Jaiprakash Associates
BSE: 532532 | NSE: JPASSOCIAT | ISIN: INE455F01025 | Construction & Contracting - Civil
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Mar '08 |
The Directors of your Company are pleased to present the 11th Annual
Report together with the Audited Accounts of the Company for the year
ended March 31, 2008.
WORKING RESULTS
The working results of the Company for the year under report are as
under:
(Rs. in Crores)
Financial year ended 31.03.2008 31.03.2007
Gross Revenue 4273.89 3575.45
Profit before Depreciation & Tax 1046.65 782.96
Less: Depreciation 203.30 163.05
Profit before Tax 843.35 619.91
Less: Provision for Tax
Current Tax 157.76 195.09
- Deferred Tax 69.55 6.90
- Fringe Benefit Tax 6.37 233.68
3.02 205.01
Profit after Tax 609.67 414.90
Add:
- Profit brought forward 1110.06 900.38
- DRR no longer required 60.00 1170.06
32.00 932.38
Profit available for appropriation 1779.73 1347.28
Less: Transferred to:
- Provision for Dividend
Pertaining to Previous Year
(including Dividend Tax) 0.06 -
- Reserve for Premium
on FCCB 36.82 31.98
- Debenture Redemption
Reserve 34.85 71.33
- General Reserve 61.00 43.00
- Interim Dividend 67.74 43.74
- Proposed Final Dividend 46.86 35.08
- Tax on Dividends 19.47 266.80
12.09 237.22
Balance carried to Balance Sheet 1512.93 1110.06
Basic Earnings Per Share 5.42 3.82
[Face value Rs. 2 per share]
Diluted Earnings Per Share 5.32 3.55
[Face value Rs. 2 per share]
The results of the current year reflect an encouraging growth over that
of previous year as under: -
SI. Results Unit
No.
1. Profit before tax Rs. Crore
2. Profit after tax Rs. Crore
3. Earnings per share
(Face Value Rs.2) Rs.
Year Year Increase
ended ended
31.03.2008 31.03.2007
843.35 619.91 36.0%
609.67 414.90 46.9%
5.42 3.82 41.8%
DIVIDEND
Your Directors had declared two interim Dividends of 15% each on July
14,2007 and January 12, 2008 for the financial year ended March 31,
2008. The Board has recommended a final dividend (proposed) of 20%
which will be paid after your approval at the ensuing Annual General
Meeting. The final dividend will absorb an amount of Rs. 46.86 Crores
(excluding dividend tax of Rs. 7.96 Crores). Thus the total dividend
for the year would aggregate to 50% leading to pay out of Rs. 114.60
Crores (excluding tax on dividend of Rs. 19.47 Crores).
SUB-DIVISION OF THE FACE VALUE OF EQUITY SHARES OF THE COMPANY
Pursuant to the approval of the shareholders accorded on November 24,
2007 through Postal Ballot, each equity share of the face value of Rs.
10 was sub-divided into five equity shares of the face value of Rs. 2
each, effective December 26, 2007. Consequently, the sub- divided
equity shares of the face value of Rs. 2 each have been issued to such
shareholders who held the equity shares of Rs. 10 each of the Company,
on December 26, 2007, being the Record Date.
SHARE WARRANTS ISSUED ON PREFERENTIAL BASIS TO PROMOTER GROUP COMPANY
Considering the growth opportunities in different fields of business
interest of the Company and with a view to augmenting the long term
resources for growth & diversification plans and for general corporate
purposes, in accordance with the approval of shareholders received
through postal ballot on January 18, 2008, the Company had, during the
year, issued 5,00,00,000 (five crore) Warrants on preferential basis to
Jaypee Ventures Private Limited (a Promoter Group Company), entitling
the holder to apply for allotment of one Equity Share of Rs.2 at a
premium of Rs.395 on full payment, per Warrant, in one or more
tranches.
After receipt of in-principle approvals for listing of the shares
underlying the said Warrants from BSE on January 21, 2008 and from NSE
on January 22, 2008 and on receipt of 10% up-front payment from Jaypee
Ventures Private Limited, the Warrants were allotted on January 22,
2008.
FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
To meet requirement of funds for its on-going and growing business,
your Company had, during the year under report, issued Foreign Currency
Convertible Bonds (FCCBs) for USD 400 Million. The particulars about
conversion, outstanding amount, coupon, etc. in respect of FCCB Issues
made by the Company are detailed at para 26 of the Corporate Governance
Report forming part of this Report.
CHANGES IN SHARE CAPITAL
The paid-up capital of the Company on March 31, 2007 stood at Rs.
219,23,96,540. During the year ended March 31, 2008, 1,60,024 FCCBs
have been converted into 7,53,24,147 Equity Shares of Rs. 2 each
thereby raising the share capital by Rs. 15,06,48,294. Thus, the
paid-up capital of the Company as at March 31, 2008 stood at Rs.
2,34,30,44,834.
OPERATIONS
1.0 ENGINEERING DIVISION
1.1 New Contracts
1.1.1 During the year under report, your Company was awarded contracts
for the following works:-
(i) Development of the prestigious Access-Controlled 8-Lane Expressway,
about 1,047 Kms long, from Greater Noida to Ballia in the State of
Uttar Pradesh along the left bank of river Ganga on Design,
Engineering, Finance, Construction, Operation, and Maintenance (DBFO)
basis for a concession period of 35 years. The Project, valued at an
estimated sum of Rs. 29,825 Crores, includes 12,281 hectares of land at
eight locations to be given to the developer for development on ninety
years lease. Jaypee Ganga Infrastructure Corporation Ltd., a 100%
subsidiary of your Company - which has already signed the Concession
Agreement, will implement the Project.
(ii) Construction of Civil & Structural and Mechanical & Electrical
Fabrication & Works of Clinkerisation Unit at Satna and Grinding Unit
at Bhilai of Bhilai Jaypee Cement Limited in the States of Madhya
Pradesh and Chhatisgarh respectively at a Project value of Rs. 128
crore excluding cost of steel and cement.
1.1.2 Your Company, on its own, has been pre-qualified to participate
in the tender, invited on turnkey basis, for the following projects:
(i) 1,500 MW Tipaimukh Hydro-electric Project in Manipur State; and
(ii) 1,000 MW Pakal Dul Hydro-electric Project in J & K State.
1.1.3 Your company has also submitted Application for Pre-
qualification for Civil & Hydro-mechanical works including Penstock
liners of Vishnugad Pipalkoti Hydro Electric Project (4x111 MW) in the
State of Uttarakhand on EPC contract basis and is expected to be
qualified soon.
1.2 Works in Progress
Presently the Company is executing works of the following major
projects:
SI. Name of the Project Location of
No. under Execution the Project
Works pertaining to:
1. Baglihar -I & II, HEP Jammu & Kashmir
2. Karcham Wangtoo HEP Himachal Pradesh
3. Turnkey construction of Andhra Pradesh
Srisailam Left Bank Canal
Tunnel Scheme including
Head Regulator etc. of
Alimineti Madhava Reddy
Project
4. Taj Expressway (six-lane Uttar Pradesh
165 km) connecting Noida (NCR)
and Agra and related activities
5. Zirakpur-Parwanoo Highway Punjab. Haryana
From Km 39.860 to &
Km 67.000 of NH - 22 on Himachal Pradesh
BOT basis
6. Ganga Expressway Uttar Pradesh
(Eight-lane 1047 km long)
connecting Greater Noida and
Ballia and related activities
7. Civil & Structural and Madhya
Mechanical & Electrical Pradesh and
Fabrication & Erection works Chattisgarh
of Clinkerisation Unit at Satna
and Grinding Unit at Bhilai of
Bhilai Jaypee Cement Limited.
Contract Price Nature of
(Base Value) Project
(Rs. in crore)
2,152 Power
Generation
(900 MW)
4.150 Power
Generation
(1000 MW)
1,925 Irrigation
Tunnels
6,000 Expressway
and Real Estate
Project
414 Highway
Project
29,825 Expressway
and Real Estate
Project
128(Excluding Cement Project
cost of steel
& cement)
Projects being Executed in Joint Venture, with the Company as the
Leader
8. Sri Rama Sagar Project Andhra Pradesh
Flood Flow Canal
Package - 2
9. Polavaram Project Right
Main Canal Package - 4 Andhra Pradesh
10. Veligonda Feeder and Andhra Pradesh
Teegaleru Canal Project-2
11. Rajiv Sagar Lift Irrigation Andhra Pradesh
Project (Dummugudem)
12. GNSS Main Canal from Andhra Pradesh
km 119.000 to km 141.350
including construction of
CM & CD works
187 Irrigation Canal
301 Irrigation Canal
347 Irrigation Canal
(Revised)
282 Lift Irrigation
Project
112 Irrigation Canal
The progress of work on all the projects is generally satisfactory.
1.3. Works Completed
During the year, your Company has completed the works on the following
Projects:
(i) Teesta- V Hydro-electric Project (510 MW) in Sikkim.
(ii) Omkareshwar Hydro-electric Project (520 MW) in Madhya
Pradesh.
(iii) Contract for construction of civil works of Zone-Ill Laole-
Quazigund Section of Katra-Baramullah Railway Line in J&K State was
foreclosed by mutual consent without any liability on either side.
Thus during the year reported, your Company completed Projects with
power generation capacity of 1,030 MW. Besides, 390 MW Dulhasti Hydro
Electric Project in the State of Jammu & Kashmir was handed over to
NHPC during the year, after completion of all works.
2.0 CEMENT DIVISION
2.1 Operations
The production and sale of Cement and Clinker during the year, as
compared to the previous year, are as under:-
2007-08 2006-07
Cement Production (MT) 67,76,663 66,80,910
Clinker Production (MT) 51,35,109 51,02,939
Cement Sale (MT)
(including Self-Consumption) 67,63,237 66,38,409
Clinker Sale (MT) - 1,00,095
The cement and clinker production for the year under report registered
a growth over the previous year.
The combined increased capacity of Jaypee Rewa Plant, Jaypee Bela
Plant, Jaypee Cement Blending Unit and Jaypee Ayodhya Grinding
Operation (JAAGO) as on March 31, 2008 was 7 million tonnes per annum.
The Directors are pleased to report that Phase-I of Chunar and Dalla
Cement Plants in Uttar Pradesh and Grinding Unit in Haryana have been
successfully commissioned during the months of February and March 2008.
During the year under review, 93% of the power requirements of the
cement plants at Rewa and Bela were met from captive power plants
entailing substantial saving in cost of production.
2.2 Expansion Plans
The Company has undertaken creation of new/enhancement of existing
capacities of cement/cement products, directly or through Joint Venture
and Special Purpose Vehicles over a period of next four years within an
approximate capital outlay of over Rs. 3.000 Crores.
3.0 HOTEL & REAL ESTATE DIVISION
Your Company is developing a premium Golf-centric complex of about 8
million Sq. ft. at Jaypee Greens, Greater Noida, primarily consisting
of high end residential development, besides a 220 rooms boutique Spa
Resort under construction which is likely to be operational by end
2009. The Golf course, the largest in India and the third largest in
Asia, has created a unique niche for itself among connoisseurs.
The Jaypee Greens Golf Resort, categorised as a Five Star Deluxe Hotel
as well as the Holiday Resort - the Jaypee Residency Manor at
Mussoorie, owned by the Company, are being managed by Jaypee Hotels
Limited, a subsidiary of your Company and are operating satisfactorily.
DIVERSIFICATION
A. WIND POWER PLANT
The Company has fully commissioned its Wind Turbine Generators with an
aggregate capacity of 49 MW (40.25 MW in Maharashtra and 8.75 MW in
Gujarat) as on March 31, 2008. Out of the total installed capacity of
49 MW, 16.25 MW (13 Generators, each with a capacity of 1.25 MW) was
commissioned at Dhule, Maharashtra during December 2006 to March 2007.
The remaining 32.75 MW was commissioned at Sangli, Maharashtra (24 MW
-16 Generators, each with a capacity of 1.5 MW) during September 2007
to March 2008 and at Kutchh, Gujarat (8.75 MW 7 Generators, each with a
capacity of 1.25 MW) in March 2008.
The electricity generated is being sold to Maharashtra State
Electricity Distribution Company Ltd. in Maharashtra and Gujarat Urja
Vikas Nigam Limited in Gujarat.
B. DEVELOPMENT OF DONGRI TAL II COAL BLOCKS IN MADHYA PRADESH
The Company has received a Letter of Intent (LOI) from Madhya Pradesh
State Mining Corporation Limited (MPSMCL) for formation of another
Joint Venture Company (JVC) for mining of Coal in Dongri Tal II Coal
Block in District Sidhi in M.R In terms of the LOI, MPSMCL would be
allotted 51% of issued equity shares in the JVC in consideration of
conferring mining rights on the JVC and your Company would be required
to hold 49% equity in the JVC. The new JVC shall be floated in due
course.
C. ENERGY FROM MUNICIPAL SOLID WASTE AT CHANDIGARH
The Plant at Chandigarh for producing alternate source of energy from
Municipal Solid Waste is almost ready for commissioning within a month.
D. EXPLORATION AND DEVELOPMENT OF OIL AND NATURAL GAS
The Government of India has awarded the South Rewa Basin in Madhya
Pradesh with an approximate area of 13,000 sq. km. for exploration and
development of the largest on- shore Oil-Gas Block to the Consortium of
the Company and Prize Petroleum Corporation Limited, a Company with
vast experience in the field of Oil and Gas exploration. The Companys
stake in the Consortium is 90% and balance 10% is of Prize Petroleum
Corporation Limited (PPCL) which will act as the Operator. A Production
Sharing Contract has been executed between the President of India and
the Consortium.
Keeping in view the advantages to have substantial stake in the capital
of PPCL, the Company has taken necessary steps for acquisition of
present shareholding of 45% of PPCL held by ICICI Bank Limited and
ICICI Venture Funds Management Company Limited
The Company shall also participate in the bidding for exploration of
Oil and Natural Gas under New Exploration Licensing Policy
- Seventh Round for which the Government of India has invited bids.
E. MANUFACTURE OF IRON AND STEEL
During the year, the Company has purchased and taken possession of the
assets of Malvika Steels Limited at Jagdishpur in Uttar Pradesh that
were put up for sale through an open auction by the Debt Recovery
Tribunal (DRT). This acquisition and revival of the Steel Plant would
be a step in the direction of backward integration.
Steel Authority of India Limited, the only other Bidder in the auction
has appealed before the Presiding Officer, DRT who has ordered to
maintain status quo on deposit of an amount equal to the sale value of
assets. The Company has preferred an appeal before Debt Recovery
Appellate Tribunal against the Order of Presiding Officer, DRT, which
is pending.
F. OTHER DIVERSIFICATION INITIATIVES
Companys other diversification initiatives include development and
mining of Coal, setting-up of pit-head based Thermal Power Station,
construction of Expressways and development of Sports Complex. These
are being implemented through different subsidiaries of the Company.
Details of these initiatives are furnished under the heading
Subsidiaries.
SUBSIDIARIES
As on March 31,2008, the Company had following fifteen subsidiaries
engaged in different business activities:
1. Jaypee Hotels Limited (72.18%)
2. Jaiprakash Hydro-Power Limited (63,34%)
3. Jaiprakash Power Ventures Limited (80.56%)
4. Jaypee Karcham Hydro Corporation Limited (100%)
5. Jaypee Powergrid Limited (74%)
6. Jaypee Cement Limited (100%)
7. Gujarat Anjan Cement Limited (99.88%)
8. Madhya Pradesh Jaypee Minerals Limited (70%)
9. Jaypee Infratech Limited (98.96%) w.e.f. 05.04.2007
10. Bhilai Jaypee Cement Limited (74%) w.e.f. 11.04.2007
11. Himalyan Expressway Limited (100%) w.e.f. 25.05.2007
12 Gujarat Jaypee Cement & Infrastructure Limited (100%) w.e.f.
26.12.07
13. JPSK Sports Private Limited (61.70%) w.e.f. 07.03.2008
14 Bokaro Jaypee Cement Limited (74%) w.e.f. 13.03.2008
15. Jaypee Ganga Infrastructure Corporation Limited (100%) w.e.f.
18.03.2008
Since the first financial years of Companies at serial no. 13 to 15
will close on March 31, 2009 the consolidated Balance Sheet reflects
the consolidated accounts of the other 12 subsidiaries.
After March 31, 2008 one more subsidiary namely Jaypee Arunachal Power
Limited has been incorporated on April 23, 2008 to put up a Power
Project in Joint Venture with Government of Arunachal Pradesh.
The status of the aforesaid subsidiaries is as under:
HOTEL AND RELATED BUSINESS
1. Jaypee Hotels Limited (JHL)
Jaypee Hotels Limited (JHL), a 72.18% subsidiary of your Company, has
shown improvement in all performance parameters compared to previous
year. While gross revenue and gross profit registered a growth of over
32% and 25% respectively, profit before and after tax witnessed an
upswing of over 30% and 28% respectively.
The Board of Directors of JHL has declared a dividend of 18% for the
year ended March 31, 2008.
The future for the Hotel Industry in India holds high promise and with
the forthcoming Commonwealth Games being hosted by India, at New Delhi,
JHL is expected to perform better in the coming years.
POWER AND RELATED BUSINESS
2. Jaiprakash Hydro-Power Limited (JHPL)
300 MW Baspa-ll Power Station
During the year under report, the power station with an availability of
99.91%, has generated 1274.16 million units of electricity including
12% free power to Himachal Pradesh State Electricity Board/ Government
of Himachal Pradesh. The net saleable energy for the year was 1121.26
million units, out of which 1050.06 million units was primary energy
and the balance 71.20 million units was secondary energy. The Plant is
expected to generate at full design energy during the current year.
Profit after tax during the reporting period was Rs. 213.39 Crores as
against Rs. 199.54 Crores during the previous period. The Board of JHPL
had paid an interim dividend of 7.5% in September 2007 and has
recommended a final dividend of 7.5 % for the year ended March 31,
2008.
3. Jaiprakash Power Ventures Limited (JPVL)
400 MW Vishnuprayag Power Station
The Vishnuprayag Power Station of this subsidiary has been operating
satisfactorily with generation and plant availability exceeding the
normative availability and design energy. The Plant availability and
Energy generated during the year under report were as under:-
Plant Availability
Plant Availability Generation (million units)
Actual 12% Free Saleable
Energy Energy to Energy to
delivered Government U.P. Power
of Uttarakhand Corporation
Ltd.
99.14% 1846.89 221.63 1625.26
(Against normative (Against design
availability of 90%) saleable energy
of 1545.88)
JPVL had declared and paid in October 2007, an interim dividend of 12%
for the Financial Year ended on March 31, 2008. In view of the
satisfactory working results, the Board of JPVL has decided to
recommend to the Members a Final Dividend of 8% for the Financial Year
ended March 31, 2008. Thus the total dividend for the year 2007-08
aggregates to 20% of the Companys Paid-up Share Capital leading to an
aggregate pay out of Rs.121.30 Crores (including Dividend Distribution
Tax of Rs. 17.62 Crores) for the year.
JPVL has taken major initiatives to further pursue the power business
in a big way either directly or by participating/investing in other
companies and/or forming Joint Venture companies, as under:
(i) Hydropower Projects in Arunachal Pradesh
Lower Siang Project (2000 MW) and the Hirong Project (500 MW) in Joint
Venture with the Government of Arunachal Pradesh.
(ii) Hydropower Projects in Meghalaya
450 MW Kynshi-ll project and the 270 MW Umngot hydro-electric project
in Joint Venture with Government of Meghalaya.
(iii) Thermal Power Project in Madhya Pradesh
A pit-head based 1320 MW Thermal Power Plant, using super- critical
technology, at Nigrie, M.R
4. Jaypee Karcham Hydro Corporation Limited (JKHCL)
Jaypee Karcham Hydro Corporation Limited (JKHCL), a wholly owned
subsidiary of your Company, is setting-up the Karcham Wangtoo
Hydro-electric Project (1000 MW) in Kinnaur District of Himachal
Pradesh on Build, Own and Operate basis.
The project is scheduled to be commissioned by November 2011. JKHCL
has obtained all statutory approvals required for setting up of the
Project. The Project is progressing satisfactorily.
5. Jaypee Powergrid Limited (JPL)
This company, a Joint Venture of Jaiprakash Hydro-Power Ltd. and
Powergrid Corporation of India Limited is setting up the Transmission
Line for evacuation of Power from the Karcham Wangtoo Project of the
Jaypee Group. Central Electricity Regulatory Commission has granted
Transmission License to this subsidiary.
Feasibility report of the Project & Detailed survey of route alignment
for the transmission line in the 230 km. stretch from Karcham Wangtoo
to Abdullapur sub-station of PGCIL and loop- in-loop-out with
Baspa-Jhakri line has been completed during the year.
The Project is scheduled to be completed in June, 2010.
CEMENT BUSINESS
6. Jaypee Cement Limited (JCL)
As on March 31, 2008, JCL holds 99.88% equity shares of Gujarat Anjan
Cement Limited. The Company is exploring opportunities of setting
up/acquiring new/existing cement plants in India. JCL is also in the
process of acquiring mines in Andhra Pradesh for its proposed Cement
Project.
7. Gujarat Anjan Cement Limited (GACL)
This Company, a subsidiary of Jaypee Cement Limited, is setting up a
cement plant of 4.00 mtpa capacity at village Vayor, Taluka Abdasa in
Distt. Bhuj (Phase I of 1.20 mtpa & Phase II of 2.80 mtpa) and grinding
unit of 2.40 mtpa (Phase I & Phase II of 1.20 mtpa each) at Wanakbori
in Distt. Kheda in Gujarat. Phase I of the Project is expected to be
completed by November 2008 followed by Phase II in March 2010.
8. Bhilai Jaypee Cement Limited (BJCL)
BJCL, incorporated on April 11, 2007, as a Joint Venture between the
Company and Steel Authority of India Ltd. (SAIL) with management
control vested in your Company, is setting-up a 2.2 million tonne per
annum capacity split-located Cement Plant at Bhilai in Chattisgarh and
at Babupur, Satna in Madhya Pradesh. The Project is due to be
commissioned by April 2010.
Required land for the Grinding Unit at Bhilai has been acquired on
long-term lease basis from SAIL. Land for setting up the Clinkerization
Unit at Babupur, Satna has also been purchased.
The Company has entered into a long-term Agreement with SAIL for
operating its Limestone Mines on right to use basis as well as for
supply of Slag for manufacture of Cement.
9. Bokaro Jaypee Cement Limited (BOJCL)
BOJCL, the second joint venture between the Company and SAIL with
management control vested in the Company, was incorporated on March 13,
2008 to set up a 2.1 million tonne per annum capacity Cement Plant at
Bokaro in Jharkhand. This Project is expected to be commissioned in
2010.
BOJCL shall source slag from SAIL and clinker from your Company for
production of cement.
10. Gujarat Jaypee Cement & Infrastructure Limited (GJCIL)
The Company has signed an Agreement with Gujarat Mineral Development
Corporation Limited (GMDCL) on January 8, 2007 for setting up of a 2.4
million tonnes per annum capacity Cement manufacturing plant with
captive power station and captive Jetty in Kutch Distt. of Gujarat,
through a Special Purpose Vehicle (SPV) viz. Gujarat Jaypee Cement &
Infrastructure Limited. This SPV, which was incorporated on June 20,
2007 shall have equity contribution of 74% from the Company and 26%
from GMDCL. Preparatory work for implementation of this Project has
started.
COAL MINING
11. Madhya Pradesh Jaypee Minerals Limited (MPJML)
MPJML, a joint venture with Madhya Pradesh State Mining Corporation
Limited (MPSMCL), shall develop and mine coal from the Coal Block at
Amelia (North) in M.R This company shall feed coal to the pit-head
based 1320 MW Thermal Power Plant being set up by JPVL at Nigrie, M.R
Detailed Project Report and Composite Geological Report for the Project
has been received in June 2007 and August 2007 respectively. Mining
lease for the Project is expected to be executed shortly. Approval for
construction of private assisted Railway siding for the Project has
also been received from Railways. Necessary tie-up for supply of power
for the Project has also been made.
EXPRESSWAYS AND RELATED BUSINESS
12. Jaypee Infratech Limited (JIL)
JIL was incorporated on April 5,2007 as a wholly owned subsidiary for
implementation of 160 km long 6-lane Access-Controlled Taj Expressway
Project which was awarded to your Company by Taj Expressway Industrial
Development Authority (TEA) on Build, Own, Operate and Transfer basis.
After obtaining necessary approval, implementation of the Project has
been assigned to JIL. JIL shall also develop Real Estate in five
different locations along the Expressway. The Company has invested
Rs.955 Crores in the equity capital of JIL out of the total Equity
Share Capital of Rs. 965 Crores. Jaypee Group Employees Welfare Trust
holds balance Equity Share Capital of Rs. 10 Crores. Construction work
for the Expressway is in full swing and is progressing satisfactorily.
13. Jaypee Ganga Infrastructure Corporation Limited (JGICL)
JGICL was incorporated in March 18, 2008 as a wholly owned subsidiary
of the Company for implementation of the prestigious 1047 km. long
8-lane Access-Controlled Expressway connecting Greater Noida with
Ghazipur- Ballia, namely Ganga Expressway Project. The Project includes
development of land parcels, adjacent to the Expressway, in eight
different locations. The Ganga Expressway Project was awarded by Uttar
Pradesh Expressway Industrial Development Authority (UPEIDA) on Design,
Build, Finance and Operate basis. After obtaining necessary approvals,
the Concession Agreement was executed between Uttar Pradesh Expressway
Industrial Development Authority (UPEIDA) and JGICL. Preparatory work
for the Project has started.
14. Himalyan Expressway Limited (HEL)
HEL was incorporated on May 25, 2007 as a wholly owned subsidiary for
implementation of 27.14 km long Zirakpur- Parwanoo Road Project in the
States of Punjab, Haryana and Himachal Pradesh on BOT basis under NHDP
Phase-IIIA, as awarded by the National Highways Authority of India
(NHAI). The work on the Project is progressing satisfactorily.
SPORTS AND RELATED BUSINESS
15. JPSK Sports Private Limited (JPSKSPL)
JPSK Sports Private Limited was incorporated on October 20, 2007 for
developing a Greenfield state-of-the-art Sports Complex including Car
Race track suitable for Formula One race with related integrated
support infrastructure including Township(s) and auxiliary facilities.
Your Company alongwith its affiliates has acquired 74% equity shares in
JPSKSPL. The remaining 26% Equity Capital is held by two Strategic
Partners and their affiliates.
JPSKSPL has successfully concluded Race Promotion Contract (F1
Contract) with reputed parties based in UK and Ireland for conducting
the Grand Prix of India to be a round of the FIA Formula One World
Championship.
Preliminary activities in developing the Project have already
commenced.
CONSOLIDATED FINANCIAL STATEMENTS
The statement as required under Section 212 of the Companies Act, 1956,
in respect of the subsidiaries of the Company is annexed and forms an
integral part of this Report. The consolidated financial statements of
the Company and its subsidiary companies, prepared in accordance with
Accounting Standard (AS)-21 Consolidated Financial Statements
prescribed by the Institute of Chartered Accountants of India, form
part of the Annual Report and Accounts.
Since the first financial year of three subsidiaries viz. Bokaro Jaypee
Cement Limited, Jaypee Ganga Infrastructure Corporation Limited and
JPSK Sports Private Limited would end on March 31, 2009, Balance Sheets
of these subsidiaries have not been prepared and hence have not been
included in the consolidated financial statements as at March 31, 2008.
In terms of the approval of the Central Government accorded under
Section 212 (8) of the Companies Act, 1956 the Audited Balance Sheets
as at March 31, 2008 in respect of the subsidiaries of the Company have
not been attached to the Balance Sheet of the Company. However, the
requisite information for each subsidiary has been disclosed. The
annual accounts of the subsidiary companies and the related detailed
information will be made available to the investors of the
Company/subsidiary companies seeking such information at any point of
time. The Annual Accounts of the subsidiary companies will also be kept
for inspection by any investor in its Head Office and that of
subsidiary company concerned.
The Directors are of the opinion that the subsidiaries of your Company
have bright future.
OUTLOOK
Keeping in view the performance and future prospects of the Companys
business, the expansions and diversifications being undertaken and the
business of its subsidiaries, your Company is poised for sustained
growth and the outlook is bright.
DIRECTORATE
During the year under report, the following Directors resigned from the
Directorship of the Company:
Shri Gunjit Singh w.e.f. July 9, 2007, Shri Sameer Gaur w.e.f.
September 9, 2007, Shri Suren Jain w.e.f. December 10, 2007, Shri A.K.
Jain w.e.f. December 11, 2007 and Shri D.N. Davar w.e.f. January 25,
2008.
The Board places on record its appreciation for the valuable
contributions of the above Directors during their respective tenure on
the Board.
Shri Jaiprakash Gaur, the visionary Founder Chairman of the Group
submitted his resignation as Chairman of the Company and his
resignation was reluctantly accepted by the Board almost a year back.
The spirit of entrepreneurship and the unique value system introduced
by Shri Jaiprakash Gaur in managing the affairs of the Company,
however, continued to be the guiding force in placing the Company on a
roburt and rapid growth path.
The Board unanimously decided that it would be an honour for the
Company to have Shri Jaiprakash Gaur back on the Board as its most
coveted member so that the unique and unmatched contributions of Shri
Jaiprakash Gaur could help the Board in strategic policy formulation
and monitor its implementation with added zeal and confidence for a
rapidly growing Company like this, with interest in diverse fields
The Board accordingly proffered Shri Jaiprakash Gaur to join the Board.
In deference to the persistent requests from all the members of the
Board, Shri Jaiprakash Gaur agreed to join the Board to contribute in
actualizing the goals set by the Company including enhancing
stakeholders value.
Accordingly, Shri Jaiprakash Gaur was appointed as Director w.e.f.
December 14, 2007 in the causal vacancy caused due to resignation of
Shri Suren Jain.
Further, Shri R.K. Singh was appointed w.e.f. October 15, 2007 in
casual vacancy of Shri Sameer Gaur, Shri Ranvijay Singh was appointed
w.e.f. December 14, 2007 in casual vacancy of Shri A.K. Jain and Shri
S.C. Gupta was appointed w.e.f. February 21, 2008 in casual vacancy of
Shri D.N. Davar.
Shri R. K. Singh was appointed as Whole-time Director with effect from
October 15, 2007. His appointment and remuneration was approved by
shareholders on November 24, 2007. Similarly, Shri Ranvijay Singh was
appointed as Whole-time Director with effect from December 14, 2007.
His appointment and remuneration was approved by shareholders on
January 18, 2008.
The newly appointed Directors have brought with them rich wealth of
varied experience which, pooled with the existing expertise of your
Board, would go a long way in charting the course of the Company.
Shri Sunny Gaur was re-designated by Board on December 14, 2007 as
Managing Director (Cement). Similarly, Shri Pankaj Gaur was
re-designated by Board on December 14, 2007 as Joint Managing Director
(Construction).
S/Shri B. K. Taparia, S.C. Bhargava, Pankaj Gaur, B. K. Goswami and S.
D. Nailwal, Directors would retire by rotation at the forthcoming
Annual General Meeting of the Company. Proposals for their re-
appointment have been included in the Notice of the Annual General
Meeting for your approval.
DEPOSITS
Fixed deposits received from the shareholders and the public as on
March 31,2008 stood at Rs. 190,09,05,000. Deposits of Rs. 1,58,11,000
due for repayment on maturity remained unclaimed by the depositors as
on March 31, 2008.
PARTICULARS OF EMPLOYEES
A statement showing the particulars of employees, pursuant to Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975, is annexed and forms an integral part of
this Report.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS & OUTGO
Particulars with respect to conservation of energy, technology
absorption, foreign exchange earnings & outgo, pursuant to Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Directors) Rules, 1988 for
the year ended March 31,2008 are annexed and form an integral part of
this Report.
NOTES ON ACCOUNTS
The observations of Auditors and Notes on Accounts are self-
explanatory.
AUDITORS
M/s. M. R Singh & Associates, Chartered Accountants, Auditors of the
Company shall retire at the conclusion of the ensuing Annua! General
Meeting and, being eligible, offer themselves for re-appointment.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis
Report, in terms of Clause 49 of the Listing Agreement are annexed and
form part of this Annual Report. A certificate from the Auditors
confirming compliance with the conditions of Corporate Governance is
also annexed.
EMPLOYEE RELATIONS
Employee relations continued to be cordial throughout the year. Your
Directors wish to place on record their sincere appreciation for the
excellent spirit with which the entire team of the Company worked at
all sites and other offices and achieved commendable progress.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the
Directors, based on the representation received from the operating
management, certification by the CEO and CFO to the Board of Directors
and after due enquiry, confirm in respect of the audited annual
accounts for the year ended March 31, 2008:
i) that in the preparation of the annual accounts, the applicable
accounting standards had been followed and that there were no material
departures;
ii) that the Directors had, in consultation with the Statutory
Auditors, 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 for the year ended March 31, 2008 and the profit of the
Company for that period;
iii) that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 1956 for safeguarding the assets
of the Company and for preventing and detecting fraud and other
irregularities;
iv) that the Directors had prepared the annual accounts on a going
concern basis.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for and
gratitude to various departments and undertakings of the Central and
State Governments, IDBI Bank Ltd., The Life Insurance Corporation of
India, General Insurance Corporation of India and its Subsidiaries,
IFCI Limited, ICICI Bank Ltd , AXIS Bank Limited, Export-Import Bank of
India and Consortium of Banks led by Canara Bank and valued customers,
for their valuable support and co-operation.
Your Directors also wish to place on record their appreciation of the
wholehearted and continued support extended by the Shareholders and
Investors, which had always been a source of strength for the Company.
On behalf of the Board
MANOJ GAUR
May 3, 2008 Executive Chairman
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