration d) Shri Shambhu Singh -Remuneration e) Other Directors - Commission -Sitting Fees and ` 111.31 lacs (110.97 lacs) paid to other Director Mr. Paul Heinz Hugentobler on professional capacity.
b)
Terms and conditions of transactions with related parties
15.00
15.00
15.00 -
15.00
4206.79
1456.75
65.40 76.72 4348.91
2495.27 254.77 4206.79 659.01
4600.00 55.00 55.00
1266.92
726.85
8.00 4.52
7.00 3.91
197.34
171.91
38.15
31.82
64.00 31.41 111.31
49.00 24.33 110.94
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees (except corporate bank guarantees) provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
F-102
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs For the year ended 31 March 2017 31 March 2016 c) Compensation of key management personnel of the Group - short-term employee benefits - other long-term benefits
40(A).
a.
b.
40(B).
1368.91 133.5
1,004.80 121.01
CORPORATE SOCIAL RESPONSIBILITY
Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was `308.58 lacs i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act,2013 Corporate Social Responsibility (CSR) activities undertaken during the year is ` 322.69 lacs. Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis.
OPERATING LEASE
The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.
41. FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT I. A.
Fair value measurements Financial instruments by category
`/Lacs 31 March 2017
Financial assets Investments Other non-current financial assets Current investments Trade receivables Cash and cash equivalents Bank balances other than mentioned above Other current financial assets Financial liabilities Borrowings Other financial liabilities Short term borrowings Trade payables Other current financial liabilities
31 March 2016
1 April 2015
FVTPL
FVOCI
Amotised Cost
FVTPL
FVOCI
Amotised Cost
FVTPL
FVOCI
Amotised Cost
285.13 (489.79)
-
46,752.75 14,733.06
1,047.06 (403.62)
-
36,279.56 14,134.24
(315.07) (328.35)
-
29,030.75 6,019.46
226.00 -
-
6,300.00 14,813.42 41,785.02 99.20
187.79 -
-
6,150.00 16,569.39 36,734.94 109.74
174.71 -
-
3,050.00 13,940.46 38,354.13 114.62
75.00 96.34
4,446.82 - 1,28,930.27
81.82 913.05
5,605.40 - 1,15,583.27
72.59 (396.12)
-
3,145.97 93,655.39
(358.99) (358.99)
2,31,845.63 17,671.71 16,577.24 20,517.96 66,355.84 - 3,52,968.38
(173.91) (173.91)
- 2,30,226.15 13,974.70 19,499.40 28,064.66 57,994.83 - 3,49,759.74
(141.03) (141.03)
2,15,218.86 11,687.35 26,189.31 22,925.76 53,519.57 - 3,29,540.85
F-103
NOTES
to the financial statements for the year ended 31st March, 2017
B.
Fair value hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Financial assets and liabilities measured at fair value - recurring fair value measurements `/Lacs Level 1 Financial assets Financial Investments at FVTPL Investments Equity Shares Preference shares Mutual Funds Financial Investments at FVOCI Investments Equity shares
As at 31 March 2017 Level 2 Level 3
35,197.27
Total
6,526.00 6,526.00
-
35,197.27
35,197.27 6,526.00 41,723.27
-
-
-
-
Assets and liabilities which are measured at amortised cost for which fair values are disclosed `/Lacs As at 31 March 2017 Level 1 Level 2 Financial assets Security deposits Total financial assets Financial liabilities Borrowings Total financial liabilities
Total
-
-
Nil -
-
-
Nil -
Financial assets and liabilities measured at fair value - recurring fair value measurements `/Lacs Level 1 Financial assets Financial Investments at FVTPL Investments Equity Shares Preference shares Mutual Funds Financial Investments at FVOCI Investments Equity shares Total financial assets
F-104
As at 31 March 2016 Level 2 Level 3
Total
6,337.79
-
107.71 30,156.89 -
107.71 30,156.89 6,337.79
6,337.79
-
30,264.60
36,602.39
NOTES
to the financial statements for the year ended 31st March, 2017
Assets and liabilities which are measured at amortised cost for which fair values are disclosed `/Lacs Level 1 Financial assets Security deposits Total financial assets Financial liabilities Borrowings Total financial liabilities
As at 31 March 2016 Level 2 Level 3
Total
-
-
-
Nil -
-
-
-
Nil -
Financial assets and liabilities measured at fair value - recurring fair value measurements `/Lacs
Financial assets Financial Investments at FVTPL Investments Equity shares Preference shares Mutual Funds Financial Investments at FVOCI Investments Equity shares Total financial assets
Level 1
As at 31 March 2015 Level 2 Level 3
Total
3,224.71 3,224.71
-
107.71 21,909.94 22,017.65
107.71 21,909.94 3,224.71 25,242.36
-
-
-
-
Assets and liabilities which are measured at amortised cost for which fair values are disclosed `/Lacs As at 1 April 2015 Level 1 Level 2 Financial assets Security deposits Total financial assets Financial liabilities Borrowings Total financial liabilities
Total
-
-
Nil -
-
-
Nil -
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. There are no transfers between level 1 and level 2 during the year
F-105
NOTES
to the financial statements for the year ended 31st March, 2017
Valuation technique used to determine fair value Specific valuation techniques used to value financial instruments include: - the use of quoted market prices or dealer quotes for similar instruments - the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date - the fair value of the remaining financial instruments is determined using discounted cash flow analysis. All of the resulting fair value estimates are included in level 2 except for unlisted equity securities and preference shares, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk. Fair value measurements using significant unobservable inputs (level 3) `/Lacs Unlisted equity shares
Opening balance Acquisitions Gains/losses recognised in profit or loss Closing balance
Unlisted preference shares
31 March 2017
31 March 2016
1 April 2015
31 March 2017
107.71 107.71 -
107.71 107.71
314.01 206.30 107.71
30,156.89 5,694.62 (654.24) 35,197.27
31 March 2016 21,909.94 7,514.95 732.00 30,156.89
1 April 2015 21,388.56 521.38 21,909.94
Valuation inputs and relationships to fair value `/Lacs Fair Value as at
Significant unobservable inputs
Type of financial instrument
31 March 2017
31 March 1 April 2015 2016
Unquoted preference shares
35,197.27
30,156.89
21,909.94
Expected cash inflows Riskadjusted discount rate
-
107.71
107.71
Expected cash inflows Risk-adjusted discount rate
Unquoted equity shares
Probabilityweighted range
Sensitivity
Valuation process The finance department of the Company performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO). Discussions of valuation processes and results are held between the CFO and the finance team at least once every three months, in line with the Company’s quarterly reporting periods. The main level 3 inputs for unlisted equity securities, unlisted preference shares used by the Company are derived and evaluated as follows: - Risk adjusted discount rates are estimated based on expected cash inflows arising from the instrument and the entity’s knowledge of the business and how the current economic environment is likely to impact it. Changes in level 2 and 3 fair values are analysed at the end of each reporting period during the quarterly valuation discussion between the CFO and the finance team.
F-106
NOTES
to the financial statements for the year ended 31st March, 2017
C.
Fair value of financial assets and liabilities measured at amortised cost `/Lacs
Financial assets Investments Other non-current financial assets Current investments Trade receivables Cash and cash equivalents Bank balances other than mentioned above Other current financial assets Financial liabilities Borrowings Other financial liabilities Short term borrowings Trade payables Other current financial liabilities
As at 31 March 2017
As at 31 March 2016
Carrying Amount
Carrying Amount
Fair Value
Fair Value
Carrying Amount
Fair Value
47,037.88
47,037.88
37,326.62
37,326.62
14,243.27 6,526.00 14,813.42 41,785.02 99.20 4,521.82 1,24,405.59
14,243.27 6,526.00 14,813.42 41,785.02 99.20 4,521.82 1,24,405.59
13,730.62 6,337.79 16,569.39 36,734.94 109.74 5,687.22 1,10,699.36
13,730.62 6,337.79 16,569.39 36,734.94 109.74 5,687.22 1,10,699.36
28,715.68 5,691.11 3,224.71 13,940.46 38,354.13 114.62 3,218.56 89,926.09
28,715.68 5,691.11 3,224.71 13,940.46 38,354.13 114.62 3,218.56 89,926.09
2,31,845.63 17,671.71 16,577.24 20,517.96 65,996.85
2,31,845.63 17,671.71 16,577.24 20,517.96 65,996.85
2,30,226.15 13,974.70 19,499.40 28,064.66 57,820.92
2,30,226.15 13,974.70 19,499.40 28,064.66 57,820.92
2,15,218.86 11,687.35 26,189.31 22,925.76 53,378.54
2,15,218.86 11,687.35 26,189.31 22,925.76 53,378.54
3,52,609.39
3,52,609.39
3,49,585.83
3,49,585.83
3,29,399.82
3,29,399.82
The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents, other bank balances, other financial liabilities, other current financial liabilities and other current financial assets are considered to be the same as their fair values, due to their short -term nature. The fair values for loans, security deposits and investment in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values. II.
As at 1 April 2015
Financial risk management The Company has exposure to the following risks arising from financial instruments: - credit risk; - liquidity risk; and - market risk
F-107
i. Risk management framework The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
NOTES
to the financial statements for the year ended 31st March, 2017
ii. Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.
value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). Presentation of allowance for expected credit losses in the balance sheet Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
The carrying amount of financial assets represents the maximum credit exposure.
The gross carrying amount of trade receivables is INR 15552.54 lacs (31 March 2016 – INR17171.39 lacs, 1 April 2015 – INR 14506.86 lacs).
Trade and other receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.
During the period, the Company has made no write-offs of trade receivables, it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off.
The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee.
Reconciliation of loss allowance provision – Trade receivables `/Lacs Opening balance Changes in loss allowance Closing balance
31 March 2017 602.00 137.12 739.12
31 March 2016 566.22 35.78 602.00
iii. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
More than 85% of the Company’s customers have been transacting with the Company for over four years, and no impairment loss has been recognised against these customers. In monitoring customer credit risk, customers are Companyed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties. A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables
Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local
Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present
F-108
NOTES
to the financial statements for the year ended 31st March, 2017
level in the operating companies of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans. (a) Financing arrangements The group had access to the following undrawn borrowing facilities at the end of the reporting period: `/Lacs
Floating rate Expiring within one year (bank overdraft and other facilities) Expiring beyond one year (bank loans)
31 March 2017
As at 31 March 2016
1 April 2015
700.00 6,958.00 7,658.00
12,700.00 12,700.00
10,000.00 18,290.00 28,290.00
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of 9.65years (as at 31 March 2016 - 8.36 years and as at 1 April 2015 - 8.47 years). (b) Maturities of financial liabilities The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements. `/Lacs Carrying Amounts 31 March 2017 Non-derivative financial liabilities Borrowings (as per note no.17) Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
2,31,845.63 17,671.71 16,577.24 20,517.96 65,996.85 3,52,609.39
Total
17,671.71 16,577.24 20,517.96 65,996.85 1,20,763.76
2 months or less
Contractual cash flows 2–12 months
1–5 years
More than 5 years
17,671.71 16,577.24 20,517.96 18,872.17 39,390.13
47,124.68 63,701.92
17,671.71
`/Lacs
Non-derivative financial liabilities Borrowings (as per note no.17) Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
Carrying Amounts 31 March 2016
Total
2,30,226.15 13,974.70 19,499.40 28,064.66 57,820.92 3,49,585.83
13,974.70 19,499.40 28,064.66 57,820.92 1,19,359.68
F-109
2 months or less
Contractual cash flows 2–12 months
1–5 years
More than 5 years
13,974.70 19,499.40 28,064.66 15,953.57 44,018.23
41,867.35 61,366.75
13,974.70
-
NOTES
to the financial statements for the year ended 31st March, 2017
`/Lacs
Non-derivative financial liabilities Borrowings (as per note no.17) Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
Carrying Amounts 1 April 2015
Total
2,15,218.86 11,687.35 26,189.31 22,925.76 53,378.54 3,29,399.82
11,687.35 26,189.31 22,925.76 53,378.54 1,14,180.96
2 months or less
Contractual cash flows 2–12 months
1–5 years
More than 5 years
11,687.35 26,189.31 22,925.76 11,076.82 34,002.58
42,301.72 68,491.03
11,687.35
-
Currency risk The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US$, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.
The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The interest payments on variable interest rate loans and bond issues in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change. iv. Market risk Market risk is the risk that changes in market prices – such as foreign exchange rates and interest rates – will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risks related to the principal amounts of the Company’s foreign currency payables, have been partially hedged using forward contracts taken by the Company. In respect of other monetary assets and liabilities denominated in foreign currencies, the Company’s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the Risk Management Committee. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.
Exposure to currency risk The summary quantitative data about the Company’s exposure to currency risk as reported to the management of the Company is as follows: `/Lacs 31 March 2017 USD EUR Financial assets Trade payables Net statement of financial position exposure
1138140.00 2089440.00 1138140.00 2089440.00
F-110
31 March 2016 USD EUR 1630390.00 1630390.00
784000.00 784000.00
1 April 2015 USD 4568680.00 4568680.00
EUR
289958.79 289958.79
NOTES
to the financial statements for the year ended 31st March, 2017
The following significant exchange rates have been applied `/Lacs Average Rates 31 March 2017 66.97 73.50 -
USD 1 EUR 1 GBP 1
Year end spot rates
31 March 2016 65.31 72.10 -
31 March 2017 64.84 69.25 -
31 March 2016 66.33 75.09 -
1 April 2015 62.59 67.51 -
Sensitivity analysis A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 December would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. `/Lacs Profit or loss Strengthening Weakening 31 March 2017 USD (10% movement) EUR (10% movement) GBP (10% movement) 31 March 2016 USD (10% movement) EUR (10% movement) GBP (10% movement)
Equity, net of tax Strengthening Weakening
73.79 144.69 -
(73.77) (144.69) -
73.79 144.69 -
(73.79) (144.69) -
108.15 58.87 -
(108.15) (58.87) -
108.15 58.87 -
(108.15) (58.87) -
Interest rate risk The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2017 and 31 March 2016, the Company’s borrowings at variable rate were mainly denominated in INR. The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. Currently the Company’s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk. Exposure to interest rate risk The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the Group is as follows. `/Lacs Nominal Amount
Fixed-rate instruments Financial assets Financial liabilities Variable-rate instruments Financial liabilities
F-111
31 March 2017
31 March 2016
1 April 2015
75,462.73 1,04,186.52 1,79,649.25
72,831.91 1,00,034.19 1,72,866.10
61,574.64 88,132.68 1,49,707.32
2,48,422.87 2,48,422.87
2,49,725.55 2,49,725.55
2,41,408.17 2,41,408.17
NOTES
to the financial statements for the year ended 31st March, 2017
Cash flow sensitivity analysis for variable-rate instruments A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. `/Lacs Profit or loss
31 March 2017 Variable-rate instruments Cash flow sensitivity 31 March 2016 Variable-rate instruments Cash flow sensitivity
42. FIRST TIME ADOPTION OF IND AS As stated in note 2, these are the Company’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March 2017, the comparative information presented in these financial statements for the year ended 31st March 2016 and in the preparation of an opening Ind AS statement of financial position at 1st April 2015 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.
100 bp increase
100 bp decrease
100 bp increase
100 bp decrease
(1,785.42) (1,785.42)
1,785.42 1,785.42
(1,785.42) (1,785.42)
1,785.42 1,785.42
(1,761.40) (1,761.40)
1,761.40 1,761.40
(1,761.40) (1,761.40)
1,761.40 1,761.40
Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value. (ii) Leases Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements. B.
Ind AS mandatory exceptions (i)
Exemptions and exceptions availed: Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS. A.
Equity, net of tax
Ind AS optional exemptions (i) Deemed cost Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Estimates An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.”
F-112
NOTES
to the financial statements for the year ended 31st March, 2017
(ii)
C.
Classification and measurement of financial assets Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
Reconciliations between previous GAAP and Ind AS Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS. Reconciliation of equity `/Lacs Particulars
As at 1 April 2015 Notes to firsttime adoption
Previous GAAP* Adjustments
As at 31 March 2016 Ind AS
Previous GAAP* Adjustments
Ind AS
ASSETS
Non-current assets Property, plant and equipment Capital work-in-progress Other intangible assets Financial assets (i) Investments (ii) Other non-current financial assets Other non-current assets Current assets Inventories Financial assets (i) Current investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (ii) above (v) Other current financial assets Current tax assets (net) Other current assets TOTAL ASSETS
5
2 10, 11 6,10
28,400.60 4,191.96 11,148.14
5
50,978.54
2
3,050.00 13,940.46 40,509.98 114.62 3,073.38 467.43 18,657.60 5,27,446.76
11 11 10, 12 6,10
EQUITY AND LIABILITIES Equity Equity share capital Other equity
3,33,598.56 19,117.98 197.51
9
(623.34) 3,32,975.22 19,117.98 197.51 315.08 1,827.50 67.38
3,48,883.95 15,240.46 199.76
3,172.08 3,52,056.03 15,240.46 199.76
28,715.68 6,019.46 11,215.52
36,279.56 3,513.33 12,737.58
1,047.06 10,217.29 47.52
50,978.54
47,424.30
(4,531.18)
3,224.71 13,940.46 38,354.13 114.62 3,145.97 467.43 18,686.34 5,27,153.57
6,150.00 16,569.39 47,355.85 109.74 5,605.39 547.36 16,133.10 5,56,749.77
187.79
6,992.72 1,57,661.34
6,992.72 (2,797.67) 1,54,863.67
6,992.72 1,64,448.38
6,992.72 (2,411.68) 1,62,036.70
2,15,879.73 11,687.35 1,659.47 20,715.25 -
(660.88) 2,15,218.86 11,687.35 1,659.47 31.95 20,747.20 6,051.88 6,051.88
2,30,787.67 13,974.70 1,828.53 21,814.74
(561.52) 2,30,226.15 13,974.70 1,828.53 (162.49) 21,652.25 5,652.69 5,652.69
26,189.31 22,925.76 53,660.61 5,308.66 4,766.56 5,27,446.76
26,189.31 22,925.76 (141.03) 53,519.57 589.07 5,897.73 (3,366.51) 1,400.05 (293.19) 5,27,153.57
19,499.40 28,064.66 58,168.74 6,398.44 4,771.79 5,56,749.77
19,499.40 28,064.66 57,994.83 7,052.08 1,405.28 5,56,379.99
174.71 (2,155.85) 72.59 28.74 (293.19)
(10,620.91) 81.83 28.74 (369.78)
37,326.62 13,730.62 12,785.10 42,893.12 6,337.79 16,569.39 36,734.94 109.74 5,687.22 547.36 16,161.84 5,56,379.99
LIABILITIES
Non-current liabilities Financial liabilities (i) Borrowings (ii) Other financial liabilities Long-term provisions Deferred tax liabilities (net) Other non-current liabilities Current liabilities Financial liabilities (i) Borrowings (ii) Trade payables (iii) Other financial liabilities Other current liabilities Short-term provisions TOTAL EQUITY AND LIABILITIES
4
8 1
1 7
*The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.
F-113
(173.91) 653.64 (3,366.51) (369.78)
NOTES
to the financial statements for the year ended 31st March, 2017
Reconciliation of total comprehensive income for the year ended 31 March 2016 `/Lacs Particulars
Notes to firsttime adoption
Revenue Revenue from operations Other income Total income Expenses Cost of materials consumed Purchase of Stock in Trade Excise Duty Paid Changes in inventories of finished goods, stock-in-Trade and work-in-progress Employee benefits expense Finance costs Depreciation and amotization expense Other expenses Total Expenses Profit/(loss) before tax Tax expense: Current tax MAT Credit entitlement Deferred tax Profit/ (loss) for the period (A) Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans Income tax relating to remeasurement of defined benefit plans Total other comprehensive income for the period (B) Total comprehensive income for the period (A + B)
Previous GAAP*
Adjustments
Ind AS
1. 2
4,12,735.64 4,938.63 4,17,674.27
383.80 771.96 1,155.76
4,13,119.44 5,710.59 4,18,830.03
1
66,579.74 151.78 57,578.84 828.86
-
66,579.74 151.78 57,578.84 828.86
23,144.62 26,959.06 15,628.13 2,12,490.20 4,03,361.23 14,313.04
341.26 115.66 783.49 15.15 1,255.56 (99.80)
23,485.88 27,074.71 16,411.62 2,12,505.36 4,04,616.79 14,213.24
2,359.93 (3,060.00) 4,859.56 10,153.55
(278.75) 178.95
2,359.93 (3,060.00) 4,580.81 10,332.50
10,153.55
243.61 (84.31) 159.30 338.25
243.61 (84.31) 159.30 10,491.80
3 4 5 6
8
3 3
Reconciliation of total equity as at 31 March 2016 and 1 April 2015 Particulars Total equity (shareholder’s funds) as per previous GAAP Adjustments: Issue expenses amortised over the term of debentures on the basis of Effective Interest rate (EIR) Borrowings – transaction cost adjustment Government Grant received for modernisation of Gotan Plant amortised over the life of depreciable assets. Government Grant received for modernisation of Gotan Plant transfer to Government Grant Fair valuation of Financial guarantee given by J K Cement Limited to its subsidiary J K Fujairah (the credit needs to be recognised as a part of Finance Income) Amortisation of waiver amount of interest free vehicle loan to employees during the tenure of the loan Reversal of Dividend and DDT to be recognised in the year in which it is declared Exchange rate difference on account of reinstatement of investment in J K Fujairah Fair Valuation of equity shares other than subsidiaries, JV and associates is to be done through P/L subsequent to transition date Depreciation of Stores and Spares transferred to Plant & Machinery Deferrment of revenue pertaining to FOC goods Tax effects of adjustments OCI on Acturial Valuation Profit & Loss on account of Remeasurement during year Total adjustments Net impact brought forward from Opening balance sheet
F-114
`/Lacs 31 March 2016 1,64,448.38 508.06 152.82 3,128.47 (9,579.55) 174.71 (159.64) 3,366.51 704.40 (389.32) (575.60) (48.84) (31.95) 159.30 178.95 (2,411.68) -
NOTES
to the financial statements for the year ended 31st March, 2017
Total equity as per Ind AS
1,62,036.70
Reconciliation of total comprehensive income for the year ended 31 March 2016 `/Lacs Particulars Profit after tax under India GAAP Adjustments Ind AS adjustments Tax effects on Ind AS adjustments Total adjustments Profit after tax as per Ind AS Other Comprehensive Income Total Comprehensive income for the year
Amount 10,153.55 (99.80) (278.75) 178.95 10,332.50 159.30 10,491.80
Impact of Ind AS adoption on the statements of cash flows for the year ended 31 March 2016 `/Lacs Particulars Net cash flow from operating activities Net cash flow from investing activities Net cash flow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents as at 1 April 2015 Cash and cash equivalents as at 31 March 2016
D: 1.
Previous GAAP*
Adjustments
Ind AS
63,536.64 (34,990.53) (21,729.80) 6,816.31 40,770.57
(4,663.20) (3,981.99) 209.69 (8,435.50) (2,416.44) (10,851.94)
58,873.44 (38,972.52) (21,520.11) (1,619.19) 38,354.13 36,734.94
47,586.88
Notes to first-time adoption: Revenue Under Ind AS, revenue from operations is presented as inclusive of excise duty as per Ind-AS 18. The excise duty paid is presented in cost of material consumed on the face of financial statements. This change has resulted in an increase in total revenue and total expenses for the year ended 31st March 2016 by INR 57,060.38 Lacs. Adjustment to revenue also includes the Impact of Government Grant received for modernisation of Plant Gotan and Nimbahera plants is amortised over the life of depreciable assets. Deferral of revenue pertaining to free cost of goods has impacted in reduction of total revenue by INR 31.68 lacs.
2.
Other Income Other income consist of Exchange gain arising on reinstatement of investment in JK Fujairah (redeemable preference shares) which is INR 732 Lacs, Gain on fair valuation of current investment which is INR 13.07 Lacs.
3.
Remeasurements of post-employment benefit obligations Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined F-115
benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31st, 2016 decreased by ` 159.30. There is no impact on the total equity as at 31 March 2016. 4.
Finance cost Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, on account on long term borrwings, debentures and deferred sales tax loans, the profit for the year ended 31st March 2016 reduced by INR 115.6 Lacs as a result of the additional interest expense.
5.
Depreciation and Amortization Expenses This is due to the impact of amortising Freehold mining land from inception till the date of transition which is based on extraction of minerals from the ore body. The profit for the
NOTES
to the financial statements for the year ended 31st March, 2017
dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of ` 3,366.51 Lacs as at 31st March 2016 (1 April 2015 – ` 3,366.51 Lacs ) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
year ended 31st March 2016 have been reduced by INR 57.43 Lacs as a result of the this adjustment. Capital stores and spares have been reclassified to plant, property and equipment, due to this transaction profit for the year ended 31st March 2016 has been reduced to INR 726.06 lacs. 6.
7.
Other Expenses Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the group has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by INR 56.66 Lacs as at 1st April 2015. The prepaid rent increased by INR 56.66 Lacs as at 1st April 2015. The profit for the year and total equity as at 31st March 2016 decreased by INR 1.14 Lacs due to amortisation of the prepaid rent of INR 15.15 Lacs which is partially off-set by the notional interest income of INR 13.74 Lacs recognised on security deposits.
8.
Deferred Tax Deferred tax have been recognised on the adjustments made on transition to Ind AS.
9.
Retained earnings Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments on the date of transition.
Proposed Dividend Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such
12. Reclassification of MAT Credit Entitlement as per Ind AS -12 from short term loans and advances to deferred tax asset, and Deferred tax impact of Ind AS adjustments.
For P.L.Tandon and Co., Chartered Accountants ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
10. Vehicle Loan Impact of measuring the interest free vehicle loans to employees at fair value. 11. Classification of fixed deposits Fixed deposit have been classified in between cash and cash equivalents and bank balances with others
For and on behalf of the Board of Directors of J K Cement Limited Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
F-116
Directors
INDEPENDENT AUDITOR’S REPORT To The Members of J.K.CEMENT LIMITED
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
We have audited the accompanying consolidated Ind AS financial statements of J.K. Cement Limited (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its jointly controlled entity, comprising the Consolidated Balance Sheet as at 31st March, 2017, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity, for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance (including other comprehensive income), consolidated cash flows and consolidated statement of changes in equity of the Group including Jointly controlled entity in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act. The respective Board of Directors of the companies included in the Group and of its jointly controlled entity are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its jointly controlled entity and for preventing and detecting frauds and other irregularities, the selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and the design, implementation and maintenance of adequate, internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions
F-117
of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, and jointly controlled entity , the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the financial position of the Group, and its jointly controlled entity as at 31st March, 2017, and their financial performance including other comprehensive income, their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date.
OTHER MATTERS (a)
We did not audit the financial statements of three subsidiaries, whose financial statements reflect total assets of ` 109141.92 lacs and net assets of ` 30 283.23 lacs as at their respective closing dates, total revenues of ` 27418.03 lacs and net cash inflows amounting to ` 372.49 lacs for the year ended on that date, as considered in the consolidated financial statements. Two of three subsidiaries are located outside India whose financial statements and other financial
information have been prepared in accordance with accounting principles generally accepted in their country and which have been audited by other auditors under generally accepted auditing standards applicable in their country. The Company’s management has converted the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their country to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Company and audited by us. (b)
We did not audit the financial statements of jointly controlled entity, whose financial statements reflect total assets of ` 15.19 lacs and net assets of ` 15.16 lacs as at 31st March, 2017, total revenues of ` 0.98 lacs and net cash outflows amounting to ` 0.28 lacs for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net profit ` 0.26 lacs for the year ended 31st March, 2017, as considered in the consolidated financial statements, in respect of one jointly controlled entity , whose financial statements have not been audited by us. These financial statements are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of this jointly controlled entity and our report in terms of sub-section (3) of Section 143 of the Act in so far as it relates to the aforesaid jointly controlled entity is based solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us by the Management, these financial statements are not material to the Group. Our opinion above on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the financial statements certified by the Management.
filed an appeal against CCI Order before the Competition Appellate Tribunal (‘COMPAT’). COMPAT has granted stay on the CCI Order on the condition that the Company deposits penalty amounting to ` 6.56 crore which has since been deposited. Based on a legal opinion and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter. (b)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of subsidiaries, and jointly controlled entity, as noted in the ‘other matter’ paragraph, we report, to the extent applicable, that: (a)
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
(b)
In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
(c)
The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.
(d)
In our opinion, the aforesaid consolidated financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e)
On the basis of the written representations received from the directors of the Holding Company as on 31st March,
EMPHASIS OF MATTER
We draw attention to Note No 38 (A)(vi)of the financial statement which describes the following matters: (a)
In terms of order dated 31 August 2016, the Competition Commission of India (‘CCI’ ) has imposed penalty of ` 128.54 crore for alleged contravention of the provisions of the Competition Act, 2002 by the Company. The Company had
In terms of order dated 19 January 2017, the CCI has imposed penalty of ` 9.28 crore pursuant to a reference filed by the Government of Haryana for alleged contravention of the provisions of the Competition Act, 2002 in August 2012 by the Company. The Company has filed an appeal before COMPAT. The Company believes it has a good case and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter.
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2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary company incorporated in India, none of the directors of the Group Companies incorporated in India is disqualified as on 31st March 2017 from being appointed as a director in terms of Section 164(2) of the Act. (f)
(g)
With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company and its subsidiary company incorporated in India and the operating effectiveness of such controls, refer to our separate Report in “Annexure C”. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries, and jointly controlled entity , as noted in the ‘Other matter’ paragraph: (i)
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group and its jointly controlled entity.( Refer Note 38 (A) and (B) to the consolidated financial statements).
(ii)
The Group, its jointly controlled entity did not have any material foreseeable losses on long-term contracts including derivative contracts during the year ended 31st March 2017.
(iii) There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Holding Company and its subsidiary company incorporated in India during the year ended 31st March 2017. (iv) The company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November,2016 to 30th December , 2016.Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the company and as produced to us by the management. For P.L. TANDON & Co. Chartered Accountants Registration Number: 000186C
Place: KANPUR Date: 13th May, 2017
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P.P.SINGH (PARTNER) Membership Number: 072754
ANNEXURE “C” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF J.K. CEMENT LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated financial statements of the company as of and for the year ended 31st March, 2017, we have audited the internal financial controls over financial reporting of J.K. CEMENT LIMITED (“the Holding Company”) and its subsidiary which is incorporated in India as of that date.
MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Respective Board of Directors of the Holding Company and its subsidiary, which is company incorporated in India are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Holding Company and its subsidiary which is incorporated in India, have , in all material respects, an adequate internal financial controls system over financial reporting and
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such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For P.L. TANDON & Co. Chartered Accountants Registration Number: 000186C
Place: KANPUR Date: 13th May, 2017
P.P.SINGH (PARTNER) Membership Number: 072754
CONSOLIDATED BALANCE SHEET as at 31st March, 2017
` /Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
4,51,839.02 12,674.80 2,332.12 -
4,23,331.67 32,108.64 2,021.88 -
4,04,673.69 33,714.47 2,065.46 16.16
4 5 6
1,500.84 14,264.06 9,773.30 4,92,384.14
1,525.47 13,812.25 12,980.61 4,85,780.52
211.25 6,131.49 11,261.54 4,58,074.06
7
56,089.29
49,310.61
54,147.60
8 9 10 11 12 13 14
6,526.00 20,193.34 42,624.56 99.20 4,925.82 17,583.05 1,48,041.26 6,40,425.40
6,337.79 21,134.75 37,202.27 109.74 1,745.18 547.47 16,318.55 1,32,706.36 6,18,486.88
3,224.71 17,708.01 39,284.20 114.62 4,815.27 467.52 18,822.66 1,38,584.59 5,96,658.65
6,992.72 1,68,955.02 1,75,947.74 398.74 1,76,346.48
6,992.72 1,51,709.75 1,58,702.47 975.46 1,59,677.93
6,992.72 1,51,201.80 1,58,194.52 1,277.33 1,59,471.85
2,90,623.46 17,671.71 2,237.99 21,107.33 5,271.37 3,36,911.86
2,87,106.61 13,974.70 2,022.71 21,652.25 5,652.69 3,30,408.96
2,72,347.84 11,687.35 1,800.42 20,746.40 6,051.88 3,12,633.89
22,441.35 23,371.51 70,868.97 8,382.12 1,946.56 156.55 1,27,167.06 4,64,078.92 6,40,425.40
24,935.55 30,469.10 63,729.38 7,585.48 1,680.48 1,28,399.99 4,58,808.95 6,18,486.88
29,924.88 30,711.18 54,696.65 7,656.94 1,563.26 1,24,552.91 4,37,186.80 5,96,658.65
Note
ASSETS
Non-current assets Property, plant and equipment Capital work-in-progress Other intangible assets Intangible assets under development Financial assets (i) Investments (ii) Others Other non-current assets Total non-current assets Current assets Inventories Financial assets (i) Current investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other(iii) than above (v) Other current financial assets Current tax assets (net) Other current assets Total current assets Total assets
2 3
EQUITY AND LIABILITIES
Equity Equity share capital 15 Other equity 16 Equity attributable to equity holders of the J K Cement Ltd. Non-controlling interests Total equity Liabilities Non-current liabilities Financial liabilities (i) Borrowings 17 (ii) Other financial liabilities 18 Long-term provisions 19 Deferred tax liabilities (net) 20 Other non-current liabilities 21 Total non-current liabilities Current liabilities Financial liabilities (i) Borrowings 22 (ii) Trade payables 23 (iii) Other financial liabilities 24 Other current liabilities 25 Short-term provisions 26 Current Tax liability (Net) 13 Total Current liabilities Total liabilities Total equity and liabilities The accompanying notes to the financial statements This is the Balance Sheet referred to in our report of even date For P.L.Tandon and Co., For and on behalf of the Board of Directors of Chartered Accountants J K Cement Limited ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
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Directors
CONSOLIDATED STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2017
` /Lacs Note Revenue from operations Other income Total income
27 28
Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods, stock-in-Trade and work-in-progress Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses Total Expenses Profit/(loss) before exceptional items and tax Exceptional items Profit/(loss) before tax Tax expense: Current tax MAT Credit entitlement Earlier Years Tax Adjustments Deferred tax Profit/ (loss) for the year Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans Income tax relating to remeasurement of defined benefit plans Exchange differences on translations
29
EXPENSES
Total comprehensive income for the year Profit attributable to: Equity holders of the J K Cement Limited Non-controlling interests Other comprehensive income attributable to: Equity holders of the J K Cement Limited Non-controlling interests Total comprehensive income attributable to: Equity holders of the J K Cement Limited Non-controlling interests Earnings per equity share (` ) Basic Diluted The accompanying notes to the financial statements This is the Statement of profit and loss referred to in our report of even date For P.L.Tandon and Co., For and on behalf of the Board of Directors of Chartered Accountants J K Cement Limited ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
30 31 32 33 34
For the year ended 31 March 2017 4,69,487.60 5,029.39 4,74,516.99
For the year ended 31 March 2016 4,36,877.80 4,980.79 4,41,858.59
73,794.08 92.50 2,102.72 31,554.28 29,540.31 21,694.99 2,85,244.97 4,44,023.85 30,493.14 1,931.62 28,561.52
70,947.77 151.78 (1,418.37) 26,874.65 30,492.59 19,739.57 2,85,706.40 4,32,494.39 9,364.20 9,364.20
7,047.08 (7,047.08) (2.75) 6,488.28 22,075.99
3,060.00 (3,060.00) (700.07) 4,580.81 5,483.46
48.17 (16.67) (1,896.15) (1,864.65) 20,211.34
243.61 (84.31) (2,117.90) (1,958.60) 3,524.86
22,652.72 (576.73) 22,075.99
5,785.32 (301.86) 5,483.46
(1,864.65)
(1,958.60)
(1,864.65)
(1,958.60)
20,788.07 (576.73) 20,211.34
3,826.72 (301.86) 3,524.86
32.39 32.39
8.27 8.27
Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
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Directors
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31st March, 2017
` /Lacs
A.
For the year ended 31 March 2016
28,002.98
10,096.19
21,694.99 2,709.83 38.29 379.43 31.50 29,571.26 (3,365.71) (239.67) (148.80) (4,811.31) 21.48 73,884.27
19,739.57 13.19 16.29 47.74 159.30 30,370.76 (4,084.72) (165.51) (745.07) (1,615.30) 7.72 (7.81) 53,832.35
(7,097.59) 11,032.68 5,226.63 654.06 (194.18) (6,778.68) 959.63 1,984.65 2,306.48 81,977.95 (6,032.32) 75,945.63
(538.48) 9,423.36 2,400.32 278.56 53.23 4,836.99 (1,953.38) (8,231.11) 954.92 61,056.76 (3,054.84) 58,001.92
10.54 (188.21) 264.28 2,091.46 (34,473.66) (992.55) (33,288.14)
4.88 (3,113.08) (1,880.71) 4,207.95 7.81 (38,129.40) (1,858.70) (40,761.25)
CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax Adjustment for :Depreciation Loss/ (profit) on the sale of fixed asset Impariment of Asset/written off Ind(AS) adjustment OCI adjustment Interest paid Interest received Profit on sale of current Investment Net fair value gain on financial assets measured at fair value through profit or loss Government grant Mines restoration charges Dividend Income Operating Profit Before Working Capital Changes Movements in working capital :Increase / (Decrease) in Trade Payables Increase / (Decrease) in Other financial liabilities Increase / (Decrease) in Other liabilities Increase / (Decrease) in provisions-Short term Increase / (Decrease) in provisions- long term (Increase )/ Decrease in Inventories (Increase)/ Decrease in Trade receivables (Increase)/ Decrease in Other financial assets (Increase)/ Decrease in Other assets Cash Generated From Operations Less : Income Tax Paid (inclusive of tax deducted at source) Net Cash From Operating Activities
B.
For the year ended 31 March 2017
CASH USED IN INVESTING ACTIVITIES Movement in fixed deposit Net (purchase) of current Investment Net (purchase) of Investment Interest received Dividend Received Net proceeds / (purchase) of Fixed Asset Exchange Rate Fluctuation Reserve on Conversion Net Cash Used In Investing Activities
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CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31st March, 2017
` /Lacs
C.
For the year ended 31 March 2017
For the year ended 31 March 2016
(915.89) (689.94) (2,494.20) (29,768.66) (3,366.51) (37,235.20) 5,422.29 37,202.27 42,624.56 5,422.29
19,121.48 (4,989.33) (30,088.24) (3,366.51) (19,322.60) (2,081.93) 39,284.20 37,202.27 (2,081.93)
CASH FLOW FROM FINANCING ACTIVITIES Advances to related party Net (Repayment) of Long Term Borrowings Net (Repayment) of Short Term Borrowings Share Capital raised Interest Expense Paid (inclusive of tax deducted at source) Dividend paid Net Cash Used in Financing Activities Net Increase/( Decrease ) in Cash and Cash Equivalents Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year
Notes : 1. Cash and cash equivalents includes cash in hand and bank balances including Fixed Deposits. For P.L.Tandon and Co., Chartered Accountants ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754 Place : Kanpur Dated : 13th May, 2017
For and on behalf of the Board of Directors of J K Cement Limited Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
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Directors
STATEMENT OF CHANGE IN EQUITY for the year ended 31st March, 2017
(A) EQUITY SHARE CAPITAL
Balance at the beginning of the year Changes in equity share capital during the year Balance at the end of the reporting period
As at 31 March 2017 No. of Shares Amount 6,99,27,250 6,992.72 6,99,27,250 6,992.72
As at 31 March 2016 No. of Shares Amount 6,99,27,250 6,992.72 6,99,27,250 6,992.72
` /Lacs As at 31 March 2015 No. of Shares Amount 6,99,27,250 6,992.72 6,99,27,250 6,992.72
(B) OTHER EQUITY ` /Lacs Reserves and Surplus
Other Comprehensive Income
Total
Securities premium account
Debenture redemption reserve
General reserve
Retained earnings
Balance at 1 April 2015 Impacts due to Ind AS Adjustments Restated balance at 1 April 2015
25,988.60 25,988.60
6,662.50 6,662.50
66,501.31 66,501.31
52,049.39 47.74 52,097.13
Profit for the year Other comprehensive income/ (loss) for the year Total comprehensive income for the year Adjustments to current year Transfer to/(from) general reserve Transfer to debenture redemption reserve Dividend paid Dividend distribution tax Balance at 31 March 2016 Restated balance at the beginning of the reporting period
25,988.60 25,988.60
1,581.95 8,244.45 8,244.45
3,000.00 69,501.31 69,501.31
5,785.32 5,785.32 (3,000.00) (1,581.95) (2,797.09) (569.42) 49,933.99 49,933.99
- 1,51,201.80 47.74 - 1,51,249.54 5,785.32 (1,958.60) (1,958.60) (1,958.60) 3,826.72 (2,797.09) (569.42) (1,958.60) 1,51,709.75 (1,958.60) 1,51,709.75
-
1,710.65
5,000.00 (176.29)
22,652.72 22,652.72 (5,000.00) (1,710.65)
(1,864.65) (1,864.65) -
Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transfer to/(from) general reserve Transfer to debenture redemption reserve Adjustments during the year Dividend paid Dividend distribution tax Balance at 31 March 2017
25,988.60
9,955.10
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74,325.02
(2,797.09) (569.42) 62,509.55
22,652.72 (1,864.65) 20,788.07 (176.29) (2,797.09) (569.42) (3,823.25) 1,68,955.02
NOTES
on consolidated financial statements for the year ended 31st March, 2017
1.
1.
SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS
(c)
Foreign Subsidiaries, being non integral foreign operations, revenue items are consolidated at the rate prevailing on the date of transactions. All assets and liability are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognized in Other Comprehensive Income in accordance with Ind AS.
(d)
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as the Company’s separate financial statements.
(e)
Calendar year as accounting year is adopted by J.K. Cement (Fujairah) FZC and J.K. Cement Works (Fujairah) FZC and the books are being prepared on year ending 31.12.2016.
Principles of Consolidation. The consolidated financial statements of the Group have been prepared on the following basis: (a)
(b)
The consolidated financial statements of the Group are prepared in accordance with Accounting Standard IND(AS) 110 “ Consolidated Financial Statements” issued by ICAI. The financial statements of the Company, its Subsidiary Company and Joint Venture Company have been consolidated on a line-by-line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances.
2. The Companies considered in the consolidated financial statements are: Name of the Company J.K. Cement (Fujairah)FZC J.K. Cement Works (Fujairah)FZC Bander Coal Company Pvt Ltd Jaykaycem(Central)Ltd
Nature of Company Subsidiary Fellow Subsidiary Joint Venture Subsidiary
Country of Incorporation U.A.E. U.A.E. India India
Holding as on31.03.2017 100% 90% 37.5% 100%
Date of period consolidation Calender year 2016 Calendar year 2016 FY 2016-2017 FY 2016-2017
3.
Investment in subsidiary company is expressed in Indian Rupees at the rate of exchange prevailing at the date of investment.
4.
Other Significant Accounting Policies: These are set out under ‘Significant Accounting Policies’ as given in the Standalone Financial Statements of J.K. Cement Ltd.
5.
The Subsidiary Companies have prepared the Financial Statements in accordance with International Financial Reporting Standards for Small and Medium Enterprises(IFRS for SME’s)
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F-128
9,097.20
69,729.45
5,64,679.50
-
5,64,679.50
32,092.48
5,32,587.02
-
5,32,587.02
32,092.48
13,665.70
13,665.70
-
1,090.81
89.43
6,470.20
3,225.16
3,365.69
4,680.32
4,09,240.42
69,729.45
21,029.84
54,635.66
54,635.66
2,649.46
-
265.93
-
556.82
471.13
660.80
7.22
31,464.44
10,589.21
7,970.65
Ind AS Opening as Additions Adj per Ind AS
Gross Block
16.16
32,092.48
5,32,587.02
13,665.70
-
1,090.81
89.43
6,470.20
3,225.16
3,365.69
4,680.32
4,09,240.42
69,729.45
21,029.84
As at 31 March 2016
-
26,398.14 5,92,917.02
1,09,255.35
1,09,255.35
19,433.84
49.48 12,658.64
813.40
1,356.74
6,964.30 5,80,258.38
55.66
89.43 -
1,047.65
2,054.81
1,606.87
3,688.60 10,297.52
-
222.60 1,599.12
16,265.68
-
-
-
(3,270.50)
7.69
389.65
4,687.54
92,936.66
9,240.29 4,31,464.57 3,636.84
-
526.79
8,918.58
As at 31 March 2016
79,791.87
As at 31 March 2017
89,048.63
-
-
89,048.63
1,100.49
688.04
47.47
747.20
1,312.67
1,291.87
38.93
77,908.89
5,913.07
As at 1 April 2015
28,979.59
20.90
Disposal
3,072.76 5,64,695.66
1,621.99
1,450.77
4.82
(40.37)
181.94
229.36
1,075.02
Disposal
# Cost incurred by company ownership of which vest with State Electricity Boards & Indian Railways.
Total
Capital work-in-progress
Total
Leasehold land
Assets under Finance Lease
1,090.81
6,470.20
Railway sidings #
Other assets
3,225.16
Furniture and fixtures
89.43
3,365.69
Vehicles
Rolling stock
4,680.32
Plant & equipment-Others #
4,09,240.42
21,029.84
As at 31 March 2016
1,490.88
- 5,28,076.29 39,692.13
16.16
5,28,076.29
33,714.47
16.16
Building
Plant and equipment
12,179.64
181.58
4,219.58
311.88
284.92
3,311.61
18,141.20
5,957.25
5,793.23
- 4,94,345.66 39,692.13
3,082.44
-
868.86
89.43
2,250.62
3,095.22
3,310.13
1,368.71
3,92,174.24
63,772.20
15,236.61
Opening as per Ind Additions AS
Gross Block
33,714.47
4,94,345.66
Freehold land
Tangible Assets
Particulars
Total
Intangible Asset under Development
Capital work-in-progress
Total
Leasehold land
Assets under Finance Lease
868.86
2,250.62
Railway sidings #
Other assets
3,095.22
Furniture and fixtures
89.43
3,310.13
Vehicles
Rolling stock
1,368.71
Plant & equipmentOthers #
3,92,174.24
63,772.20
Plant and equipment
18,319.05 (3,082.44)
Ind AS Adj
Buildings
As at 1 April 2015
Freehold land
Tangible Assets
Particulars
2. PROPERTY, PLANT AND EQUIPMENT
-
-
89,671.97
1,723.83
-
688.04
47.47
747.20
1,312.67
1,291.87
38.93
-
-
18,877.10
321.33
114.91
8.19
300.45
315.23
421.89
183.67
-
-
1,09,255.35
-
1,09,255.35
2,054.81
-
813.40
55.66
1,047.65
1,606.87
1,599.12
222.60
92,936.66
8,918.58
-
21,469.58
21,469.58
511.77
-
167.75
8.19
628.53
347.74
416.39
261.40
15,917.40
3,210.41
Ind AS Opening as Additions Adj per Ind AS
2,941.99
-
Additions as per Ind As
57.43
378.76
-
-
19,660.59
-
-
Ind AS Adj
-
21,469.58
-
21,469.58
511.77
-
167.75
8.19
628.53
347.74
416.39
261.40
15,917.40
3,210.41
-
-
1,09,255.35
2,054.81
-
813.40
55.66
1,047.65
1,606.87
1,599.12
222.60
92,936.66
8,918.58
-
As at 31 March 2016
12,014.41
-
As at 31 March 2017
484.00
2,747.33
-
981.30
63.85
1,813.83
1,953.25
1,782.08
2,305.57 1,28,419.36
-
2,305.57 1,28,419.36
(180.75)
-
(0.15)
-
(137.65)
1.36
233.43
2,274.75 1,06,579.31
114.58
Disposal
77.21 1,09,255.35
-
-
77.21
47.78
(10.45)
21.03
114.64
(32.27)
(63.52)
Disposal
Additions as per Ind As
783.49 19,660.59
783.49
-
114.91
8.19
300.45
315.23
421.89
183.67
726.06 14,995.50
Ind AS Adj
Depreciation
623.34 89,671.97 18,877.10
623.34
623.34
2,941.99
77,908.89 14,269.44
5,913.07
-
Opening Ind AS as per Ind Additions Adj AS
Depreciation
16.16
32,092.48
4,23,331.67
11,610.89
-
277.41
33.77
5,422.55
1,618.29
1,766.57
4,457.72
3,16,303.76
60,810.87
21,029.84
As at 31 March 2016
` /Lacs
As at 31 March 2017
4,203.54
-
375.44
25.58
8,483.69
1,735.35
1,854.76
4,55,424.15 4,64,497.66
32,092.48 12,658.64
4,23,331.67 4,51,839.02
11,610.89 13,518.35
-
277.41
33.77
5,422.55
1,618.29
1,766.57
4,457.72
3,16,303.76 3,24,885.26
60,810.87 67,777.46
21,029.84 28,979.59
As at 31 March 2016
Net Block
` /Lacs
4,38,404.32 4,55,440.31
16.16
33,714.47
4,04,673.69
10,455.81
-
180.82
41.96
1,503.42
1,782.55
2,018.26
1,329.78
3,14,265.35
57,859.13
15,236.61
As at 1 April 2015
Net Block
NOTES
on consolidated financial statements for the year ended 31st March, 2017
3,730.34
Total
3,769.06
3,769.06
742.70
1,148.98
535.65
535.65
Opening as per Additions Ind AS
Total
-
38.72
38.72
Gross Block
3,730.34
1,877.38
1,877.38
-
1,110.26
742.70
-
Disposal
-
55.26
1,877.38 1,747.18
742.70
4,304.71
949.22
742.70
As at 31 March 2016
1,664.88
9.43
912.75
742.70
As at 1 April 2015
1,684.63
As at 31 March 2017
3,769.06
1,877.38
1,148.98
742.70
Opening As at as per Additions Disposal 31 March Ind AS 2016
1,877.38
742.70
1,148.98
Ind AS Adj
Ind AS Adj
Gross Block
Minning Rights
Goodwill
Computer Software
Intangible Assets
As at 31 March 2016
1,877.38
Minning Rights
Particulars
1,110.26
742.70
As at 1 April 2015
Goodwill
Computer Software
Intangible Assets
Particulars
3. OTHER INTANGIBLE ASSETS
-
-
Ind AS Adj
Ind AS Adj
1,747.18
55.26
742.70
949.22
225.41
46.97
178.44
-
-
Ind AS Adj
Depreciation
78.98
36.47 42.51
Opening as per Additions Ind AS
1,664.88
742.70 912.75 9.43
Opening Ind AS as per Additions Adj Ind AS
Depreciation
225.41
46.97
-
178.44
Additions as per Ind As
78.98
36.47 42.51
-
Disposal
(3.32)
(3.32)
1,972.59
102.23
742.70
1,127.66
As at 31 March 2017
1,747.18
742.70 949.22 55.26
Additions As at as per Disposal 31 March Ind As 2016
` /Lacs As at 31 March 2016
` /Lacs
2,021.88
-
556.97
2,021.88
2,332.12
1,822.12 1,775.15
-
199.76
As at As at 31 March 31 March 2016 2017
Net Block
2,065.46
197.51 199.76 1,867.95 1,822.12
As at 1 April 2015
Net Block
NOTES
on consolidated financial statements for the year ended 31st March, 2017
F-129
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
4.
INVESTMENTS
A.
Investment in equity instruments (fully paid-up) Unquoted -5200 (31st March 2016 : 3400, 1st April 2015 : 8000) equity shares of ReNew Wind Energy AP (Pvt.) Ltd. (Face value ` 10) - 3140101 (31st March 2016 : 3,140,101, 1st April 2015 : 3,140,101) equity shares of VS Legnite Power Pvt. Ltd.@ (Face value ` 10) at FVTPL
B.
C.
Investment in preference shares (fully paid up) Unquoted - Share Application Money-Compulsory convertible preference Shares Others at FVTPL - 2785552 (31st March 2016 : 2785552, 1st April 2015 : 2785552) 0.01% cumulative redeemable Preference shares in VS Legnite Power Pvt. Ltd. (Face value ` 10) Investment In Mutual Funds Quoted 50,00,000 HDFC fmp 1302D Sep2016(1)Regular-Growth -Series-37 Maturity date 2020 50,00,000 HDFC fmp 1188D Mar-2017(1)-Regular-Growth-Series38Maturity date-29-6-2020
D.
Investments in Bonds 50 State bank of India SR-111 8.39 BD perpetual Bonds Face value per Bonds ` 1000000 purchased @991285
Aggregate amount of unquoted investment
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
5.20
3.40
8.00
-
107.71
107.71
-
1,318.82
-
95.54
95.54
500.00
-
-
500.00
-
-
495.64 1,500.84 5.20
1,525.47 1,525.47
211.25 211.25
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10,413.25 130.93 12.03 3,707.85 14,264.06
10,638.44 89.01 82.55 3,002.25 13,812.25
2,168.98 129.69 178.34 3,654.48 6,131.49
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
9,720.69 26.92 25.69 9,773.30
12,933.09 26.36 21.16 12,980.61
11,194.16 41.51 25.87 11,261.54
` /Lacs
5.
OTHER NON-CURRENT FINANCIAL ASSETS
Fixed Deposits Advance to Employees Vehicle Loan Recoverable Security Deposits
` /Lacs
6
OTHER NON-CURRENT ASSETS
Capital Advances Prepaid Rent Deferred Employee Compensation
F-130
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
7
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
9,142.96 7,933.27 8,032.86 16.45 29,625.49
6,347.46 9,801.12 8,260.75 23.43 23,632.40
1,338.26 56,089.29
1.91 1,243.54 49,310.61
6,897.77 9,815.70 6,836.28 14.95 30,296.56 1.20 285.14 54,147.60
INVENTORIES
(Valued at lower of cost or/and net realisable value) Raw Materials Work-in-Process Finished goods Stock-in-Trade Consumable Stores and Spares Goods in transit : - Raw Materials - Consumable Stores and Spares
Stock of Stores, Spare parts also includes stock of Project material aggregate to ` Nil (31 March 2016 is ` 156.57 lacs and 1 April 2015 ` 937.50 Lac). ` /Lacs
8.
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
-
1,501.48
-
-
2,002.64
-
1,076.47
522.57
-
575.19
525.15
-
CURRENT INVESTMENTS
Investment in Mutual Funds at FVTPL Quoted - Nil ( 31st March 2016 : 92,772.634, 1st April 2015 : nil) units in IDBI Liquid Fund made Growth - Nil (31st March 2016 : 84,283.316, 1st April 2015 : nil) units in SBI Premium Liquid Fund -6568620.89 (31st March 2016 : 3,489,841.073, 1st April 2015 : nil) units in ICICI Prudential Regular Income - 17,74,748.873 (31st March 2016 : 1,774,748.873, 1st April 2015 : nil) units in HDFC Short Term Fund-Growth - Nil(31st March 2016 : nil, 1st April 2015 : 50,000,000) units in BOI AXA FIXED MATURITY PLAN-SERIES13(380) - Nil( 31st March 2016 : nil, 1st April 2015 : 5,000,000) units in Baroda Pioneer FMP-372 Days - Nil(31st March 2016 : nil, 1st April 2015 : 5,000,000) units in HDFC FMPSERIES 29 (384DMARCH2014(1) - 27,21,606.837(31st March 2016 : 493,622.399, 1st April 2015 : 493,622) units in Edelweiss Erstwhile J.P.Morgan Active Bond Fund Institutional - Nil(31st March 2016 : 2,721,606.8, 1st April 2015 : 2,721,606.8) units in JP morgan govt.Securities fund-regular plan Growth option -Nil( 31st March 2016 : 2,638,078.471, 1st April 2015 : 2,638,078.471) units in SBI magnum Guilt Fund - Nil (31st March 2016 : 1,652,073.352, 1st April 2015 : nil) units in SBI magnum Guilt Fund -Nil (31st March 2016 : nil, 1st April 2015 : 26,741.654) units in IDBI Liquid Fund - 31,80,661.58(31st March 2016 : nil, 1st April 2015 : nil) units in Axis Mutual Fund
F-131
548.52 545.45 546.68 372.44
67.09
62.71
-
339.27
320.03
-
848.33
801.04
-
531.26
-
-
-
400.28
500.81
-
-
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
- 39,292.91(31st March 2016 : nil, 1st April 2015 : 26,741.6) units in SBI Premier Liquid fund
1,000.28
-
-
-46,894.59 (31st March 2016 : nil, 1st April 2015 : nil) units in HDFC Liquid Fund Growth -86,538.37( 31st March 2016 : nil,1st April 2015 : nil) units in IDBI Liquid Fund -Regular Plan-Growth
1,500.46 1,500.35
-
-
Aggreegate amount of quoted Investments
6,526.00
6,337.79
3,224.71
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
11,604.71
7,967.31
6,946.25
8,588.63 739.12 (739.12) 20,193.34
13,167.44 602.00 (602.00) 21,134.75
10,761.76 566.22 (566.22) 17,708.01
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
4,007.82
4,600.65
8,132.12
8,288.98 30,421.23 (151.93) 42,566.10 33.23 25.23 42,624.56
2,919.59 29,764.84 (121.29) 37,163.79 35.74 2.74 37,202.27
2,507.83 28,753.61 (145.97) 39,247.59 33.04 3.57 39,284.20
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
99.20
109.74
99.20
109.74
114.62 114.62
8.
CURRENT INVESTMENTS (CONTD.)
` /Lacs
9
TRADE RECEIVABLES
Secured Considered good Unsecured Considered good Considered doubtful Less: Provision for doubtful balances
` /Lacs
10
CASH AND CASH EQUIVALENTS
i.
Balance with banks: - In current accounts - In Fixed Deposits a) upto 3 months b) more than 3 months but upto a year - Less: Overdraft against Fixed Deposits
ii. iii.
Cash on hand Cheques in hand
` /Lacs
11
OTHER BANK BALANCES
Earmarked balances with banks: Bank balances other than mentioned in Note No.10
F-132
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
12
OTHER CURRENT FINANCIAL ASSETS
Unsecured Loans and Advances considered doubtful Provision for doubtful advances Loans and Advances to Related Parties Other Loans and Advances * Advance to Employees Interest Accrued Others
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
49.63 (49.63) 915.89 2,085.94 292.41 1,258.12 373.46 4,925.82
31.41 (31.41) 15.00 632.78 258.13 832.39 6.88 1,745.18
31.93 (31.93) 1,471.75 2,060.31 322.22 954.11 6.88 4,815.27
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
(156.55)
547.47
(156.55)
547.47
467.52 467.52
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
5,806.66
5,273.86
10,887.79
18.85 2,531.73 7,871.93 15.45 1,338.43 17,583.05
15.15 2,284.11 6,954.80 13.59 1,777.04 16,318.55
15.15 608.34 5,237.38 13.59 2,060.41 18,822.66
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
6,992.72
6,992.72
6,992.72
6,992.72
6,992.72
6,992.72
* includes Govt.subsidy ` 1403.11 Lacs (Previous year Nil)
` /Lacs
13
CURRENT TAX (NET)
Advance tax (Net of provision for income tax of ` 7047.08 lacs)
` /Lacs
14
OTHER CURRENT ASSETS
Balances with excise and custom department Prepayments - Rent - Expenses Advances recoverable in cash or in kind Deferred employee compensation Others
` /Lacs
15
SHARE CAPITAL
Authorised: 8,00,00,000 (As at 31 March 2016 and 1 April 2015 - 8,00,00,000) equity shares of ` 10/- each Issued, subscribed & fully paid up: 6,99,27,250 (As at 31 March 2016 and 1 April 2015 - 6,99,27,250) equity Shares of ` 10/- each
F-133
NOTES
on consolidated financial statements for the year ended 31st March, 2017
a.
Terms and rights attached to equity shares Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However, same is subject to the approval of the shareholders in the Annual General Meeting.
b.
Reconciliation of number of shares outstanding at the beginning and end of the year : ` /Lacs
c.
Outstanding at the 1 April 2015
Number of Shares 6,99,27,250
Amount 6,992.72
Equity Shares issued during the year in consideration for cash Outstanding at the 31 March 2016 Equity Shares issued during the year in consideration for cash Outstanding at the 31 March 2017
6,99,27,250 6,99,27,250
6,992.72 6,992.72
Shareholders holding more than 5% shares in the company ` /Lacs As at 31 March 2017 No. of Shares
Percentage
As at 31 March 2016 No. of Shares
As at 1 April 2015
Percentage
No. of Shares
Percentage
2,26,55,100 1,42,79,843 72,28,418
32.40% 20.42% 10.34%
Yadu International Ltd
2,99,49,518
42.83%
2,26,55,100
32.40%
Yadupati Singhania Juggilal Kamlapat Holding Ltd.
1,22,84,198 Nil
17.57% Nil
1,42,76,002 72,94,418
20.41% 10.43%
` /Lacs As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
25,988.60
25,988.60
25,988.60
25,988.60
25,988.60
25,988.60
8,244.45 1,710.65 9,955.10
6,662.50 1,581.95 8,244.45
5,030.00 1,632.50 6,662.50
69,501.31 5,000.00 (176.29) 74,325.02
66,501.31 3,000.00 69,501.31
64,540.05 4,000.00 (2,038.74) 66,501.31
49,933.99
52,049.39
39,321.88
22,652.72 5,000.00 1,710.65
47.74 5,785.32 3,000.00 1,581.95
7,362.50 14,364.02 4,000.00 1,632.50
16. OTHER EQUITY a.
b.
c.
d.
Securities premium reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year Debenture redemption reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year General reserve Balance at the beginning of the year Add: Transfer from retained earnings Less: Adjustment during the year Balance at the end of the year Retained earnings Balance at the beginning of the year Add: Impacts due to Ind AS Adjustments (Date of transition) Add: Ind AS profit for the year (J K Cement Limited) Less: Transfer to general reserve Less: Transfer to debenture redemption reserve
F-134
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
16. OTHER EQUITY (CONTD.) Less: Dividend on equity shares Less: Dividend distribution tax on equity shares e.
f.
Foreign Currency Translation Reserve As per last Balance Sheet Adjustment during the year Transfer to Retained Earnings Other Comprehensive Income Balance at the beginning of the year Addition during the year Balance at the end of the year
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
2,797.09 569.42 62,509.55
2,797.09 569.42 49,933.99
2,797.09 569.42 52,049.39
-
-
1,683.69 (398.69) (1,285.00)
(1,958.60) (1,864.65) (3,823.25) 168955.02
(1,958.60) (1,958.60) 151709.75
1,51,201.80
Nature and purpose of other reserves/ other equity General reserve The Company appropriates a portion to general reserves out of the profits either as per the requirements of the Companies Act 2013 (‘Act’) or voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act Other Comprehensive Income a) Remeasurement of defined benefit plans Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits: (a) actuarial gains and losses (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset) b) Foreign Currency Translations Foreign Currency Translation adjustments on foreign subsidiaries. ` /Lacs
17
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
66,197.39
66,100.23
59,491.94
7,300.00
-
5,300.00
2,33,666.65 14,032.48 539.29 239.79 7,318.54
2,30,486.75 19,396.44 339.84 193.06 5,537.02
2,24,371.72 13,441.38 408.27 202.02 2,879.24
5,005.54 531.68 2,90,623.46
4,880.61 648.34 2,87,106.61
5,016.97 876.90 2,72,347.84
BORROWINGS
Secured Non convertible debentures Less: Current maturities of non convertible debentures (Refer note 24) Term loans (Secured) - From banks Less: Current maturities of term loans (Refer note 24) - Vehicle loans Less: Current maturities of vehicle loans (Refer note 24) - VAT loans from Government Unsecured Deferred sales tax liabilities Less: Current maturities of def.sales tax liabilities (Refer note 24)
F-135
NOTES
on consolidated financial statements for the year ended 31st March, 2017
a. (1)
Securities NCD as shown above includes ` 302.61 Lacs ( 31 March 2016 ` 399.82, 1 April 2015 ` 483.51 Lacs) towards amortised expenses.
b)
From Consortium of Banks: ` 8619.78 lacs (8436.78 lacs) Secured by First Pari-passu charge by way of equitable mortgage of all the immovable Properties (except mining land) and hypothecation of all moveable non current assets, present and future pertaining to J.K. Cement Works and Thermal power plant, Muddapur, Karnataka.
c)
From State Bank of India: ` 3815.13 lacs(` 4360.73 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
d)
From Allahabad Bank: ` 2031.21 lacs ( ` 2421.84 lacs) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
Non Convertible Debentures(NCDs): ` 66500.00 lacs (` 66500.00 lacs) i)
Security for NCDs for ` 36500.00 lacs ( ` 36500.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge on the assets specified in (2)(i)(b) below .
ii)
Security for NCDs for ` 30000.00 lacs (` 30000.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of movable fixed assets pertaining to Company’s existing cement plant at village Muddapur Karnataka.
(2)
(i)
Term Loan as shown above includes ` 344.92 Lacs (31 March 2016 ` 157.47, 1 April 2015 ` 152.82 Lacs) towards amortised expenses Term Loans secured against Cement Plants at Rajasthan a) From Canara Bank: ` 2475.56 lacs (` 3575.85 lacs) & From Export Import Bank of India: ` 4464.75 lacs ( ` 5000 lacs) Secured by equitable mortgage of immovable properties and hypothecation of movable assets pertaining to undertaking of J.K. Cement Works, Gotan except current assets and vehicles. b)
From other Banks: ` 20256.25 lacs ( ` 18337.46 lacs)Secured by first pari-passu charge by way of equitable mortgage of all the immovable properties and hypothecation of all the movable assets of the Company both present and future save and except i) inventories, book debts, cash and bank balances and all assets pertaining to J.K. Cement Works, Gotan, J.K. Cement Works, Muddapur, Karnataka ii) properties for office and guest house including those having exclusive charge of other lenders iii) New Cement plant at Mangrol and Jharli and iv) Putty Plant at Katni, Madhya Pradesh.
(ii) Term Loans secured against Cement Plant at Karnataka a) From Indian Bank( Consortium of Banks) : ` NIL (` 930.45 lacs)
(iii) Term Loans secured against Cement Plant at Rajasthan and Haryana From Consortium of Banks : ` 119092.56 lacs (` 119803.64 lacs) Secured by First charge by way of mortgage, on all the immovable properties, both present and future, of the new cement Plants at Mangrol, Rajasthan including captive power plant of 25 MW and waste heat recovery based power plant of 10 MW and split Grinding Unit at Jharli, Haryana (save and except mining land) and hypothecation of all the movable fixed assets of the above plants (save and except Current Assets), both present and future and second charge on all current assets, present and future, pertaining to the above plants (subject to prior charge created or to be created on the Current Assets in favour of the Working Capital Lenders for securing the Working Capital Facilities). (iv) Term loan secured against Putty Plant at Katni, Madhya Pradesh: ` 9300.00 lacs (` 3800.00 lacs) Secured against exclusive charge on entire movable fixed assets ( by way of hypothecation) and on immovable fixed assets related to the Wall Putty project at Katni, Madhya Pradesh(excluding current assets and mining land, if any). (v) Term Loans secured against the Properties: ` 2392.98 lacs (` 1422.32 lacs) Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.
F-136
NOTES
on consolidated financial statements for the year ended 31st March, 2017
(vi) Term Loans related to Cement Plant at Fujairah : ` 61563.33 lacs (` 62555.15 lacs) First pari-passu charge on the entire movable and immovable fixed assets pertaining to J.K. Cement Works(Fujairah)FZC, UAE as per prevalent local laws in UAE. Hypothecation of Inventories & assignment of trade receivables. Assignment of the rights under the Land Lease Agreement in respect of lease hold land(both plant and mining land). Corporate Guarantee of J.K. Cement Limited for entire tenor of loan Assignment of Insurance Contracts/Insurance proceeds arising from the Insurance Contracts. b.
Term of repayment and interest are as follows : ` /Lacs
Loan From Term Loan - Mangrol / Jharli Plant - IDBI Bank Ltd. - Allahabad - Andhra Bank - Axis Bank - Canara Bank - Dena Bank - Exim Bank - Indian Bank - Indian Overseas Bank - Jammu & Kashmir Bank - Oriental Bank of Commerce - State Bank of India - Union Bank of India - United Bank of India Refinanced Loan - Karnataka Plant - State Bank of India - Andhra Bank - Indian Bank - Indian Overseas Bank Term Loan 1 - Karnataka Plant - IDBI Bank Ltd. - Andhra Bank - Canara Bank - Dena Bank - Exim Bank - Indian Bank - Indian Overseas Bank - Jammu & Kashmir Bank - United Bank of India Term Loan 2 - Karnataka Plant - IDBI Bank Ltd. - Andhra Bank - Dena Bank - Indian Bank - Jammu & Kashmir Bank
Repayment Frequency
Year of Maturity
Rate of Interest p.a.
Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly
2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31 2030-31
Quarterly Quarterly Quarterly
2021-22 2021-22 2021-22
F-137
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
12,870.00 9,900.00 9,899.64 12,543.13 7,425.00 7,487.38 17,325.00 9,899.08 4,826.25 5,568.75 7,488.33 6,435.00 7,425.00
13,500.00 12,499.94 12,390.27 9,912.95 10,000.16 10,001.51 10,005.91 6,501.63 7,498.26 9,993.79 7,500.00 9,999.23
12,825.00 11,875.22 11,875.00 9,500.00 8,900.00 8,900.00 8,900.00 5,785.04 6,675.00 8,900.18 6,675.00 8,900.00
8.50% 9.75% 9.75%
7,279.83 488.37 851.58 -
7,895.65 540.82 930.45 0.34
-
-
-
2,343.60 1,241.40 1,624.92 876.46 714.10 1,750.00 1,560.00 1,124.95 1,750.00
-
-
627.86 396.65 590.05 785.70 589.27
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs Loan From - United Bank of India Loan for Promoter’s Cont. for Fujairah -Dena Bank -Exim Bank -State Bank of India Misc. Capex/Gen Corp Loan - 1 - IDBI Bank Ltd. - Allahabad Bank - State Bank of India Misc. Capex/Gen Corp Loan - 2 - Allahabad Bank - State Bank of India Misc. Capex/Gen Corp Loan - 3 - Canara Bank - Exim Bank SBI Corporate Loan Property Loans -Indian Bank -Indian Bank -ING Vysya Bank Term Loan - New Putty Plant -Exim - Putty, Katni Term Loan - Fujairah Plant - SBI Consortium Non Convertible Debentures Series - A - at 10.25% - at 10.50% - at 11.00% Series - B - at 11.00% Series - C - at 10.50% - at 11.00% Series - D - at 9.65%
Repayment Frequency
Year of Maturity
Rate of Interest p.a.
-
As at 31 March 2016 -
As at 1 April 2015 535.72
As at 31 March 2017
Quarterly Quarterly Quarterly
2021-22 2019-20 2019-20
10.45% 9.75% 8.75%
3,570.69 1,134.32 4,262.64
4,463.59 1,625.00 5,301.35
5,000.00 2,125.00 6,427.45
Quarterly Quarterly Quarterly
2018-19 2018-19 2017-18
9.60% 10.70% 9.00%
857.14 714.18 248.07
1,285.71 1,607.10 573.74
1,714.28 2,500.00 916.52
Quarterly Quarterly
2023-24 2022-23
10.20% 8.50%
2,031.21 3,815.13
2,421.84 4,360.73
2,500.00 5,000.10
Quarterly Quarterly Quarterly
2019-20 2022-23 2023-24
10.25% 9.75% 8.50%
2,475.58 4,464.75 9,469.21
3,575.85 5,000.00 3,480.98
4,722.22 5,000.00 -
Quarterly Quarterly
2018-19 2020-21
10.40% 9.25%
850.98 1,542.00 -
1,422.32 -
1,994.38 117.50
Quarterly
2023-24
9.75%
3,800.00
2,000.00
Quarterly
2024-25
3.25%+ 6 month LIBORE
9,300.00 61,563.33
62,555.15
58,261.42
Annual Annual Annual
2020-21 2020-21 2020-21
10.25% 10.50% 11.00%
9,000.00 9,000.00 7,000.00
9,000.00 9,000.00 7,000.00
Annual
2020-21
11.00%
11,500.00
15,000.00
Annual Annual
2023-24 2023-24
10.50% 11.00%
Annual
2025-26
9.65%
Less : Shown in current maturities of long term debt Balance shown as above
F-138
9,000.00 9,000.00 7,000.00 11,500.00 8,500.00 11,500.00 10,000.00 3,00,511.57 21,332.48
8500.00 11500.00
8,500.00 11,500.00
10000.00 297144.27 19,396.44
2,84,499.99 18,741.38
2,79,179.09
2,77,747.83
2,65,758.61
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
18
OTHER NON-CURRENT FINANCIAL LIABILITIES
Security Deposits
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
17,671.71
13,974.70
17,671.71
13,974.70
11,687.35 11,687.35
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
10.00 2,030.84 197.15 2,237.99
10.00 1,837.04 175.67 2,022.71
10.00 1,622.77 167.65 1,800.42
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
175.67 21.48 197.15
167.65 8.02 175.67
153.91 13.74 167.65
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
58,450.60
55,691.41
49,577.62
14,859.37 840.64 272.97 3,021.94 269.09 18,079.26 21,107.33
18,140.11 700.75 235.44 3,771.44 162.05 11,029.37 21,652.25
17,811.13 616.53 216.10 2,950.11 (31.95) 7,269.30 20,746.40
` /Lacs
19
LONG-TERM PROVISIONS
Provision for employee benefits (Refer note 40) - Gratuity - Leave encashment Provision for Mines Restoration Charges*
` /Lacs
* Provision for Mines Restoration charges: Opening Balance Addition during the year Closing Balance
` /Lacs
20
DEFERRED TAX LIABILITIES (NET)
The balance comprises temporary differences attributable to: Deferred tax liabilities Property, plant and equipment Deferred tax assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on payment basis Ind-AS adjustments MAT Credit adjustment
F-139
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
21
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
5,271.37 5,271.37
5,652.69 5,652.69
6,051.88 6,051.88
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
22,593.28 (151.93) 22,441.35
25,056.84 (121.29) 24,935.55
30,070.85 (145.97) 29,924.88
OTHER NON-CURRENT LIABILITIES
Deferred government subsidies - Capital subsidy sanctioned by Rajasthan government on fixed assets
` /Lacs
CURRENT LIABILITIES
22. SHORT TERM BORROWINGS Loan repayable on demand (Secured)* - From banks Less: Overdraft against Fixed Deposits
* Working Capital Facilities from banks are secured/to be secured by hypothecation of moveable’s including book debts, both present and future, of the unit, ranking paripassu inter se. * Cash credit account : ` 16729.17 lacs (` 19620.69 lacs) Cash credit accounts are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders. * Short Term Loan/Over Draft Account : ` 5864.11 lacs (` 5436.15 lacs) Working Capital facilities are secured by first charge on current assets of the Company namely inventories, book debts etc. and undated cheques covering the exposure.
` /Lacs
23. TRADE PAYABLE Micro ,Small and Medium Enterprises Trade Payables Acceptances
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
403.57 22,967.94 2,3371.51
940.77 27,310.25 2,218.08 30,469.10
681.21 22,582.06 7,447.91 30,711.18
Trade Payables include project creditors for ` 558.04 lacs (31 March 2016 is ` 1776.10 lacs and 1 April 2015 is ` 4437.41 lacs). Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March,2017 as per the terms of Contract.
F-140
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
24
OTHER FINANCIAL LIABILITIES
Current maturities of long-term debt Employee payable Interest accrued but not due on borrowings Interest accrued and due on borrowings Unpaid dividends Unclaimed fraction money Security deposits Expenses & GRR payable Others
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
22,103.95 1,391.66 1,463.51 90.22 99.20 9.23 843.12 19,476.24 25,391.84 70,868.97
20,237.84 1,310.62 1,496.60 253.22 109.74 9.23 801.27 14,431.16 25,079.70 63,729.38
19,820.30 520.78 1,201.57 264.19 114.62 9.24 663.22 10,300.02 21,802.71 54,696.65
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
7,178.34 1,203.78 8,382.12
6,126.08 1,459.40 7,585.48
5,036.80 2,620.14 7,656.94
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
663.09 895.27 388.20 1,946.56
479.36 829.15 371.97 1,680.48
632.28 568.94 322.04 40.00 1,563.26
` /Lacs
25
OTHER CURRENT LIABILITIES
Advance from customers Others
` /Lacs
26
SHORT-TERM PROVISIONS
Employee benefits - Gratuity - Bonus & Superannuation - Leave Encashment Others - Wealth Tax
` /Lacs
27
REVENUE FROM OPERATIONS
Sale of products (including excise duty) Total (i) Other operating revenue Claims realised Government grants Miscellaneous income Total (ii) Revenue from operations [(i) + (ii)]
F-141
For the year ended 31 March 2017
For the year ended 31 March 2016
4,60,200.01 4,60,200.01
4,32,910.30 4,32,910.30
511.69 4,811.31 3,964.59 9,287.59 4,69,487.60
508.31 1,615.30 1,843.89 3,967.50 4,36,877.80
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
28
For the year ended 31 March 2017
For the year ended 31 March 2016
3,269.26 970.31 (165.04) 239.67 715.19
3,059.57 1,026.66 7.81 13.08 165.51 708.16
5,029.39
4,980.79
For the year ended 31 March 2017
For the year ended 31 March 2016
OTHER INCOME
Interest income from financial assets measured at amortised cost - from bank deposits - from others Dividend income from investments measured at fair value through profit or loss Net fair value gain on financial assets measured at fair value through profit or loss Profit on sale of current investment (net) Miscellaneous income
` /Lacs
29
COST OF MATERIALS CONSUMED
Raw material Consumed
73,794.08
70,947.77
73,794.08
70,947.77
For the year ended 31 March 2017
For the year ended 31 March 2016
(7,933.27) (8,032.86) (16.45) (15,982.58)
(9,801.12) (8,260.75) (23.43) (18,085.30)
9,801.12 8,260.75 23.43 18,085.30
9,815.70 6,836.28 14.95 16,666.93
2,102.72
(1,418.37)
For the year ended 31 March 2017
For the year ended 31 March 2016
26,816.09 2,524.13 2,214.06
22,573.68 2,292.29 2,008.68
31,554.28
26,874.65
` /Lacs
30 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND TRADED GOODS Closing Inventory Work-in-Progress Finished Goods Traded Goods Total (A) Opening Inventory Work-in-Progress Finished Goods Traded Goods Total (B) Total (A-B)
` /Lacs
31
EMPLOYEE BENEFITS EXPENSE
Salaries and wages Contribution to provident and other funds Staff welfare expenses
F-142
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
32
FINANCE COST
Interest expenses Other Borrowing Costs (includes bank charges, etc.) Exchange differences regarded as an adjustment to borrowing costs
For the year ended 31 March 2017
For the year ended 31 March 2016
29,572.58 683.42 (715.69)
30,372.27 254.63 (134.31)
29,540.31
30,492.59
For the year ended 31 March 2017
For the year ended 31 March 2016
21,469.58 225.41
19,660.59 78.98
21,694.99
19,739.57
For the year ended 31 March 2017
For the year ended 31 March 2016
16,988.00 11,059.49
16,835.97 9,205.65
1,257.04 8,342.29 134.41 1,107.74 3,351.32 641.58 967.32 66,451.05 63,260.16 51.22 2,777.98 322.69 1,000.00 172.25 0.03 26.77 15,037.52 1,089.70 11,695.23 76,146.69 3,364.49
1,142.19 7,037.29 141.44 940.06 1,774.73 270.80 792.81 82,864.00 58,325.83 54.55 2,366.17 464.05 133.62 56.90 3.49 16.20 10,878.40 683.76 10,473.03 77,971.25 3,274.21
2,85,244.97
2,85,706.40
` /Lacs
33
DEPRECIATION AND AMORTISATION EXPENSE
Depreciation on tangible assets Amortisation on intangible assets
` /Lacs
34
OTHER EXPENSES
Packing material consumed Stores and spares consumed Repairs and maintenance: - Buildings - Plant and machinery - Other Assets Other manufacturing expenses Rent Rates and taxes Insurance Power and fuel Excise Duty Paid Lease rent and hire charges Travelling and conveyance CSR expenses Bad trade receivables / advances / deposits written off Provision for doubtful trade receivables / advances / deposits Net Loss on foreign currency transactions Loss on disposal of Fixed Assets Miscellaneous expenses Sales tax/VAT Selling and promotion expenses Freight and forwarding Advertisement and publicity
F-143
NOTES
on consolidated financial statements for the year ended 31st March, 2017
` /Lacs
35
EARNING PER SHARE
Total profit/ (loss) for the year Weighted average number of equity shares of ` 10/- each (In lacs) EPS - Basic and Diluted (`)
For the year ended 31 March 2017
For the year ended 31 March 2016
22,652.72 699.27 32.39
5,785.32 699.27 8.27
36. RELATED PARTIES (1) (a) Parties where the control/significant influence exists:i) Yadu International Ltd (b) Key Management Personnel & their Relatives: i) Shri Yadupati Singhania Chairman & Managing Director ii) Smt. Shushila Devi Singhania Relative of Chairman & Managing Director iii) Shri Ajay Kumar Saraogi President (Corp.Affairs) & CFO iv) Shri Shambhu Singh Company Secretary v) Shri A.Karati Non Executive Independent vi) Shri J.N Godbole Non Executive Independent vii) Dr. K.B.Agarwal Non Executive Independent viii) Shri K.N.Khandelwal Non Executive Non Independent ix) Shri Raj Kumar Lohia Non Executive Independent x) Shri Suparas Bhandari Non Executive Independent xi) Shri Shyam Lal Bansal Non Executive Independent xii) Mr. Paul Heinz Hugentobler Non Executive Non Independent (c) Enterprises significantly influenced by Key Management Personnel or their Relatives i) Jaykay Enterprises Ltd ii) J.K. Cotton Ltd. iii) Jaykaycem (Eastern) Ltd iv) J.K.Cement(Western) Ltd
(Related parties relationship is as identified by the Company and relied upon by the Auditors).
F-144
NOTES
on consolidated financial statements for the year ended 31st March, 2017
(2) a) Following are the transactions with related parties as defined under section 188 of Companies Act 2013. ` /Lacs For the year ended 31 March 2017 31 March 2016 (i)
(ii)
(iii)
Jaykay Enterprises Ltd - Services received - Rent paid - Expenses Reimbursed J.K. Cotton Ltd - Rent paid - Purchases - Sale of Products J.K. Cement(Fujairah)FZC
Advances given J.K. Cement(Western) Ltd Opening Advances given during the year Received during the year Balance as at close of the year (v) Key Management Personnel and their relatives a) Shri Y.P. Singhania(Chairman & Managing Director) -Remuneration b) Smt Sushila Devi Singhania - Commission - Sitting Fees c) Shri Ajay Kumar Saraogi -Remuneration d) Shri Shambhu Singh -Remuneration e) Other Directors - Commission -Sitting Fees and ` 111.31 lacs (110.97 lacs) paid to other Director Mr. Paul Heinz Hugentobler on professional capacity.
34.47 47.71 50.60
34.17 43.80 50.11
45.42 0.21
45.02 1.81 -
915.89
1,318.82
15.00 15.00 -
15.00 -
1,266.92
726.85
8.00 4.52
7.00 3.91
197.34
171.91
38.15
31.82
64.00 31.41 111.31
49.00 24.33 110.94
(iv)
15.00
b) Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided (except corporate bank guarantee) or received for any related party receivables or payables. For the year ended 31 March 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. c) Compensation of key management personnel of the Group ` /Lacs For the year ended 31 March 2017 31 March 2016 1,368.91 1,004.80 133.50 121.01
- Short-term employee benefits - Other long-term benefits
F-145
NOTES
on consolidated financial statements for the year ended 31st March, 2017
37(1) ADDITIONAL INFORMATIONS, AS REQUIRED UNDER SCHEDULE III OF THE COMPANIES ACT,2013 OF ENTERPRISES CONSOLIDATED AS SUBSIDIARY/JOINT VENTURES ` /Lacs Net Assets i.e. (Total Assets-Total Liabilites) Name of Enterprise
Share in Profit or Loss
As % of Consolidated Assets
Amount (` in lacs)
As % of Consolidated Profit
Amount (` in lacs)
82.82%
146048.09
117.06%
26516.17
0.37%
653.69
-0.01%
(3.14)
17.03% -0.23%
30028.28 (398.74)
-19.60% 2.55%
(4437.31) 576.73
0.01% 100.00%
15.16 176346.48
0.00% 100.00%
0.26 22652.71
Parent J.K.Cement Ltd. Subsidiary (Indian) Jaykaycem Central Ltd. Subsidiary including Fellow Subsidiary (Foreign) J.K.Cement (Fujairah) FZC & J.K.Cement Works (Fujairah) FZC Minority Interest in Foreign Subsidiary Joint Venture Bander Coal Company Pvt. Ltd Total
37 (2). SALIENT FEATURES OF FINANCIAL STATEMENTS OF SUBSIDIARIES (PART-A) ` /Lacs S.No. Name of the Subsidiary Company
Reporting
Share Reserves &
Currency #
Total
Total
Capital
Surplus
Assets
Liabilites
(330.27)
Investment
Profit/
Total Income
(Loss) before Tax
Provision for Tax
Profit/ (Loss) after Tax
Proposed
% of
Dividend
Holding
1
J.K.Cement (Fujairah) FZC *
AED
19,830.39
45,506.17
26,006.05
44,148.40
689.14
30.28
-
30.28
-
100.00
2
J.K.Cement Works (Fujairah) FZC *
AED
20,391.00 (16,402.88) 1,03,863.38
99,875.26
-
26,586.27
(4,467.63)
-
(4,467.63)
-
90.00
4,622.25
-
0.34
(3.14)
-
(3.14)
-
100.00
(Fellow Subsidiary) 3
Jaykaycem (Central) Ltd.
INR
659.01
(5.32)
5,275.94
Notes ; # Exchange Rate adopted for consolidation ` 18.507992 for 1 AED * Company having 31st December as a reporting date.
37 (3). SALIENT FEATURES OF FINANCIAL STATEMENTS OF JOINT VENTURES (PART-B) ` /Lacs Latest S.No.
Name of Joint
Audited
Venture
Balance Sheet Date
1
Bander Coal
31.03.2016
Shares of Joint Ventures held by the
Description
Reason why
of how there
the Joint
Extent of
is significant
ventre is not
Holding
influence
consolidated
company on the year end Amount of Nos.
Investment in Joint Venture
375000
37.50
37.50%
Company Pvt. Ltd
Share holding
Note ; ** Financial Information is based on Unaudited Results
F-146
Networth attributable to Shareholding as per latest audited Balance Sheet -
14.72
Profit/(Loss) for the year** Considered in Consolidation 0.26
Not Conisdered in Consolidation -
NOTES
on consolidated financial statements for the year ended 31st March, 2017
38.(A) CONTINGENT LIABILITIES, CONTINGENT ASSETS AND COMMITMENTS ` /Lacs
19,709.99
As at 31-03-2016 17,519.27
As at 31-03-2015 15,596.90
1,662.53 887.72 1,085.42 1,231.06
1,732.71 3,159.88 1,085.42 1,210.68
1,636.40 3,057.80 1,085.42 1,190.30
4,150.61 839.29 13,782.00
3,718.82 805.02 -
3,272.60 521.03 12,854.00
560.17
-
-
613.89 1,397.99
613.89 412.98 143.95
613.89 383.40 -
As at 31-03-2017 (i) (ii)
(iii)
In respect of claims not acknowledged as debts by the Company OTHER MONEY FOR WHICH THE COMPANY IS CONTINGENTLY LIABLE In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts-no provision has been considered necessary by the Management a) Excise duty b) Sales tax c) Service tax In respect of Interest on “ Cement Retention Price” realised in earlier years
(iv) (v) (vi)
In respect of interest of Rajasthan Entry tax In respect of penalty of non lifting of fly ash The Competition Commission of India CCI has imposed penalty of ` 128.54 crores and ` 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal(COMPAT) against above orders COMPAT has stayed the CCI order in first matter on deposit of ` 6.56 crores and Appeal is being heard.In second matter issued notice and stayed demand in the meantime, stay petition and appeal are yet to be heard. The Company, backed by a legal opinion, believes that it has a good case and accordingly no Provision has been made in the Accounts (vii) In respect of demand raised by Karnataka Government for conversion of agricultural land into non agricultural land for mining purpose FINANCIAL GUARANTEES (viii) Other Financial Guarantees including Joint Ventures (ix) Gurantee issued by bankers on behalf of the company (x) Dividend on preference shares
F-147
NOTES
on consolidated financial statements for the year ended 31st March, 2017
38.(A) CONTINGENT LIABILITIES, CONTINGENT ASSETS AND COMMITMENTS (CONTD.) ` /Lacs
B.
C.
As at 31-03-2017
As at 31-03-2016
As at 31-03-2015
535.66 1,319.83
7,562.87
11,132.05
1,550.28 6,201.13 18,603.39
1,513.62 6,054.48 19,677.05
-
1,228.41
-
-
COMMITMENTS i) ii)
Capital commitments Estimated amount of contracts remaining to be executed on capital accounts and not provided for
iii)
Contractual Commitments for Lease Non cancellable operating lease commitments ; Not longer than one year Longer than one year and not longer than five years Longer than five years
CONTINGENT ASSETS i)
Insurance Claims
For P.L.Tandon and Co., Chartered Accountants
For and on behalf of the Board of Directors of J K Cement Limited
ICAI Firm Regn. No. 000186C P.P. Singh Partner Membership No - 072754
Place : Kanpur Dated : 13th May, 2017
Achintya Karati Yadupati Singhania Jayant Narayan Godbole Chairman & Managing Director Kailash Nath Khandelwal Krishna Behari Agarwal A.K. Saraogi Paul Heinz Hugentobler President (Corp.Affairs) & CFO Raj Kumar Lohia Shambhu Singh Shyam Lal Bansal Company Secretary Suparas Bhandari Smt.Sushila Devi Singhania Director
F-148
Directors
INDEPENDENT AUDITOR’S REPORT To the Members of J.K. Cement Limited Report on the Standalone Ind AS Financial Statements
Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
We have audited the accompanying standalone Ind AS financial statements of J.K.Cement Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Opinion In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Management’s Responsibility for the Standalone Ind AS Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Emphasis of Matter a)
We draw attention to note 36(A)(5) to the standalone Ind AS financial statements wherein it has been stated that The Competition commission of India (CCI) has imposed penalty of Rs. 128.54 crores and Rs. 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders. COMPAT has stayed the CCI order in first matter on deposit of Rs. 6.56 crores and hearing of appeal is concluded and order stayed. In second matter stayed demand and appeal are yet to be heard. The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts.
Auditor’s Responsibility
Our opinion was not qualified in respect of above matter.
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
b)
We draw attention to note 42 of the standalone Ind AS financial statement which describes the impact on deferred tax charge, deferred tax liability and reclassifications to the previous year figures, which has led to the restatement of the comparative year figures in the financial statements for the year ended March 31, 2018.
Our opinion was not qualified in respect of above matter. Report on Other Legal and Regulatory Requirements
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the
1.
As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2.
As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
F-149
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
Other Matter The comparative financial information of the Company for the year ended March 31, 2017 prepared in accordance with Ind AS, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who had audited the standalone financial statements for the relevant periods. The report of the predecessor auditor on the comparative financial information and the opening balance sheet dated May 13, 2017expressed an unmodified opinion
(e) On the basis of the written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act; (f)
With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i.
______________________________ per Atul Seksaria Partner Membership Number: 086370 Place of Signature: Kanpur Date: May 12, 2018
The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements – Refer Note 36 to the standalone Ind AS financial statements;
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ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE UNDER SECTION ‘REPORT ON OTHER LEGAL REGULATORY REQUIREMENTS’
AND
J.K.Cement Limited (‘the Company’) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment. (b) All property, plant and equipment have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. (c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for 1 case of leasehold land and 4 cases of freehold land amounting to gross block of Rs. 1,353.07 lacs (net block: Rs.177.29 lacs) and gross block of Rs. 225.64 lacs (net block: Rs. 225.64 lacs) respectively as at March 31, 2018 for which title deeds are in the name of the erstwhile company that merged with the Company pursuant to a scheme of amalgamation and arrangement as approved by the honourable High Court in earlier years. Also refer note 2 of the accompanying financial statements. (ii)
(iv)
In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities given in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.
(v)
The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi)
We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of cement and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and services tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.
The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and services tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, excise duty, sales-tax and cess on account of any dispute, are as follows: Period to which Amount relates 2009-10 2008-09, 2011-12 July'99- Mar'2008
Joint commissioner (Appeals) Deputy commissioner (Appeals) Commissioner (Appelas)
Amount (Rs in lacs) 86.58 90.60 1,593.43
1989-90
Supreme Court
419.02
July'99- Mar'2008 June'2007- Mar'08 June'05 to June'2008
Commissioner (Appelas) Commissioner - Jaipur CESTAT DELHI
51.32 1,085.42 277.45
2008-9 to 2015-16
Jodhpur & Banglore high court
3,323.44
2002-03 on wards
Jodhpur high court Various court in Uttar pradesh, Bihar, Gujrat rajasthan & Karnataka Appeal with supreme court Allahabad High Court. ITAT, Lucknow CIT (Appeals), Kanpur
4,993.21
Name of the Statute
Nature of Dues
Bihar Entry Tax Act Bihar Entry Tax Act Central excise Act,1944
Rajasthan Entry tax
Entry tax Entry tax Excise duty Excise duty including interest thereon Excise duty Service tax Service tax Environment & health cess Entry tax
State sales tax Act
Sales Tax
1990-91 to 2014-15
Uttar pradesh entry tax Act Income Tax act Income Tax act Income Tax act
Entry tax Allahabad High Court. ITAT, Lucknow CIT (Appeals), Kanpur
2005-06 to 2009-10 2004-05 to 2010-11 2012-13 2012-13 to 2013-14
Central excise Act,1944 Central excise Act,1944 Finance act, 1994 Finance act, 1994 Finance Act, 2008 (State)
F-151
Forum where dispute is pending
586.50 314.48 4,229.82 650.36 570.19
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans and borrowings to banks, debenture holders or the government. The Company does not have any outstanding dues towards financial institutions. (ix)
(x)
(xi)
(xii)
In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
In our opinion and according to the information and explanations given by the management, monies raised through term loans were ultimately applied for the purposes for which they were raised. The Company has not raised any money by way of initial public offer / further public offer.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xv)
According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
______________________________ per Atul Seksaria Partner Membership Number: 086370 Place of Signature: Kanpur Date: May 12, 2018
F-152
ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF J.K.CEMENT LIMITED Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements A company's internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
We have audited the internal financial controls over financial reporting of J.K.Cement Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
company's internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.
per Atul Seksaria Partner Membership Number: 086370 Place of Signature: Kanpur Date: May 12, 2018
F-153
J K Cement Limited Balance sheet as at 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) ASSETS Non-current assets Property, plant and equipment Capital work-in-progress Intangible assets Financial assets (i) Investments (ii) Loan & Advances Other non-current assets Total non-current assets Current assets Inventories Financial assets (i) Current investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (iii) above (v) Other current financial assets Current tax assets (net) Other current assets Assets held for sale Total current assets
As at 31 March 2018
As at 31 March 2017 (Restated)
2 2 3
359,231.71 8,780.53 437.48
367,445.95 10,482.45 556.98
4 5 6
55,694.47 5,013.21 11,491.77 440,649.17
47,037.80 13,456.72 10,471.29 449,451.19
7
53,161.07
49,806.98
8 9 10 11 12 13 14 44
7,757.62 18,797.37 18,244.25 36,107.82 7,262.95 752.57 14,562.98 902.61 157,549.24
6,526.00 14,813.42 12,171.42 30,520.43 4,862.36 16,155.98 134,856.59
598,198.41
584,307.78
15 16
6,992.72 207,741.79 214,734.51
6,992.72 180,159.57 187,152.29
17 18 19 20 21
206,970.78 20,678.88 2,507.55 26,718.99 9,232.02 266,108.22
228,236.67 17,671.71 2,237.99 26,280.63 8,633.01 283,060.01
22 23 24 25 26 13
11,351.76 41,355.94 43,752.10 19,011.45 1,884.43 117,355.68 383,463.90
16,729.17 37,773.54 43,145.55 15,591.89 706.33 149.00 114,095.48 397,155.49
598,198.41
584,307.78
Note
Total assets EQUITY AND LIABILITIES Equity Equity share capital Other equity Total equity Liabilities Non-current liabilities Financial liabilities (i) Borrowings (ii) Other financial liabilities Long-term provisions Deferred tax liabilities (net) Other non-current liabilities Total non-current liabilities Current liabilities Financial liabilities (i) Borrowings (ii) Trade payables (iii) Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Total Current liabilities Total liabilities Total equity and liabilities The accompanying notes are an integral part of the financial statements As per our report of even date
For and on behalf of the Board of Directors of J K Cement Limited
For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005 per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-154
J K Cement Limited Statement of profit and loss for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) Note Revenue from operations Other income
27 28
Total income Expenses Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods, stock-in-Trade and workin-progress `Employee benefit expense Finance costs Depreciation and amortization expense Other expenses
475,817.73 12,764.65
For the year ended 31 March 2017 (Restated) 437,983.02 9,932.30
488,582.38
447,915.32
29 30
73,038.01 84.75 4,201.02
31 32 33 34
32,545.61 24,535.38 18,626.77 289,881.93
27,545.54 27,290.70 17,609.58 277,572.60
442,913.47
413,540.53
45,668.91
34,374.79
43,972.76
32,443.17
Total Expenses Profit/(loss) before tax & Exceptional items
45
Exceptional Items `
For the year ended 31 March 2018
Profit/(loss) before tax Tax expense Current tax Deferred tax charge/(credit) Earlier Years Tax Adjustments
20
Profit/ (loss) for the year
1,696.15
9,413.62 371.78 34,187.36
Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement gains/(losses) on defined benefit plans Income tax relating to remeasurement of defined benefit plans
195.55 (67.67)
Total comprehensive income for the year Earnings per equity share (Rs.) Basic Diluted
35
64,406.17 92.50 (976.56)
1,931.62
7,047.08 4,320.39 (2.75) 21,078.45
48.17 (16.67)
127.88
31.50
34,315.24
21,109.95
48.89 48.89
30.14 30.14
The accompanying notes are an integral part of the financial statements As per our report of even date For and on behalf of the Board of Directors of J K Cement Limited
For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005 per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-155
J K Cement Limited Statement of Cash flow for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) For the year ended 31 March 2018
For the year ended 31 March 2017
43,972.76
32,443.17
18,626.77 1,747.97 23,888.26 (4,171.14)
17,609.58 2,708.68 26,705.53 (4,888.35)
83,723.19
76,363.93
3,582.40 6,119.56 4,018.57 1,433.26 (3,354.09) (4,168.48) (3,604.99) 1,450.07 89,199.49 (10,248.61) 78,950.88
(4,722.28) 7,834.21 3,432.06 (310.97) (6,913.86) 583.72 2,522.70 (1,563.08) 77,226.43 (6,039.98) 71,186.45
6,030.10 (1,750.00) (17,754.47) 5,751.15 (6,021.94) (65,766.35) 62,071.73 (4,500.00) 4,500.00 4,320.19
(30,184.44) (29,492.90) 837.15 (8,175.34) (17,691.76) 16,207.38 (7,862.00) 7,862.00 2,962.62
A. Cash Flow from Operating Activities Net Profit before tax Adjustment for :Depreciation & amortization expences Loss on the sale of property, plant & equipment/ Impairment Interest paid Interest received
Bad Debts / Loans and Advances Provision for doubtful debts / loans and advances Profit on sale of current Investment Net fair value gain on financial assets measured at fair value through profit or loss Net loss on unrealised Foreign Currency transactions and translation Mines restoration charges
9.85 174.68 (171.73) (284.83) (83.80) 14.40
Operating Profit Before Working Capital Changes Movements in working capital :Increase / (Decrease) in Trade Payables Increase / (Decrease) in Other financial liabilities Increase / (Decrease) in Other liabilities Increase / (Decrease) in provisions (Increase )/ Decrease in Inventories (Increase)/ Decrease in Trade receivables (Increase)/ Decrease in Other financial assets (Increase)/ Decrease in Other assets Cash Generated From Operations Less : Income Tax Paid (inclusive of tax deducted at source) Net Cash From Operating Activities
B. Cash Used in Investing Activities Proceed from maturituy of fixed deposit Investment in Fixed Deposits Acquisition/Purchase of property, plant & equipment Sale of property, plant & equipment Investments in Subsidary Investment in Equity, Mutual funds & Bonds Sale of Current Investment / Impairment Intercorporate loan given Repayment of intercorporate loan Interest received Net (purchase) of property, plant & equipment Net Cash Used In Investing Activities
1,000.00 172.25 (239.67) 723.73 107.53 21.48
(0.00) (13,119.59)
0.00 (65,537.29)
(0.00) 2,314.27 (1,910.33) (5,377.41) (24,075.89)
0.00 (1,702.51) 13,542.00 (2,770.23) (9,273.12)
C. Cash used in Financing Activities Net proceeds from Long Term Borrowings Proceeds of Deffered Sales Tax / VAT Loans Repayment of Deffered Sales Tax / VAT Loans Proceeds from Term Loans Repayment of short term borrowings Repayment of Long Term Borrowings
Proceeds from Vehicle Loans Interest Expense Paid (inclusive of tax deducted at source) Dividend paid (including dividend distribution tax) Net Cash Used in Financing Activities
Net Increase/( Decrease ) in Cash and Cash Equivalents Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year
132.75 (24,108.83) (6,733.02) (59,758.46)
217.88 (26,860.19) (3,366.51) (30,212.68)
6,072.83
(24,563.52)
12,171.42 18,244.25 6,072.83
36,734.94 12,171.42 (24,563.52)
Notes : 1. Cash and cash equivalents includes cash in hand and bank balances including Fixed Deposits. As per our report of even date attached
As per our Report attached For S.R. Batliboi & Co.LLP. Chartered Accountants ICAI Firm Regn. No. 301003E/E300005
per Atul Seksaria Partner Membership No - 086370
Place : Kanpur
Dated : 12th May, 2018
For and on behalf of the Board of Directors of J K Cement Limited
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-156
J K Cement Limited Statement of Changes in Equity for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) (a) Equity share capital
As at 31 March 2018
Balance at the beginning of the year (Equity shares of Rs. 10 each issued,subscribed and fully paid) Changes in equity share capital during the year Balance at the end of the reporting period (Equity shares of Rs. 10 each issued,subscribed and fully paid)
6,992.72
6,992.72
-
-
6,992.72
(b) Other equity
6,992.72
Reserves and Surplus Securities premium account
Balance at 31 March 2016 Dividend on 3% cumulative redeemable preference shares Profit for the year Other comprehensive income/ (loss) for the year Total comprehensive income for the year Amortisation of mining rights Transfer to general reserve Transfer to/(from) debenture redemption reserve Dividend paid Dividend distribution tax
25,988.60
Balance at 31 March 2017(Restated)
25,988.60
Debenture redemption reserve 8,244.45
1,710.65
Adjustments Profit for the year Other comprehensive income for the year Total comprehensive income for the year Adjustment during the year Transfer to general reserve Transfer to/(from) debenture redemption reserve Dividend paid Dividend distribution tax Balance at 31 March 2018
As at 31 March 2017
The accompanying notes are an integral part of the financial statements
9,955.10
General reserve 69,501.31
(176.29) 5,000.00
74,325.02
-
-
-
9.40
6,000.00 -
9,964.50
80,325.02
25,988.60
Retained earnings (including Other Comprehensive Income)
-
58,302.34
(5,000.00) (1,710.65) (2,797.09) (569.42)
162,036.70 555.72 21,078.45 31.50 21,665.67 (176.29) (2,797.09) (569.42)
69,890.85
180,159.57
34,187.36 127.88 34,315.24
34,187.36 127.88 34,315.24
(6,000.00) (9.40) (5,594.18) (1,138.84)
(5,594.18) (1,138.84)
555.72 21,078.45 31.50 21,665.67
91,463.67
As per our report of even date For and on behalf of the Board of Directors of J K Cement Limited
For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005 per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-157
Total
207,741.79
Notes
to the financial statements for the year ended 31st March, 2018
1. I.
CORPORATE INFORMATION
Reporting Entity J K Cement Limited (‘J K Cement Limited’ or ‘the Company’) is a public limited Company domiciled in India and has its registered office at Kamla Tower, Kanpur, Uttar Pradesh – 208001. J K Cement Limited’s equity shares are listed on National Stock Exchange and Bombay Stock Exchange in India.
accounting policies and the reported amounts of assets, liabilities, income, expenses, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
II.
Significant Accounting Policies The Company has consistently applied the following accounting policies to all periods presented in the financial statements:
and underlying assumptions are reviewed Estimates on an ongoing basis. Revisions to estimates are recognised prospectively.
1.
A. Judgements Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below:
Basis of preparation The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).
–
Assessment of lease contracts: Classification of lease under finance lease or operating requires judgement with regard to the estimated economic life and estimated cost of the assets. The Company has analysed each lease contract on case to case basis to classify the arrangements as operating and finance lease, based on evaluation of the term and conditions of the arrangements.
–
Provision and contingencies The assessment undertaken in the recognising provision and contingencies have been made in accordance with Ind AS 37, ‘Provisions, contingent liabilities and contingent assets’. The evaluation of the likelihood of the contingent events has required best judgement by management regarding the probability of exposure to potential loss.
B.
Assumptions and estimation uncertainties The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below, the Company based its assumptions and estimates on parameters available when the financial statements where prepared. Existing circumstances and assumptions about future
These are Company’s separate financial statements. These financial statements were authorised for issue by the Board of Directors on 12.05.2018. 2.
Basis of measurement The financial statements have been prepared on a historical cost basis except the following items, which are measured on fair value basis on each reporting date: –
Certain financial assets and liabilities that is measured at fair value (Refer Note 41)
–
Defined benefit liability/(assets): fair value of plan assets less present value of defined benefit obligation(Refer Note 38)
3.
Functional and presentation currency These financial statements are presented in Indian National Rupee (‘INR’), which is the Company’s functional currency. All amounts have been rounded to the nearest lacs up to two decimal places unless otherwise indicated.
4.
Use of judgements and estimates In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company’s
F-158
Notes
to the financial statements for the year ended 31st March, 2018
are available and measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
development, however, may change due to market change or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occurred. Taxes: Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with tax planning strategy.
5.
Useful lives of property, plant and equipment The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence, demand, competition, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset. The Company reviews the useful life of property, plant and equipment at the end of each reporting date.
Classification of Assets and Liabilities as Current and Non-Current The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is treated as current when it is: –
Expected to be realised or intended to be sold or consumed in normal operating cycle.
–
Held primarily for the purpose of trading
–
Expected to be realised within twelve months after the reporting period, or
–
Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. Post-retirement benefit plans Employee benefit obligations (gratuity obligations) are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rates, future salary increases and Mortality rates. Due to the complexities involved in the valuation and its long-term natures, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
An liability is treated as current when:
Fair value measurement of financial instruments The fair value of financial assets and financial liabilities recorded in the balance sheet in respect of which quoted prices in active markets
–
It is expected to be settled in normal operating cycle.
–
It is held primarily for the purpose of trading
–
It is due to be settled within twelve months after the reporting period, or
–
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current. Deferred tax liabilities are classified as non-current liabilities.
F-159
Notes
to the financial statements for the year ended 31st March, 2017 2018
assets residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.
The operating cycle is the time between the acquisition of the assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle. 6.
Leasehold land is being amortised over the period of lease tenure.
Property, plant and equipment Recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred up to the date when the assets are ready to use. Capital work-inprogress includes cost of assets at sites, construction expenditure and interest on the funds deployed.
Tangible Assets
Factory building (including roads) Non-factory building (including roads) Plant and machinery Vehicles Furniture and fixtures Office equipment Railway slidings
03-30 Years 05-60 Years 05-40 Years 08 Years 10 Years 05 Years 15 Years
The useful lives of certain plant and machineries have been considered lower/higher than 15 years. These lives are lower/higher those indicated in schedule II of Companies Act, 2013.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as a separate items (major components) of property, plant and equipment.
Freehold Mining Land is depleted according to the ‘unit of production’ method by reference to the ratio of extraction of limestone in the year to the related reserves of limestone.
Items such as spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory
Leasehold Land is amortised on a straight-line basis over the primary lease period.
Any gain/(loss) on disposal of property, plant and equipment is recognised in statement of profit and loss.
Limestone reserves are estimated by the management based on the internal best estimates or independent expert’s valuation as considered appropriate. These estimates are reviewed at least annually.
Subsequent Measurement Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Depreciation Depreciation on Property, plant and equipment (PPE) is calculated using the straight-line method (SLM) to allocate their cost, net of their residual values, over their estimated useful lives (determined by the management based on technical estimates). The
Useful Life (In years)
The management believes that the estimated useful lives are realistic and reflect approximation of the period over which the assets are likely to be used. 7.
F-160
Intangible assets Intangible Assets are stated at cost less accumulated amortisation and impairment loss, if any. Intangible assets are amortised on straight-line method basis over the estimated useful life. Estimated useful life of the Software is considered as 3 years.
Notes
to the financial statements for the year ended 31st March, 2018
8.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
–
Amortisation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (‘EIR’) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
Financial instruments A financial instrument is any contract that gives rise to asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract.
Debt instrument at fair value through Other Comprehensive Income (FVOCI) Debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI.
Financial Assets Initial recognition and measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Debt instrument at fair value through profit and loss (FVTPL) Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVOCI, is classified as at FVTPL.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e. the date that the Company commits to purchase or sell the asset.
In addition, the Company may elect to classify a debt instrument, which otherwise meets amortised cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’).
Classifications The Company classifies its financial assets as subsequently measured at either amortised cost or fair value depending on the Company’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the profit and loss.
Business model assessment The Company makes an assessment of the objective of a business model in which an asset is held at an instrument level because this best reflects the way the business is managed and information is provided to management.
Equity Instruments All equity instruments in scope of Ind AS 109 are measured at fair value and all changes in fair value are recorded in FVTPL. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI and fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of
Debt instruments at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: –
The contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.
It is held within a business model whose objective is to hold assets in order to collect contractual cash flows.
F-161
Notes
to the financial statements for the year ended 31st March, 2018
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
investment. However, the Company may transfer the cumulative gain or loss within equity. This election is made on an investment-by-investment basis. All other Financial Instruments are classified as measured at FVTPL. Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when: –
–
Impairment of financial assets The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost and at FVOCI
The rights to receive cash flows from the asset have expired, or
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity revert to recognising impairment loss allowance based on 12 month ECL.
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 -month ECL is a portion of the lifetime ECL which results from default events on a financial instrument that are possible within 12 months after the reporting date
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
F-162
Notes
to the financial statements for the year ended 31st March, 2018
For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.
All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial Liabilities measured at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Derecognition of financial liabilities The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. Reclassification of financial assets The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company’s senior management determines change in the business model as a result of external or internal changes which are significant to the Company’s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. 9.
Inventories Inventories are valued as follows: Raw materials, packing materials, stores and spares Work-in-progress, finished goods and traded goods Waste
Lower of cost and net realisable value. Cost is determined on a moving weighted average basis. Materials and other items held for use in the production of inventories are at cost not written down below costs, if finished goods in which they will be incorporated are expected to be sold at or above cost Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads. Cost of finished goods includes excise duty, wherever applicable. At net realisable value
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
F-163
Notes
to the financial statements for the year ended 31st March, 2018
10. Investment in subsidiary and joint venture Investment in subsidiaries and joint venture are carried at cost/fair value as per the requirement of IND AS 32 and IND AS 109 in the separate financial statements. Investment carried at cost is tested for impairment as per IND AS 36. 11. Provisions, Contingent Liabilities and Assets Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
12. Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is acting as a principal in all of its revenue arrangements since it is the primary obliger in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks. Based on the education material on Ind AS 18 issued by the ICAI, the Company assumed that recovery of excise duty flows to the Company on its own account. This is for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the Company on its own account, revenue includes excise duty. However, sales tax/value added tax (VAT) goods & service tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly it is excluded from the revenue. The specific recognition criteria described below must also be met before revenue is recognised.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Company, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
(a) Sale of goods Revenue is recognised when the significant risk and rewards of ownership have been transferred to the customer which generally coincide with the delivery of goods, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty upto 30.06.2017 and net of returns, trade discounts and volume rebates.
Contingent Assets are not recognised in the financial statements. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. Mines Restoration Expenditure The expenditure on restoration of the mines based on technical estimates by Internal/External specialists is recognised in the accounts. The total estimated restoration expenditure is apportioned over the estimated quantity of mineral resources (likely to be made available) and provision is made in the accounts based on minerals mined during the year.
(b) Dividend Income from investments is recognised when the right to receive payment is established and recovery is probable.
F-164
Notes
to the financial statements for the year ended 31st March, 2018
(c) Interest income is recognised using the EIR method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate.
a) b)
Provident fund Superannuation scheme
(iii) Defined benefit plans The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
(d) Insurance Claims: Claims lodged with the insurance Companies are accounted for on accrual basis to the extent these are measurable and ultimate collection is reasonably certain. 13. Government Grants and Subsidies Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
Government grants that compensate the Company for expenses incurred are recognised in profit or loss as income on a systematic basis in the periods in which the expense is recognised. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
14. Employee benefits (i) Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
The Company has following defined benefit plans: a)
(ii) Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. The Company has following defined contribution plans:
F-165
Gratuity The Company provides for its gratuity liability based on actuarial valuation of the gratuity liability as at the Balance Sheet date, based on Projected Unit Credit Method, carried out
Notes
to the financial statements for the year ended 31st March, 2018
ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
by an independent actuary and contributes to the gratuity fund formed by the Company. The contributions made are recognised as plan assets. The defined benefit obligation as reduced by fair value of plan assets is recognised in the Balance Sheet. Re-measurements are recognised in the Other Comprehensive Income, net of tax in the year in which they arise. (iv) Other long-term employee benefits The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise.
17. Taxes Tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income i)
The Company has following long-term employment benefit plans: a)
Leave Liability Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment, which is a defined benefit scheme, is provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary.
Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
15. Foreign currency transactions Transactions in foreign currencies are translated into the Company’s functional currency at the exchange rates at the dates of the transactions.
Current tax assets and liabilities are offset only if, the Company:
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.
ii)
16. Borrowing Cost Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get
F-166
a)
Has a legally enforceable right to set off the recognised amounts; and
b)
Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for
Notes
to the financial statements for the year ended 31st March, 2018
iii)
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the concerned Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the ‘MAT credit entitlement’ asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period
18. Impairment of non-financial assets At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (‘CGUs’).
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
The carrying amount of deferred tax asset is reviewed on each reporting date. Deferred tax assets and liabilities are offset only if: a)
The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
b)
The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
F-167
Notes
to the financial statements for the year ended 31st March, 2018
19. Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.
The board of directors of the Company has been identified as being the chief operating decision maker by the Management of the Company. Refer note 37 for segment information presented. 20. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 21. Leases Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
22.
Exceptional item Items of income or expense of non-routine are presented separately when their nature and amount of such significance and is relevant to an understanding of the entity’s financial performance.
23. Earnings Per Share (EPS) Basic earnings per share are computed by dividing the profit for the year by the weighted average number of equity shares outstanding during the period. Diluted earnings per shares is computed by dividing the profit for the year by the weighted average number of equity shares considered for deriving basic earnings per shares and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
F-168
J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) 2. Property, plant and equipment
Particulars Tangible Assets Freehold land Factory building Non factory buildings Plant and equipment (vi) Plant & equipment-Others (i) Vehicles Furniture and fixtures Office Equipment Railway sidings (i) Rolling stock Other assets Assets under Finance Lease Leasehold land (iii) Total Capital work-in-progress(ii) Total
Opening 25,154.76 30,022.07 31,820.89 361,229.81 5,029.13 3,408.61 3,611.87 429.22 10,297.52 89.43 470.37 16,315.16 487,878.84 10,482.45 498,361.29
Gross Block
Additions
Disposal
2,673.19 1,171.34 1,485.54 10,537.36
4,963.95 249.64 146.75 6,312.08
650.76 107.89 78.17 245.88 17.56
192.28 2.99 12.20 1.04 -
1,368.39 18,336.08 9,654.62 27,990.70
39.17 11,920.10 11,356.54 23,276.64
As at 31.03.2018
22,864.00 30,943.77 33,159.68 365,455.09 5,029.13 3,867.09 3,716.77 495.19 10,542.36 89.43 487.93 17,644.38 494,294.82 8,780.53 503,075.35
Opening
Depreciation
Additions
Disposal
6,562.82 4,005.39 100,623.07 518.64 1,615.56 1,965.01 232.41 1,813.81 63.85 285.00 2,747.33 120,432.89
1,937.75 969.68 13,044.91 299.19 401.13 319.18 67.39 677.54 8.19 69.81
33.38 17.59 3,554.31
611.37 18,406.14
3.26 3,775.92
120,432.89
18,406.14
3,775.92
153.99 2.43 10.84 0.12 -
As at 31.03.2018
8,467.19 4,957.48 110,113.67 817.83 1,862.70 2,281.76 288.96 2,491.23 72.04 354.81 3,355.44 135,063.11 135,063.11
Net Block As at As at 31.03.2017 31.03.2018 25,154.76 23,459.25 27,815.50 260,606.74 4,510.49 1,793.05 1,646.86 196.81 8,483.71 25.58 185.37 13,567.83 367,445.95 10,482.45 377,928.40
22,864.00 22,476.58 28,202.20 255,341.42 4,211.30 2,004.39 1,435.01 206.23 8,051.13 17.39 133.12 14,288.94 359,231.71 8,780.53 368,012.24
(i) Cost incurred by company ownership of which vest with State Electricity Boards & Indian Railways. (ii) The amount of Rs. 11,356.54 Lacs represents the amount capitalised during the year (iii) It includes freehold land for minning having cost of 3274.81/- (31st March 2017 : 3082.44/-), amortisation of 117.66/- (31st March 2017 : 74.16/-) and net block of 2449.95/- (P.Y. 2375.24/-) (iv) Property , plant & equipmetnt pledged as security: Refer note 17 for information on property, plant & equipment pledged as security by the company. (v) The title deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for 1 case of leasehold land and 4 cases of freehold land amounting to gross block of Rs. 1,353.07 lacs (net block: Rs.177.29 lacs) and gross block of Rs. 225.64 lacs (net block: Rs. 225.64 lacs) respectively as at March 31, 2018 for which title deeds are in the name of the erstwhile company that merged with the Company pursuant to a scheme of amalgamation and arrangement as approved by the honourable High Court in earlier years. (vi) Assets related to thermal power plant and other DG sets at Rajasthan location are decapitalised and kept for final disposal refer note no 44 & 45. 3. Intangible Assets Particulars Computer Software Total
Opening 739.48 739.48
Gross Block
Additions
149.59 149.59
Deletions / Adj 48.46 48.46
As at 31.03.2018
840.61 840.61
F-169
Opening 182.50 182.50
Depreciation
Additions
220.63 220.63
Deletions / Adj
-
As at 31.03.2018
403.13 403.13
Net Block As at As at 31.03.2017 31.03.2018 556.98 556.98
437.48 437.48
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) As at 31 March 2018 4. A.
Non Current Investments Investment in equity instruments (fully paid-up) Unquoted Subsidiary Companies(at cost)
-107145 ( 31st March 2017 : 36538) equity shares of J. K. Cement (fujairah) FZC.* (Face value AED1000 each) - 10447217 (31st March 2017 : 6590070) equity shares of Jaykaycem (Central) Limited # (Face value Rs. 10 each)
Joint Ventures (at cost) -375000 (31st March 2017 : 375000 ) equity shares of Bander Coal Company Pvt. Ltd.(Face value Rs.10 each) joint operation
Others (at FVTPL) - 8000 (31st March 2017 : 5200) equity shares of ReNew Wind Energy AP (Pvt.) Ltd. (Face value Rs.10 each)
B.
As at 31 March 2017
- 3140101(31st March 2017 : 3140101) equity shares of VS Legnite Power Pvt. Ltd. (Face value Rs 10) ##
Investment in preference shares (fully paid up) Unquoted Subsidiary Companies (at FVTPL)
- NIL (31st March 2017 : 18300) 3% cumulative 11 years compulsory convertible (Face value AED1000 each) preference shares in J. K. Cement (Fujairah) FZC.*
- NIL (31st March 2017 : 33027) 3% cumulative 12 years compulsory convertible (Face value AED 1000 each) preference shares in J. K. Cement (Fujairah) FZC.* - NIL (31st March 2017 : 3759) 3% cumulative 13 years compulsory convertible (Face value AED1000 each) preference Share in J.K.Cement(Fujairah) FZC*
- NIL (31st March 2017 : 15521) 3% cumulative 14 year compulsory convertible (Face value AED1000 each) preference Share in J.K.Cement(Fujairah) FZC*
- 3488 (31st March 2017 : NIL)3% Non cumulative 11 years Redeemable (Face value AED1000 each) preference shares in J.K.Cement (Fujairah)FZC* - 3488 (31st March 2017 : NIL)3% Non cumulative 12 years Redeemable (Face value AED1000 each) preference shares in J.K.Cement (Fujairah)FZC* - 3489 (31st March 2017 : NIL)3% Non cumulative 13 years Redeemable (Face value AED1000 each) preference shares in J.K.Cement (Fujairah)FZC* - 3490(31st March 2017 : NIL) 3% Non cumulative 14 years Redeemable (Face value AED1000 each) preference shares in J.K.Cement (Fujairah)FZC*
(at amortised Cost) - 34370(31st March 2017 : 34370) 3% cumulative 11 years redeemable (Face value AED1000 each) preference shares in J. K. Cement (Fujairah) FZC.* - 34370 (31st March 2017 : 34370) 3% cumulative 12 years redeemable (Face value AED1000 each) preference shares in J. K. Cement (Fujairah) FZC.*
- 34370 (31st March 2017 : 34370) 3% cumulative 13 years Redeemable (Face value AED1000 each) preference shares in J.K.Cement (Fujairah)FZC*
F-170
15,941.56
5,043.18
8,759.02
659.01
37.50
37.50
8.00
5.20
-
-
-
2,717.30
-
4,886.70
-
668.30
-
2,626.07
617.76
-
617.76
-
617.94
-
618.12
-
6,087.31
6,074.73
6,087.31
6,074.73
6,087.31
6,074.72
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
- 34370 (31st March 2017 : 34370) 3% cumulative 14 years Redeemable (Face value AED1000 each) preference shares in J.K.Cement (Fujairah)FZC*
As at 31 March 2018
Others (at FVTPL)
- 2785552(31st March 2017 : 2785552) 0.01% cumulative redeemable Preference shares in VS Legnite Power Pvt. Ltd. (Face value Rs 10) ## C.
D.
Investment In Debenture, Unquoted Subsidiary Companies (at FVTPL) NIL( 31st March 2017 :46000000) Zero Percent Unsecured Compulsorily convertible Debenture of Rs.10each in JayKaycem (Central) Ltd #
6,087.31
-
As at 31 March 2017
6,074.72
4,600.00
Investment In Mutual Fund (Quoted)(at FVTPL)
5000000( 31st March 2017:5000000) HDFC fmp 1302D Sep2016(1)Regular-Growth -Series-37 Maturity date2020
5000000( 31st March 2017:5000000) HDFC fmp 1188D Mar-2017(1)Regular-Growth-Series38- Maturity date-29-6-2020 5000000( 31st March 2017:NIL) “UTI FITF Series XXVII - II (1161 days)” 5000000( 31st March 2017:NIL) ICICI Prudentail Fixed Maturity Plan Series 82-1187 Days
5000000( 31st March 2017:NIL) ICICI Prudentail Fixed Maturity Plan Series 82-1136 Days
F-171
569.69
500.00
540.32
500.00
522.56 508.53 501.51
-
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
E.
As at 31 March 2018
Investments in Bonds(Quoted) (at FVTPL)
50 (31st March 2017:50) State bank of India SR-III 8.39% BD perpetual Bonds, Face value per Bond Rs.1000000 purchased @991285 50 (31st March 2017:NIL) State bank of India SR-II 8.75% BD perpetual Bonds, Face value per Bond Rs.1000000 purchased @1007773
50 (31st March 2017:NIL) Punjab National Bank SR- VIII, 8.95% BD perpetual Bonds, Face value per Bond Rs.1000000 purchased @1006175
Aggregate amount of market value of quoted investment Aggregate amount of unquoted investment
As at 31 March 2017
494.15
495.64
499.44 491.37
-
55,694.47
47,037.80
4,127.57 51,566.90
1,495.64 45,542.16
*On 26 March 2018, the Company early converted its investment of 3% cumulative compulsory convertible preference shares (CCPS) into equity shares, which were due for conversion in financial year 2022-2023 to 202829, vide its approval in board meeting held on 3 February 2018. In addition, board of directors, also approved to convert 3% cumulative and non-cumulative redeemable preference share capital (RPS) into the equity shares. However the aforesaid conversion was pending as at 31 March 2018 # On 28 February 2018, the Company early converted its investment of 0% compulsory convertible debenture (CCD) into equity shares which were due for conversion in the financial year 2025-26 ## The fair value of investment is Nil (31st March 2017 : Nil)
5.
Non Current Loan & Advances (unsecured, considered good) Fixed Deposits * Vehicle Loan Recoverable Security Deposits Share Application money(Refer note no 39)
527.17 143.41 3,039.67 1,302.96 5,013.21
10,394.66 12.03 3,049.95 0.08 13,456.72
*includes Rs. 27.16 Lacs (31 March 2017 is Rs. 112.82 Lacs ) pledged against overdraft /other commitments. 6.
Other non-current assets
7.
Inventories (Valued at lower of cost and net realisable value)
Capital Advances Prepaid Rent Deferred Employee Compensation Advance to Employees Deposit under protest with Govt Authorities
9,732.38 29.43 26.03 122.41 1,581.52 11,491.77
8,854.83 26.92 25.69 130.93 1,432.92 10,471.29
8,293.69 4,679.90 6,950.14 8.04 28,532.72
6,555.44 8,045.91 7,776.74 16.45 26,074.18
4,696.58 53,161.07 Refer to note 17 for information on inventories pledged as security by the company.
1,338.26 49,806.98
Raw Materials Work-in-Process Finished goods Stock-in-Trade Consumable Stores and Spares (net of provisions for non-moving inventores of Rs. 108.75 lacs (31 march 2017: Rs.38.91) Goods in transit : - Consumable Stores and Spares
F-172
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
8.
As at 31 March 2018
Current Investments
Investment in Mutual Funds Quoted (at FVTPL) - 6568620.89(31st March 2017 : 6568620.89) units in “ICICI Prudential Regular Income fund” - 1774748.873 (31st March 2017 : 1774748.873) units in “HDFC Regular Saving – Growth” - 2721606.837(31st March 2017 : 2721606.837) units in Edelweiss Mutual Fund “Edelweiss Government Securities Regular- Growth” - 9322487.4370 (31st March 2017 :3180661.58) units in “ Axis Regular Saving Fund –Regular Plan Growth” - 73605.432(31st March 2017 : 39292.91) units in “SBI Premier Liquid fund -DIR Plan Growth”
-44082.999 (31st March 2017 : 46894.59) units in HDFC Liquid Fund Growth -Nil ( 31st March 2017 :86538.37) units in IDBI Liquid Fund -Regular Plan-Growth -2353040.835 ( 31st March 2017 :Nil) units in Birla Sun Life(BSL)
9.
Aggregate amount of quoted investments
Trade receivables Secured Considered good
Unsecured Considered good Considered doubtful Less: Provision for doubtful balances
1,151.85
1,076.47
611.12
575.19
389.06
372.44
1,579.11
500.81
2,005.30
1,000.28
1,504.04
1,500.46
517.14
1,500.35 -
7,757.62
6,526.00
7,757.62
6,526.00
5,646.56
6,224.79
13,150.81 959.87 959.87
8,588.63 739.12 739.12
18,797.37 Refer to Note 17 for information on Trade receivables pledged as security by the company.
F-173
As at 31 March 2017
14,813.42
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
10.
As at 31 March 2018
Cash and cash equivalents Balance with banks: - In current accounts -Fixed Deposits with maturity of upto 3 months Cash on hand Cheques in hand
11.
As at 31 March 2017
3,127.49 12,910.45
3,173.20 8,944.68
34.90 2,171.41 18,244.25
28.31 25.23 12,171.42
117.88
99.20
35,989.94 36,107.82
30,421.23 30,520.43
Other bank balances Earmarked Bank balances #
'Fixed Deposits with maturity of more than 3 months but upto one year* #Bank balances are against unpaid dividend
*Fixed Deposits for more than 3 months & upto one year include deposit of Rs.2,698.08 Lacs (31 March 2017:Rs. 1,839.70 Lacs ) pledged against overdraft /other commitments. 12.
Other current financial assets Other Loans and Advances - Doubtful Provision for doubtful advances
33.96 (33.96) -
Other Loans and Advances* Advance to Employees Interest Accrued
49.63 (49.63) -
4,613.46 40.74 2,608.75
2,008.86 95.70 2,757.80
7,262.95
4,862.36
*Includes Government Subsidy of Rs. 3233.65 Lacs (31 March 2017: Rs. 1403.11 Lacs ). Refer to Note 17 for information on other current financial assets pledged as security by the company. 13.
14.
Current tax (net)
Advance tax/ (liability) (Net of provision for income tax of Rs. 9413.62 Lacs)
Other current assets Balances with Government authorities Prepaid Expenses Advance to Employees Advances recoverable in cash or in kind Deferred employee compensation
752.57 752.57 2,976.11 2,467.26 88.52 9,016.55 14.54
14,562.98
F-174
(149.00) (149.00) 5,806.66 2,386.86 75.09 7,871.92 15.45
16,155.98
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
As at 31 March 2018
As at 31 March 2017
15. Equity Share capital
Authorised: 8,00,00,000 ( 31 March 2017 - 8,00,00,000) equity shares of Rs.10/- each
8,000.00
8,000.00
Issued, subscribed & fully paid up: 6,99,27,250 (31 March 2017- 6,99,27,250) equity Shares of Rs.10/- each
6,992.72
6,992.72
6,992.72
6,992.72
a. Terms and rights attached to equity shares Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However, same is subject to the approval of the shareholders in the Annual General Meeting. b. Reconciliation of number of shares outstanding at the beginning and end of the year :
Number of Shares 69,927,250 69,927,250 69,927,250
Outstanding at the 1 April 2016 Equity Shares issued during the year Outstanding at the 31 March 2017 Equity Shares issued during the year Outstanding at the 31 March 2018
Amount
6,992.72 6,992.72 6,992.72
c. Shareholders holding more than 5% shares in the Company As at 31 March 2018 As at 31 March 2017 No. of Shares Percentage No. of Shares Percentage Yadu International Ltd Yadupati Singhania
30,199,518 12,064,198
43.19% 17.25%
29,949,518 12,284,198
42.83% 17.57% As at 31 March 2018
16. Other equity
As at 31 March 2017
a. Securities premium reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year
25,988.60 25,988.60
25,988.60 25,988.60
b. Debenture redemption reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year
9,955.10 9.40 9,964.50
8,244.45 1,710.65 9,955.10
c. General reserve Balance at the beginning of the year Less :Amortisation of mining rights Add: Transfer from retained earnings Balance at the end of the year
74,325.02 6,000.00 80,325.02
69,501.31 176.29 5,000.00 74,325.02
69,890.85 34,187.36 127.88 6,000.00 9.40 5,594.18 1,138.84 91,463.67 207,741.79
58,302.34 555.72 21,078.45 31.50 5,000.00 1,710.65 2,797.09 569.42 69,890.85 180,159.57
d. Retained earnings (including Other Comprehensive Income) Balance at the beginning of the year Add: Dividend on 3% cumulative redeemable preference shares Add: Net profit for the year Add: Other Comprehensive income for the year Less: Transfer to general reserve Less: Transfer to debenture redemption reserve Less: Dividend on equity shares Less: Dividend distribution tax on equity shares
F-175
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) Nature and purpose of other equity
Debenture Redemption Reserve (DRR) The Company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), require the Company to create DRR out of profits of the Company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued.
General reserve The Company appropriates a portion to general reserves out of the profits either as per the requirements of the Companies Act 2013 ('Act') or voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act Other Comprehensive Income Remeasurement of defined benefit plans Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits: (a) actuarial gains and losses (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset) Dividend The following dividends were paid by the Company for the year. Final dividend for the year ended 31 March 2017 Rs. 8 per share (31 March 2016: Rs. 4 per share) Dividend Distribution tax on final dividend
31 March 2018 5,594.18 1,138.84 6,733.02
31 March 2017 2,797.09 569.42 3,366.51
After the reporting date, the following dividends were proposed by the board of directors. The dividends have not been recognised as liabilities and there are no tax consequences. 31 March 2018 31 March 2017 Proposed dividend for the year ended 31 March 2018 Rs. 10 per share (31 March 2017: Rs. 8 per share) 6,992.72 5,594.18 Dividend Distribution tax on final dividend 1,437.37 1,138.84 8,430.09 6,733.02 Capital management
For the purpose of the company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company’s capital management is to maximise the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.The company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, excluding discontinued operations. As at 31 March 2018
As at 31 March 2017
Borrowings (note 17) Current maturities of long-term debt (note 24) Cash and Cash equivalents (note 10) Net debt
206,970.78 17,045.14 (18,244.25) 205,771.67
228,236.67 19,318.45 (12,171.42) 235,383.70
Total Equity Capital and net debt
214,734.51 420,506.18
187,152.29 422,535.99
Gearing ratio
48.93%
55.71%
In order to achieve this overall objective, the company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.
F-176
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
As at 31 March 2018
As at 31 March 2017
58,992.88 7,300.00
66,197.39 7,300.00
155,231.94 8,760.06
172,103.32 11,246.98
672.04 325.13
539.29 239.79
VAT loans from Government
5,300.66
4,419.13
Unsecured Deferred sales tax liabilities Less: Current maturities of Deferred sales tax liabilities (Refer note 24)
3,818.40 659.95
4,295.99 531.68
206,970.78
228,236.67
17. Borrowings
Secured Non convertible debentures Less: Current maturities of non convertible debentures (Refer note 24) Term loans (Secured) From banks Less: Current maturities of term loans (Refer note 24)
Vehicle loans Less: Current maturities of Vehicle loans (Refer note 24)
a.
Particulars of Securities, Repayment & Interest
Loan's Securities
1) Secured Non Convertible Debentures NCD as shown includes Rs.207.12 Lacs ( 31 March 2017 Rs. 302.61) towards amortised expenses. Non Convertible Debentures(NCDs): Rs.59,200.00 lacs (31 March 2017 Rs.66,500.00 lacs) i) Security for NCDs for Rs.29,200.00 lacs ( Rs. 36,500.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge on the assets specified below:Secured by pari-passu first charge on the Company's PPE (movable & immovable) by way of equitable mortgage on immovable Assets and hypothecation on movable PPE ,related to company's plant at Nimbahera ,Mangrol,Gotan Grey and Katni . a) Company's Existing Plant at Nimbahera having capacity of 3.25 MnTPA. b) Company's Existing Plant at Mangrol having capacity of 0.75 MnTPA. c) Company's Existing Plant at Gotan consisting of White Cement plant having capacity of 0.40 MnTPA and Thermal Power Plant. d) Company's Existing Thermal power plant at Bamania. ii)Security for NCDs for Rs. 30,000.00 lacs (Rs. 30,000.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of movable PPE pertaining to Company’s existing cement plant at village Muddapur Karnataka
Repayment Frequency
Year of Maturity
Rate of Interest p.a.
Annual
2020-21
Annual
Carrying Amount
As at 31 March 2018
As at 31 March 2017
10.25%
7,200.00
9,000.00
2020-21
10.50%
7,200.00
9,000.00
Annual
2020-21
11.00%
3,660.00
7,000.00
Annual
2020-21
11.00%
11,140.00
11,500.00
Annual
2023-24
10.50%
8,500.00
8,500.00
Annual
2023-24
11.00%
11,500.00
11,500.00
Annual
2025-26
9.65%
10,000.00
10,000.00
59,200.00
66,500.00
Sub Total (1) 2) Secured Term Loans from Banks Term Loan as shown includes Rs. 313.13 Lacs (31 March 2017 Rs. 344.92 Lacs) towards amortised expenses . Secured by pari-passu first charge on the Company's PPE (movable & immovable) by way of equitable mortgage on immovable Assets and hypothecation on movable PPE ,related to company's existing plant at Nimbahera, Mangrol,Gotan Grey and Katni . i) Company's Existing Plant at Nimbahera having capacity of 3.25 MnTPA. ii) Company's Existing Plant at Mangrol having capacity of 0.75 MnTPA. iii) Company's Existing Plant at Gotan consisting of White Cement plant having capacity of 0.40 MnTPA and Thermal Power Plant. iv) Company's Existing Thermal power plant at Bamania. Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.
Quarterly
2021-22
Quarterly
2019-20
MCLR+0.75%
2,910.70
2018-19
MCLR+0.20%
428.57
Quarterly Quarterly Quarterly
Quarterly
Quarterly
2019-20 2023-24 2018-19
2017-18
Quarterly
2018-19
Secured by equitable mortgage of immovable properties and hypothecation of Quarterly movable PPE pertaining to undertaking of J.K. Cement Works, Gotan except Quarterly current assets and vehicles.
2019-20
Quarterly
Secured by First Pari-passu charge by way of equitable mortgage of all the Quarterly immovable Properties (except mining land) and hypothecation of all moveable Quarterly non current assets, present and future pertaining to J.K. Cement Works and Quarterly Thermal power plant, Muddapur, Karnataka.
Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of all movable PPE, Quarterly present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
2020-21
-
LTMLR
MCLR+0.50% -
-
MCLR+0.65% -
-
625.00
8,460.28 -
-
1,541.91 -
3,570.69
1,134.32
4,262.64 9,469.21 857.14
714.18
248.07 850.98
1,542.00 2,475.58
2022-23
LTMLR
3,750.00
2021-22 2021-22
MCLR+ 0.50% MCLR
6,267.50
7,279.83
757.50
851.58
2022-23
MCLR+0.50%
3,058.57
2021-22
F-177
MCLR
433.30
4,464.75
488.37
3,815.13
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable PPE, present and future Quarterly pertaining to J.K. Cement Works, Muddapur, Karnataka.
Secured against exclusive charge on entire movable PPE (by way of hypothecation) and on immovable PPE related to the Wall Putty project at Katni, Madhya Pradesh (excluding current assets and mining land, if any).
Quarterly
Secured by First charge by way of mortgage, on all the immovable properties, Quarterly both present and future pertaining to, of the new cement Plants at Mangrol, Rajasthan (save and except mining land) including captive power plant of 25 MW and waste heat recovery based power plant of 10 MW and split Grinding Unit at Jharli, Haryana and hypothecation of all the movable PPE of the above plants (save and except Current Assets), both present and future and second charge on all current assets, present and future, pertaining to the above Quarterly plants (subject to prior charge created or to be created on the Current Assets in favour of the Working Capital Lenders for securing the Working Capital Facilities.
2023-24
2023-24
MCLR+0.25%
LTMLR
2,031.21
8,800.00
9,300.00
2030-31
MCLR+ 0.50%
104,254.72
111,604.23
2030-31
MCLR+ 0.40%
12,538.33
7,488.33
Sub Total (2)
155,545.07
172,448.24
Less : Shown in current maturities of long term debt Balance shown as above
16,060.06 198,685.01
18,546.98 220,401.26
Total (1) + (2)
b
1,718.69
214,745.07
238,948.24
Net Debt Reconciliation This section sets out an analysis of net debt and the movements in net debt for each of the periods presentated Cash and cash equivalents Liquid investments Current borrowings Non Current borrowings Net Debt
18. Other non-current financial liabilities Security Deposits
As at 31 March As at 31 March 2018 2017 54,761.36 52,987.31 7,757.62 6,526.00 (28,396.90) (36,047.62) (206,970.78) (228,236.67) (172,848.70) (204,770.98)
20,678.88
19. Long-term provisions Provision for employee benefits (Refer note 38) - Gratuity - Leave encashment Provision for Mines Restoration Charges*
17,671.71
20.00 2,276.00 211.55
10.00 2,030.84 197.15
197.15 14.40 211.55
175.67 21.48 197.15
2,507.55
* Provision for Mines Restoration charges: Opening Balance Addition during the year Closing Balance
17,671.71
20,678.88
2,237.99
The Company provides for the expenditure to reclaim the quarries used for mining in the Statement of Profit and Loss based on the estimated expenditure required to be made towards restoration and rehabilitation at the time of vacation of mine. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimates.
F-178
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
20. A.
Deferred tax liabilities (net) The balance comprises temporary differences attributable to: Deferred tax liabilities Property, plant and equipment
Deferred tax assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on payment basis MAT Credit adjustment B.
Movement in deferred tax balances
As at 31 March 2017
Deferred Tax Assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on expenses MAT Credit Entitlement Sub- Total (a) Deferred Tax Liabilities Property, plant and equipment
9,980.15 840.63 272.97 2,996.96 18,079.26 32,169.97
Sub- Total (b) Net Deferred Tax Liability (b)-(a)
Sub- Total (b)
C.
Net Deferred Tax Liability (b)-(a) * Movement included Rs. 294.07 Lacs in other equity # Movement included Rs.1.08 Lacs of earlier year tax adjustment Amounts recognised in profit or loss Current tax expense Current year Deferred tax expense Origination and reversal of temporary differences Earlier year Tax Adjustment Total Tax Expense
F-179
58,450.60
1,893.29 965.63 343.95 2,763.18 27,372.44 26,718.99
9,980.15 840.63 272.97 2,996.96 18,079.26 26,280.63
Recognized in P&L
Recognized in OCI
(8,086.86) 192.67 70.98 (233.78) 9,293.18 1,236.19
(67.67) (67.67)
1,893.29 965.63 343.95 2,763.18 27,372.44 33,338.49
1,606.88
58,450.60
1,606.88
-
60,057.48
26,280.63
#370.69
67.67
26,718.99
Recognized in P&L (8,159.96) 156.55 37.53 (936.53) 7,049.89 (1,852.52)
-
As at 31 March 2018
58,450.60
As at 31 March 2016 18,140.11 700.75 235.44 3,933.49 11,029.37 34,039.16
Deferred Tax Assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on expenses MAT Credit Entitlement Sub- Total (a) Deferred Tax Liabilities Property, plant and equipment
60,057.48
60,057.48
Recognized in OCI (16.67) (16.67)
As at 31 March 2017 9,980.15 840.63 272.97 2,996.96 18,079.26 32,169.97
55,691.41
2,759.19
-
58,450.60
55,691.41
2,759.19
-
58,450.60
21,652.25
*4611.71
16.67
26,280.63
For the year ended 31 March 2018
For the year ended 31 March 2017
9,413.62 9,413.62
7,047.08 7,047.08
371.78 371.78 9,785.40
4,320.39 (2.75) 4,317.64 11,364.72
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
D.
Amounts recognised in Other Comprehensive Income
For the year ended 31 March 2018
Before tax Remeasurements of defined benefit liability
E.
195.55
195.55
Tax (Expense)/ Income
(67.67)
(67.67)
Tax losses carried forward Unabsorbed Depreciation carried forward expire as follows. Never expire *Actual carry over was Rs.28,604.07 Lacs.
Net of tax 127.88
127.88
For the year ended 31 March 2018 Rate 34.61
Reconciliation of effective tax rate
Profit before tax from continuing operations Tax using the Company’s domestic tax rate Tax effect of: Non-deductible expenses Tax-exempt income & incentives Recognition of tax effect of previously unrecognised tax losses Others F.
For the year ended 31 March 2017
31 March 2018 Amount Expiry date 4,276.46 -
21. Other non-current liabilities
Deferred government subsidies - Capital subsidy sanctioned by Rajasthan government on PPE
Before tax 48.17
48.17
Tax (Expense)/ Income
(16.67)
(16.67)
Net of tax 31.50
31.50
For the year ended 31 March 2017 Amount Rate 43,972.76 34.61 15,218.10
Amount 32,443.17 11,227.93
300.36 (5,786.91) -
1,344.28 (1,402.87) 187.92
53.85 9,785.40
7.46 11,364.72
31 March 2017 Amount Expiry date *42,936.13 As at 31 March 2018
9,232.02 9,232.02
As at 31 March 2017 8,633.01
8,633.01
Government grants have been received against the purchase of certain items of property, plant and equipment. There are no unfulfilled conditions or contingencies attached to these grants. As at 31 March 2017 Current Non Current Received during the year Released to statement of profit or loss As at 31 March 2018 Current Non Current
F-180
606.88 8,633.01 9,239.89 1,499.65 753.76
399.19 7,747.68 8,146.87 1,699.90 606.88
753.76 9,232.02 9,985.78
606.88 8,633.01 9,239.89
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 22. Short term borrowings Loan repayable on demand (Secured)* - From banks
11,351.76 11,351.76
16,729.17 16,729.17
*Loan repayable on demand are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on PPE of the Company except the PPE pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders. 23. Trade Payable Micro ,Small and Medium Enterprises Other Trade Payables
1,227.33 40,128.61 41,355.94
403.57 37,369.97 37,773.54
Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March,2018 as per the the terms of contract. As at 31 March 2018
24. Other financial liabilities Current maturities of long-term debt Employee Dues Interest accrued but not due on borrowings Interest accrued and due on borrowings Unpaid dividends Unclaimed fraction money Security deposits Project Creditors Temporary Book Overdraft Others *
17,045.14 1,358.09 1,333.16 117.88 9.22 1,033.33 673.96 54.28 22,127.04 43,752.10
*Other Includes Customer obligations ,customers claims etc.
As at 31 March 2017
19,318.45 2,286.87 1,463.51 90.22 99.20 9.23 843.12 558.04 185.29 18,291.62 43,145.55
25. Other current liabilities Statutory Dues Payable Government Grant Advance From Customer Others 26. Short-term provisions
Employee benefits - Gratuity [Refer note 38] - Leave Encashment
F-181
9,046.25 753.76 8,939.58 271.86
7,008.75 606.88 7,178.34 797.92
19,011.45
15,591.89
1,390.23 494.20
318.13 388.20
1,884.43
706.33
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
27.
Revenue from operations Sale of products (including excise duty) Total (i) Other operating revenue Claims realised Government grants Miscellaneous income Total (ii) Revenue from operations [(i) + (ii)]
For the year ended 31 March 2018
For the year ended 31 March 2017
470,955.40 470,955.40
432,784.00 432,784.00
356.42 3,825.13 680.78 4,862.33
511.69 4,451.75 235.58 5,199.02
475,817.73
437,983.02
Sale of products includes excise duty collected from customers of Rs. 16,696.42 lacs (31 March 2017: Rs. 62,428.74 lacs). Sale of goods net of excise duty is Rs. 454,258.98 lacs (31 March 2017: Rs. 3,70,355.26 lacs). Revenue from operations for periods up to 30 June 2017 includes excise duty. From 1 July 2017 onwards the excise duty and most indirect taxes in India have been replaced Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations year ended 31 March 2018 is not comparable 31 March 2017 28.
Other Income Interest income from financial assets measured at amortised cost - from bank deposits - from others Net fair value gain/(loss) on financial assets measured at fair value through profit or loss Profit on sale of current investment (net) Government grants Miscellaneous income Net Gain on Foreign Currency transactions and translation
29.
Cost of materials consumed
3,084.75 950.66
3,267.94 1,620.41
420.56 171.73 332.23 7,804.72 12,764.65
(723.73) 239.67 359.56 4,442.50 725.95 9,932.30
73,038.01
Raw material Consumed
73,038.01
F-182
64,406.17 64,406.17
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
30.
For the year ended 31 March 2018
For the year ended 31 March 2017
(4,679.90) (6,950.14) (8.04) (11,638.08)
(8,045.91) (7,776.74) (16.45) (15,839.10)
8,045.91 7,776.74 16.45 15,839.10
6,978.10 7,861.01 23.43 14,862.54
26,627.13 3,904.48 2,014.00
23,099.86 2,376.38 2,069.30
23,888.28 251.81 395.29 24,535.38
26,705.53 526.11 59.06 27,290.70
18,406.14 220.63
17,431.14 178.44
18,626.77
17,609.58
Changes in Inventories of Finished Goods, Work-in-Progress and Stock in Trade Closing Inventory Work-in-Progress Finished Goods Stock in Trade Total (A) Opening Inventory Work-in-Progress Finished Goods Stock in Trade Total (B)
4,201.02
Total (A-B) 31.
Employee benefits expense
32.
Finance cost
33.
Depreciation and amotisation expense
Salaries and wages Contribution to provident and other funds (Refer Note No 38) Staff welfare expenses
Interest expenses Other Borrowing Costs (includes bank charges, etc.) Unwinding of discounts
Depreciation on tangible assets Amortisation on intangible assets
F-183
32,545.61
(976.56)
27,545.54
J K Cement Limited Notes to financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
34.
Other expenses Packing material consumed Stores and spares consumed Repairs and maintenance: - Buildings - Plant and machinery - Other Assets Other manufacturing expenses Power and fuel Rent Lease rent and hire charges Rates and taxes Insurance Travelling and conveyance # CSR expenses (Refer Note No 43) Bad trade receivables / advances / deposits written off Provision for doubtful trade receivables / advances / deposits Sales tax/VAT Excise Duty Loss on disposal of property, plant & equipment Miscellaneous expenses # Selling and promotion expenses Freight and forwarding Advertisement and publicity
# Details of payments to auditors As auditor: Audit fees For other services Certification fees and other matters Re-imbursement of expenses
35.
Earning per share
Total profit/ (loss) for the year Weighted average number of equity shares of Rs. 10/- each (In lacs) EPS - Basic and Diluted (Rs.)
F-184
For the year ended 31 March 2018
For the year ended 31 March 2017
21,161.19 10,396.57
17,006.25 10,002.30
1,214.45 7,294.19 89.43 768.75 88,968.72 2,159.04 43.33 318.53 964.25 2,786.53 481.07 9.85 174.68 343.13 16,696.42 164.03 12,353.62 10,249.97 107,244.19 5,999.99
1,241.63 8,153.24 134.41 728.97 62,526.27 1,921.10 51.22 461.03 804.85 2,540.92 322.69 1,000.00 172.25 1,089.70 62,428.74 25.61 14,003.92 11,741.76 77,958.04 3,257.70
289,881.93
277,572.60
85.27
54.00
0.58 9.53 95.38
4.24 1.39 59.63
34,187.36 699.27 48.89
21,078.45 699.27 30.14
J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) As at 31 March 2018
As at 31 March 2017
36. Contingent liabilities, contingent assets and commitments
A. Contingent liabilities (not provided for) in respect of: 1. Claim against the Company not acknowledged as debts (includes show cause notices pertaining to excise duty and others)(cash flow is dependent on court decision pending at various level)
22,345.42
16,338.86
1,724.76 5,469.56 1,362.89 5,450.36
1,662.53 5,162.02 1,314.31 5,450.36
1,251.43 1,270.56 13,782.00
1,231.06 839.29 13,782.00
Other for which the Company is contingently liable
2. In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts – no provision has been considered necessary by the Management a) Excise duty * b) Sales and Entry Tax* c) Service Tax* d) Income Tax (primarily on account of disallowance of depreciation on goodwill and additional depreciation on power plants etc)
3. In respect of interest on “Cement Retention Price” realised in earlier years 4 In respect of penalty of non lifting of fly Ash 5 The Competition commission of India (CCI) has imposted penalty of Rs. 128.54 crores and Rs. 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders.COMPAT has stayed the CCI order in first matter on deposit of Rs. 6.56 crores and Appeal is being heard. In second matter stayed demand and appeal are yet to be heard.The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts.
6 In respect of demand made by Revenue Department, Karnataka for conversion of agricultural land into non agricultural land for mining purpose 7 In respect of land tax levied by state governement of Rajasthan 8 In respect of demand of Railway Administration pending with Jodhpur High Court 9 In respect of charges on account of electricity duty, water cess etc levied by Ajmer Vidyut Vitran Nigam Ltd (AVVNL) 10 In respect of Environmental and Health Cess
560.17
206.69 218.86
191.23 212.10
4497.04 324.52
3,869.34 324.52
* Disputes are primarily on account of disallowances of input credits, interest on enty tax, etc. Financial Guarantees
11 Corporate guarantees given to Banks for finance provided to subsidiary Companies. 12 Other Financial Guarantees including of Joint Ventures.
54,292.26 -
58,168.57 613.89
3,690.66
1,319.83
685.00
1,228.41
The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required for the above guarantees.
B. Commitments Capital commitments a) Estimated amount of contracts remaining to be executed on capital accounts and not provided for C. Contingent assets a) Insurance Claims
37. Segment information
Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure.
Operating Segments The Company's Board of Directors have been identified as the Chief Operating Decision Maker ('CODM'), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.
Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is "Cement", hence no specific disclosures have been made. Entity wide disclosures
A. Information about product total revenue
Product Grey Cement WhiteCement and allied products
For the year ended 31 March 2018 333,489.26
For the year ended 31 March 2017 292,632.34
137,466.14
140,151.66
B. Information about geographical areas Non-current assets (Property, plant and equipment, Intangible assets and other non-current assets ) are in India C. Information about major customers (from external customers) The Company has not derived revenues from single customer during the year as well as during previous year which amount to 10 per cent or more of the entity’s revenues.
F-185
J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) 38.
Employee benefits The Company contributes to the following post-employment defined benefit plans in India. (i) Defined Contribution Plans: The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. Contribution to government Provident Fund Contribution to Superannuation Scheme Contribution to Family Pension Fund
For the year ended 31 March 2018 31 March 2017 1,135.91 942.09 478.06 398.25 473.87 444.72
(ii) Defined Benefit Plan: The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity Trust registered under Income Tax Act-1961.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date: 31 March 2018
Net defined benefit obligation Total employee benefit asset Net defined benefit liability
7,190.39 5,800.16 1,390.23
31 March 2017 6,061.68 5,596.87 464.81
B. Movement in net defined benefit (asset) liability - Gratuity (Funded) The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components: 31 March 2018 31 March 2017 Net defined Net defined Defined benefit Fair value of Defined benefit Fair value of benefit benefit obligation plan assets obligation plan assets (asset)/ liability (asset)/ liability Balance as at 31 March 6,061.68 5,596.87 464.81 5,739.12 5,388.80 350.32 Included in profit or loss Current service cost 420.41 420.41 347.70 347.70 Past service credit 1,137.18 1,137.18 Interest cost (income) 400.58 368.51 32.07 420.45 401.33 19.12 1,958.17 368.51 1,589.66 768.15 401.33 366.82 Included in OCI Remeasurements loss (gain) – Actuarial loss (gain) arising from: - demographic assumptions - financial assumptions (251.19) (251.19) 309.49 309.49 - experience adjustment (65.95) (121.58) 55.63 (197.53) 160.13 (357.66) – Return on plan assets excluding interest income (317.14) (121.58) (195.56) 111.96 160.13 (48.17) Other Contributions paid by the employer 468.68 (468.68) 204.16 (204.16) Benefits paid (512.32) (512.32) (557.55) (557.55) (512.32) (43.64) (468.68) (557.55) (353.39) (204.16) 7,190.39 5,800.16 1,390.23 6,061.68 5,596.87 464.81 Balance as at 31 March
F-186
J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) C. Plan assets
The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted according to norms of Gratuity Trust, whose pattern of investment is available with the Company. Particulars Government of India Securities (Central and State) High quality corporate bonds (including Public Sector Bonds) Equity shares of listed companies Property Cash (including Special Deposits) Schemes of insurance - conventional products Schemes of insurance - ULIP products Others
As at March 31, As at March 31, 2018 2017 52.57% 0.00% 1.81%
0.00%
0.00% 0.00% 23.27% 0.00% 0.00% 22.35%
0.00% 0.00% 0.00% 0.00% 0.00% 100%
D. Actuarial assumptions The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages). Discount rate Expected rate of return on plan assets Mortality Turnover rate : Staff Turnover rate : Worker Expected rate of future salary increase
31 March 2018 7.40% 8.50%
31 March 2017 6.90% 8.50%
5% of all ages 1% of all ages 10%
5% of all ages 1% of all ages 10%
Assumptions regarding future mortality have been based on published statistics and mortality tables. At 31 March 2018, the weighted-average duration of the defined benefit obligation was 6 years (as at 31 March 2017: 6 years).
F-187
J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) E. Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below. Gratuity
31 March 2018 Increase Decrease (450.10) 522.30 424.00 (388.00)
Discount rate (1% movement) Expected rate of future salary increase (1% movement)
(26.10)
31 March 2017 Increase Decrease (381.71) 439.89 285.84 (280.87)
134.30
(95.87)
159.02
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown. F. Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme's bond holdings. Life expectancy: The pension obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy. The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve longterm investments that are in line with the obligations under the employee benefit plans. Within this framework, the group's ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Compnay has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets at reporting date consists of government and corporate bonds, although the group also invests in equities, cash and mutual funds. The group believes that equities offer the best returns over the long term with an acceptable level of risk.
G. The expected benifit payments in future years:
31 March 2018 963.40 3,593.55 4,276.01 18,905.01 27,737.97
Within the next 12 months (next annual reporting period) Between 2 and 5 years Between 5 and 10 years Beyond 10 years Total expected payments H. The expected employer contribution in the next year
31 March 2018 31 March 2017 594.95 326.49
Within the next 12 months (next annual reporting period) 39.
Related parties
(1) (a) Parties where the control/significant influence exists:i) Yadu International Ltd (b) Key Management Personnel & their Relatives: i) Shri Yadupati Singhania ii) Smt. Shushila Devi Singhania iii) Shri Ajay Kumar Saraogi iv) Shri Shambhu Singh v) Shri Achintya Karati vi) Shri Jayant Narayan Godbole vii) Dr. Krishna Behari Agarwal viii) Shri K.N.Khandelwal ix) Shri Raj Kumar Lohia x) Shri Suparas Bhandari xi) Mr. Paul Heinz Hugentobler xii) Shri Shyam Lal Bansal
31 March 2017 716.83 3,644.18 4,333.77 18,905.01 27,599.79
Chairman & Managing Director Relative of Chairman & Managing Director President (Corp.Affairs) & CFO Company Secretary Non Executive Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Non Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Non Independent Director Non Executive Independent Director
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J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) (c) Enterprises significantly influenced by Key Management Personnel or their Relatives. i) Jaykay Enterprises Ltd ii) J.K. Cotton Ltd. iii) Jaykaycem (Eastern) Ltd iv) J.K.Cement(Western) Ltd (d) Subsidiary Companies. i) J.K. Cement (Fujairah) FZC (Holding Company of ( ii) below) ii) J.K. Cement Works(Fujairah) FZC iii) Jaykaycem(Central) Ltd (e) Joint Venture i) Bander Coal Company Pvt. Ltd (2)
a) Following are the transactions with related parties as defined under section 188 of Companies Act 2013. (i) Jaykay Enterprises Ltd - Services received - Rent paid - Expenses Reimbursed
(ii) J.K. Cotton Ltd - Rent paid - Purchases (iii) J.K. Cement(Fujairah)FZC Amount paid against preference shares Corporate Guarantees Interest recoverable on Redeemable Pref Shares Amount paid as application money for equity shares Preference shares converted into equity shares (Refer note 4) (iv) J.K. Cement(Western) Ltd Opening as at beginning of the year Advance Received during the year Balance as at close of the year
(v) Jaykaycem (Central) Ltd. Opening as at beginning of the year Loan given during the year Interest received / receivable Amount received against loan and interest Balance at close of the year
For the year ended 31 March 2018 31 March 2017 35.17 49.50 60.34
34.47 47.71 50.60
32.39 0.00
45.42 0.21
2,458.00 54292.26 1,410.72 1302.80 10898.37
4,375.74 58168.57 1499.95 -
-
15.00 15.00 -
-
4206.79 65.40 76.72 4348.91 -
2500.00 1000.00 5600.00
4600.00 55.00 55.00 -
1761.00 5087.99 15.13 30.47
1266.92 -
9.00 5.26
8.00 4.52
226.52
197.34
45.41
38.15
72.00 30.55 108.13
64.00 31.41 111.31
-
Equity shares acquired during the year Debenture acquired during the year Amount given in current deposit Amount received in current account Debentures converted into equity shares(Refer note 4) (vi) Key Management Personnel and their relatives a) Shri Y.P. Singhania(Chairman & Managing Director) -Remuneration - Sale of farm house - Rent paid - Rent paid to relatives b) Smt Sushila Devi Singhania - Commission - Sitting Fees c) Shri Ajay Kumar Saraogi -Remuneration d) Shri Shambhu Singh -Remuneration e) Other Directors - Commission -Sitting Fees and Rs.108.13 lacs (111.31 lacs) paid to other Director Mr. Paul Heinz Hugentobler on professional capacity.
b) Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the yearend are unsecured and interest free and settlement occurs in cash. There have been no guarantees (except corporate guarantees) provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. c) Compensation of key management personnel of the company
For the year ended 31 March 2018 31 March 2017 2,032.93 1,368.91 48.54 133.50
- short-term employee benefits - other long-term benefits 40
Operating Lease
The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.
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J K Cement Limited Notes to the financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) 41. I.
Financial instruments – Fair values and risk management Fair value measurements A. Financial instruments by category
As at 31 March 2018 FVTPL
FVOCI
As at 31 March 2017
Amortised cost
FVTPL
FVOCI
Financial assets Investments Other financial assets Trade receivables Cash and cash equivalents Other Bank balances Financial liabilities
Non Current Borrowings Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities
14,364.77 14,364.77
-
-
-
24,349.24 12,276.16 18,797.37 18,244.25 36,107.82 109,774.84
23,525.21 23,525.21
206,970.78 20,678.88 11,351.76 41,355.94 43,752.10 324,109.46
-
-
-
-
-
-
Amortised cost 24,298.90 18,319.08 14,813.42 12,171.42 30,520.43 100,123.25 228,236.67 17,671.71 16,729.17 37,773.54 43,145.55 343,556.64
B. Fair value hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table. Financial assets and liabilities measured at fair value - recurring fair value measurements As at 31 March 2018 Level 1 Level 2 Level 3 Financial assets Assets measured at fair value Investments Equity Shares 8.00 Mutual Funds & Bonds 11,885.19 2,471.58 Financial liabilities Liabilities for which fair values are disclosed 206,161.84 Long Term Borrowings 11,885.19 208,641.42 Financial assets and liabilities measured at fair value - recurring fair value measurements As at 31 March 2017 Level 1 Level 2 Level 3 Financial assets Assets measured at fair value Investments Equity Shares 5.20 Mutual Funds & Bonds 8,021.64 15,498.37 Financial liabilities Liabilities for which fair values are disclosed Long Term Borrowings 228,145.50 8,021.64
-
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243,649.07
Total 8.00 14,356.77 206,161.84 220,526.61
Total 5.20 23,520.01 228,145.50 251,670.71
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted preference securities. The fair value of the unquoted preference shares in cement sector has been computed using the DCF method considering the no growth model and discount rate @ 6.12% .Increase in 1% discount rate will result into decrease of fair valuation by Rs 0.95 Lacs whearas decrease in 1% discount rate will result into increase of fair valuation by Rs 1.33 Lacs. There are no transfers between level 1 and leve 2 during the year Valuation technique used to determine fair value Specific valuation techniques used to value financial instruments include: - the use of quoted market prices or dealer quotes for similar instruments - the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date - the fair value of the remaining financial instruments is determined using discounted cash flow analysis. C. Fair value of financial assets and liabilities measured at amortised cost As at 31 March 2018 Carrying Fair Value Amount Financial assets Investments 24,349.24 24,349.24 Other financial assets 12,276.16 12,276.16 Trade receivables 18,797.37 18,797.37 Cash and cash equivalents 18,244.25 18,244.25 Other Bank balances 36,107.82 36,107.82 109,774.84 109,774.84 Financial liabilities Non Current Borrowings Other non current financial liabilities Short term borrowings Trade payables Other current financial liabilities
206,970.78 20,678.88 11,351.76 41,355.94 43,752.10 324,109.46
206,161.84 20,678.88 11,351.76 41,355.94 43,752.10 323,300.52
As at 31 March 2017 Carrying Fair Value Amount 24,298.90 18,319.08 14,813.42 12,171.42 30,520.43 100,123.25
24,298.90 18,319.08 14,813.42 12,171.42 30,520.43 100,123.25
228,236.67 17,671.71 16,729.17 37,773.54 43,145.55 343,556.64
228,145.50 17,671.71 16,729.17 37,773.54 43,145.55 343,465.47
(i) The carrying amounts of trade receivables, trade payables, Short Term Borrowings, cash and cash equivalents, other bank balances, other financial liabilities, and other financial assets are considered to be the same as their fair values, due to their short-term nature. The fair values for security deposits are calculated based on cash flows discounted using a current lending rate. (ii) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
(iii) The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. II. Financial risk management
The Company has exposure to the following risks arising from financial instruments: - credit risk; - liquidity risk; and - market risk i. Risk management framework The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company's Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
ii. Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers including deposits with banks and financial institutions.
F-191
Trade and other receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.
The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee. In monitoring customer credit risk, customers are Companyed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors.The Company holds bank guarantees/security deposits agraist trade receivables of Rs. 5,646.56 lacs (31 March 2017: Rs. 6,224.79) and as per the terms and condition of the agreements, the Company has the right to encash the bank guarantee or adjust the security deposits in case of defaults.
The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Comapny expects to receive). During the based on specific assessment, the Company recognised bad debts and advances of Rs. 9.85 lacs (31 March 2017: Rs. 1,000). The year end trade receivables do not include any amounts with such parties.
The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9 Reconciliation of loss allowance provision - Trade Receivables Particulars Opening Balance Change in loss allowance Closing Balance
As at 31 March 2018 739.12 220.75 959.87
As at 31 March 2017 602 137.12 739.12
Financial instruments and cash deposits Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018 and 31 March 2017 is the carrying amounts as shown in Note 4,8,10,11 & 12. The Company has not recorded any further loss during the year in these financial instruments and cash deposits as these pertains to counter parties of good credit ratings/credit worthiness. A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).
iii. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans. (a) Financing arrangements The company had access to the following undrawn borrowing facilities at the end of the reporting period: As at As at 31 March 2018 31 March 2017 Floating rate Expiring within one year (bank overdraft and other Nil 700.00 facilities) Expiring beyond one year (bank loans) Nil 6,958.00
-
7,658.00
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of Nil years (as at 31 March 2017 - 6.57 years).
F-192
(b) Maturities of financial liabilities The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.
Carrying Amounts 31 March 2018
Non-derivative financial liabilities Non Current Borrowings Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
206,970.78 20,678.88 11,351.76 41,355.94 43,752.10 324,109.46
Carrying Amounts 31 March 2017 Non-derivative financial liabilities Non Current Borrowings Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
228,236.67 17,671.71 16,729.17 37,773.54 43,145.55 343,556.64
Total
212,186.54 20,678.88 11,351.76 41,355.94 43,752.10 329,325.22
Total
232,493.16 17,671.71 16,729.17 37,773.54 43,145.55 347,813.13
Contractual cash flows 2 months or less 2–12 months
41,355.94 3,604.13 44,960.07
11,351.76 40,011.52 51,363.28
Contractual cash flows 2 months or less 2–12 months
37,773.54 4,454.60 42,228.14
16,729.17 38,591.75 55,320.92
1–5 years
100,117.22 20,678.88 136.45 120,932.55
1–5 years
100,011.96 17,671.71 99.20 117,782.87
More than 5 years 112,069.32 112,069
More than 5 years 132,481.20 132,481
Further the Company issued financial guarantee as disclosued in note 39 for which the possibility of payment is remote. iv. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk and currency risk. Financial instruments affected by market risk primarily include trade and other receivables, trade and other payables and borrowings. Currency risk Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency). The Company manages its foreign currency risk by taking foreign currency forward contracts, if required Exposure to currency risk The summary quantitative data about the Company’s exposure to currency risk as reported to the management of the Company is as follows: As at 31 March 2018 As at 31 March 2017 USD EUR USD EUR 1,939,975.00 Trade payables 1,886,009.00 1,138,140.00 2,089,440.00 Net statement of financial position exposure 1,939,975.00 1,886,009.00 1,138,140.00 2,089,440.00
Investment made by the Company in redeemable preference shares of its subsidiary company has not been considered here as the Company has decided to convert all its redeemable preference shares into equity shares. Also refer note 4. The following significant exchange rates have been applied USD 1 EUR 1 AED 1
Average Rates Year end spot rates 31 March 2018 31 March 2017 31 March 2018 31 March 2017 64.39 66.97 65.04 64.84 75.32 73.50 80.62 69.25 17.53 18.27 18.24 17.66
Sensitivity analysis A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Profit or loss, before tax Strengthening Weakening
31 March 2018 USD (10% movement) EUR (10% movement) GBP (10% movement) 31 March 2017 USD (10% movement) EUR (10% movement) GBP (10% movement)
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Equity, net of tax Strengthening Weakening
126.17 152.05 -
(126.17) (152.05) -
82.50 99.43 -
(82.50) (99.43) -
73.79 144.69 -
(73.79) (144.69) -
48.25 94.62 -
(48.25) (94.62) -
Interest rate risk The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2018 and 31 March 2017, the Company’s borrowings at variable rate were mainly denominated in INR.
The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. Currently the Company's borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.
Exposure to interest rate risk The interest rate profile of the Company’s interest-bearing financial instruments as reported to the management of the company is as follows. Nominal Amount 31 March 2018 31 March 2017 Fixed-rate instruments Financial assets 83,381.71 95,861.23 Financial liabilities 89,462.86 93,123.51 172,844.57 188,984.74 Variable-rate instruments Financial assets 35,146.31 13,270.89 Financial liabilities 166,583.70 188,832.49 201,730.01 202,103.38 Cash flow sensitivity analysis for variable-rate instruments A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. Profit or loss, before tax 100 bp 100 bp increase decrease
31 March 2018 Variable-rate instruments Cash flow sensitivity 31 March 2017 Variable-rate instruments Cash flow sensitivity
(1,690.44) (1,690.44)
1,690.44 1,690.44
(1,785.42) (1,785.42)
1,785.42 1,785.42
Equity, net of tax 100 bp 100 bp increase decrease (1,105.41) (1,105.41)
1,105.41 1,105.41
(1,167.52) (1,167.52)
1,167.52 1,167.52
42(a). Prior year errors During the financial year ended 31 March 2018, the Company discovered that the deferred tax charge was erroneously created lower by Rs.4,879.19 lacs due to consideration of incorrect carried forward unabsored depreciation and business losses. Consequently, Deferred tax liability (net) was shown lower by the same amount. Financial statements for the year ended 31 March 2017 has been restated to correct this error. The effect of the restatement on those financial statements is summarised below. There is no effect in financial year 2017-18. In financial year ended 31 March 2017, the Company reported as follows: Profit before tax Current Tax Mat Credit entitlement Earlier years tax adjustments Deferred tax Profit/(loss) for the year Basic and Diluted earnings per share (Rs.)
31 March 2017 32,443.17 7,047.08 (7,047.08) (2.75) 6,488.28 25,957.64 37.12
Deferred tax liability (net) was shown Rs.21,401.44 in the Balance Sheet as at 31 March 2017 The following are the restated amounts which are being reported after correction for the year ended 31 March 2017 as comparatives. 31 March 2017 Restated 32,443.17 Profit before tax 7,047.08 Current Tax (2.75) Earlier years tax adjustments Deferred tax charge/(credit) 4,320.39 21,078.45 Profit/(loss) for the year Basic and Diluted earnings per share (Rs.)
30.14
Deferred tax liability (net) restated to Rs.26,280.63 in the Balance Sheet as at 31 March 2017
F-194
42(b). In addition to the above, following are the reclassifications made in the previous year figures to make them comparable/better presentation with the current year figures. These reclassification does not have any significant effect on the balance sheet at the beginning of the preceding financial year, i.e, April 1, 2016. Also, these reclassifications do not have any impact on the profit other than those described in note (a) above. Particulars ASSETS NON CURRENT ASSETS Non current - Investments Non current - Loans and advances Other non current assets CURRENT ASSETS Current Assets - Financial assets - Cash and cash equivalents Current Assets - Financial assets - Bank balances other than (iii) above Other Current Financial Assets Other current assets EQUITY AND LIABILITIES Other Equity Borrowings - Non Current Deferred tax liabilities (net)
Other non-current liabilities Current Liabilities Borrowings - Current Trade Payable - Current Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net)
Profit & loss Account Revenue from operations Other income Cost of materials consumed Changes in inventories of finished goods, stock-in-Trade and work-in-progress Finance costs Other expenses Tax Expense MAT Credit Entitlement
Deferred Tax Profit/ (loss) for the year Earning per equity share Basic Diluted
As at 31st March 2017 (Restated)
As at 31st March 2017 (Published)
Nature
47,037.80 13,456.72 10,471.29
47,037.88 Reclassification items 14,243.27 Reclassification items 8,907.44 Reclassification items
12,171.42
41,785.02 Reclassification items
30,520.43 4,862.36 16,155.98
Reclassification items 99.20 4,521.82 Reclassification items 17,419.33 Reclassification items
180,159.57 228,236.67
26,280.63
8,633.01
16,729.17 37,773.54 43,145.55 15,591.89 706.33 149.00
185,038.76 Reclassification items 231,845.63 Reclassification items Variance due to error as mentioned in 21401.44 note a above 5271.37 Reclassification items 16577.24 20517.96 65996.85 8335.82 1601.6 156.65
Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items
437,983.02 9,932.30 64,406.17
442,070.71 Reclassification items 5118.68 Reclassification items 69552.72 Reclassification items
27,290.70 277,572.60 -
26564.75 Reclassification items 271,775.18 Reclassification items -7047.08 Reclassification items Variance due to :-i) reclassification of MAT credit entitlement in deferred tax 6488.28 and ii) error as mentioned in note a above 25,957.64
(976.56)
4,320.39 21,078.45
30.14 30.14
-325.67 Reclassification items
37.12 37.12
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43.
Corporate Social Responsibility
44.
Assets held for sale During the year, the Company entered into agreement to sell the thermal power plant and other DG sets at Rajasthan location as these were not in active use. Accordingly, these assets has been classified as 'held for sale'. Sale of these assets are expected to be completed within next 12 months.
45.
Exceptional Items This represents the loss booked on accounts of sale of thermal power plant and other DG sets in current year. The previous year exceptional item represents governement cess reversed.
46.
Standards issued but not yet effective
a. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was Rs.461.28 lacs i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act,2013 b. Corporate Social Responsibility (CSR) activities undertaken during the year is Rs. 481.07 lacs. Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis.
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:
Ind AS 115 Revenue from Contracts with Customers Ind AS 115 was issued on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018. The Company plans to adopt the new standard on the required effective date using the modified retrospective method. The Company is in the business of manufacturing and selling cement and related products. The cement and related products are sold both on their own in separate identified contracts with customers and through distribution channel of dealers and distributors. (a) Sale of goods For contracts with customers in which the sale of cement and related products is generally expected to be the only performance obligation, adoption of Ind AS 115 is not expected to have any material impact on the Company's revenue and profit or loss. The Company expects the revenue recognition to occur at a point in time when control of the asset is transferred to the customer, generally on delivery of the goods. In preparing to adopt Ind AS 115, the Company is considering the following: (i) Variable consideration Some contracts with customers provide a right of return, trade discounts or volume rebates. Currently, the Company recognises revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. If revenue cannot be reliably measured, the Company defers revenue recognition until the uncertainty is resolved. Such provisions give rise to variable consideration under Ind AS 115, and will be required to be estimated at contract inception and updated thereafter. Ind AS 115 requires the estimated variable consideration to be constrained to prevent over-recognition of revenue. The Company does not expects that application of the constraint will result in material revenue being deferred than under current Ind AS. (b) Presentation and disclosure requirements The presentation and disclosure requirements in Ind AS 115 are more detailed than under current Ind AS. The presentation requirements represent a significant change from current practice and significantly increases the volume of disclosures required in the Company's financial statements. Many of the disclosure requirements in Ind AS 115 are new and the Company has assessed that the impact of these disclosures requirements will not be significant. In particular, the Company does not expect that the notes to the financial statements will be expanded because of the disclosure of significant judgements made: . In addition, as required by Ind AS 115, the Company will disaggregate revenue recognised from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. It will also disclose information about the relationship between the disclosure of disaggregated revenue and revenue information disclosed for reportable segment (c) Other adjustments The recognition and measurement requirements in Ind AS 115 are also applicable for recognition and measurement of any gains or losses on disposal of nonfinancial assets (such as items of property, plant and equipment and intangible assets), when that disposal is not in the ordinary course of business. However, on transition, the effect of these changes is not expected to be material for the Company. Amendments to Ind AS 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112 The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10–B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. This amendments are not applicable to the Company.
Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact. These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have significant impact on the Company. Transfers of Investment Property — Amendments to Ind AS 40 The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use. Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight. The amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have significant impact on the Company.
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Ind AS 28 Investments in Associates and Joint Ventures – Clarification that measuring investees at fair value through profit or loss is an investment-byinvestment choice The amendments clarify that: • An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. • If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. The amendments should be applied retrospectively and are effective from 1 April 2018. These amendments are not applicable to the company. Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after: (i) The beginning of the reporting period in which the entity first applies the Appendix, or (ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix. The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Company’s current practice is in line with the Interpretation, the Company does not expect any effect on its consolidated financial statements. As per our report of even date
For and on behalf of the Board of Directors of J K Cement Limited
For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005 per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-197
INDEPENDENT AUDITOR’S REPORT To the Members of J.K.Cement Limited Report on the Consolidated Ind AS Financial Statements We have audited the accompanying consolidated Ind AS financial statements of J.K.Cement Limited (hereinafter referred to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its joint venture, comprising of the consolidated Balance Sheet as at March 31, 2018, the consolidated Statement of Profit and Loss, including other comprehensive income, the consolidated Cash Flow Statement, the consolidated Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘the consolidated Ind AS financial statements’).
Company’s preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.
Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group including its joint venture in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act., read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group and of its joint venture are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and its joint venture for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.
Opinion In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2018, their consolidated profit including other comprehensive income, their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date. Emphasis of Matter a) We draw attention to note 36(A);5) to the consolidated Ind AS financial statements wherein it has been stated that The Competition commission of India (CCI) has imposed penalty of Rs. 128.54 crores and Rs. 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders. COMPAT has stayed the CCI order in first matter on deposit of Rs. 6.56 crores and hearing of appeal is concluded and order stayed. In second matter stayed demand and appeal are yet to be heard. The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts. Our opinion was not qualified in respect of above matter.
Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
b) We draw attention to note 42 of the consolidated Ind AS financial statement which describes the impact on deferred tax charge, deferred tax liability and reclassifications to the previous year figures, which has led to the restatement of the comparative year figures in the financial statements for the year ended March 31, 2018. Our opinion was not qualified in respect of above matter. Other matter (a) We did not audit the financial statements and other financial information, in respect of 3 subsidiaries, whose Ind AS financial statements include total assets of Rs Rs.101,240.12 lacs and net assets of Rs Rs.3,813.68 lacs as at March 31, 2018, and total revenues of Rs. 26,229.90 lacs and net cash inflows of Rs 755.10 lacs for the year ended on that date. These financial statement and other financial information have been audited by other auditors, which financial statements, other financial information and auditor’s reports have been furnished to us by the management. Our opinion on the
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding
F-198
consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of such other auditors.
(b) In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors; (c) The consolidated Balance Sheet, consolidated Statement of Profit and Loss including the Statement of Other Comprehensive Income, the consolidated Cash Flow Statement and consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements; (d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended; (e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2018 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its subsidiary companies and its joint venture company, none of the directors of the Group’s companies, and joint venture incorporated in India is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act. (f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements of the Holding Company, its subsidiary company and incorporate in India, refer to our separate report in “Annexure 1” to this report; (g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries and joint venture noted in the ‘Other matter’ paragraph: i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated financial position of the Group and its joint venture– Refer Note 36 (A) and (B) to the consolidated Ind AS financial statements; ii. The Group and its joint venture did not have any material foreseeable losses in long-term contracts including derivative contracts during the year ended March 31, 2018; iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, its subsidiaries and joint venture, incorporated in India during the year ended March 31, 2018.
Certain of these subsidiaries are located outside India whose financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Company’s management has converted the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Company and audited by us. (b) The consolidated Ind AS financial statements of the Company for the year ended March 31, 2017, included in these consolidated Ind AS financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on May 13, 2017. (c) The accompanying consolidated Ind AS financial statements include unaudited financial statements and other unaudited financial information in respect of joint venture, whose financial statements and other financial information reflect total assets of Rs Rs. 15.90 lacs and net assets of Rs 15.86 lacs as at March 31, 2018, and total revenues of Rs Nil and net cash inflows of Rs 0.64 lacs for the year ended on that date. These unaudited financial statements and other unaudited financial information have been furnished to us by the management. Our opinion, in so far as it relates amounts and disclosures included in respect of joint venture, and our report in terms of sub-sections (3) of Section 143 of the Act in so far as it relates to the aforesaid joint venture, is based solely on such unaudited financial statement and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information are not material to the Group. Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management. Report on Other Legal and Regulatory Requirements
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
As required by section 143 (3) of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of subsidiaries, as noted in the ‘other matter’ paragraph we report, to the extent applicable, that:
per Atul Seksaria Partner Membership Number: 086370 Place of Signature: Kanpur Date: May 12, 2018
(a) We / the other auditors whose reports we have relied upon have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated Ind AS financial statements;
F-199
ANNEXURE 1 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF J.K.CEMENT LIMITED Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated financial statements of J.K.Cement Limited as of and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of J.K.Cement Limited (hereinafter referred to as the “Holding Company”) and its subsidiary company, its joint venture company, which are companies incorporated in India as of that date
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Consolidated Financial Statements A company's internal financial control over financial reporting with reference to these consolidated financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Holding Company, its subsidiary company and its joint venture company, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Consolidated Financial Statements Because of the inherent limitations of internal financial controls over financial reporting with reference to these consolidated financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these consolidated financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these consolidated financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Auditor’s Responsibility Our responsibility is to express an opinion on the company's internal financial controls over financial reporting with reference to these consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, both, issued by Institute of Chartered Accountants of India, and deemed to be prescribed as under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these consolidated financial statements was established and maintained and if such controls operated effectively in all material respects.
Opinion In our opinion, the Holding Company, its subsidiary company and its joint venture company, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls over financial reporting with reference to these consolidated financial statements and such internal financial controls over financial reporting with reference to these consolidated financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these consolidated financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these consolidated financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
For S.R. Batliboi & CO. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these consolidated financial statements.
per Atul Seksaria Partner Membership Number: 086370 Place of Signature: Kanpur Date: May 12, 2018
F-200
J K Cement Limited
-
-
As at 31 March 2018
As at 31 March 2017 (Restated)
Consolidated balance sheet as at 31 March 2018
(All amounts are in Rupees lacs, unless otherwise stated) Notes
ASSETS
Non-current assets
Property, plant and equipment
2
Capital work-in-progress
442,121.39
451,839.02
2,212.62
2,332.12
Intangible assets
2 3
(i) Investments
4
4,135.57
6
12,338.55 475,037.58
11,337.15 493,161.36
7
58,980.96
56,089.29
Financial assets
5
(ii) Loan & Advances
Other non-current assets Total non-current assets Current assets Inventories
Financial assets
8
(i) Current investments
(ii) Trade receivables
7,757.62
6,526.00
11
36,107.82
30,520.43
12 13
14 44
Assets held for sale Total current assets
13,477.43
20,193.34
(v) Other current financial assets
Other current assets
1,500.84
3,802.93
23,578.91
10
Current tax assets (net)
12,674.80
9
(iii) Cash and cash equivalents
(iv) Bank balances other than (iii) above
10,426.52
Total assets
19,839.53
13,010.96
7,442.00
5,266.36 -
757.45
15,014.79
16,319.70
902.61 170,381.69
147,926.08
645,419.27
641,087.44
EQUITY AND LIABILITIES Equity
15
Equity share capital Other equity
Equity attributable to equity holders of the J K Cement Ltd.
16
6,992.72
6,992.72
190,494.10
164,075.83
197,486.82
171,068.55
17
257,410.51
287,014.50
19
2,737.12
Non-controlling interests
197,486.82
Total equity
398.74 171,467.29
Liabilities
Non-current liabilities Financial liabilities (i) Borrowings
(ii) Other financial liabilities
Long-term provisions
Deferred tax liabilities (net)
18 20
20,678.88
17,671.71
2,237.99
26,696.66
25,986.52
21
9,232.02 316,755.19
8,633.01 341,543.73
(i) Borrowings
22
15,646.93
22,593.28
(iii) Other financial liabilities
24
50,585.13
45,931.78
Other non-current liabilities Total non-current liabilities Current liabilities
Financial liabilities (ii) Trade payables
Other current liabilities Short-term provisions
Current Tax liability (Net) Total Current liabilities
23 25 26 13
Total liabilities
43,571.66
42,712.98
19,091.31
15,638.19
2,282.23 -
1,051.29
131,177.26
148.90 128,076.42
645,419.27
641,087.44
447,932.45
Total equity and liabilities The accompanying notes are an integral part of the financial statements As per our report of even date For S.R. Batliboi & Co.LLP,
Chartered Accountants
469,620.15
For and on behalf of the Board of Directors of
J K Cement Limited
ICAI Firm Regn. No. 301003E/E300005
Yadupati Singhania
per Atul Seksaria Partner
A.K. Saraogi
President (Corp.Affairs) & CFO
Chairman & Managing Director
Place : Kanpur
Shambhu Singh
Krishna Behari Agarwal
Membership No - 086370 Dated : 12th May,2018
Company Secretary
Membership No -F5836
F-201
Director
J K Cement Limited Consolidated statement of profit and loss for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated)
Notes Revenue from operations Other income
27 28
Total income Expenses Cost of materials consumed Purchase of Stock in Trade Changes in inventories of finished goods, stock-in-Trade and work-inprogress `Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses
For the year ended 31 March 2018 502,047.63 12,813.85 514,861.48
475,242.92
30
78,185.98 84.75 1,869.13
68,647.53 92.50 1,451.83
31 32 33 34
36,827.86 28,409.15 23,132.18 306,334.45
31,554.28 30,266.26 21,694.99 291,042.39
474,843.50
444,749.78
40,017.98
30,493.14
1,696.15
1,931.62
38,321.83
28,561.52
29
Total Expenses Profit/(loss) before exceptional items and tax Exceptional items `
45
Profit/(loss) before tax Tax expense: Current tax Deferred tax charged/(credit) Earlier Years Tax Adjustments
20
Profit/ (loss) for the year
9,413.62 349.45 28,558.76
Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement gains/(losses)of defined benefit plans Income tax relating to remeasurement of defined benefit plans Exchange differences on translations
195.55 (67.67) 1,680.07 1,807.95
Total comprehensive income for the year Profit attributable to: Equity holders of the J K Cement Limited Non-controlling interests Other comprehensive income attributable to: Equity holders of the J K Cement Limited Non-controlling interests Total comprehensive income attributable to: Equity holders of the J K Cement Limited Non-controlling interests
Earnings per equity share (Rs.) Basic Diluted
For the year ended 31 March 2017 (Restated) 465,399.91 9,843.01
35
The accompanying notes are an integral part of the financial statements
7,047.08 4,320.39 (2.75) 17,196.80
48.17 (16.67) (1,896.15) (1,864.65)
30,366.71
15,332.15
28,957.50 (398.74) 28,558.76
17,773.53 (576.73) 17,196.80
1,807.95 1,807.95
(1,864.65) (1,864.65)
30,765.45 (398.74) 30,366.71
15,908.88 (576.73) 15,332.15
41.41 41.41
25.42 25.42
As per our report of even date For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005
For and on behalf of the Board of Directors of
J K Cement Limited
per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
F-202
Yadupati Singhania Chairman & Managing Director Krishna Behari Agarwal Director
J K Cement Limited Statement of Consolidated Cash flow for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated)
A. Cash Flow from Operating Activities Net Profit before tax Adjustment for :Depreciation & amortization expences Loss on the sale of property, plant & equipment/ Impairment Interest paid Interest received Bad Debts / Loans and Advances Provision for doubtful debts / loans and advances Profit on sale of current Investment Net fair value gain on financial assets measured at fair value through profit or loss Net loss on unrealised Foreign Currency transactions and translation Mines restoration charges Operating Profit Before Working Capital Changes Movements in working capital :Increase / (Decrease) in Trade Payables Increase / (Decrease) in Other financial liabilities Increase / (Decrease) in Other liabilities Increase / (Decrease) in provisions (Increase )/ Decrease in Inventories (Increase)/ Decrease in Trade receivables (Increase)/ Decrease in Other financial assets (Increase)/ Decrease in Other assets Cash Generated From Operations Less : Income Tax Paid (inclusive of tax deducted at source) Net Cash From Operating Activities
For the year ended 31 March 2018
For the year ended 31 March 2017
38,321.83
28,561.52
23,132.18 1,748.14 27,698.35 (4,220.12) 9.85 174.68 (171.73) (284.83) (83.80) 14.40 86,338.95
21,694.99 2,709.84 29,513.52 (4,239.57) 1,000.00 172.25 (239.67) 165.04 21.48 79,359.40
858.68 8,957.60 4,052.13 4,101.51 (2,891.67) (3,570.10) (738.37) 1,161.98 98,270.71 (9,959.28) 88,311.43
(411.18) (1,865.99) 11,033.03 (435.39) (6,778.68) (230.84) (2,009.77) 4,854.71 83,515.29 (6,334.08) 77,181.21
(31,015.47) 35,277.57 (20,179.56) 5,751.87 (65,766.35) (4,500.00) 4,500.00 62,071.73 4,279.45 (9,580.76)
(30,410.69) (40,371.48) 1,976.15 (17,691.76) (7,862.00) 7,862.00 17,767.85 3,813.84 (64,916.09)
(1,302.96) (0.00) 2,314.27 (1,910.33) (6,946.35) (31,247.05) 132.75 (27,889.48) (6,733.02) (73,582.17)
(915.89) 75,105.33 (1,702.51) (2,342.27) (71,828.27) 199.45 (29,709.61) (3,366.51) (34,560.28)
5,148.50
(22,295.16)
1,680.07 13,010.96 19,839.53 5,148.50
(1,896.15) 37,202.27 13,010.96 (22,295.16)
B. Cash Used in Investing Activities Proceed from maturituy of fixed deposit Investment in fixed deposit Acquisition/Purchase of property, plant & equipment Sale of property, plant & equipment Investment in Equity, Mutual funds & Bonds Intercorporate loan given Repayment of intercorporate loan Sale of Current Investment / Impairment Interest received Net Cash Used In Investing Activities C. Cash used in Financing Activities Advance to Related Party Increase in Long Term Borrowings Deffered Sales Tax / VAT Net proceeds from Long Term Borrowings Cash Credit Accounts Repayment of Long Term Borrowings Vehicle Loans Interest Expense Paid (inclusive of tax deducted at source) Dividend paid Net Cash Used in Financing Activities Net Increase/( Decrease ) in Cash and Cash Equivalents Exchange rate fluctuation reserve on conversion Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year
Notes : 1. Cash and cash equivalents includes cash in hand and bank balances including Fixed Deposits. For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005
For and on behalf of the Board of Directors of
J K Cement Limited
per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
F-203
Yadupati Singhania Chairman & Managing Director Krishna Behari Agarwal Director
J K Cement Limited Statement of Changes in Equity for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) (a) Equity share capital
As at 31 March 2018 Amount
Balance at the beginning of the year (equity share of Rs.10/- each issued, subscribed & paid up)
Changes in equity share capital during the year Balance at the end of the reporting period (equity share of Rs.10/each issued,subsribed & paid up)
6,992.72
6,992.72
6,992.72
6,992.72
-
(b) Other equity
Balance at 31 March 2016
As at 31 March 2017 Amount
Reserves and Surplus
Securities premium account
Debenture redemption reserve
-
-
-
-
25,988.60
Profit for the year Other comprehensive income/ (loss) for the year Total comprehensive income for the year Amortisation of mining rights Transfer to/(from) general reserve Transfer to/(from) debenture redemption reserve Dividend paid Dividend distribution tax Balance at 31 March 2017 (Restated)
25,988.60
Profit for the year Other comprehensive income for the year Total comprehensive income for the year Dividend on 3% preference shares Transfer to/(from) general reserve Transfer to/(from) debenture redemption reserve Dividend Dividendpaid paid Dividend Dividenddistribution distributiontax tax Balance at 31 March 2018 The accompanying notes are an integral part of the financial statements
-
8,244.45
1,710.65 9,955.10
General reserve 69,501.31 -
74,325.02
-
-
-
9.40
6,000.00 -
9,964.50
80,325.02
(5,000.00) (1,710.65) (2,797.09) (569.42)
(176.29) (2,797.09) (569.42)
Noncontrolling interests 975.47 (576.73) (576.73)
Total 152,685.22 17,196.80 (1,864.65) 15,332.15 (176.29) (2,797.09) (569.42)
53,807.11
164,075.83
398.74
164,474.57
28,957.50 1,807.95 30,765.45
28,957.50 1,807.95 30,765.45
(398.74) (398.74)
28,558.76 1,807.95 30,366.71
2,385.84 (6,000.00) (9.40) (5,594.18) (1,138.84) 74,215.98
2,385.84 (5,594.18) (1,138.84) 190,494.10
-
2,385.84 (5,594.18) (1,138.84) 190,494.10
For and on behalf of the Board of Directors of J K Cement Limited
per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-204
151,709.75 17,773.53 (1,864.65) 15,908.88
As per our report of even date For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005
Total
17,773.53 (1,864.65) 15,908.88
(176.29) 5,000.00
-
25,988.60
Retained earnings (including Other Comprehensive Income) 47,975.39
Notes
to the consolidated financial statements for the year ended 31st March, 2018
1. I.
II.
CORPORATE INFORMATION
the appropriate headings. Details of the joint operation as set out in note 47(3).
Reporting Entity The consolidated financial statement comprise statement of JK Cement limited, its subsidiaries and joint venture operation (collectively, the group) for the year ended 31 March 2018. J K Cement Limited (“J K Cement Limited” or “the Company” or the “Parent”) is a public limited company domiciled in India and has its registered office at Kamla Tower, Kanpur, Uttar Pradesh – 208 001. J K Cement Limited’s equity shares are listed on National Stock Exchange and Bombay Stock Exchange in India.
These are Group’s separate financial statements. These financial statements were authorised for issue by the Board of Directors on 12.05.2018. (c) The assets and liabilities of foreign operations are translated into INR at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. For practical reasons, the group uses an average rate to translate income and expense items, if the average rate approximates the exchange rates at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or loss.
Significant Accounting Policies The Group has consistently applied the following accounting policies to all periods presented in the financial statements. 1.
Basis of consolidation (a) The consolidated financial statements of the Group have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). The financial statements of the Company and its Subsidiary Company have been consolidated on a line-by-line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances.
(d) The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as the Company’s separate financial statements.
(b) Bander Coal Company Private Limited recognizes its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the financial statements under
(e) Calendar year as accounting year is adopted by J.K. Cement (Fujairah) FZC and J.K. Cement Works (Fujairah) FZC and the books are being prepared on year ending 31.12.2017.
(f) The Companies considered in the consolidated financial statements of Group are: Name of the Company
Nature of Company
Country of Incorporation
Holding as on 31.03.2018
Date of period consolidation
J.K. Cement (Fujairah) FZC J.K. Cement Works (Fujairah) FZC Bander Coal Company Pvt Ltd Jaykaycem(Central)Ltd
Subsidiary Fellow Subsidiary Joint Venture Subsidiary
U.A.E. U.A.E. India India
100% 90% 37.5% 100%
Calendar year December 2017 Calendar year December 2017 FY 2017-2018 FY 2017-2018
(g) Profit or loss attributable to ‘non-controlling interest’ and to ‘owners of the parent’ in the statement of profit and loss is presented as allocation for the period. Further, ‘total comprehensive income’ for the period attributable to ‘noncontrolling interest’ and to ‘owners of the parent’ is presented in the statement of profit and loss as allocation for the period. The aforesaid disclosures for ‘total comprehensive income’ is made in the statement of changes in equity.
F-205
Notes
to the consolidated financial statements for the year ended 31st March, 2018
the estimated economic life and estimated cost of the assets. The Group has analyzed each lease contract on case to case basis to classify the arrangements as operating and finance lease, based on evaluation of the term and conditions of the arrangements.
Non-controlling interests’ in the Balance Sheet and in the Statement of Changes in Equity, within equity, is presented separately from the equity of the ‘owners of the parent’. 2.
Basis of measurement The Consolidated financial statements have been prepared on a historical cost basis except the following items, which are measured on fair value basis on each reporting date: –
Certain financial assets and liabilities that is measured at fair value (Refer Note 41)
–
Defined benefit liability/(assets): fair value of plan assets less present value of defined benefit obligation(Refer Note 38)
3.
Functional and presentation currency These financial statements are presented in Indian National Rupee (‘INR’), which is the Company’s functional currency. All amounts have been rounded to the nearest lacs up to two decimal places unless otherwise indicated.
4.
Use of judgements and estimates In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income , expenses, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
–
B.
Assumptions and estimation uncertainties The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below, the Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future development, however, may change due to market change or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occurred. Taxes: Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with tax planning strategy.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. A. Judgements Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below: –
Provision and contingencies The assessment undertaken in the recognizing provision and contingencies have been made in accordance with Ind AS 37, ‘Provisions, contingent liabilities and contingent assets’. The evaluation of the likelihood of the contingent events has required best judgement by management regarding the probability of exposure to potential loss.
Useful lives of property, plant and equipment The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence,
Assessment of lease contracts: Classification of lease under finance lease or operating requires judgement with regard to
F-206
Notes
to the consolidated financial statements for the year ended 31st March, 2018
5.
demand, competition, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset. The Group reviews the useful life of property, plant and equipment at the end of each reporting date.
–
Expected to be realised within twelve months after the reporting period, or
–
Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
Post-retirement benefit plans Employee benefit obligations (gratuity obligations) are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rates, future salary increases and Mortality rates. Due to the complexities involved in the valuation and its long term natures, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
A liability is treated as current when:
Fair value measurement of financial instruments The fair value of financial assets and financial liabilities recorded in the balance sheet in respect of which quoted prices in active markets are available and measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
All other liabilities are classified as non-current.
Classification of Assets and Liabilities as Current and Non-Current The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: –
–
Expected to be realised or intended to be sold or consumed in normal operating cycle. Held primarily for the purpose of trading
F-207
All other assets are classified as non-current.
–
It is expected to be settled in normal operating cycle.
–
It is held primarily for the purpose of trading
–
It is due to be settled within twelve months after the reporting period, or
–
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
Deferred tax liabilities are classified as non-current liabilities. The operating cycle is the time between the acquisition of the assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle. 6.
Property, plant and equipment Recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred upto the date when the assets are ready to use. Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as a separate items (major components) of property, plant and equipment.
Notes
to the consolidated financial statements for the year ended 31st March, 2018
7.
Any gain/ (loss) on disposal of property, plant and equipment is recognised in statement of profit and loss. Subsequent Measurement Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation Depreciation on Property, plant and equipment (PPE) is calculated using the straight-line method (SLM) to allocate their cost, net of their residual values, over their estimated useful lives (determined by the management based on technical estimates). The assets residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.
Amortisation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively. 8.
Leasehold land is being amortised over the period of lease tenure. The management estimates the useful lives for the property, plant and equipment, except leasehold land as follows – Tangible Assets
Factory building Non factory building Plant and machinery Vehicles Furniture and fixtures Office equipment Railway slidings
Intangible assets Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Intangible assets are amortized on straight line method basis over the estimated useful life. Estimated useful life of the Software is considered as 3 years.
Financial instruments A financial instrument is any contract that gives rise to asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract. Financial Assets Initial recognition and measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Life
03-30 Years 03-60 Years 02-40 Years 04-10 Years 03-15 Years 03-05 Years 05-18 Years
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Freehold Mining Land is depleted according to the ‘unit of production’ method by reference to the ratio of extraction of limestone in the year to the related reserves of limestone.
Classifications The Group classifies its financial assets as subsequently measured at either amortised cost or fair value depending on the Group’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Leasehold Land is amortized on a straight line basis over the primary lease period. Limestone reserves are estimated by the management based on the internal best estimates or independent expert’s valuation as considered appropriate. These estimates are reviewed at least annually.
Business model assessment The Group makes an assessment of the objective of a business model in which an asset is held at an instrument level because this best reflects the way the business is managed and information is provided to management.
The management believes that the estimated useful lives are realistic and reflect approximation of the period over which the assets are likely to be used.
F-208
Notes
to the consolidated financial statements for the year ended 31st March, 2018
Debt instruments at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: –
–
investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investmentby-investment basis.
It is held within a business model whose objective is to hold assets in order to collect contractual cash flows.
All other Financial Instruments are classified as measured at FVTPL. Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s balance sheet) when:
The contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (‘EIR’) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. Debt instrument at fair value through Other Comprehensive Income (FVOCI) Debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI. Debt instrument at fair value through profit and loss (FVTPL) Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. In addition, the Group may elect to classify a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. Equity Instruments All equity instruments in scope of Ind AS 109 are measured at fair value. On initial recognition an equity
–
The rights to receive cash flows from the asset have expired, or
–
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the
F-209
Notes
to the consolidated financial statements for the year ended 31st March, 2018
financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Impairment of financial assets The Group assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost The impairment methodology applied depends on whether there has been a significant increase in credit risk.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.
With regard to trade receivable, the Group applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate.
Derecognition of financial liabilities The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. Reclassification of financial assets The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Group ’s senior management determines change in the business model as a result of external or internal changes which are significant to the Group ’s operations. Such changes are evident to external parties. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Group does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial Liabilities measured at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
F-210
Notes
to the consolidated financial statements for the year ended 31st March, 2018
9.
Inventories Inventories are valued as follows: aw materials, packing R materials, stores and spares Work-in-progress, finished goods and traded goods Waste
Lower of cost and net realisable value. Cost is determined on a moving weighted average basis. Materials and other items held for use in the production of inventories are at cost not written down below costs, if finished goods in which they will be incorporated are expected to be sold at or above cost Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads. Cost of finished goods includes excise duty, wherever applicable. At net realisable value
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale. 10. Provisions, Contingent Liabilities and Assets Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Group , are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
restoration expenditure is apportioned over the estimated quantity of mineral resources (likely to be made available) and provision is made in the accounts based on minerals mined during the year. 11. Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Group has concluded that it is acting as a principal in all of its revenue arrangements since it is the primary obliger in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks. Based on the education material on Ind AS 18 issued by the ICAI, the Group assumed that recovery of excise duty flows to the Group on its own account. This is for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the Group on its own account, revenue includes excise duty. However, sales tax/value added tax (VAT) goods & service tax (GST) is not received by the Group on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly it is excluded from the revenue. The specific recognition criteria described below must also be met before revenue is recognised.
Contingent Assets are not recognized in the financial statements. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. Mines Restoration Expenditure The expenditure on restoration of the mines based on technical estimates by Internal/External specialists is recognized in the accounts. The total estimated
(a) Sale of goods Revenue is recognised when the significant risk and rewards of ownership have been transferred
F-211
Notes
to the consolidated financial statements for the year ended 31st March, 2018
to the customer which generally coincide with the delivery of goods, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty upto 30.06.2017 and net of returns, trade discounts and volume rebates.
the expected lives of the related assets and presented within other income. 13. Employee benefits (i) Short term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
(b) Dividend Income from investments is recognized when the right to receive payment is established and recovery is probable.
(ii) Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. The Group has following defined contribution plans: a) Provident fund b) Superannuation scheme
(c) Interest income is recognized using the EIR method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate.
(iii) Defined benefit plans The Group‘s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
(d) Insurance Claims: Claims lodged with the insurance Companies are accounted for on accrual basis to the extent these are measurable and ultimate collection is reasonably certain. 12. Government Grants and Subsidies Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability
Government grants that compensate the Group for expenses incurred are recognised in profit or loss as income on a systematic basis in the periods in which the expense is recognised. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over
F-212
Notes
to the consolidated financial statements for the year ended 31st March, 2018
Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary.
(asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
14. Foreign currency transactions Transactions in foreign currencies are translated into the Group ’s functional currency at the exchange rates at the dates of the transactions.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Nonmonetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.
The Group has following defined benefit plans: a)
Gratuity The Group provides for its gratuity liability based on actuarial valuation of the gratuity liability as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary and contributes to the gratuity fund formed by the Group. The contributions made are recognized as plan assets. The defined benefit obligation as reduced by fair value of plan assets is recognized in the Balance Sheet. Remeasurements are recognized in the Other Comprehensive Income, net of tax in the year in which they arise.
15. Borrowing Cost Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(iv) Other long-term employee benefits The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise.
16. Taxes Tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income i)
The Group has following long term employment benefit plans: a)
Leave Liability Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment, which is a defined benefit scheme, is provided based on actuarial valuation as at the Balance
F-213
Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.
Notes
to the consolidated financial statements for the year ended 31st March, 2018
ii)
Current tax assets and liabilities are offset only if, the Group:
The carrying amount of deferred tax asset is reviewed on each reporting date.
a)
Has a legally enforceable right to set off the recognised amounts; and
Deferred tax assets and liabilities are offset only if:
b)
Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
a)
The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b)
The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.
17. Impairment of non-financial assets At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (‘CGUs’). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
F-214
Notes
to the consolidated financial statements for the year ended 31st March, 2018
18. Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors of the Group has been identified as being the chief operating decision maker by the Management of the Group. Refer note 37 for segment information presented. 19. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 20. Leases Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is
F-215
allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. 21. Earnings Per Share (EPS) Basic earnings per share are computed by dividing the profit for the year by the weighted average number of equity shares outstanding during the period. Diluted earnings per shares is computed by dividing the profit for the year by the weighted average number of equity shares considered for deriving basic earnings per shares and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
J K Cement Limited Notes to the consolidated financial statements for the year ended 31 March 2018 (All amounts are in Rupees lacs, unless otherwise stated) 2. Property, plant and equipment
Particulars Tangible Assets Freehold land Building Plant and equipment (iv) Plant & equipment-Others (i) Vehicles Furniture and fixtures Office Equipment Railway sidings Rolling stock Other assets Assets under Finance Lease Leasehold land (iii) Total Capital work-in-progress(ii) Intangible Asset under Development Total
Gross Block Opening
28,930.11 80,606.42 431,523.48 5,029.13 3,636.84 3,787.53 450.53 10,297.52 89.43 537.39 16,315.16 581,203.54 12,674.80 593,878.34 -
Additions
5,004.11 2,660.64 11,160.40 650.76 111.40 79.93 245.88 90.05 1,368.39 21,371.56 10,968.22 32,339.78
Deletions / Adj
4,983.85 396.46 6,324.39 192.28 6.09 12.52 1.04 1.32 39.17 11,957.12 13,216.50 25,173.62
Foreign Exchange Impact
(321.77) (287.30) (32.72) 42.34 0.61 (53.29) (40.44) (692.57) (692.57)
As at 31.03.2018 28,950.37 82,870.60 436,359.49 5,029.13 4,095.32 3,892.84 517.94 10,542.36 89.43 626.12 17,644.38 590,617.98 10,426.52 601,044.50 -
Depreciation Opening
Additions
12,676.78 107,145.45 518.64 1,782.08 2,059.05 243.64 1,813.83 63.85 313.87 2,747.33 129,364.52 129,364.52 -
3,871.51 16,453.36 299.19 439.56 339.33 70.96 677.54 8.19 95.55 656.36 22,911.55 22,911.55
Foreign Deletions / Exchange Adj Impact 50.97 3,554.82 153.99 5.20 11.12 0.12 3.26 3,779.48 3,779.48
(92.19) (278.09) 7.16 (12.80) (0.63) 6.91 (4.54) (374.18) (374.18)
As at 31.03.2018 16,497.32 120,043.99 817.83 2,067.65 2,393.18 303.48 2,491.25 72.04 409.42 3,400.43 148,496.59 148,496.59
Net Block
As at 31.03.2017
28,930.11 67,929.64 324,378.03 4,510.49 1,854.76 1,728.48 206.89 8,483.69 25.58 223.52 13,567.83 451,839.02 12,674.80 464,513.82
As at 31.03.2018 28,950.37 66,373.28 316,315.50 4,211.30 2,027.67 1,499.66 214.46 8,051.11 17.39 216.70 14,243.95 442,121.39 10,426.52 452,547.91
(i). Cost incurred by company ownership of which vest with State Electricity Boards & Indian Railways. (ii) The amount of Rs.13216.50 lacs represents the amount capitalised during the year. (iii) It includes freehold land for minning having cost of 3274.81/- (31st March 2017 : 3082.44/-), amortisation of 117.66/- (31st March 2017 : 74.16/-) and net block of 2449.95/- (P.Y. 2375.24/-) (iv). Property , plant & equipmetnt pledged as security: Refer note no. 17(a) for information on property, plant & equipment pledged as security by the company. (v) The title deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for 1 case of leasehold land and 4 cases of freehold land amounting to gross block of Rs. 1,353.07 lacs (net block: Rs.177.29 lacs) and gross block of Rs. 225.64 lacs (net block: Rs. 225.64 lacs) respectively as at March 31, 2018 for which title deeds are in the name of the erstwhile company that merged with the Company pursuant to a scheme of amalgamation and arrangement as approved by the honourable High Court in earlier years.
(vi) Assets related to Thermal Power Plant and other DG Set at Rajasthan Location are decapitalised & kept for final disposal. Refer Note 44 & 45. 3. Intangible Assets
Particulars Intangible Assets
Computer Software Minning Rights Total
Gross Block Opening 739.47 1,877.38 2,616.85 -
Additions 149.59 149.59
Deletions / Adj
48.46 48.46
Foreign Exchange Impact 1.15 1.15
As at 31.03.2018 840.60 1,877.38 2,717.98 -
F-216
Depreciation Opening 182.50 102.23 284.73 -
Additions 220.63 220.63
Foreign Deletions / Exchange Adj Impact -
0.06 0.06
As at 31.03.2018 403.13 102.23 505.36 -
Net Block
As at 31.03.2017
556.97 1,775.15 2,332.12 -
As at 31.03.2018 437.47 1,775.15 2,212.62 -
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) As at 31 March 2018
As at 31 March 2017
4 Non Current Investments A.
B.
Investment in equity instruments (fully paid-up) Unquoted (at FVTPL) - 8000 (31st March 2017 : 5200) equity shares of ReNew Wind Energy AP (Pvt.) Ltd. (Face value Rs.10 each)
8.00
5.20
-
-
-
-
5000000( 31st March 2017:5000000) HDFC fmp 1302D Sep2016(1)Regular-Growth -Series-37 Maturity date2020 5000000( 31st March 2017:5000000) HDFC fmp 1188D Mar-2017(1)Regular-Growth-Series38- Maturity date-29-6-2020 5000000 (31st March 2017: Nil) UTI FITF Series XXVII-II (1161 Days)
569.69
500.00
540.32
500.00
522.56
-
5000000( 31st March 2017:NIL) ICICI Prudentail Fixed Maturity Plan Series 82-1187 Days 5000000( 31st March 2017:NIL) ICICI Prudentail Fixed Maturity Plan Series 82-1136 Days
508.53
-
501.51
-
494.15
495.64
499.44
-
491.37
-
4,135.57-
1,500.84-
4,127.57 8.00
1,495.64 5.20
563.76 143.41 3,095.76 3,802.93
10,413.25 12.03 3,052.15 13,477.43
- 3140101(31st March 2017 : 3140101) equity shares of VS Legnite Power Pvt. Ltd. (Face value Rs 10) ## Investment in preference shares (fully paid up) Unquoted (at FVTPL)
- 2785552(31st March 2017 : 2785552) 0.01% cumulative redeemable Preference shares in VS Legnite Power Pvt. Ltd. (Face value Rs 10) ## C.
Investment In Mutual Funds Quoted (at FVTPL)
D. Investments in Bonds (Quoted) (at FVTPL)
50 (31st March 2017:50) State bank of India SR-III 8.39% BD perpetual Bonds, Face value per Bond Rs.1000000 purchased @991285
50 (31st March 2017:NIL) State bank of India SR-II 8.75% BD perpetual Bonds, Face value per Bond Rs.1000000 purchased @1007773 50 (31st March 2017:NIL) Punjab National Bank SR- VIII, 8.95% BD perpetual Bonds, Face value per Bond Rs.1000000 purchased @1006175
Aggregate amount of market value of quoted investment Aggregate amount of unquoted investment
## The fair value of investment is Nil (31 March 2017: Nil). 5 Non Current Loan & Advances (unsecured, considered good) Fixed Deposits* Vehicle Loan Recoverable Security Deposits
*Non Current Fixed Deposits includes deposit of Rs. 27.16 Lacs (31 March 2017 is Rs. 112.82 Lacs ) pledged against overdraft /other commitments.
F-217
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) As at 31 March 2018
6 Other non-current assets
Capital Advances Prepaid Rent Deferred Employee Compensation Advance to Employees Deposit under protest with Govt Authorities
As at 31 March 2017
10,579.16 29.43 26.03 122.41 1,581.52 12,338.55
9,720.69 26.92 25.69 130.93 1,432.92 11,337.15
8,977.25 7,412.67 7,343.63 8.04 30,542.79
8,492.07 8,584.16 8,032.86 16.45 29,625.49
4,696.58
1,338.26
58,980.96
56,089.29
7 Inventories (Valued at lower of cost and net realisable value) Raw Materials Work-in-Process Finished goods Stock-in-Trade Consumable Stores and Spares (net of provisions for non-moving inventores of Rs. 108.75 lacs (31 March 2017: Rs.38.91) Goods in transit : - Consumable Stores and Spares
Refer to note 17 for information on inventories pledged as security by the company. 8 Current Investments Investment in Mutual Funds Quoted (at FVTPL) - 6568620.89(31st March 2017 : 6568620.89) units in “ICICI Prudential Regular Income fund” - 1774748.873 (31st March 2017 : 1774748.873) units in “HDFC Regular Saving – Growth” - 2721606.837(31st March 2017 : 2721606.837) units in Edelweiss Mutual Fund “Edelweiss Government Securities Regular- Growth” - 9322487.4370 (31st March 2017 :3180661.58) units in “ Axis Regular Saving Fund –Regular Plan Growth” - 73605.432(31st March 2017 : 39292.91) units in “SBI Premier Liquid fund -DIR Plan Growth”
-44082.999 (31st March 2017 : 46894.59) units in HDFC Liquid Fund Growth -Nil ( 31st March 2017 :86538.37) units in IDBI Liquid Fund -Regular Plan-Growth -2353040.835 ( 31st March 2017 :Nil) units in Birla Sun Life(BSL)
Aggreegate amount of quoted Investments
1,151.85
1,076.47
611.12
575.19
389.06
372.44
1,579.11
500.81
2,005.30
1,000.28
1,504.04
1,500.46
-
1,500.35
517.14 7,757.62
F-218
6,526.00
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) As at 31 March 2018
As at 31 March 2017
9 Trade receivables Secured Considered good
10,428.10 -
Unsecured Considered good Considered doubtful Less: Provision for doubtful balances
13,150.81 959.87 959.87
23,578.91 Refer to Note 17 for information on Trade receivables pledged as security by the company.
11,604.71 -
8,588.63 739.12 739.12
20,193.34
10 Cash and cash equivalents
Balance with banks: - In current accounts -Fixed Deposits with maturity of upto 3 months Cash on hand Cheques in hand
11 Other bank balances Earmarked Bank balances # Fixed Deposits for more than 3 months & upto one year*
# Bank balances are against unpaid dividend
3,566.47 14,060.34 41.31 2,171.41 19,839.53
4,007.82 8,944.68 33.23 25.23 13,010.96
117.88 35,989.94 36,107.82
99.20 30,421.23 30,520.43
*Fixed Deposits for more than 3 months & upto one year include deposit of Rs.2,698.08 Lacs (31 March 2017: Rs. 1,839.70 Lacs ) pledged against overdraft /other commitments. 12 Other current financial assets
Other Loans and Advances - Doubtful Provision for doubtful advances
33.96 (33.96) 1,302.96 4,899.51 40.74 1,198.79 -
Loans and Advances to Related Parties# Other Loans and Advances * Advance to Employees Interest Accrued Others
49.63 (49.63) 915.89 2,509.21 217.32 1,258.12 365.82
7,442.00
5,266.36
*Includes Government Subsidy of Rs. 3,233.65 Lacs (31 March 2017: Rs. 1,403.11 Lacs ).
# Funds remmitted after consolidated period (31st December) to J.K.Cement (Fujairah) FZC. Refer to Note 17 for information on other current financial assets pledged as security by the company.
13 Current tax (net)
Advance tax/(Liability) (Net of provision for income tax of Rs. 9,413.62 Lacs)
14 Other current assets
Balances with Government authorities Prepaid - RentExpenses Advance to Employees Advances recoverable in cash or in kind Deferred employee compensation
F-219
757.45
(148.90)
757.45
(148.90)
3,041.24 2,686.42 88.52 9,184.07 14.54 15,014.79
5,806.66 2,550.58 75.09 7,871.92 15.45 16,319.70
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
As at 31 March 2018
As at 31 March 2017
Authorised: 8,00,00,000 (As at 31 March 2017 - 8,00,00,000) equity shares of Rs.10/- each
8,000.00
8,000.00
Issued, subscribed & fully paid up: 6,99,27,250 (As at 31 March 2017 - 6,99,27,250) equity Shares of Rs.10/- each
6,992.72
6,992.72
6,992.72
6,992.72
15 Share capital
a. Terms and rights attached to equity shares Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However, same is subject to the approval of the shareholders in the Annual General Meeting. b. Reconciliation of number of shares outstanding at the beginning and end of the year :
Number of Shares 69,927,250 69,927,250 69,927,250
Outstanding at the 1 April 2016 Equity Shares issued during the year Outstanding at the 31 March 2017 Equity Shares issued during the year Outstanding at the 31 March 2018 c. Shareholders holding more than 5% shares in Yadu International Ltd Yadupati Singhania
Amount
6,992.72 6,992.72 6,992.72
As at 31 March 2018 As at 31 March 2017 No. of Shares Percentage No. of Shares Percentage 30,199,518.00 12,064,198.00
43.19% 17.25%
29,949,518.00 12,284,198.00
42.83% 17.57%
As at 31 March 2018
As at 31 March 2017
a. Securities premium reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year
25,988.60 25,988.60
25,988.60 25,988.60
b. Debenture redemption reserve Balance at the beginning of the year Add: Transfer from retained earnings Balance at the end of the year
9,955.10 9.40 9,964.50
8,244.45 1,710.65 9,955.10
c. General reserve Balance at the beginning of the year Add: Transfer from retained earnings Less :Amortisation of mining rights Balance at the end of the year
74,325.02 6,000.00 80,325.02
69,501.31 5,000.00 (176.29) 74,325.02
53,807.11 2,385.84 28,957.50 1,807.95 6,000.00 9.40 5,594.18 1,138.84 74,215.98
47,975.39 17,773.53 (1,864.65) 5,000.00 1,710.65 2,797.09 569.42 53807.11
16 Other equity
d. Retained earnings Balance at the beginning of the year Add: Dividend on 3% cumulative preference shares Add: Net profit for the year Add: Other Comprehensive income for the year Less: Transfer to general reserve Less: Transfer to debenture redemption reserve Less: Dividend on equity shares Less: Dividend distribution tax on equity shares
190,494.10
F-220
164,075.83
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) Nature and purpose of other reserves/ other equity
Debenture Redemption Reserve The Group has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), require the group to create DRR out of profits of the company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued.
General reserve The Company appropriates a portion to general reserves out of the profits either as per the requirements of the Companies Act 2013 ('Act') or voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act Other Comprehensive Income a)Remeasurement of defined benefit plans Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits: (a) actuarial gains and losses (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset) b)Foreign Currency Translations Foreign Currency Translation adjustments on foreign subsidiaries.
Capital management
For the purpose of the Group’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximise the shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, excluding discontinued operations. As at As at 31 March 2018 31 March 2017 257,410.51 287,014.50 20,997.58 22,103.95 (19,839.53) (13,010.96) 258,568.56 296,107.49
Borrowings (Note 17) Current matuirty of Long term Borrowings (Note 24) Cash and cash equivalents (Note 10) Net debt
197,486.82
Total Equity
Capital and net debt
456,055.38
Gearing ratio
56.70%
171,467.29
467,574.78
63.33%
In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017
F-221
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
As at 31 March 2018
17 Borrowings Secured Non convertible debentures Less: Current maturities of non convertible debentures (Refer note 24) Term loans (Secured) - From banks Less: Current maturities of Term loans (Refer note 24)
- Vehicle loans Less: Current maturities of Vehicle loans (Refer note 24) - VAT loans from Government Unsecured Deferred sales tax liabilities
Less: Current maturities of Def.sales tax liabilities (Refer note 24)
F-222
As at 31 March 2017
58,992.88
66,197.39
7,300.00
7,300.00
209,624.11 12,712.50
233,666.65 14,032.48
672.04 325.13
539.29 239.79
5,300.66
4,419.13
3,818.40
4,295.99
659.95 257,410.51
531.68 287,014.50
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) a. Particulars of Securities, Repayment & Interest Repayment Year of Rate of Interest Frequency Maturity p.a.
Loan's Securities
1) Secured Non Convertible Debentures
NCD as shown includes Rs.207.12 Lacs ( 31 March 2017 Rs. 302.61) towards amortised expenses. Non Convertible Debentures(NCDs): Rs.59,200.00 lacs (31 March 2017 Rs.66,500.00 lacs) i) Security for NCDs for Rs.29,200.00 lacs ( Rs. 36,500.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge on the assets specified below:Secured by pari-passu first charge on the Company's PPE (movable & immovable) by way of equitable mortgage on immovable Assets and hypothecation on movable PPE ,related to company's plant at Nimbahera ,Mangrol,Gotan Grey and Katni . a) Company's Existing Plant at Nimbahera having capacity of 3.25 MnTPA. b) Company's Existing Plant at Mangrol having capacity of 0.75 MnTPA. c) Company's Existing Plant at Gotan consisting of White Cement plant having capacity of 0.40 MnTPA and Thermal Power Plant. d) Company's Existing Thermal power plant at Bamania. ii)Security for NCDs for Rs. 30,000.00 lacs (Rs. 30,000.00 lacs) Secured by first mortgage on the Company’s flat at Ahmedabad and also against first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of movable PPE pertaining to Company’s existing cement plant at village Muddapur Karnataka
Carrying Amount As at As at 31 March 2018 31 March 2017
Annual
2020-21
10.25%
7,200.00
9,000.00
Annual
2020-21
10.50%
7,200.00
9,000.00
Annual
2020-21
11.00%
3,660.00
7,000.00
Annual
2020-21
11.00%
11,140.00
11,500.00
Annual
2023-24
10.50%
8,500.00
8,500.00
Annual
2023-24
11.00%
11,500.00
11,500.00
Annual
2025-26
9.65%
10,000.00
10,000.00
59,200.00
66,500.00
Sub Total (1) 2) Secured Term Loans from Banks
Term Loan as shown includes Rs. 313.13 Lacs (31 March 2017 Rs. 344.92 Lacs) towards amortised expenses .
Secured by pari-passu first charge on the Company's PPE (movable & immovable) by way of equitable mortgage on immovable Assets and hypothecation on movable PPE ,related to company's existing plant at Nimbahera, Mangrol,Gotan Grey and Katni . i) Company's Existing Plant at Nimbahera having capacity of 3.25 MnTPA. ii) Company's Existing Plant at Mangrol having capacity of 0.75 MnTPA. iii) Company's Existing Plant at Gotan consisting of White Cement plant having capacity of 0.40 MnTPA and Thermal Power Plant. iv) Company's Existing Thermal power plant at Bamania.
Quarterly
2021-22
Quarterly
2019-20
MCLR+0.75%
2,910.70
2018-19
MCLR+0.20%
428.57
2017-18
-
Quarterly Quarterly
Quarterly Quarterly Quarterly
2019-20
2023-24 2018-19
-
LTMLR
MCLR+0.50% -
625.00
8,460.28
3,570.69
1,134.32
4,262.64
9,469.21
857.14
-
714.18
-
850.98
-
248.07
Secured by exclusive charge by way of equitable mortgage over the Quarterly immovable assets and hypothecation of movable assets pertaining to Quarterly the specified properties.
2018-19 2020-21
MCLR+0.65%
Secured by equitable mortgage of immovable properties and hypothecation of movable PPE pertaining to undertaking of J.K. Cement Works, Gotan except current assets and vehicles.
Quarterly
2019-20
-
Quarterly
2022-23
LTMLR
3,750.00
4,464.75
2021-22
MCLR+ 0.50%
6,267.50
7,279.83
2021-22
MCLR
433.30
488.37
2021-22
MCLR
757.50
851.58
Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of Quarterly all movable PPE, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
2022-23
MCLR+0.50%
3,058.57
3,815.13
Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable PPE, Quarterly present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.
2023-24
MCLR+0.25%
1,718.69
2,031.21
Secured by First Pari-passu charge by way of equitable mortgage of Quarterly all the immovable Properties (except mining land) and hypothecation of all moveable non current assets, present and future Quarterly pertaining to J.K. Cement Works and Thermal power plant, Muddapur, Karnataka. Quarterly
F-223
-
-
1,541.91 -
1,542.00 2,475.58
Secured against exclusive charge on entire movable PPE (by way of hypothecation) and on immovable PPE related to the Wall Putty Quarterly project at Katni, Madhya Pradesh (excluding current assets and mining land, if any).
First pari-passu charge on the entire movable and immovable fixed assets pertaining to J.K. Cement Works(Fujairah)FZC, UAE as per prevalent local laws in UAE. Hypothecation of Inventories & assignment of trade receivables. Assignment of the rights under the Land Lease Agreement in Quarterly respect of lease hold land(both plant and mining land). Corporate Guarantee of J.K. Cement Limited for entire tenor of loan. Assignment of Insurance Contracts/Insurance proceeds arising from the Insurance Contracts.
2023-24
LTMLR
8,800.00
9,300.00
2024-25
3.25% + 6 Month LIBORE
54,392.17
61,563.33
2030-31
MCLR+ 0.50%
104,254.72
111,604.23
2030-31
MCLR+ 0.40%
12,538.33
7,488.33
Sub Total (2)
209,937.24
234,011.57
Total (1) + (2)
269,137.24
300,511.57
Secured by First charge by way of mortgage, on all the immovable properties, both present and future pertaining to, of the new cement Plants at Mangrol, Rajasthan (save and except mining land) Quarterly including captive power plant of 25 MW and waste heat recovery based power plant of 10 MW and split Grinding Unit at Jharli, Haryana and hypothecation of all the movable PPE of the above plants (save and except Current Assets), both present and future and second charge on all current assets, present and future, pertaining to the above plants (subject to prior charge created or to be created on Quarterly the Current Assets in favour of the Working Capital Lenders for securing the Working Capital Facilities.
Less : Shown in current maturities of long term debt Balance shown as above
20,012.50 249,124.74
21,332.48 279,179.09
b. Net Debt Reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presentated Particulars Cash and cash equivalents Liquid investments Current borrowings Non Current borrowings Net Debt
F-224
As at 31 March 2018 56,393.23
As at 31 March 2017 53,845.44
7,757.62 (36,644.51) (257,410.51) (229,904.17)
6,526.00 (44,697.23) (287,014.50) (271,340.29)
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) As at 31 March 2018
18 Other non-current financial liabilities
Security Deposits
20,678.88
17,671.71
20.00 2,505.57 211.55 2,737.12
10.00 2,030.84 197.15 2,237.99
197.15 14.40 211.55
175.67 21.48 197.15
20,678.88
19 Long-term provisions
Provision for employee benefits (Refer Note No.38) - Gratuity - Leave encashment Provision for Mines Restoration Charges* * Provision for Mines Restoration charges: Opening Balance Addition during the year Closing Balance
As at 31 March 2017
17,671.71
The Company provides for the expenditure to reclaim the quarries used for mining in the Statement of Profit and Loss based on the estimated expenditure required to be made towards restoration and rehabilitation at the time of vacation of mine. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimates. 20 Deferred tax liabilities (net)
The balance comprises temporary differences attributable to:
Deferred tax liabilities Property, plant and equipment
Deferred tax assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on payment basis MAT Credit adjustment
B. Movement in deferred tax balances Deferred Tax Assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on expenses MAT Credit Entitlement Sub- Total (a) Deferred Tax Liabilities Property, plant and equipment Sub- Total (b) Net Deferred Tax Liability (b)-(a)
As at 31 March 2017
9,980.15 840.63 272.97 3,291.07 18,079.26 32,464.08
As at 31 March 2018
As at 31 March 2017
60,057.48
58,450.60
1,915.62 965.63 343.95 2,763.18 27,372.44 26,696.66
9,980.15 840.63 272.97 3,291.07 18,079.26 25,986.52
Recognized in P&L
(8,064.53) 192.67 70.98 (527.89) 9,293.18 964.41
Recognized in OCI (67.67)
(67.67)
As at 31 March 2018
1,915.62 965.63 343.95 2,763.18 27,372.44 33,360.82
58,450.60
1,606.88
58,450.60
1,606.88
-
60,057.48
25,986.52
#642.47
67.67
26,696.66
F-225
60,057.48
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
Deferred Tax Assets Unabsorbed depreciation & Losses Employee benefits Trade receivables Liability on expenses MAT Credit Entitlement Sub- Total (a) Deferred Tax Liabilities Property, plant and equipment
Recognized in P&L (8,159.96) 156.55 37.53 (642.42) 7,049.89 (1,558.41)
As at 31 March 2016 18,140.11 700.75 235.44 3,933.49 11,029.37 34,039.16
As at 31 March 2017 9,980.15 (16.67) 840.63 272.97 3,291.07 18,079.26 (16.67) 32,464.08
55,691.41
2,759.19
-
58,450.60
55,691.41
2,759.19
-
58,450.60
21,652.25 Net Deferred Tax Liability (b)-(a) # Movement included Rs.293.02 lacs of earlier year tax adjustment
4,317.60
16.67
25,986.52
For the year ended 31 March 2018
For the year ended 31 March 2017
Sub- Total (b)
C. Amounts recognised in profit or loss Current tax expense Current year Deferred tax expense Origination and reversal of temporary differences Earlier year Tax Adjustment Total Tax Expense D. Amounts recognised in Other Comprehensive Income For the year ended Tax (Expense)/ Income 31 March 2018 Before tax Remeasurements of defined 195.55 -67.67 benefit liability (67.67) 195.55
Profit before tax from continuing operations Tax using the Company’s domestic tax rate Tax effect of: Non-deductible expenses Tax-exempt income & incentives Recognition of tax effect of previously unrecognised tax losses Others
127.88 127.88
34.608
F. Tax losses carried forward Unabsorbed Depreciation carried forward expire as follows. Never expire *Actual carry over was Rs.28,604.07 Lacs.
Net of tax
For the year ended 31 March 2018 Rate Amount
E. Reconciliation of effective tax rate
21
Recognized in OCI
Amount 4,276.46
43,972.76 15,218.10
9,413.62 9,413.62
7,047.08 7,047.08
349.45 349.45 9,763.07
4,320.39 (2.75) 4,317.64 11,364.72
For the year ended 31 March 2017 Before tax 48.17 48.17
Tax (Expense)/ Income
Net of tax
(16.67) (16.67)
31.50 31.50
For the year ended 31 March 2017 Rate Amount 34.608
32,443.17 11,227.93
300.36 (5,786.91) -
1,344.28 (1,402.87) 187.92
31.52 9,763.07
7.46 11,364.72
31 March 2018 Expiry date -
31 March 2017 Amount Expiry date *42936.13 -
As at 31 March 2018
Other non-current liabilities Deferred government subsidies - Capital subsidy sanctioned by Rajasthan government on PPE
9,232.02 9,232.02
As at 31 March 2017
8,633.01 8,633.01
Government grants have been received against the purchase of certain items of property, plant and equipment. There are no unfulfilled conditions or contingencies attached to these grants.
F-226
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
As at 31 March 2017 Current Non Current Received during the year Released to statement of profit or loss As at 31 March 2018 Current Non Current
606.88 8,633.01 9,239.89 1,499.65 753.76
399.19 7,747.68 8,146.87 1,699.90 606.88
753.76 9,232.02 9,985.78
606.88 8,633.01 9,239.89
15,646.93 15,646.93
22,593.28 22,593.28
22 Short term borrowings
Loan repayable on demand (Secured)* - From banks
* Cash credit account : Rs. 11,351.76 Lacs(31 March 2017 is Rs. 16,729.17 Lacs ) Cash credit accounts are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders.
* Short Term Loan/Over Draft Account : Rs. 4,295.17 lacs (Rs. 5,864.11 lacs)
Working Capital facilities are secured by first charge on current assets of the Company namely inventories, book debts etc. and undated cheques covering the exposure. As at As at 31 March 2018 31 March 2017 23 Trade Payable Micro, Small and Medium Enterprises Trade Payables
1,227.33 42,344.33 43,571.66
403.57 42,309.41 42,712.98
Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March,2018 as per the the terms of contract. 24 Other financial liabilities
Current maturities of long-term debt Employee Dues Interest accrued but not due on borrowings Interest accrued and due on borrowings Unpaid dividends Unclaimed fraction money Security deposits Project Creditors Temporary Book Overdraft Others*
*Other Includes Customer obligations ,customers claims etc. 25 Other current liabilities
Statutory Dues Payable Government Grant Advance from Customers Others
20,997.58 1,358.09 1,362.60 117.88 9.22 1,033.33 686.34 54.28 24,965.81 50,585.13
22,103.95 2,286.93 1,463.51 90.22 99.20 9.23 843.12 558.04 185.29 18,292.29 45,931.78
9,046.25 753.76 9,019.44 271.86 19,091.31
7,008.75 606.88 7,178.34 844.22 15,638.19
1,788.03 494.20 2,282.23
663.09 388.20 1,051.29
26 Short-term provisions
Employee benefits - Gratuity (Refer Note 38) - Leave Encashment
F-227
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 27 Revenue from operations
Sale of products (including excise duty) Total (i) Other operating revenue Claims realised Government grants Miscellaneous income Total (ii) Revenue from operations [(i) + (ii)]
For the year ended For the year ended 31 March 2017 31 March 2018 497,162.19 497,162.19
460,200.01 460,200.01
356.42 3,825.13 703.89 4,885.44
511.69 4,451.75 236.46 5,199.90
502,047.63
465,399.91
Sale of products includes excise duty collected from customers of Rs. 16,696.42 lacs (31 March 2017: Rs. 62,428.74 lacs). Sale of goods net of excise duty is Rs. 4,80,465.77 lacs (31 March 2017: Rs. 3,97,771.27 lacs). Revenue from operations for periods up to 30 June 2017 includes excise duty. From 1 July 2017 onwards the excise duty and most indirect taxes in India have been replaced Goods and Service Tax (GST). The group collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations year ended 31 March 2018 is not comparable 31 March 2017. 28 Other Income
Interest income from financial assets measured at amortised cost - from bank deposits - from others Net fair value gain/(loss) on financial assets measured at fair value through profit or loss Profit on sale of current investment (net) Government grants Miscellaneous income Net Gain on Foreign Currency transactions and translation
29 Cost of materials consumed Raw material Consumed
3,133.73 1,086.39
3,269.26 970.31
284.83 171.73 332.23 7,804.94 -
(165.04) 239.67 359.56 4,443.30 725.95
12,813.85
9,843.01
78,185.98 78,185.98
68,647.53 68,647.53
30 Changes in Inventories of Finished Goods, Work-in-Progress and Stock in Trade Closing Inventory Work-in-Progress Finished Goods Stock in Trade Total (A) Opening Inventory Work-in-Progress Finished Goods Stock in Trade Total (B)
(7,412.67) (7,343.63) (8.04) (14,764.34)
(8,584.16) (8,032.86) (16.45) (16,633.47)
8,584.16 8,032.86 16.45 16,633.47
9,801.12 8,260.75 23.43 18,085.30
1,869.13
Total (A-B)
F-228
1,451.83
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
31 Employee benefits expense
Salaries and wages Contribution to provident and other funds (Refer Note No 38) Staff welfare expenses
32 Finance cost
Interest expenses Other Borrowing Costs (includes bank charges, etc.) Unwinding of discounts
33 Depreciation and amortisation expense Depreciation on tangible assets Amortisation on intangible assets
34(i)
Other expenses
Packing material consumed Stores and spares consumed Repairs and maintenance: - Buildings - Plant and machinery - Other Assets Other manufacturing expenses Power and fuel Rent Lease rent and hire charges Rates and taxes Insurance Travelling and conveyance CSR expenses (Refer Note No 43) Bad trade receivables / advances / deposits written off Provision for doubtful trade receivables / advances / deposits Sales tax/VAT Excise Duty Paid Loss on disposal of Fixed Assets Miscellaneous expenses Selling and promotion expenses Freight and forwarding Advertisement and publicity
35 Earning per share
Total profit/ (loss) for the year Weighted average number of equity shares of Rs. 10/- each (In lacs) EPS - Basic and Diluted (Rs.)
F-229
For the year ended For the year ended 31 March 2017 31 March 2018 30,717.79 4,036.19 2,073.88 36,827.86
26,816.09 2,524.13 2,214.06 31,554.28
27,698.35 268.16 442.64 28,409.15
29,513.52 691.79 60.95 30,266.26
22,911.55 220.63
21,469.58 225.41
23,132.18
21,694.99
22,171.05 10,871.96
18,171.27 10,544.75
1,235.10 7,709.39 89.43 989.97 95,213.30 2,276.10 1,744.50 548.66 1,184.38 2,949.08 498.29 9.85 174.68 343.13 17,415.81 164.20 13,429.27 10,686.99 110,607.40 6,021.91
1,257.04 8,342.29 134.41 1,107.74 66,451.05 3,351.32 51.22 641.58 967.32 2,777.98 322.69 1,000.00 172.25 1,089.70 63,260.16 26.77 15,037.54 11,695.23 81,275.59 3,364.49
306,334.45
291,042.39
28,957.50 699.27 41.41
17,773.53 699.27 25.42
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 36.(A) Contingent Liabilities, Contingent assets and commitments
(i)
Claim against the Company not acknowledged as debts (includes show cause notices pertaining to ecise duty and others) (cash flow is dependent on court decisions pending at various level.)
Other for which the Company is contingently liable (ii) In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts-no provision has been considered necessary by the Management
(iii) (iv) (v)
(vi)
a) Excise Duty* b) Sales Tax and Entry Tax* c) Service Tax* d) Income Tax (primarily on account of disallowance of depreciation on goodwill and additional depreciation on Power Plants etc.) In respect of Interest on " Cement Retention Price" realised in earlier years In respect of penalty of non lifting of fly ash The Competition commission of India (CCI) has imposted penalty of Rs. 128.54 crores and Rs. 9.28 crores in two separate orders dated 31.08.2016 and 19.01.2017 respectively for alleged contravention of provisions of the Competition Act 2002 by the Company. The Company has filed appeals with Competition Appellate Tribunal (COMPAT) against above orders.COMPAT has stayed the CCI order in first matter on deposit of Rs. 6.56 crores and Appeal is being heard. In second matter stayed demand and appeal are yet to be heard.The Company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the Accounts.
In respect of demand made by Revenue Department, Karnataka for conversion of agricultural land into non agricultural land for mining purpose
(vii) In respect of land tax levied by State Governement of Rajasthan (viii) In respect of demand of Railway Administration pending with Jodhpur High Court In respect of charges on account of electricity duty, water cess etc levied by Ajmer Vidyut (ix) Vitran Nigam Ltd. (x) In respect of Environmental and Health Cess
As at 31-03-2018
As at 31-03-2017
22,345.42
16,338.86
1,724.76 5,469.56 1,362.89
1,662.53 5,162.02 1,314.31
5,450.36
5,450.36
1,251.43 1,270.56
1,231.06 839.29
-
560.17
206.69 218.86
191.23 212.10
4,497.04 324.52
3,869.34 324.52
* disputes are primarily on account of disallowances of input credits, interest on entry tax etc.
FINANCIAL GUARANTEES (i) Other Financial Guarantees including Joint Ventures The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required for the above guarantees. (B)
(C)
-
613.89
-
535.66
Commitments i)
Capital commitments
ii)
Estimated amount of contracts remaining to be executed on capital accounts and not provided for
iii)
Contractual Commitments for Lease Non cancellable operating lease commitments ; Not longer than one year Longer than one year and not longer than five years Longer than five years
i)
Contingent assets Insurance Claims
F-230
3,804.91
1,319.83
1,458.09 5,832.34 16,038.94
1,550.28 6,201.13 18,603.39
685.00
1,228.41
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 37
Segment information Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure. Operating Segments The Company's Board of Directors have been identified as the Chief Operating Decision Maker ('CODM'), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.
Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is "Cement", hence no specific disclosures have been made. Entity wide disclosures
A. Information about product total revenue Product Grey Cement WhiteCement and allied products
For the year For the year ended ended 31 March 2018 31 March 2017 333,489.26 292,632.34 163,672.93 167,567.67
B. Information about geographical areas Non-current assets (Property, plant and equipment, Intangible assets and other non-current assets ) are in India and UAE. C. Information about major customers (from external customers) The Company has not derived revenues from single customer during the year as well as during previous year which amount to 10 per cent or more of the entity’s revenues. 38. Employee benefits The Company contributes to the following post-employment defined benefit plans in India. (i) Defined Contribution Plans: The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. Contribution to government Provident Fund Contribution to Superannuation Scheme Contribution to Family Pension Fund
For the year ended 31 March 2018 31 March 2017 1,135.91 942.09 478.06 398.25 444.72 473.87
(ii) Defined Benefit Plan: The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity Trust registered under Income Tax Act-1961.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date: 31 March 2018
Net defined benefit obligation Total employee benefit asset Net defined benefit liability
7,190.39 5,331.48 1,858.91
31 March 2017
6,061.68 5,596.87 464.81
B. Movement in net defined benefit (asset) liability - Gratuity (Funded) The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components: 31 March 2018 31 March 2017 Net defined Net defined Defined benefit Fair value of Defined benefit Fair value of benefit benefit obligation plan assets obligation plan assets (asset)/ liability (asset)/ liability Balance as at 31 March 6,061.68 5,596.87 464.81 5,739.12 5,388.80 350.32 Included in profit or loss Current service cost 420.41 420.41 347.70 347.70 Past service credit 1,137.18 1,137.18 Interest cost (income) 400.58 368.51 32.07 420.45 401.33 19.12 1,958.17 368.51 1,589.66 768.15 401.33 366.82 Included in OCI Remeasurements loss (gain) – Actuarial loss (gain) arising from: - demographic assumptions - financial assumptions (251.19) (251.19) 309.49 309.49 - experience adjustment (65.95) (121.58) 55.63 (197.53) 160.13 (357.66) – Return on plan assets excluding interest income (317.14) (121.58) (195.56) 111.96 160.13 (48.17) Other Contributions paid by the employer 468.68 (468.68) 204.16 (204.16) Benefits paid (512.32) (512.32) (557.55) (557.55) (512.32) (43.64) (468.68) (557.55) (353.39) (204.16) 7,190.39 5,800.16 1,390.23 6,061.68 5,596.87 464.81 Balance as at 31 March Gratuty in the books of Subsidiary Companies is accounted on actual basis.
F-231
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) C. Plan assets
The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted according to norms of Gratuity Trust, whose pattern of investment is available with the Company. Particulars
As at March 31, 2018 52.57% 1.81% 0.00% 0.00% 23.27% 0.00% 0.00% 22.35%
Government of India Securities (Central and State) High quality corporate bonds (including Public Sector Bonds) Equity shares of listed companies Property Cash (including Special Deposits) Schemes of insurance - conventional products Schemes of insurance - ULIP products Others
As at March 31, 2017 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100%
D. Actuarial assumptions The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages). Discount rate Expected rate of return on plan assets Mortality Turnover rate : Staff Turnover rate : Worker Expected rate of future salary increase
31 March 2018 7.40% 8.50%
31 March 2017 6.90% 8.50%
5% of all ages 1% of all ages 10%
5% of all ages 1% of all ages 10%
Assumptions regarding future mortality have been based on published statistics and mortality tables. At 31 March 2018, the weighted-average duration of the defined benefit obligation was 6 years (as at 31 March 2017: 6 years). E. Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below. Gratuity Discount rate (1% movement) Expected rate of future salary increase (1% movement)
31 March 2018 Increase Decrease (450.10) 522.30 424.00 (388.00) (26.10)
134.30
31 March 2017 Increase Decrease (381.71) 439.89 285.84 (280.87) (95.87)
159.02
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown. F. Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme's bond holdings. Life expectancy: The pension obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy. The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the group's ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Compnay has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets at reporting date consists of government and corporate bonds, although the group also invests in equities, cash and mutual funds. The group believes that equities offer the best returns over the long term with an acceptable level of risk.
G. The expected benifit payments in future years:
31 March 2018 963.40 3,593.55 4,276.01 18,905.01 27,737.97
Within the next 12 months (next annual reporting period) Between 2 and 5 years Between 5 and 10 years Beyond 10 years Total expected payments H. The expected employer contribution in the next year
31 March 2017 716.83 3,644.18 4,333.77 18,905.01 27,599.79
31 March 2018 31 March 2017 594.95 326.49
Within the next 12 months (next annual reporting period)
F-232
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 39. (1)
(2)
Related parties (a) Parties where the control/significant influence exists:i) Yadu International Ltd (b) Key Management Personnel & their Relatives: i) Shri Yadupati Singhania ii) Smt. Shushila Devi Singhania iii) Shri Ajay Kumar Saraogi iv) Shri Shambhu Singh v) Shri A.Karati vi) Shri J.N Godbole vii) Dr. K.B.Agarwal viii) Shri K.N.Khandelwal ix) Shri Raj Kumar Lohia x) Shri Suparas Bhandari xi) Shri Shyam Lal Bansal xii) Mr. Paul Heinz Hugentobler (c) Enterprises significantly influenced by Key Management Personnel or their Relatives. i) Jaykay Enterprises Ltd ii) J.K. Cotton Ltd. iii) Jaykaycem (Eastern) Ltd iv) J.K.Cement(Western) Ltd a) Following are the transactions with related parties as defined under section 188 of Companies Act 2013.
For the year ended 31 March 2018
(i) Jaykay Enterprises Ltd - Services received - Rent paid - Expenses Reimbursed
(ii) J.K. Cotton Ltd - Rent paid - Purchases - Sale of Products (iii) J.K. Cement(Fujairah) FZC Advances given (iv)
Chairman & Managing Director Relative of Chairman & Managing Director President (Corp.Affairs) & CFO Company Secretary Non Executive Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Non Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Non Independent Director
J.K. Cement(Western) Ltd Opening Advances given during the year Received during the year Balance as at close of the year
35.17 49.50 60.34
34.47 47.71 50.60
32.39 -
45.42 0.21
1,302.80
915.89
-
(v) Key Management Personnel and their relatives a) Shri Y.P. Singhania(Chairman & Managing Director) - Remuneration - Sale of farm house - Rent paid - Rent paid to relatives b) Smt Sushila Devi Singhania - Commission - Sitting Fees c) Shri Ajay Kumar Saraogi -Remuneration d) Shri Shambhu Singh -Remuneration e) Other Directors - Commission -Sitting Fees and Rs.108.13 lacs (111.31 lacs) paid to other Director Mr. Paul Heinz Hugentobler on professional capacity.
31 March 2017
15.00 15.00 -
1,761.00 5,087.99 15.13 30.47
1,266.92 -
9.00 5.26
8.00 4.52
226.52
197.34
45.41
38.15
72.00 30.55 108.13
64.00 31.41 111.31
b)
Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided (except corporate bank guarantee) or received for any related party receivables or payables. For the year ended 31 March 2018, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
c)
Compensation of key management personnel of the Group
For the year ended 31 March 31 March 2018 2017 2,032.93 1,368.91 48.54 133.50
- short-term employee benefits - other long-term benefits
F-233
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
40 Operating Lease The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms. 41. Financial instruments – Fair values and risk management I. Fair value measurements
A. Financial instruments by category Financial assets
Investments Other financial assets Trade receivables Cash and cash equivalents Other Bank balances
Non-current Borrowings Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities
As at 31 March 2018 FVOCI Amortised cost
FVTPL 11,893.19 11,893.19
-
-
-
11,244.93 23,578.91 19,839.53 36,107.82 90,771.19
As at 31 March 2017 FVOCI Amortised cost
FVTPL 8,026.84 8,026.84
257,410.51 20,678.88 15,646.93 43,571.66 50,585.13 387,893.11
B. Fair value hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.
-
-
-
-
-
-
18,743.79 20,193.34 13,010.96 30,520.43 82,468.52 287,014.50 17,671.71 22,593.28 42,712.98 45,931.78 415,924.25
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Quantitative disclosures fair value measurement hierarchy for assets and liabilites as at 31 March 2018: Financial assets Assets measured at fair value Investments Equity Shares Mutual Funds & Bonds Financial liabilities Liabilities for which fair values are disclosed Long Term Borrowings
Level 1
Level 2
11,885.19
11,885.19
-
-
Level 3 8.00
8.00 11,885.19
256,601.57 256,609.57
256,601.57 268,494.76
Quantitative disclosures fair value measurement hierarchy for assets and liabilites as at 31 March 2017: Financial assets Assets measured at fair value Investments Equity Shares Mutual Funds & Bonds Financial liabilities Liabilities for which fair values are disclosed Long Term Borrowings
Level 1
Level 2
8,021.64 8,021.64
-
-
Total
Level 3
Total
5.20
5.20 8,021.64
286,923.33 286,928.53
286,923.33 294,950.17
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity There are no transfers between level 1 and level 2 during the year Valuation technique used to determine fair value Specific valuation techniques used to value financial instruments include: - the use of quoted market prices or dealer quotes for similar instruments - the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date - the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
C. Fair value of financial assets and liabilities measured at amortised cost As at 31 March 2018 As at 31 March 2017 Carrying Fair Value Carrying Amount Fair Value Amount Financial assets Other financial assets 11,244.93 11,244.93 18,743.79 18,743.79 Trade receivables 23,578.91 23,578.91 20,193.34 20,193.34 Cash and cash equivalents 19,839.53 19,839.53 13,010.96 13,010.96 Other Bank balances 36,107.82 36,107.82 30,520.43 30,520.43 90,771.19 90,771.19 82,468.52 82,468.52 Financial liabilities Non-current Borrowings Other non current financial liabilities Short term borrowings Trade payables Other current financial liabilities
257,410.51 20,678.88 15,646.93 43,571.66 50,585.13 387,893.11
256,601.57 20,678.88 15,646.93 43,571.66 50,585.13 387,084.17
F-234
287,014.50 17,671.71 22,593.28 42,712.98 45,931.78 415,924.25
286,923.33 17,671.71 22,593.28 42,712.98 45,931.78 415,833.08
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
(i) The carrying amounts of trade receivables, trade payables, Short Term Borrowings, cash and cash equivalents, other bank balances, other financial liabilities, and other financial assets are considered to be the same as their fair values, due to their short-term nature. The fair values for security deposits are calculated based on cash flows discounted using a current lending rate. (ii) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
(iii) The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
II. Financial risk management
The Company has exposure to the following risks arising from financial instruments: - credit risk; - liquidity risk; and - market risk i. Risk management framework The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company's Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
ii. Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers including deposits with banks and financial institutions. Trade and other receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.
The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee. In monitoring customer credit risk, customers are Companyed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors.The Company holds bank guarantees/ security deposits agraist trade receivables of Rs. 10,428.10 lacs (31 March 2017: Rs.11,604.71) and as per the terms and condition of the agreements, the Company has the right to encash the bank guarantee or adjust the security deposits in case of defaults.
The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Comapny expects to receive).
During the based on specific assessment, the Company recognised bad debts and advances of Rs. 9.85 lacs (31 March 2017: Rs. 1,000). The year end trade receivables do not include any amounts with such parties. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9
Reconciliation of loss allowance provision -Trade Receivables As at 31 March 2018 Particulars 739.12 Opening Balance Change in loss allowance 220.75 Closing Balance 959.87
As at 31 March 2017 602.00 137.12 739.12
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018 and 31 March 2017 is the carrying amounts as shown in Note 4,8,10,11 & 12. The Company has not recorded any further loss during the year in these financial instruments and cash deposits as these pertains to counter parties of good credit ratings/credit worthiness.
A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors
The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).
iii. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
F-235
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(a) Financing arrangements The company had access to the following undrawn borrowing facilities at the end of the reporting period: As at As at 31 March 2018 31 March 2017 Floating rate Expiring within one year (bank overdraft and other facilities) Nil 700.00 Expiring beyond one year (bank loans) Nil 6,958.00 7,658.00
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of Nil years (as at 31 March 2017 - 6.57 years).
(b) Maturities of financial liabilities The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.
Non-derivative financial liabilities Non-current Borrowings Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
Non-derivative financial liabilities Non-current Borrowings Other non-current financial liabilities Short term borrowings Trade payables Other current financial liabilities Total non-derivative liabilities
Carrying Amounts 31 March 2018
257,410.51 20,678.88 15,646.93 43,571.66 50,585.13 387,893.11
Carrying Amounts 31 March 2017
287,014.50 17,671.71 22,593.28 42,712.98 45,931.78 415,924.25
Total 262,626.82 20,678.88 15,646.93 43,571.66 50,585.13 393,109.42
Total 291,270.99 17,671.71 22,593.28 42,712.98 45,931.78 420,180.74
Contractual cash flows 2–12 months 1–5 years 2 months or less 43,571.66 4,963.88 48,535.54
15,646.93 45,484.80 61,131.73
129,679.60 20,678.88 136.45 150,494.93
Contractual cash flows 2–12 months 1–5 years 2 months or less 42,712.98 6,497.88 49,210.86
22,593.28 39,334.70 61,927.98
128,300.90 17,671.71 99.20 146,071.81
More than 5 years
132,947.22 132,947
More than 5 years
162,970.09 162,970
Further the Company issued financial guarantee as disclosued in note 39 for which the possibility of payment is remote.
iv. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk and currency risk. Financial instruments affected by market risk primarily include trade and other receivables, trade and other payables and borrowings. Currency risk Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency). The Company manages its foreign currency risk by taking foreign currency forward contracts, if required Exposure to currency risk The summary quantitative data about the Company’s exposure to currency risk as reported to the management of the Company is as follows: As at 31 March 2018 As at 31 March 2017 USD EUR USD EUR 1,939,975.00 Trade payables 1,886,009.00 1,138,140.00 2,089,440.00 Net statement of financial position exposure 1,939,975.00 1,886,009.00 1,138,140.00 2,089,440.00 The following significant exchange rates have been applied USD 1 EUR 1 AED 1
Average Rates Year end spot rates 31 March 2018 31 March 2017 31 March 2018 31 March 2017 64.39 66.97 65.04 64.84 75.32 73.50 80.62 69.25 17.53 18.27 18.24 17.66
Sensitivity analysis A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Profit or loss, before tax Strengthening Weakening
31 March 2018 USD (10% movement) EUR (10% movement) GBP (10% movement) 31 March 2017 USD (10% movement) EUR (10% movement) GBP (10% movement)
F-236
Equity, net of tax Strengthening Weakening
126.17 152.05 -
(126.17) (152.05) -
82.50 99.43 -
(82.50) (99.43) -
73.79 144.69 -
(73.79) (144.69) -
48.25 94.62 -
(48.25) (94.62) -
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
Interest rate risk The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.During 31 March 2018 and 31 March 2017, the Company’s borrowings at variable rate were mainly denominated in INR.
The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Currently the Company's borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk. Exposure to interest rate risk The interest rate profile of the Company’s interest-bearing financial instruments as reported to the management of the company is as follows. Nominal Amount 31 March 2018 31 March 2017 Fixed-rate instruments Financial assets 56,393.55 54,585.07 Financial liabilities 89,462.86 93,123.51 145,856.41 147,708.58 Variable-rate instruments Financial assets 10,408.23 7,531.20 Financial liabilities 225,271.04 256,259.93 235,679.27 263,791.13 Cash flow sensitivity analysis for variable-rate instruments A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. Profit or loss, before tax 100 bp 100 bp increase decrease
31 March 2018 Variable-rate instruments Cash flow sensitivity 31 March 2017 Variable-rate instruments Cash flow sensitivity
(2,321.01) (2,321.01)
2,321.01 2,321.01
(2,462.51) (2,462.51)
2,462.51 2,462.51
Equity, net of tax 100 bp 100 bp increase decrease (1,735.98) (1,735.98)
1,735.98 1,735.98
(1,841.79) (1,841.79)
1,841.79 1,841.79
42. a) Prior year errors During the financial year ended 31 March 2018, the Company discovered that the deferred tax charge was erroneously created lower by Rs.4,879.19 lacs due to consideration of incorrect carried forward unabsored depreciation & business losses. Consequently, Deferred tax liability (net) was shown lower by the same amount. Financial statements for the year ended 31 March 2017 has been restated to correct this error. The effect of the restatement on those financial statements is summarised below. There is no effect in financial year 2017-18. In financial year ended 31 March 2017, the Company reported as follows: Profit before tax Current Tax MAT credit entitlement Earlier years tax adjustments Deferred tax Profit/(loss) for the year Basic and Diluted earnings per share (Rs.)
31 March 2017 28,561.52 7,047.08 (7,047.08) (2.75) 6,488.28 22,075.99 32.39
Deferred tax liability (net) was shown Rs.21,107.33 in the Balance Sheet as at 31 March 2017
The following are the restated amounts which are being reported after correction for the year ended 31 March 2017 as comparatives.
Profit before tax Current Tax Earlier years tax adjustments Deferred tax charged/(credit) Profit/(loss) for the year Basic and Diluted earnings per share (Rs.)
31 March 2017 Restated 28,561.52 7,047.08 (2.75) 4,320.39 17,196.80 25.42
Deferred tax liability (net) restated to Rs.25986.52 in the Balance Sheet as at 31 March 2017
F-237
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
b) In addition to the above, following are the reclassifications made in the previous year figures to make them comparable/ better presentation with the current year figures. These reclassification does not have any significant effect on the balance sheet at the beginning of the preceding financial year, i.e, April 1, 2016. Also, these reclassifications do not have any impact on the profit other than those described in note (a) above. Particulars ASSETS NON CURRENT ASSETS Non current - Investments Non current - Loans and advances Other non current assets CURRENT ASSETS Current Assets - Financial assets - Cash and cash equivalents Current Assets - Financial assets - Bank balances other than (iii) above Other Current Financial Assets Other current assets EQUITY AND LIABILITIES Other Equity Borrowings - Non Current
Deferred tax liabilities (net)
Other non-current liabilities Current Liabilities Borrowings - Current Trade Payable - Current Other financial liabilities Other current liabilities Short-term provisions Current tax Liability (net) Profit & loss Account Revenue from operations Other income Cost of materials consumed Changes in inventories of finished goods, stock-inTrade and work-in-progress Finance costs Other expenses
As at 31st March 2017 (Restated)
Profit/ (loss) for the year Earning per equity share (Rs.) Basic Diluted
Nature
1500.84 13477.43 11337.15
1500.84 Reclassification items 14264.06 Reclassification items 9773.30 Reclassification items
13010.96
42624.56 Reclassification items
30520.43
5266.36 16319.70 164075.83 287014.50
25986.52
8633.01
22593.28 42712.98 45931.78 15638.19 1051.29 148.90
99.20 Reclassification items
4925.82 Reclassification items 17583.05 Reclassification items 168955.02 Reclassification items 290623.46 Reclassification items Variance due to error as mentioned in 21107.33 note above 5271.37 Reclassification items 22441.35 23371.51 70868.97 8382.12 1946.56 156.55
Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items Reclassification items
465399.91 9843.01 68647.53
469487.60 Reclassification items 5029.39 Reclassification items 73794.08 Reclassification items
30266.26 291042.39
29540.31 Reclassification items 285244.97 Reclassification items
1451.83
Tax Expense MAT Credit Entitlement
Deferred Tax
As at 31st March 2017 (Published)
4320.39
2102.72 Reclassification items
-7047.08 Reclassification items Variance due to :6488.28 i) reclassification of MAT credit ii) error as mentioned in note above
17196.80
22075.99
25.42 25.42
32.39 32.39
43. Corporate Social Responsibility
a. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was Rs.461.28 lacs i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act,2013
b. Corporate Social Responsibility (CSR) activities undertaken during the year is Rs. 481.07 lacs. Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis.
44. Assets held for sale
During the year, the Company entered into agreement to sell the thermal power plant and other DG sets at Rajasthan location as these were not in active use. Accordingly, these assets has been classified as 'held for sale'. Sale of these assets are expected to be completed within next 12 months.
45. Exceptional Items
This represents the loss booked on accounts of sale of thermal power plant and other DG sets in current year. The previous year exceptional item represents governement cess reversed.
F-238
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 46(1) Additional informations, as required under Schedule III of the Companies Act,2013 of Enterprises consolidated as Subsidiary/Joint Ventures Name of Enterprise Parent J.K.Cement Ltd. Subsidiary (Indian) Jaykaycem Central Ltd. Subsidiary including Fellow Subsidiary (Foreign) J.K.Cement (Fujairah) FZC & J.K.Cement Works (Fujairah) FZC
Net Assets i.e. (Total Assets-Total Liabilites) As % of Consolidated Amount Assets (Rs in lacs)
Share in Profit or Loss As % of Consolidated Profit
Amount (Rs in lacs)
96.84%
191,239.52
118.06%
34,187.36
4.40%
8,689.28
-0.22%
(64.41)
-1.24%
(2,457.84)
-19.22%
(5,564.89)
Minority Interest in Foreign Subsidiary
0.00%
-
1.38%
398.74
Joint Venture Bander Coal Company Pvt. Ltd
0.01%
15.86
0.00%
0.70
100.00%
197,486.82
100.00%
28,957.50
Total
F-239
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 46 (2). SALIENT FEATURES OF FINANCIAL STATEMENTS OF SUBSIDIARIES (PART-A)
Name of the Subsidiary Company S.No.
Reporting Currency #
Share Capital
Reserves & Non Current Surplus Assets
Total Assets
Non Current Liabilities
Current Liabilities
Total Liabilites
Investment
1,105.37
Profit/(Loss) before Tax
J.K.Cement (Fujairah) FZC *
AED
15,190.03
48,230.57
8.06
48,238.62
32,510.48
20.47
32,530.95
2
J.K.Cement Works (Fujairah) FZC * (Fellow Subsidiary) @
AED
15,518.52
(21,234.56)
80,825.75
11,733.91
92,559.66
84,648.30
13,627.40
98,275.71
-
26,230.11
(5,567.40)
INR
1,044.72
7,644.56
7,444.60
1,255.67
8,700.27
10.99
10.99
-
48.01
(86.74)
-
44,846.41
Total Income
1
3 Jaykaycem (Central) Ltd.
517.64
Current Assets
Provision for Tax
266.26
(22.33)
Notes ;
# Exchange Rate adopted for consolidation Rs.17.407025 1 AED * Company having 31st December as a reporting date. @ Non-controlling interest as on reporting date is Nil
46 (3). SALIENT FEATURES OF FINANCIAL STATEMENTS OF JOINT VENTURES (PART-B)
S.No.
1
Name of Joint Venture
Bander Coal Company Pvt. Ltd
Latest Audited Balance Sheet Date
31.03.2017
Shares of Joint Ventures held by the company on the year end Amount of Investment in Joint Venture
Nos. 375000
37.50
Extent of Holding
37.50%
Description of how there is significant influence
Share holding
Note ; ** Financial Information is based on Unaudited Results
F-240
Networth Profit/(Loss) for the year** attributable to Reason why the Shareholding as Joint ventre is per latest not consolidated Not Conisdered audited Balance Considered in Consolidation in Consolidation Sheet -
15.14
0.70
-
Profit/(Loss) after Tax
266.26
Proposed Dividend
% of Holding
-
100.00
(5,567.40)
-
90.00
(64.41)
-
100.00
J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated) 46. Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:
Ind AS 115 Revenue from Contracts with Customers Ind AS 115 was issued on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018. The Company plans to adopt the new standard on the required effective date using the modified retrospective method. The Company is in the business of manufacturing and selling cement and related products. The cement and related products are sold both on their own in separate identified contracts with customers and through distribution channel of dealers and distributors. (a) Sale of goods For contracts with customers in which the sale of cement and related products is generally expected to be the only performance obligation, adoption of Ind AS 115 is not expected to have any material impact on the Company's revenue and profit or loss. The Company expects the revenue recognition to occur at a point in time when control of the asset is transferred to the customer, generally on delivery of the goods. In preparing to adopt Ind AS 115, the Company is considering the following: (i) Variable consideration Some contracts with customers provide a right of return, trade discounts or volume rebates. Currently, the Company recognises revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. If revenue cannot be reliably measured, the Company defers revenue recognition until the uncertainty is resolved. Such provisions give rise to variable consideration under Ind AS 115, and will be required to be estimated at contract inception and updated thereafter. Ind AS 115 requires the estimated variable consideration to be constrained to prevent over-recognition of revenue. The Company does not expects that application of the constraint will result in material revenue being deferred than under current Ind AS. (b) Presentation and disclosure requirements The presentation and disclosure requirements in Ind AS 115 are more detailed than under current Ind AS. The presentation requirements represent a significant change from current practice and significantly increases the volume of disclosures required in the Company's financial statements. Many of the disclosure requirements in Ind AS 115 are new and the Company has assessed that the impact of these disclosures requirements will not be significant. In particular, the Company does not expect that the notes to the financial statements will be expanded because of the disclosure of significant judgements made: . In addition, as required by Ind AS 115, the Company will disaggregate revenue recognised from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. It will also disclose information about the relationship between the disclosure of disaggregated revenue and revenue information disclosed for reportable segment
(c) Other adjustments The recognition and measurement requirements in Ind AS 115 are also applicable for recognition and measurement of any gains or losses on disposal of non-financial assets (such as items of property, plant and equipment and intangible assets), when that disposal is not in the ordinary course of business. However, on transition, the effect of these changes is not expected to be material for the Company.
Amendments to Ind AS 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112 The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10–B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. This amendments are not applicable to the Company.
Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact. These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have significant impact on the Company. Transfers of Investment Property — Amendments to Ind AS 40 The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use. Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight. The amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have significant impact on the Company.
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J K Cement Limited Notes to consolidated financial statements for the year ended 31 March 2018 (All amounts are in rupees lacs, unless otherwise stated)
Ind AS 28 Investments in Associates and Joint Ventures – Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice The amendments clarify that: • An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. • If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. The amendments should be applied retrospectively and are effective from 1 April 2018. These amendments are not applicable to the company. Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after: (i) The beginning of the reporting period in which the entity first applies the Appendix, or (ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix. The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Company’s current practice is in line with the Interpretation, the Company does not expect any effect on its consolidated financial statements.
As per our report of even date For S.R. Batliboi & Co.LLP, Chartered Accountants ICAI Firm Regn. No. 301003E/E300005
For and on behalf of the Board of Directors of J K Cement Limited
per Atul Seksaria Partner Membership No - 086370
A.K. Saraogi President (Corp.Affairs) & CFO
Yadupati Singhania Chairman & Managing Director
Place : Kanpur Dated : 12th May,2018
Shambhu Singh Company Secretary Membership No -F5836
Krishna Behari Agarwal Director
F-242
2nd & 3rd Floor Golf View Corporate Tower -8 Sector -42, Sector Road Gurugram -122 002. Haryana, India
S.R. BAILIBol & Co. LLP Chartered Accountants
Limited Review RReDort
Tel : ngi 124 681 6ooo
•Review Report to The Board of Directors J.K. Cement Limited I.
We have reviewed the accompanying statement of unaudited standalone lnd As financial results ofJ.K. Cement Limited (the `Company') for tlie quarter ended September 30, 2018 and year to date from April I, 2018 to September 30, 2018 (the "Statement") attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 (`the Regulation'), read with SEBI Circular No. CIR/CFD/FAC/62Q016 dated July 5, 2016 (`the Circular').
2.
The preparation of the statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS) 34 "Interim Financial Reporting" prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015, as amended, read with the Circular is the responsibility of the Company's management and has been approved by the Board of Directors of the Company. Our responsibility is to express a conclusion on the Statement based on our review.
3.
We conducted our review in accordance with the Standard on Review Engagements (SRE) 2410, •Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued
by the Institute of Chartered Accountants of India. This standard requires that we plan and perfom the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion. 4.
Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid dour in the applicable Indian Accounting Standards (`Ind AS') specified under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of the Regulation, read with the Circular, including the manner in which it is to be disclosed, or that it contains any material misstatement.
5.
We draw attention to note 4(i) and 4(ii) in the statement of standalone unaudited Financial Results for the quarter and half year ended September 30, 2018 wherein it has been stated that the Competition Commission of India (`CCI') has imposed penalty of Rs 12,854 lakhs and Rs 928 lakhs in two separate orders dated August 31, 2016 and January 19, 2017 respectively for alleged contravention of provisions of Competition Act 2002 by the Company. The Company has filed appeals against above orders. The National Company Law Appellate Tribunal (`NCLAT'), on hearing the appeal, upheld the decision of CCI for levying the penalty in the fust matter on July 25, 2018. The Company has filed appeal with Hon'ble Supreme Court against above order. Hon'ble Supreme Court has stayed the NCLAT order. While the appeal of the Company is pending for hearing, the company backed by a legal opinion, believes that it has a good case and accordingly no provision has been considered in the books of accounts. In second matter, demand had been stayed and the matter is pending for the hearing before NCLAT. The company, backed by a legal opinion, believes that it has a good case and accordingly no provision has been made in the books of accounts. Our report is not qualified in respect of the above matter."
For S.R. BATLIBOI & CO. LLP Chartered Accountants
Partner Membership No.: 086370 Place: Kanpur Date: November 03, 2018
F243
F244
F245
F246
DECLARATION Our Company certifies that all relevant provisions of Chapter VI and Schedule VII of the SEBI ICDR Regulations have been complied with and no statement made in this Placement Document is contrary to the provisions of Chapter VI and Schedule VII of the SEBI ICDR Regulations and that all approvals and permissions required to carry on our Company’s business have been obtained, are currently valid and have been complied with. Our Company further certifies that all the statements in this Placement Document are true and correct. Signed by:
Name: Yadupati Singhania Designation: Chairman and Managing Director Date: December 28, 2018 Place: Kanpur
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DECLARATION We, the Board of Directors of the Company certify that: (i)
our Company has complied with the provisions of the Companies Act, 2013 and the rules made thereunder;
(ii)
the compliance with the Companies Act, 2013 and the rules thereunder does not imply that payment of dividend or interest or repayment of preference shares or debentures, if applicable, is guaranteed by the Central Government; and
(iii)
the monies received under the offer shall be used only for the purposes and objects indicated in this Placement Document (which includes disclosures prescribed under Form PAS-4).
Signed by:
Name: Yadupati Singhania Designation: Chairman and Managing Director I am authorized by the Committee of the Board of Directors, vide its resolution dated December 28, 2018 to sign this form and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been complied with. Whatever is stated in this form and in the attachments thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records maintained by the promoters subscribing to the Memorandum of Association and the Articles of Association. It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this form.
Name: Yadupati Singhania Designation: Chairman and Managing Director Date: December 28, 2018 Place: Kanpur
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APPLICATION FORM
J. K. CEMENT LIMITED (Originally incorporated on November 24, 1994 as J. K. Cement Limited, under the Companies Act, 1956) Registered Office: Kamla Tower, Kanpur, Uttar Pradesh 208 001, India Website: http://www.jkcement.com | CIN: L17229UP1994PLC017199 Telephone No.: +91-512-2371478-81| Email:
[email protected]
Form No. [] Date: December 24, 2018
QUALIFIED INSTITUTIONS PLACEMENT OF UP TO [●] EQUITY SHARES OF FACE VALUE ₹ 10 EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF ₹ [●] PER EQUITY SHARE INCLUDING A PREMIUM OF ₹ [●] PER EQUITY SHARE (“ISSUE PRICE”) AGGREGATING UP TO ₹ [●] CRORE UNDER CHAPTER VI OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018 (“SEBI ICDR REGULATIONS”) AND SECTION 42 OF THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER BY J.K. CEMENT LIMITED (“COMPANY”) (HEREINAFTER REFERRED TO AS THE “ISSUE”). Only “Qualified Institutional Buyers” (“QIBs”) as defined under Regulation 2(1)(ss) of the SEBI ICDR Regulations and not otherwise excluded pursuant to Regulation 179(2)(b) of the SEBI ICDR Regulations can submit this Application Form. The Equity Shares offered hereby have not been and will not be registered under the United States Securities Act of 1933, as amended (“U.S. Securities Act”) or any state securities laws of the United States, and unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and in compliance with the applicable laws of the jurisdiction where those offers and sales are made. You should note and observe the solicitation and distribution restrictions contained in the sections of the preliminary placement document dated December 24, 2018 (“PPD”) titled “Selling Restrictions” and “Transfer Restrictions”. To, STATUS (Please ) The Board of Directors Banks & Financial Alternative FI J.K. Cement Limited Institutions Investment Fund – AIF-VC Kamla Tower, Kanpur, Category I – Venture Mutual Funds MF Uttar Pradesh 208 001, India Capital Fund Alternative Eligible Foreign Dear Sirs, Investment Fund FPI AIF Portfolio Investors* other than AIF-VC On the basis of the serially numbered PPD-cum-Application Form of the Company, and subject to the Venture Capital Systemically terms and conditions mentioned in the other sections of the PPD and in this section of Application VCF SI-NBFC Funds Important NBFC Form, we hereby submit our Bid for the Allotment of the Equity Shares at the terms and price indicated Insurance Foreign Venture below. We confirm that we are a QIB as defined under Regulation 2(1)(ss) of the SEBI ICDR IC FVCI Companies Capital Funds Regulations and not otherwise excluded pursuant to Regulation 179(1)(b) of the SEBI ICDR Regulations. We are not a promoter (as defined in SEBI ICDR Regulations) of the Company Others (Please Specify) OTH (“Promoter”), or any person related to the Promoter, directly or indirectly. Further, we confirm that we DECLARATION OF SHAREHOLDING – as on the date of do not have any right under a shareholders’ agreement or voting agreement entered into with the Application Form (Please round-off to two decimal places) Promoter or Promoter Group , veto rights or right to appoint any nominee director on the board of directors of the Company. In addition, we confirm that we are eligible to invest in the Equity Shares under the SEBI ICDR Regulations, Reserve Bank of India circulars and other applicable laws.
Total shares currently held by QIB or QIBs belonging to the same group or those who are under common control. For details of what constitutes “same group” or “common control”, please see the sub- section titled “Application Form” under Issue Procedure section of the PPD. *Foreign portfolio investors as defined under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 excluding qualified foreign investors and Category III Foreign Portfolio Investors who are not allowed to participate in the Issue
We confirm that the application size / aggregate number of Equity Shares applied for by us does not exceed the relevant regulatory or approved limits. We confirm that each foreign portfolio investor as defined under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, as amended (such foreign portfolio investor, an “FPI”) (other than Category III FPIs), and including persons who have been registered under these regulations (such FPIs, “Eligible FPIs”), has submitted a separate Application Form and asset management companies of mutual funds would have specified the details of each scheme for which the application is being made along with the Bid Amount and number of shares to be Allotted under each fund. We undertake that we will sign all such documents, provide such documents and do all such acts, if any, necessary on our part to enable us to be registered as the holders of the Equity Shares which may be Allotted to us. We confirm that the signatory is authorized to apply on behalf of the applicant and the applicant has all the relevant approvals. We authorize you to place our name in the register of members of the Company as holders of the Equity Shares that may be Allotted to us. We note that the Company is entitled, in its absolute discretion to accept or reject this Application Form without assigning any reason thereof. We are aware that our name will be included in the Placement Document as proposed allottees, if applicable, along with the number of equity shares proposed to be Allotted to us and the percentage of our post issue shareholding in the Company and we consent to such disclosure. We are also aware that if we, together with any other QIBs belonging to the same group or under common control, are Allotted more than 5% of the Equity Shares in this Issue, the Company shall be required to disclose our name, along with the name of such other Allottees and the number of Equity Shares Allotted to us and to such other Allottees, on the website of the Stock Exchanges, and we consent to such disclosure. We further confirm that our bid will not result in triggering an open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended. We are aware that if we are circulated the PPD or are Allotted any Equity Shares in the Issue, the Company is required to disclose details such as our name, address, PAN, email-id and the number of Equity Shares Allotted along with other relevant information as may be required, to the Registrar of Companies, Uttar Pradesh & Uttarakhand at Kanpur (“RoC”) and we consent to such disclosures. Further, we agree to comply with the rules and regulations that are applicable to us, including restriction on transferability. In this regard, we authorise the Company to issue instructions to the depositories for such restriction on transferability , as may be applicable to us. By signing and submitting this Application Form, we hereby confirm and agree (i) that the representation and warranties as provided in the sections titled “Notice to Investors”, “Representations by Investors”, “Issue Procedure”, “Transfer Restrictions” and “Selling Restrictions” of this PPD–cum-Application Form and the terms, conditions and agreements mentioned herein are true and correct and acknowledge and agree that these representations and warranties are given by us for the benefit of the Company and the Book Running Lead Manager (“BRLM”) for the Issue, each of which are entitled to rely and are relying on these representations and warranties in consummating the Issue, (ii) that we are purchasing the Equity Shares outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales are made, (iii) that we have been provided a serially numbered copy of the PPD-cum-Application Form, and have read it in its entirety including in particular, the “Risk Factors” therein, and (iv) to abide by the PPD-cum-Application Form and the Placement Document, the confirmation of allocation note (the “CAN”), when issued, and the terms, conditions and agreements contained therein, (v) that we shall not trade in the Equity Shares credited to our beneficiary account maintained with the Depository Participant until the final listing and trading approvals for the Equity Shares are issued by the Stock Exchanges (vi) to the best of our knowledge and belief, the number of Equity Shares Allotted to us pursuant to the Issue, together with other Allottees that belong to the same group or are under common control, shall not exceed 50% of the Issue. For the purposes of this representation: the expression: QIBs belonging to the “same group” shall mean entities where (a) any of them controls, directly or indirectly, through its subsidiary or holding company, not less than 15% of the voting rights in the other; or (b) any of them, directly or indirectly, by itself, or in combination with other persons, exercise control over the others; or (c) there is a common director, excluding nominee and independent directors, amongst a QIB, its subsidiary or holding company and any other QIB; and ‘Control’ shall have the same meaning as is assigned to it under Regulation 2(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended. We hereby agree to accept the Equity Shares applied for, or such lesser number as may be Allocated to us, subject to the provisions of the memorandum of association and articles of association of the Company, applicable laws and regulations, the terms of the PPD-cum- Application Form and the Confirmation of Allocation Note (“CAN”), when issued and the terms, conditions and agreements mentioned therein and request you to credit the same to our beneficiary account with the Depository Participant as per the details given below. The Bid Amount payable by us for the Equity Shares to be allotted in the Issue will be remitted to the designated bank account, only through electronic mode pursuant to duly completed Application Form. We acknowledge and agree that we shall not make any payment in cash or cheque. We also agree that the amount payable for the Equity Shares in the Issue is being (shall be) made from the bank account maintained in our name and the Bid Amount (or the excess Bid Amount, as applicable) may be refunded to the same bank account in the event we are not Allocated Equity Shares, for any reasons, for all or part of the Bid Amount submitted by us, or if we withdraw the Bid before the Issue Closing Date, or in case we have deposited Bid Amount higher than the Issue Price. We further confirm that if Equity Shares are Allotted to us pursuant to the Issue, we shall not sell the Equity Shares, for a period of one year from the date of Allotment, otherwise than on the floor of a recognized stock exchange. Further, we acknowledge that we shall not have the right to revise or withdraw our Bid after the Bid/Issue Closing Date. By making this application, we further represent, warrant and agree that we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of the prospective investment in the Equity Shares and we understand the risks involved in making an investment in the Equity Shares. No action has been taken by us to permit a public offering of the Equity Shares in any jurisdiction. We further represent that in making our investment decision, we have relied only on the information contained in the PPD-cumapplication form and not on any other information obtained by us either from the Company, the BRLM or from any other source, including publicly available information. We satisfy any and all relevant suitability standards for investors in the Equity Shares, have the ability to bear the economic risk of our investment in the Equity Shares, have adequate means of providing for our current and contingent needs, have no need for liquidity with respect to our investment in the Equity Shares, and are able to sustain a complete loss of our investment in the Equity
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Shares. We acknowledge that the Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any applicable state securities laws. Accordingly, the Equity Shares are being offered, sold and delivered only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales are made. For a description of the selling restrictions in certain other jurisdictions, see section titled “Selling Restrictions” in the PPD-cum-Application Form. The Equity Shares are transferable only in accordance with the restrictions described in the section titled “Transfer Restrictions” in the PPD-cum-Application Form.
BANK ACCOUNT DETAILS FOR PAYMENT OF AMOUNT Name of the Account
J. K. Cement QIP - Escrow Account
Name of the Bank
Axis Bank Limited
Address of the Branch of the Bank
Lucknow Circle Branch
Account Type
Current
Account Number
918020054804322
IFSC code
UTIB0000133
MICR Code
211208002
Tel No.
0522-4917235
Fax No.
0522-2390650
E-mail.
[email protected];
[email protected];
[email protected];
[email protected]
The Bid Amount should be transferred pursuant to the PPD-cum-Application Form. All payments must be made only by way of electronic funds transfer, in favour of “J. K. Cement QIP - Escrow Account”. The payment for subscription to the Equity Shares Allotted in the Issue shall be made only from the bank account of the person subscribing to the Equity Shares and in case of joint holders, from the bank account of the person whose name appears first in the Application Form. APPLICANT DETAILS (In Block Letters) NAME OF APPLICANT* ADDRESS COUNTRY PHONE NO.
FAX NO.
EMAIL For AIFs/MFs/VCFs/FVCIs/SIRegistration #: NBFCs * Name should exactly match with the name in which the beneficiary account is held. Any discrepancy in the name as mentioned in this Application Form with the depository records would render the application invalid and liable to be rejected at the sole discretion of the Issuer and the BRLM. Mutual Fund Bidders are requested to provide details of the Bids made by each Scheme of the Mutual Fund. Registration #:
FOR FPIs
DEPOSITORY ACCOUNT DETAILS Depository Name(Please )
National Security Depository Limited
Central Depository Services (India) Limited
Depository Participant Name DP – ID
I
N
Beneficiary Account Number
(16 digit beneficiary account. No. to be mentioned above)
The Demographic details like address, bank account details etc., will be obtained from the Depositories as per the beneficiary account given above. However, for the purpose of refund, if any, only the bank details as mentioned below, from which remittance towards subscription has been made, will be considered. RUPEE BANK ACCOUNT DETAILS (FOR REMITTANCE) Bank Account Number
IFSC Code
Bank Name
Bank Branch Address NO. OF EQUITY SHARES BID (In Figures)
BID AMOUNT PER EQUITY SHARE (RUPEES)
(In Words)
(In Figures)
DETAILS OF CONTACT PERSON NAME ADDRESS
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(In Words)
FAX NO.
TEL. NO. EMAIL OTHER DETAILS
ENCLOSURES ATTACHED Attested/ certified true copy of the following: Copy of PAN Card or PAN allotment letter Copy of FPI Registration Certificate /MF Registration certificate /SEBI certificate of registration for AIFs/FVCI/VCF/SI-NBFC Registration Certificate FIRC Copy of IRDAI registration certificate Certified true copy of Power of Attorney Other
PAN**
Date of Application
Signature of Authorised Signatory
*The application form is liable to be rejected if any information provided is incomplete or inadequate. **It is to be specifically noted that the applicant should not submit the GIR number or any other identification number instead of the PAN as the applications are liable to be rejected on this ground Note: Capitalized terms used but not defined herein shall have the same meaning as ascribed to them in the PPD-cum-Application Form, unless specifically defined herein. The PPD -cum-Application Form and the Placement Document sent to you, either in physical form or both, are specific to you and you may not distribute or forward the same and are subject to disclaimer and restrictions contained in or accompanying these documents.
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REGISTERED AND CORPORATE OFFICE OF OUR COMPANY J. K. Cement Limited Kamla Tower, Kanpur Uttar Pradesh 208 001, India ASSISTANT VICE PRESIDENT (LEGAL) &COMPANY SECRETARY AND COMPLIANCE OFFICER Shambhu Singh J. K. Cement Limited Kamla Tower, Kanpur, Uttar Pradesh 208 001, India Tel: +91-512-2371 478-81 Fax: +91-512-2332 665/2399 854 Email:
[email protected] BOOK RUNNING LEAD MANAGER Edelweiss Financial Services Limited 14th Floor, Edelweiss House Off CST Road, Kalina, Mumbai 400 098, India LEGAL COUNSEL TO THE COMPANY AND THE BRLM AS TO INDIAN LAW L&L Partners* 1st and 9th Floors Ashoka Estate, Barakhamba Road New Delhi 110 001, India (*Formerly Luthra & Luthra Law Offices)
INTERNATIONAL LEGAL COUNSEL WITH RESPECT TO SELLING AND TRANSFER RESTRICTIONS Squire Patton Boggs Singapore LLP 10 Collyer Quay #03/01-03 Ocean Financial Centre Singapore – 049 315 Republic of Singapore
STATUTORY AUDITORS M/s. S. R. Batliboi & Co. LLP Chartered Accountants 2nd & 3rd Floor Golf View Corporate Tower B Sector 42, Sector Road Gurugram, Haryana 122 002, India E-mail:
[email protected] ICAI Firm Registration No. 301003E/E300005
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