Kakatiya Cement Sugar & Industries Ltd

To

The Members

Your Directors have pleasure in presenting the 45^th Annual Report together with the Audited Financial statements for the year ended 31^st March, 2024.

Financial Results

The Financial Results for the year ended 31^st March, 2024 are summarized below:

Dividend

Your Directors are pleased to recommend for your consideration a Dividend at Rs. 3.00 per equity share of Rs. 10/- each for the year ended 31.03.2024, at par with the dividend declared in the past few years, which entails an outlay of Rs. 233.22 lacs.

Transfer of Profits to Reserves

In view of the loss incurred by the Company during the year under review, no amounts were transferred to Reserves. The Company has not transferred any amount to reserves from out of the profits of the preceding year.

Transfer to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 and in terms of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all shares on which dividend has not been claimed for seven consecutive years shall be transferred to the Investor Education and Protection Fund (IEPF).

Accordingly, the Company has transferred 14,146 equity shares to the IEPF Authority during the year ended 31^st March, 2024. The shareholders are requested to visit the website of the Company www.kakatiyacements.com and refer to the Investor/Unpaid-Dividend-IEPF section to know the details of the investors whose shares/unpaid dividend have been transferred to IEPF. In case the shares/unpaid dividend of any shareholder have already been transferred to IEPF, then such shareholder is requested to claim the same from IEPF by filing the requisite e-form IEPF-5 along with all the attachments on www.mca.gov.in and forward the uploaded e-form IEPF-5 along with all its duly executed attachments to the Company for further processing.

According to Section 125 of the Companies Act, 2013 read with Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, the Company has transferred unclaimed dividend amounting to Rs. 9,11,086 to IEPF during the year under review. The said transfer was in respect of the unclaimed dividend for the financial year 2015-2016.

Material Changes and Commitments

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

Public Deposits

The Company has not accepted any deposits during the year under review and there were no outstanding deposits as at the end of the year falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

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

There are no significant and material orders passed by the Regulators or Courts or Tribunals in the year under review impacting the ‘going concern' status and Company's operations in future.

During the year under review, the BSE Limited and National Stock Exchange of India Limited have imposed fine of X 1,04,000/- each (excluding GST) alleging non-compliance with the provisions of Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to the appointment of Shri Vankineni Siva Rama Krishna Murthy as a Non-Executive Independent Director of the Company w.e.f. 04.08.2023. In order to avoid any unpleasant situations, the Company has paid the said penalty along with GST and submitted applications seeking waiver of the said penalty. The Company has not received any final communication in this regard.

Other than the above, no other penalty has been imposed by any Stock Exchange, SEBI or any other regulatory authority during the year under review.

Directors

Consequent upon the completion of the second term of five years on 31.03.2024, as Non-Executive Independent Directors, Shri T R C Bose (DIN:00160630) and Shri B V Subbaiah (DIN:01147062) have ceased to be the Directors of the Company from 01.04.2024. Your Board places on record its sincere appreciation for the valuable services rendered and guidance given by them during their tenure as Non-Executive Independent Directors of the Company.

As informed earlier, Shri K Venkat Rao (DIN:06566627) has resigned as a Non-Executive Independent Director of the Company w.e.f. 01.06.2023.

As informed earlier, Shri Vankineni Siva Ramakrishna Murthy (DIN:03642007) was appointed as a Non-Executive Independent Director of the Company w.e.f. 04.08.2023 and the same has been approved by the Members at their 44^th Annual General Meeting held on 25.09.2023.

Shri Karumanchi Rama Rao (DIN 07532854) was appointed by the Board as a Non-Executive Independent Director with effect from 01.04.2024 and the same has been approved by the Members at their Extra-ordinary General Meeting held on 27.03.2024.

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

The brief profile of the Shri J. S. Rao, Director who is retiring by rotation and seeking appointment at the ensuing Annual General Meeting is presented elsewhere in this Annual Report.

Smt. (Dr.) P. Anuradha, Spouse of Shri P Veeraiah, Chairman & Managing Director, was re-appointed as the Chief Executive Officer of the Company by the Board for a period of 3 (Three) years w.e.f. 25.05.2024 and the approval of the Members is being sought at the ensuing Annual General Meeting for her re-appointment and payment of remuneration.

Shri V. Sesha Sayee, Company Secretary & Compliance Officer has tendered his resignation w.e.f. 31.05.2024 and Shri M.V.R.L.S Rao has been appointed as the Company Secretary & Compliance Officer of the Company w.e.f. 01.06.2024.

Dematerialisation

As on 31^st March, 2024, 76,28,211 (98.13%) shares were dematerialised with the following depositories:

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

KYC Compliance by Members holding shares in Physical Form

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

Please note that in case of failure of the Members to get the above referred details registered/updated with the RTA, the Company will be withholding the dividend payable (if declared by the Members at the ensuing Annual General Meeting) and the same shall be released only after the said details are updated. Further, in respect of such folio(s) the Members will not be eligible to lodge grievance or avail any services from Company or Registrar and receive dividend, till the above mentioned details are furnished.

The relevant forms prescribed by Securities and Exchange Board of India (viz. ISR-1, ISR-2, ISR-3, SH-13 and SH-14) can be downloaded from the Company's website www.kakatiyacements.com/investors/shareholders Information/KYC compliance documents section or that of RTA website https://xlsoftech.com.

Statement of Affairs of the Company

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

Performance of the Year under review

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

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

During the year under review, the Cement Division has produced 2,44,020 MT as against 2,59,575 MT in the year ago period thereby registering a decrease of about 6%.

The Cement Division has clocked a turnover of Rs. 97.84 crores in 2023-24 as against the turnover of 104.98 crores recorded in the previous year and this works out to a decrease of 6.80%.

The Cement Division has incurred profit before interest and tax (PBIT) of Rs. 4.05 crores in the year under review as against loss of Rs. 10.04 crores earned in the previous year.

Sugar Division:

The Sugar cane crushed in the Sugar Division in the year under review is 1,14,101 MT as against 1,43,140 MT in the previous year thereby recording a decrease of about 20%. Even though the Company could procure the mandals and villages of its choice during the year under review, by the time the same were allotted to the Company, the cane growers in the said mandals have already entered into agreements with neighbouring factory and as a result, the Company could procure only negligible quantity of cane from these additional areas. The Government Regulation restricting the sale of sugar has also impacted the quantum of sales during the year under review.

The Sugar Division has clocked a turnover of Rs. 63.88 crores in 2023-24 in comparison with Rs. 50.62 crores in the preceding year and thereby registering an increase of about 26% over the year ago period. The Sugar Division has recorded profit before interest and tax (PBIT) of Rs. 0.63 crores in the year under review as against loss of Rs. 0.08 crores in the preceding year.

Power Division:

The Power Division has generated 53,88,759 kWh in 2023-24 as against 1,61,54,956 kWh of power in the preceding year thereby recording a decrease of about 67%. The members are aware that the Company has not been able to generate power during off-season period in the sugar division since the Government of Telangana has not been conceding to the request of the power entities to generate power using coal as an alternative fuel to the bagasse.

As already informed earlier, the Power Purchase Agreement earlier entered into with TS TRANSCO has expired on 11.04.2022 and the same is yet to be renewed. As a result, during the year under review, there was no sale of power to DISCOMS. There was no wheeling of power generated to the Cement Plant. The Power division has clocked a turnover Rs. of 1.24 crores in the year under review as against the turnover of Rs. 10.70 crores made in the year-ago period and this works out to a decrease of 88% over the previous year.

The Power Division made a loss before interest and tax (PBIT) of Rs. 1.07 crores as against a profit of Rs. 10.20 crores in the previous year.

Current Year Outlook:

Cement Division:

Taking into account the market conditions and other factors, the Company has set a target of its cement production at 2,75,000 MT for the current year.

Sugar Division:

The Sugar Division was impacted by various issues during the year under review. The scarcity of water sources, and loss of productive areas in the zonal allocation made by the Government in 2022 for part of the year are some of the critical factors which continue to impact the prospects of the Company.

However, migration of farmers to alternate crops fetching more remunerative prices and incentives from both Central and State Governments for promoting oil palm cultivation coupled with the non availability of water in sufficient quantities at regular intervals have forced the Company to downward revision of the target of cane crushing to 55,000 MT during the current year.

Power Division:

The performance of power division is directly linked to the operational level of the sugar division. A favorable government policy with regard to utilization of coal as an alternative fuel to bagasse during off-season of the sugar division is yet to crystallize since the government has not been permitting the power generating companies to utilize the coal as an alternative fuel to bagasse. In view of this, the performance of the power division will continue to be low and added to this factor, any serious impediments to the sugar division will further impact the performance of the power division. The non renewal of the Power Purchase Agreement also adversely affects the operations of the Power Division.

Insurance:

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

Disclosures under the Companies Act, 2013

I) Annual Return:

The Annual Return as per provisions of Section 92 of the Companies Act, 2013 in Form MGT-7 is available on the Company's website www.kakatiyacements.com in the Investors/Annual Reports and Annual Returs section.

II) Board Meetings:

During the year under review, 4 (Four) Board Meetings were held. The details of the Board Meetings and its composition along with the attendance of the Directors are furnished elsewhere in the Corporate Governance Report.

III) Changes in Share Capital

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

IV) Changes in the nature of business, if any

There was no change in the nature of business of the Company during the year under review.

V) Remuneration Policy:

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

VI) Related Party Transactions

Particulars of contracts / arrangements entered into by the Company with Related Parties referred to in Section 188 (1) of the Companies Act, 2013 for the year ended 31^st March, 2024 have been provided in Form No.AOC-2 pursuant to clause (b) of sub Section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same are annexed to this Report (Annexure-1).

All the Related Party Transactions have been approved by the Audit Committee and are at an "arms-length" basis.

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

The statement of particulars of Appointment and Remuneration of Managerial Personnel as per Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ending 31^st March, 2024 is annexed to this Report (Annexure-2).

VIII) Key Managerial Personnel

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

IX) Registration of Independent Directors in Independent Directors Databank

All the Independent Directors of the Company have been registered and are members Independent Directors Data Bank maintained by Indian Institute of Corporate Affairs and the said registrations are valid. The Registration of Smt. Hima Bindu Myneni, is valid up to 27.02.2026 and of Shri V Siva Ramakrishana Murthy up to 28.02.2025. Registration of Shri Karumanchi Rama Rao is valid for Life Time.

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

X) Statement of declaration of independence furnished by Independent Directors under Section 149(7) of the Companies Act, 2013:

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

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

XI) Confirmation by the Board

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

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

XII) Committees of the Board and its Meetings:

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

Directors' Responsibility Statement:

Pursuant to the requirement under Section 134 (3) and 134 (5) of the Companies Act, 2013 with respect to the Director's Responsibility Statement, the Board of Directors of the Company hereby confirm that:

a. in the preparation of annual accounts for the year ended 31^st March, 2024, the applicable accounting standards have been followed and that there were no material departures therefrom.

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31^st March, 2024 and of the loss of the Company for that period.

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

d. the Directors have prepared the Annual Accounts for the Financial Year ended 31^st March, 2024 on a ‘going concern' basis.

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

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

Evaluation of the Board's Performance:

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

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

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

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

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

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

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

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

Auditors:

Statutory Auditors:

M/s. M. Anandam & Co., Chartered Accountants, Secunderabad (FRN : 000125S) were appointed as the Statutory Auditors of the Company for a period of 5 (Five) years by the Members at the 43rd Annual General Meeting held on 8^th September, 2022 and they hold office up to the conclusion of the Annual General Meeting to be conducted in 2027. Accordingly, they continue to be the Statutory Auditors of the Company.

Internal Auditors

Your Board, on the recommendation of the Audit Committee, has appointed M/s. Ramanatham & Rao, Chartered Accountants, Secunderabad (FRN:002934S) as the Internal Auditors of the Company for the year 2024-25.

Cost Auditors

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, cost records are required to be audited. Based on the recommendation of Audit Committee, your Board has appointed M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad as Cost Auditors for the current year 2024-25 and necessary Resolution for ratification of their remuneration is placed before the Members at the ensuing Annual General Meeting for their approval in terms of Rule 14 (a)(ii) of the Companies (Audit and Auditors) Rules, 2014.

Secretarial Auditor

The Board has appointed Smt. Manjula Aleti, Company Secretary in whole-time Practice to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014 for the financial year 2024-25.

The Secretarial Audit Report issued by Smt. Manjula Aleti, Practicing Company Secretary in Form-MR 3 for the financial year ended 31^st March, 2024 is annexed to this Report (Annexure -3).

The Certificate of Non-Disqualification of Directors' issued by Smt. Manjula Aleti, Practicing Company Secretary under Schedule V(C) (10) (i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stating that none of the Directors of the Company have been debarred or disqualified from being appointed or continuing as Directors of the Company by the SEBI/ Ministry of Corporate Affairs or such statutory authority as on 31^st March, 2024 is annexed to this Report (Annexure -4).

SEBI has made it mandatory on the part of the Listed Companies to secure an Annual Secretarial Compliance Report from a Practicing Company Secretary on compliance of all applicable SEBI Regulations and Circulars / guidelines issued there under. The Company has obtained the Annual Secretarial Compliance Report from Smt. Manjula Aleti, Practicing Company Secretary for the year ended 31^st March, 2024 and the same is annexed to this Report (Annexure -5).

The Auditor's Report and the Secretarial Audit Report do not contain any qualification, reservation or adverse remark. Compliance with Secretarial Standards

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India. Reconciliation of Share Capital Audit

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

Corporate Social Responsibility (CSR)

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

The Company during the Financial Years 2020-21 and 2021 -22 has spent amounts in excess of its obligation towards the Corporate Social Responsibility and the same were available for set-off. Accordingly, the Company has adjusted a part of the amount available for set-off arising out of the excess spent during FY 2020-21, during the financial years 2022-23 and 2023-24. The balance amount available for set off for the FY 2020-21 has lapsed during the current Financial Year.

However, the excess amount spent of Rs. 14,17,097/- during FY 2021-22 is available for set off during the current year and considering the same, the Company does not foresee any CSR expenditure during the current Financial Year 2024-25, unless the CSR Committee recommends and Board approves any expenditure in this regard.

The annual report on CSR activities forms part of this Report (Annexure -6).

Corporate Governance

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

Acquisition of shares by Managing Director

During the year under review, in the month of September, 2023, Shri P Veeraiah, Managing Director has acquired 93,750 shares of the Company on 27.09.2023 through NSE and Company has complied with all provisions of law in this regard.

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

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

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

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

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

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

c) Foreign Exchange earnings and outgo:

The Company has neither earned nor used any Foreign Exchange during the year under review.

Vigil Mechanism and Whistle Blower Policy:

The whistle blower policy aims at conduct of the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The policy on vigil mechanism and whistle blower policy may be accessed on the Company's website : www.kakatiyacements.com/investors/policies section.

Environmental Protection:

The Company has been making endeavors to protect the environment from the evil effects of pollution from time to time. Planting of saplings and seedlings in and around the factories and colonies is being done on a continuous basis so as to develop green belt around the plant to improve the environment.

Management Discussion and Analysis (MDA) Report

a) Statement of Affairs of the Company

The Company has recorded Cement production of 2,44,020 MT as against 2,59,575 MT in the preceding year, thereby recording a decrease of about 6%.

The Board has pleasure in informing the members that despite the serious impediments encountered by the Sugar Division, it could record 1,14,101 MT of Sugar Cane Crushing in the year under review as against 1,43,140 MT in the preceding year.

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

During the year under review, the Company has clocked a turnover (excluding other income) of Rs. 155.95 crores compared to Rs. 154.15 crores recorded in the year-ago period. The segmental revenue has increased in Sugar Division and has decreased in Cement and Power Divisions.

b) Industry Structure and Development:

The Company has a well developed network of dealers for its Cement Division, located in the states of Telangana and

Andhra Pradesh and the Company therefore is in a reasonably comfortable position in securing orders from its clients. It is heartening to note that some of the dealers have been patronizing the Company since inception and the strong bondage that is developed between the Company and dealers is one of the prominent features of this mutually beneficial relationship.

While the Company has a well established structure and dealer network, the Company anticipates that it could have some impact on its performance in the current year due to the variation in the prices of Coal and other raw materials of Cement Division. The Company shall endeavour its best to mitigate the fixed overheads to the possible extent, combat the critical challenges and move forward with a committed sprit.

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

c) Opportunities and Threats:

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

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

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

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

The Company will make its best endeavors in resolving the complicated issues in the sugar and power divisions through negotiations with governmental authorities and will also liaison with the legal advisers in respect of pending litigations concerning the power division.

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

d) Segment or product-wise performance:

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

e) Medium and long term strategy

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

f) Outlook:

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

g) Risks and concerns:

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

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

h) Internal control systems and their adequacy:

As stated elsewhere in this Report, the Company has adequate internal control systems and the Chief Financial Officer will monitor the Internal Audit Reports and brief the Audit Committee in case any deficiency in the system is noticed and corrective measures are adopted to strengthen the system.

i) Financial Performance with respect to operational performance:

This has been discussed elsewhere in this Report.

j) Human Resource Development and Industrial Relations:

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

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

The Company's strength consists of 429 permanent employees as on 31^st March, 2024.

k) The details of significant changes (change of 25% or more) as compared to the preceding year in key financial ratios are provided herein below :-

Cautionary Statement

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

Acknowledgment

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

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

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

Your Directors record their gratitude to all the Members who have been reposing confidence in the Company and its Management.