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Updated:31 Oct, 2014, 15:31 PM IST

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Updated:31 Oct, 2014, 15:32 PM IST

DIRECTORS' REPORT

To

The Members,

The Directors of your Company are pleased to present the 17th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2014.

WORKING RESULTS

In line with its publically stated policy, your Company remains focussed and committed on reduction of debt through sale of some of its assets, to deleverage its Balance Sheet and enhance shareholders' value. The details of steps taken in this regard are given elsewhere in this Report. The Restructuring Committee, which includes two of the Independent Directors on the Board continues to consider various options to achieve the aforesaid objectives.

DIVIDEND

Keeping in view the need to conserve the resources of the Company, the Board has decided not to recommend any dividend for the financial year 2013–14.

CHANGES IN SHARE CAPITAL

During the year under report, there is no change in the Paid up Share Capital of the Company and the same stood at Rs. 4,438,167,118 divided into 2,219,083,559 Equity Shares of Rs. 2 each as on March 31, 2014.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

The Company has presently only one series of outstanding FCCBs i.e. FCCB–IV issued on September 7, 2012 (total size USD 150 million) due date September 8, 2017 with an outstanding size of USD 110.40 million.

The particulars about conversion, outstanding amount, coupon, listing etc. of all past and present FCCBs are detailed in para 27 of the Corporate Governance Report forming part of this Report.

EMPLOYEE STOCK PURCHASE SCHEME

As the Members are aware, "Jaypee Group ESPS, 2009 Trust" was created in 2009 for administering the Stock Purchase Scheme of the Company namely "Jaypee Employee Stock Purchase Scheme, 2009" for the ultimate benefit of the employees (including Directors) of the Company and its subsidiaries.

In terms of the Scheme, the Company issued and allotted 1.25 Crores Equity Shares of Rs.2 each @ Rs. 60 per share (including premium of Rs. 58 per share) to the said Trust on December 14, 2009. The said Trust was also allotted 62,50,000 Equity Shares as Bonus Shares on its holding, in terms of the Bonus Issue made by the Company December 19, 2009.

During 2013–14, no further shares were allocated/ transferred by the Trust.

Thus, a balance of 1,849,117 Equity Shares (including bonus shares) are still lying with the Trust for transfer to the eligible persons in due course.

It is confirmed that:

(a) there is no employee who has been issued shares in any year amounting to 5% or more shares issued during that year; and

(b) there is no employee who is entitled to shares under the Scheme equal to or exceeding 1% of the issued capital of the Company.

OPERATIONS

1.0 ENGINEERING DIVISION

1.1.1 Prequalifications / Bids Under submission

During the year, your Company submitted prequalification applications for the following Works:

(i) Execution of Civil, Hydro–Mechanical and Electro–Mechanical Works of 390MW Kirthai–I Hydroelectric Project in Jammu & Kashmir. The application has been submitted by the Consortium with JAL as lead member.

(ii) Diversion Tunnel, Concrete Gravity Dam, Intake, Silt Excluder Arrangement, Pressure Shafts, Underground Power House and Tail Race Tunnels (Kiru Civil: Lot–1) for 660MW Kiru Hydroelectric Project in Jammu & Kashmir.

(iii) Construction of Head Race Tunnels (from RD 1780 onwards), Adit 2, Surge Shafts, Pressure Shafts, Underground Power House, Transformers Hall, Tail Race Tunnels and Pothead Yard etc. [Teesta–IV : LOT–2] of 520 MW Teesta Hydroelectric Project (Stage–IV) in the District North Sikkim in the State of Sikkim.

(iv) Execution of Agra to Lucknow Expressway (in 5 Packages) in Uttar Pradesh

• Agra to Firozabad (village Gurha) (km –1.8 to 0.0 to 53.5) Access Controlled Expressway

• Firozabad (village Gurha) to Etawah (village Moonj) (km 53.5 to km 115.5) Access Controlled Expressway

• Etawah (village Moonj) to Kannauj (village Narmau) (km 115.5 to km 172.5) Access Controlled Expressway

• Kannauj (village Narmau) to Unnao (village Neval) (km 172.5 to km 236.5) Access Controlled Expressway

• Unnao (village Neval) to Lucknow (km 236.5 to km 299.5) Access Controlled Expressway

(v) Design, Execution and Completion of the Contract Package CP1 Works: Expansion of Karkh Sewage Treatment Plant including Operation and Maintenance Services during the Defects Notification Period for Baghdad Sewerage Facilities Improvement Project in Iraq.

(vi) Design, Execution and Completion of the Contract Package CP2 Works: Rehabilitation of Pumping Stations (RQ, Kadissiya and PN) including Operation and Maintenance Services during the Defects Notification Period for Baghdad Sewerage Facilities Improvement Project, in Iraq. and

(vii) Design, Execution and Completion of the Contract Package CP3 Works: Rehabilitation of Pumping Stations (P5,P2, N3, N2 and TC1) including Operation and Maintenance Services during the Defects Notification Period Baghdad for Sewerage Facilities Improvement Project in Iraq.

1.1.2 Your Company has been prequalified to participate in the tenders/ bids for the following works:

(i) Construction of Diversion Tunnel, Coffer Dam, Concrete Gravity Dam, Intake Structure and Diversion Tunnel Gates and Hoist, Desilting Chambers, Head Race Tunnels up to RD 1780m etc. [Teesta–IV : LOT–1] of 520 MW Teesta Hydroelectric Project (Stage–IV) in the District North Sikkim in the State of Sikkim.

(ii) Construction of Civil Works for Dam, River Diversion, Intake, Adit–1, HRT upto RD 9500m including Pranmati Nallah Crossing and Diversion Tunnel Gates (PACKAGE–I) of 252 MW

Devasari Hydroelectric Project, District Chamoli, Uttarakhand; and

(iii) Construction of Civil Works of Adits–2, 3 & 4, HRT from RD 9500m to RD 17906m, Pressure Shaft, Penstocks, Surge Shaft, Valve House, Power House Complex and Tail Race Tunnel (PACKAGE–II) of 252 MW Devasari Hydroelectric Project, District Chamoli, Uttarakhand

3.0 HOTELS DIVISION

The Company owns and operates five luxury hotels in the Five Star category, the finest Championship Golf Course, Integrated Sports Complex and Town Centre strategically located for discerning business and leisure travellers Jaypee Vasant Continental with 119 rooms and Jaypee Siddharth with 94 rooms in New Delhi. Jaypee Palace Hotel and Convention Centre is the largest property located at Agra with an inventory of 341 rooms with luxurious Presedential Suites and Jaypee Residency Manor at Mussoorie has 94 rooms with new 45 rooms in Valley View Tower overlooking Doon Valley. Jaypee Greens Golf & Spa Resort, Greater Noida is a prestigious & Luxury Resort with 170 state of art rooms overlooking the Championship 18 hole Greg Norman Golf Course.

Jaypee Greens Golf & Spa Resort hosted several prestigious conferences from India and abroad. The Resort hosted the conferences like Asian Development Bank Conference 2013 in which Prime Ministers, Deputy Prime Ministers and Finance Ministers of various countries participated alongwith Heads of the National and International Banks. ONGC Petronet Conference was held in which the Cabinet Ministers and Oil Ministers of different countries attended the conference and stayed in the hotel. RSSIDC Conference was held for Doctors from all over the world. The leaders of the Automobile Industry from all over the world stayed to participate in the Auto Expo Mart held at Expo Centre, Greater Noida. Besides this, Prestigious car companies like Audi, Mercedes, Porsche, Tata Motors etc. organized car launch events and conferences at Jaypee Greens Golf & Spa Resort. The Formula One Management, F–1 Race Drivers and renowned celebrities from across the world during the Formula–1 and related events patronize the world–class services at Jaypee Greens Golf & Spa Resort, Atlantis–The Club & Jaypee DelCourt in October, 2013.

Jaypee Palace Hotel and Convention Centre, Agra has been conferred the award by Hon'ble Shri Shashi Tharoor, the then Minister of State (Human Resource Development) under the category "Best Hotel Based Meeting Venue" at The National Tourism Award 2012–13 by Ministry of Tourism, Government of India. The award is aimed to recognize the world class hospitality and tourism facilities in India.

Jaypee Hotels being the division of the Company was conferred 2nd Prize at the National Energy Conservation Award by Hon'ble President of India Shri Pranab Mukherjee in the august presence of Shri Jyotiraditya Madhavrao Scindia, the then Minister of State for Power. The award is the recognition of the implementation of the energy conservation measures with perfection at Jaypee Vasant Continental.

"Atlantis–The Club", an integrated sports complex located at Jaypee Greens offers world class facilities for International and National sporting events & tournaments with rooms & conference halls. Atlantis has emerged as Sports Academy Destination. Yuvraj Singh, Cricket for Excellence (YSCE), Cricket Academy under the supervision of celebrity Mr. Yuvraj Singh conducting coaching for more than 100 students. Bhaiching Bhutia Football School (BBFS), the Soccer Academy under the supervision of Mr. Bhaiching Bhutia, Former Captain – Indian Soccer Team conducting coaching on Soccer.

"Jaypee DelCourt", A Town Centre offers well appointed rooms for corporate entrepreneurs, expats, business and leisure stays.

The Company's Hotels at New Delhi, Agra and Mussoorie have been accredited with ISO 9001 for Quality Management System (QMS), ISO 14001 for Environment Management System (EMS), ISO 22000 for Food Safety Management System (FSMS) and Hazard Analysis and Critical Control Point (HACCP).

Global economic recovery has been very gradual with the Eurozone volatility continuing during the year, albeit at a lower intensity. The Eurozone countries continued to adopt austerity measures, as part of the fiscal adjustment.

The International tourist arrivals, worldwide have grown to 1087 billion in 2013, and are forecast to grow at moderate pace of 3% to 4% in 2014.

Foreign tourist arrivals in India during 2013 was 68.48 Lacs as against 65.78 Lacs in 2012. The Foreign exchange earnings from tourism grew by 1.6% in 2013 registering a growth of 4% in tourist arrivals in 2013.

Indian economic growth in 2013 had slowed down to 4.5%–5% which is the lowest in a decade. The high borrowing cost to combat inflation coupled with lower private consumption, low investment in infrastructure and other sectors were responsible for this.

The low economic growth appears to have bottomed out and a gradual increase in economic activity is expected from the middle of 2014.

The business of the Hotel Division is poised for sustained growth and the outlook is bright. The Company is confident to achieve better quotient of customers' satisfaction and to achieve higher growth coupled with optimization of the resource utilization.

4.0 REAL ESTATE DIVISION

Jaypee Greens, Greater Noida

The Company's prestigious project – Jaypee Greens, Greater Noida spread across 452 acres is the maiden golf centric residential development. The project integrates Luxury villas and Apartments with an 18 Hole Greg Norman Signature golf course, 9 Hole chip & putt golf course, landscaped parks and lakes along with an integrated sports complex, 60 acre Nature Reserve Park, a 5 star spa resort in collaboration with Six Senses Spa of Thailand, Town Centre, etc. The project has received an overwhelming response and majority of the launched units have been sold.

Jaypee Greens Wish Town Noida

Second real estate project – Jaypee Greens Noida – being developed by the Jaypee Group is a bench mark for extraordinary lifestyle experiences. Spread over 1063 acres, it has been designed as a new exciting place to Live–Work–Play. It offers wide range of residential options ranging from independent homes to high–rise apartments and penthouses, along with host of other amenities such as a 18+9 hole Graham Cooke designed golf facilities, a 525 bed Super specialty Hospital, educational facilities including the already operational Jaypee Public school and JIIT, landscaped parks and lakes, various recreational facilities and entertainment hubs and commercial centers.

During the year the Company offered possession in Pavilion Court towers and completed construction of couple of its projects launched in the earlier years and further consolidated its position in the premium residential segment with the launch of new Projects like Pavilion Court Royale and Tiara Tower.

Jaypee Greens AMAN

Jaypee Greens third residential project Jaypee Greens Aman at Sector 151, Noida is located on the Noida–Greater Noida Expressway and offers 2 & 3 BHK apartments. Spread over 89 acres, the project also comprises of Chip & Putt golf course, Gardens, Walkways, Fountains, Sports facilities, Social amenities like Shopping Complex, Social Club with Swimming pools, Gymnasiums, Primary and Senior Secondary Schools, Creche, Kid's play area, etc.

The Project is being developed at a fast pace and is expected to be completed soon.

Jaypee Greens Sports City

Jaypee Greens Sports City located on the Yamuna Expressway spread over 5,000 acres, is the latest project launched by Jaypee Greens and comprises of India's first International Motor racing track, International standard cricket stadium, a long green boulevard and much more. The Project owned by Jaypee Sports International Ltd., a subsidiary of your company successfully hosted the India's First F1 race in October, 2011 followed by two more races in October, 2012 and 2013. The development of Sports City inter–alia comprises of various thematic districts offering residential, sports, commercial and institutional facilities. The commercial zone will offer well defined areas for elaborate financial and civic centers, along with Residential Districts which will have a vast range of products including villas, town homes, residential plots and mid to high rise apartment blocks, with regular water supply and 24 hours electric power supply, to suit the requirements of all.

While the Projects already launched by the Company, viz., Kassia, Kove, Krowns and Country Home–I & II, Greencrest

Homes and Buddh Circuit studios are being developed at a faster pace, the Company has during the year launched new products: Naturvue Apartments, Udaan – low & high rise apartments and Aman–III for the affordable housing segment, all of which received a very encouraging response from the Customers.

Backed by a strong team of Architects, Engineers and Sales and Marketing professionals the Company is poised to launch many more new projects in the coming years.

DIVERSIFICATION

A. WIND POWER PROJECT

The Company has been operating Wind Power Project of 49 MW (40.25 MW in Maharashtra and 8.75 MW in Gujarat). Out of the aggregate capacity of 49 MW, 16.25 MW (13 generators each of 1.25 MW) was commissioned during December 2006 to March 2007 at Dhule in Maharashtra. The remaining 32.75 MW was commissioned at Sangli, Maharashtra (24 MW– 16 generators each of 1.5 MW) during September 2007

to March 2008 and at Kutchh, Gujarat (8.75 MW– 7 generators each of 1.25 MW) in March 2008. The electricity generated from the project is being sold to Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) in Maharashtra and Gujarat Urja Vikas Nigam Limited (GUVNL) in Gujarat. The energy sold and the revenue from sale of electricity during the year under report were 89.41 Million units and Rs. 37.15 crores against 94.74 Million units and Rs. 38.19 crores respectively in the year 2012–13.

B. DEVELOPMENT OF COAL BLOCKS IN MADHYA PRADESH

The Company had been awarded rights for mining of coal in Mandla (North) Coal Block in Distt Chhindwara (MP). Necessary steps have been taken to obtain various clearances including Environment Clearance. Coal from this Block shall be available for captive consumption for Cement Division of the Company.

Besides the above, the Company has entered into three separate Joint Venture Agreements (JVAs) with Madhya Pradesh State Mining Corporation Limited (MPSMCL) for development and mining of coal from coal blocks allotted to MPSMCL. All these three Joint Venture Companies (JVCs) have identical shareholding ratio of 51:49 between MPSMCL and your Company and as such these companies are Government companies, with the management control being vested with your Company.

The first JVC namely Madhya Pradesh Jaypee Minerals Limited (MPJML) is developing a coal block at Amelia (North) at Singrauli District in the State of Madhya Pradesh.

The second JVC namely MP Jaypee Coal Limited (MPJCL) is in the process of developing a coal block at Dongri Tal–II also at Singrauli in Madhya Pradesh.

Coal from these coal blocks shall be mined for supply to the 2 x 660 MW super–critical thermal power plant at Nigrie, Madhya Pradesh being set–up by Jaiprakash Power Ventures Limited (JPVL), a subsidiary of the Company.

The third JVC i.e. MP Jaypee Coal Fields Limited (MPJCFL) has been incorporated for mining and sale of coal from Mandla (South) coal block in District Chhindwara, Madhya Pradesh.

Mining of coal has since started from Amelia (North) Coal Block and that from Dongri Tal – II coal block is expected to start by August, 2014. Work on other coal blocks is progressing as per schedule.

C. REFUSE DERIVED FUEL (RDF) FROM MUNICIPAL SOLID WASTE (MSW) AT CHANDIGARH

The Plant is operating successfully taking daily garbage of the city of Chandigarh as per agreement. The plant is serving the twin purpose of keeping the city clean and to conserve the energy resources available in the form of producing fuel called Refuse Derived Fuel (RDF). RDF (in fluff form), the final product of the plant, is being disposed off commercially as a good substitute of conventional fuel in the industries and Power plants located around Chandigarh.

D. DIVERSIFICATION INITIATIVES

Company's other diversification initiatives included setting–up of pit–head based Thermal Power Station, construction of Expressways, development of Sports Complex, Fertilizer business, Aviation project, Healthcare and Agri business, which are being implemented through different subsidiaries of the Company. The Company is also in nascent stage of diversifying and setting up of a Semi Conductor Fabrication facility in association with IBM Corporation, U.S. and Tower Semi Conductor Limited, Israel. Details of the initiatives being implemented through subsidiaries are furnished under the heading 'Subsidiaries'.

The status of the aforesaid subsidiaries is as under:

POWER AND RELATED BUSINESS

1. JAIPRAKASH POWER VENTURES LIMITED (JPVL) OPERATIONS

JPVL has three operative Hydro Power Plants, and one operative Thermal Power Plant namely:

i) 300 MW Jaypee Baspa–II Hydro Power Plant in Himachal Pradesh;

ii) 400 MW Jaypee Vishnuprayag Hydro Power Plant in Uttarakhand;

iii) 1091 MW Jaypee Karcham Wangtoo Hydro Power Plant in Himachal Pradesh; and

iv) 500 MW Jaypee Bina Thermal Power Plant in Madhya Pradesh.

JPVL is also implementing 1320 MW (2 x 660 MW) Jaypee Nigrie Super Thermal Power Project in Nigrie, Distt. Singrauli, Madhya Pradesh.

Under the Jaypee Nigrie Super Thermal Power Project in Nigrie, the Jaypee Nigrie Cement Grinding Unit with capacity of 4 MTPA is also under implementation consisting of Two Lines–1 & 2, having the Scheduled Commissioning dates as August, 2014 & July, 2015 respectively.

The Plant Availability and Energy Generation of each of the Hydro Power Plants & Thermal Power Plants for the Financial Year 2013–14 were as under:

300 MW Jaypee Baspa–II Hydro Power Plant

The average tariff for Baspa–II Plant for the year under report, as per the Multi Year Tariff (MYT) Order dated 15th July, 2011 and Order dated 6th September, 2012 and in accordance with the Power Purchase Agreement (PPA), works out to Rs. 2.75 per unit. The total generation of energy during the year was 1,345.34 MUs including 12% free Power to State Electricity Board/ Government of Himachal Pradesh and also auxiliary consumption/ transformer losses. The Net Saleable Energy during the year was 1,178.41 MUs, out of which 1,056.92 MUs was Primary Energy and 121.49 MUs was Secondary Energy.

400 MW Jaypee Vishnuprayag Hydro Power Plant

The total generation of energy during the year was 1566.83 MUs (including 1186.98 MUs deemed generation) out of which Primary Energy was 1545.88 MUs and Secondary Energy was 20.95 MUs.

Generation of 400 MW Jaypee Vishnuprayag H.E.P was suspended since 16th June, 2013 due to Force Majeure event. Generation of power resumed w.e.f. 12th April, 2014 (07:45 A.M.).

1091 MW Jaypee Karcham Wangtoo Hydro Power

Plant

The average tariff for the year under report works out to Rs. 3.04 per unit. The total generation of energy during the year was 4653.24 MUs including 596.98 MUs free Power to State Government and also auxiliary consumption/ transformer losses. The Net Saleable Energy was 4056.26 MUs.

The performance of the Company's operative Hydro Power Plants, their plant availability and the Energy Generation during the year under report was satisfactory.

500 MW JAYPEE BINA THERMAL POWER PLANT

The 500 MW coal based Jaypee Bina Thermal Power Plant (comprising of two units of 250 MW each) located at Village Sirchopi, Distt. Sagar (M.P.) has already been fully commissioned.

Based on the tariff petition filed by the Company, MPERC has approved provisional tariff for Unit–I on 12th December, 2012 and for Unit–II on 29th June, 2013.

JPVL is supplying 70% of the installed capacity on long term basis to Government of Madhya Pradesh/ Madhya Pradesh Power Management Company Ltd. in terms of the Power Purchase Agreement executed with them and balance of installed capacity is being sold on merchant power basis.

The plant performance of 500 MW Jaypee Bina Thermal Power Plant from 1st April, 2013 to 31st March, 2014 was as under:

AWARDS

JPVL was conferred with the undermentioned "National Awards for the Meritorious Performance in the Power Sector" by the then Hon'ble Union Minister of State for Power on 4th February, 2014:

1. Gold Shield for the year 2012–13 for Baspa–II Hydro Electric plant in the category of 'Performance of Hydro Power Stations'.

2. Gold Shield for the year 2011–12 for Baspa–II Hydro Electric plant in the category of 'Performance of Hydro Power Stations'.

3. Gold Shield for the year 2011–12 for Unit–IV of Karcham Wangtoo Hydro Electric plant in the category of 'Early completion of Hydro Power Projects.

4. Silver Shield for the year 2011–12 for Unit–II of Karcham Wangtoo Hydro Electric plant in the category of 'Early completion of Hydro Power Projects'.

1320 MW JAYPEE NIGRIE SUPER THERMAL POWER PROJECT

The implementation of 1320 MW (2 X 660 MW) Jaypee Nigrie Super Thermal Power Project in Nigrie, Distt. Singrauli in Madhya Pradesh is progressing satisfactorily to achieve commissioning of both the units in August, 2014 and December' 2014 respectively. Supplies from L&T– MHI Boilers Private Limited and Larsen & Toubro Limited for Steam Generator and Steam Turbine Generator are being timely received. All major statutory approvals required at the current stage of the project are in place. Entire requirement of 5 Million MTPA coal for the project will be met from dedicated coal mines at Amelia (North) and Dongri Tal–II.

The Financial Closure of the project has already been achieved. As on 31st March, 2014, Project Cost has been re–appraised at Rs. 10450 crores by ICICI Bank acting as the Facility Agent and the entire additional debt has been underwritten by them.

For 400 kV D/C Transmission Line, Forest Clearance including clearance of Hon'ble Supreme Court for Wild Life Son–Ghariyal Sanctuary has been obtained. The Line profile of entire 161 kms route has been completed. Approval for the energisation of 400 kV Bays at Satna Substation has been received from Central Electricity Authority (CEA).

The overall progress of implementation of the Project continues to be satisfactory to achieve the Target COD. First unit of the Project has been successfully synchronised with the grid on 7th May, 2014.

As on 31st March, 2014 an amount of approx. Rs. 9294.56 crore has been incurred on the Project.

4 MTPA CEMENT GRINDING UNIT AT NIGRIE (M.P.)

With a view to optimally utilize the fly ash to be generated by its thermal plants, JPVL is implementing 4 MTPA Cement Grinding Unit at Nigrie, Distt. Singrauli in Madhya Pradesh with its Project Cost estimated at Rs. 550 crores. An Expenditure of approx. Rs. 217.38 crores has been incurred on the project till 31st March, 2014.

In Principle Approval for the tie up of entire debt has been arranged. Some of the statutory approvals and

RTC approval for Railway Siding have already been obtained with Consent to Establish being in place for 4 MTPA and rest of the approvals are under process. The Work Order related to the Railway Siding has been awarded and the work is under progress. Civil works of the Project are progressing satisfactorily and orders for main machinery and for BoP packages have been placed for Line–1 & 2.

VERIFIED/CERTIFIED EMMISSION REDUCTIONS (VERs/ CERs)

1091 MW Jaypee Karcham Hydro Power Plant has already been registered by UNFCCC as a CDM project w.e.f 12th April, 2012 for ten years. Action for issuance of CERs for the first period from 12th April, 2012 to 31st July, 2012 is in progress.

Final Report on Compliance with World Commission on Dams (WCD) Recommendations was issued by TUV NORD JI/ CDM Certification Programme, Germany on 21st March, 2014.

Details regarding VERs of Jaypee Baspa–II Hydro Power Plant and Jaypee Vishnuprayag Hydro Power Plant are as under:

PROPOSED DIVESTMENT OF HYDRO POWER PROJECTS

With a view to deleverage its Balance Sheet and also to enhance Shareholders' value, JPVL's Board in its meeting held on 1st March, 2014 approved a Scheme of Arrangement, subject to statutory and regulatory approvals and sanction of the Scheme by the relevant High Court, for hiving off 300 MW Baspa–II HEP and 1091 MW Karcham Wangtoo HEP to two separate wholly owned subsidiaries and eventual transfer of ownership of the said wholly owned subsidiaries to the prospective buyer. Necessary action is in progress.

2. JAYPEE ARUNACHAL POWER LIMITED (JAPL)

Jaypee Arunachal Power Limited (JAPL), a wholly owned subsidiary of the JPVL is implementing the 2700 MW Lower Siang and 500 MW Hirong H.E. Projects in the State of Arunachal Pradesh. Your Company alongwith its associates will ultimately hold 89% of the Equity of JAPL and the balance 11% will be held by the Government of Arunachal Pradesh.

For the 2700 MW Lower Siang Hydro–Electric Project, CEA approval was obtained in February, 2010 and revalidation of DPR is being in process with Central Electricity Authority (CEA). Land acquisition is in progress. Seismic data upto 31st March, 2013 has been collected and the Ministry of Environment and Forest (MoEF) Clearance Case is under scrutiny with Nodal officer, Itanagar.

In–Principle Approval has been granted and Power Purchase Agreements (PPAs) are to be submitted for final approval with respect to the Mega Power Project. Draft Rehabilitation & Resettlement Plan has been submitted to the State Government.

For 500 MW Hirong Hydro Power Project, CEA has accorded Techno–Economic Concurrence on 10th April, 2013. For the Environmental/ Forest Clearance of the Project, the EIA & EMP report has been submitted to MoEF.

3. JAYPEE POWERGRID LIMITED (JPL)

Jaypee Powergrid Limited (JPL), a joint venture of Jaiprakash Power Ventures Limited (74%) and Power Grid Corporation of India Limited (a Central Government Power Utility Undertaking) (26%) has set up 217 Kms long 400 kV Quad Bundle Conductor Double Circuit Transmission Line for evacuation of Power from the pothead yard of 1091 MW Karcham Wangtoo Plant in the State of Himachal Pradesh to Abdullapur in the State of Haryana and LILO with the existing Baspa–Jhakri Double circuit line, which is operational since April, 2012.

The cumulative availability of transmission system for FY 2013–14 was 99.97%. During the Financial Year 2013–14, JPL earned aggregate transmission tariff of Rs. 196.89 crores.

JPL has declared a total dividend (interim and final) of 15.50% during FY 2013–14.

4. SANGAM POWER GENERATION COMPANY LIMITED (SPGCL)

Sangam Power Generation Company Limited (SPGCL), a wholly owned subsidiary of JPVL, was acquired from Uttar Pradesh Power Corporation Limited (UPPCL) through competitive bidding process, for the implementation of 1980 MW (3 x 660 MW) Thermal Power Project in Tehsil Karchana of district Allahabad, Uttar Pradesh. Conveyance Deed of land was executed but physical possession is yet to be handed over. As reported last year, Hon'ble High Court of Judicature at Allahabad has quashed the notification issued by Uttar Pradesh State Government for acquisition of land for the project subject to the deposit of compensation, if any, received by the land owners. SPGCL is in the process of amicable settlement for closing the Power Purchase Agreement(s) and payment of dues with UPPCL.

5. PRAYAGRAJ POWER GENERATION COMPANY LIMITED (PPGCL)

Prayagraj Power Generation Company Limited (PPGCL), a wholly owned subsidiary of JPVL, was acquired from Uttar Pradesh Power Corporation Limited through competitive bidding process, is implementing 1980 MW (3x660 MW) Thermal Power Project (with permission to add two additional generation units of 660MW each) in Tehsil Bara of district Allahabad, Uttar Pradesh.

Fuel Supply Agreement between PPGCL & NCL has been executed on 29th August, 2013, for Coal linkages for Phase–I. All Statutory/ Regulatory approvals required for the project are in place. Financial Closure has already been achieved. The supplies from BHEL for Boiler, Turbine and Generator for Phase–I of the Project are in progress. All major packages have been awarded except a few items relating to blending terminal and environmental monitoring system. Supply of materials is in progress. The progress on the implementation of the project is satisfactory.

An expenditure of approx. Rs. 8,680.24 crores has been incurred on the implementation of the project upto March, 2014.

6. JAYPEE MEGHALAYA POWER LIMITED (JMPL)

Jaypee Meghalaya Power Limited (JMPL) was incorporated by JPVL as its wholly owned subsidiary to implement 270 MW Umngot H.E.P. in the Umngot River Basin of Meghalaya and 450 MW Kynshi–II Hydro–Electric Power Projects in the Kynshi River Basin on BOOT (Build, Own, Operate and Transfer) basis. Your Company alongwith its associates will ultimately hold 74% of the equity of JMPL and the balance 26% will be held by the Government of Meghalaya.

With respect to 450 MW Kynshi HEP, the field work of survey & investigation and EIA studies have already been completed. Drilling and drifting in Power house area have been completed. The revised proposal for Kynshi–II HEP with involvement of lesser forest area has been submitted to State Government and Ministry of Environment and Forest. The control levels i.e. FRL & TWL for Kynshi–II Project have been approved by State Government. Approval of Central Electricity Authority has been accorded to the water availability series for power potential studies.

With respect to the 270 MW Umngot H.E.P, the State Government has advised that the project will not be operationalized as per MoA till further orders. The matter is being pursued with the State Government for permission to resume the works.

7. HIMACHAL BASPA POWER COMPANY LIMITED (HBPCL)

Himachal Baspa Power Company Limited (HBPCL) was incorporated by JPVL as its wholly owned subsidiary on 14th March, 2014, which received the Certificate of Commencement of business on 24th March, 2014.

In terms of the proposed Scheme of Arrangement 300 MW Baspa–II H.E.P of JPVL would be hived–off to HBPCL for eventual transfer of its ownership to the prospective buyer.

8. HIMACHAL KARCHAM POWER COMPANY LIMITED (HKPCL)

Himachal Karcham Power Company Limited (HKPCL) was incorporated by JPVL as its wholly owned subsidiary on 14th March, 2014, which received the Certificate of Commencement of business on 24th March, 2014.

In terms of the proposed Scheme of Arrangement 1091 MW Karcham Wangtoo H.E.P of JPVL would be hived–off to HKPCL, for eventual transfer of its ownership to the prospective buyer.

Accordingly, these two companies have no business operations at present.

CEMENT BUSINESS

9. BHILAI JAYPEE CEMENT LIMITED (BJCL)

The Clinkerisation plant of BJCL, a joint venture between JAL & SAIL at Satna continued to function satisfactorily. During the period under report, the Company has achieved a gross turnover of Rs. 787 crore, as against Rs. 454 crore during the Financial Year 2012–13 which comprised a period of 6 months.

The working results of the Company for the year resulted in an operating profit of Rs. 55.62 crore as against Rs. 55.46 crore during the previous year. After taking into account the impact of interest (Rs. 53.56 crore), the Cash profit comes to Rs. 2.06 crore during the Financial Year 2013–14 as against Cash profit of Rs. 26.43 crore in the previous year. After considering depreciation of Rs. 44.54 crore, the Company has incurred loss of Rs. 42.48 crore before tax.

10. BOKARO JAYPEE CEMENT LIMITED (BOJCL)

The Grinding Unit of BOJCL a joint venture between JAL & SAIL, at Bokaro, Jharkhand. During the year under report slag supply position though improved compared to the previous year, it was less than the overall requirement for achieving the targeted production. The Company was, therefore, constrained to regulate its targeted production according to the quantity of slag received from Bokaro Steel Plant (BSL). Resultantly, the Company could not reach its targeted production and the capacity utilization was limited to only 72%.

Despite under utilization of its installed capacity, the Company, backed by a strong brand image and resultant higher realization for its product, has achieved a gross turnover of Rs. 740.20 crore during the year under report. The turnover registered a growth of 18% over previous year. In the period under report, the Company earned an operating profit of Rs. 148.41 crore as against Rs. 174.89 crore in the last year. After taking into account the impact of interest (Rs. 38.95 crore), there is a cash profit of Rs. 109.46 crore during the financial year 2013–14, as against cash profit of Rs. 137.80 crore in the previous year. The net profit during the year, after considering depreciation of Rs. 23.77 crore, comes to Rs. 85.69 crore (before tax). The net profit after tax is Rs. 30.20 crore. The Company proposes to transfer a sum of Rs. 6.85 crore to the General Reserve.

11. GUJARAT JAYPEE CEMENT & INFRASTRUCTURE LIMITED (GJCIL)

Gujarat Jaypee Cement & Infrastructure Limited (GJCIL), a Joint Venture between Jaiprakash Associates Limited (JAL) and Gujarat Mineral Development Corporation Limited (GMDC) was incorporated, inter–alia, to implement a 2.4 Million tones per annum capacity cement plant in District Kutch, Gujarat.

Out of approximately 484 hectares of land required for setting up the Project, 27 hectares are Private land and 457 hectares are Government land. Major part of Private land (22 hectares) has been purchased by the Company. However pending necessary approval from the Government of Gujarat,the Government land is yet to be acquired by the Company.

The Board is examining various options in the way forward for the Company.

12. JAYPEE CEMENT CORPORATION LIMITED (JCCL)

Jaypee Cement Corporation Limited (JCCL), a wholly owned subsidiary of your Company, is setting up an integrated cement plant with a 3.0 Mn tpa cement grinding capacity alongwith captive power plant at Shahabad district Gulbarga, Karnataka.

The project is scheduled to be commissioned by 1st October, 2014.

JCCL's Plant in West Zone with a capacity of 4.8 MTPA is under the process of demerger through a Scheme of Arrangement pursuant to Section 391–394 of the Companies Act, 1956 to UltraTech Cement Limited,a company of Aditya Birla Group. The transaction is scheduled to be consummated by 12th June, 2014.

13. JAYPEE ASSAM CEMENT LIMITED (JACL)

Jaypee Assam Cement Limited (JACL) was incorporated, as a special purpose vehicle, initially as a wholly–owned subsidiary of Jaiprakash Associates Limited (JAL) for the purpose of setting up a 2 Mn tpa capacity Cement Plant in the North Cachar Hills Distt of Assam, in Joint Venture with Assam Mineral Development Corporation Ltd. (AMDC). The same shall be converted as a Joint Venture Company (JVC) between JAL and Assam Mineral Development Corporation Ltd. (AMDC) as JV partners having a shareholding ratio of 82:18 between themselves, as per the Shareholders' Agreement (SHA). While JAL shall hold the shares for cash consideration, shares shall be allotted to AMDC in consideration of the exclusive mining rights of the mineral block identified for this Company. Under the SHA, the management and control of the JVC is vested in JAL.

As reported last year, prior to incorporation of JACL, 750 bighas of land were allotted by Dima Hasao Autonomous Council (DHAC) on 30 years lease basis to Jaiprakash Associates Limited (JAL) for the project of the Company. Necessary payment in this regard to DHAC was made by JAL as a promoter of the Company. An agreement was also executed between DHAC and JAL.

Besides the payment of Rs. 3.77 crore for the above land, JAL had also paid Rs. 10 crore to DHAC in advance as the share of royalty on limestone for a period of one year as per the Agreement executed between JAL and DHAC.

The Company had deployed necessary resources for setting–up the 2 million tonnes per annum cement plant with a 35 MW captive power plant. The Company started expeditious collection of data and preparation of Environmental Impact Assessment/Environmental Management Plan Reports for submission to Government of India, Ministry of Environment & Forest.

The Company, however, had to suspend all project activities since January, 2012 due to adverse security situation in the vicinity of the project, as reported earlier. The Company is in regular touch with concerned authorities for resumption of project activities as and when the security situation is improved.

EXPRESSWAYS AND RELATED BUSINESS

14. JAYPEE INFRATECH LIMITED (JIL)

The Yamuna Expressway had commenced its commercial operation and was opened for Public w.e.f. 9th August, 2012 and the toll collection commenced from 16th August 2012. The vehicular movements and revenue generation till date is satisfactory. The average daily traffic (ADT) has registered 69% increase and the Toll collection Revenue has registered an increase of 44% during the F.Y.2013–14.

JIL has also been provided the right to develop 25 million square meters of land for commercial, amusement, industrial, institutional & residential purposes etc. across five different locations along the Yamuna Expressway–one in Noida, two locations in District Gautam Budh Nagar (part of NCR) and one location in each of District Aligarh & District Agra, Uttar Pradesh. JIL has commenced development of its land parcels at Noida, Mirzapur, and Agra in U.P. JIL has launched approx. 108.06 million sq.ft. area and has sold approx. 101.20 million sq. feet area till 31st March, 2014 at an aggregate sale value of Rs. 20,067 Crores.

15. JAYPEE GANGA INFRASTRUCTURE CORPORATION LIMITED (JGICL)

The Jaypee Ganga Infrastructure Corporation Limited (JGICL) was incorporated as a wholly owned subsidiary of Jaiprakash Associates Limited for implementation of the 1047 Km long 8– lane Access– Controlled "Ganga Expressway Project" connecting Greater Noida with Ghazipur–Ballia along the left bank of river Ganga on Design, Build, Finance and Operate (DBFO) basis together with the development of 12,281 hectares of land parcels at eight different locations in Uttar Pradesh in terms of the Concession Agreement executed between Uttar Pradesh Expressways Industrial Development Authority and JGICL on March 23, 2008.

Preparatory work for the Project was started. Consequent upon the Order of Hon'ble High Court of Allahabad dated 29.05.2009 quashing the environment clearance earlier issued by State Environment Impact Assessment Authority (SEIAA), fresh application for the Environmental Clearance was filed which is still pending. Since there are lot of uncertainties in respect of Environment clearance, due to various developments like farmers unrest etc., upon the discussion with the Government / Authority, a supplementary agreement was signed with the Authority on 30th November, 2011 and UPEIDA has returned the Bank Guarantee after taking an undertaking from JGICL that the Company would revive the Bank Guarantee, when the project gets environmental clearance.

16. HIMALYAN EXPRESSWAY LIMITED (HEL)

Himalyan Expressway Ltd. was incorporated as a Special Purpose Vehicle for implementing the Zirakpur–Parwanoo Expressway project in the States of Punjab, Haryana and Himachal Pradesh. The Expressway connecting the three states became operational and the toll collection started from 6th April, 2012. Being the first in the country with Radio Frequency Identification Device (RFID) technology based electronic toll collection system, it has provided a seamless travel to long journey road users while saving cost and time. During the year under report, the toll collection at the Expressway has shown an increase.

17. JAYPEE AGRA VIKAS LIMITED (JAVL)

Jaypee Agra Vikas Limited (JAVL) was incorporated as a Special Purpose Vehicle for implementing Project for development of Inner Ring Road at Agra and other infrastructure facilities, under Integrated Urban Rejuvenation Plan on Design, Build, Finance, Operate and Transfer basis. The Company signed a Concession Agreement on 4th February, 2010 with Agra Development Authority (ADA).

The project could not progress as Agra Development Authority has not been able to fulfill its obligation in respect of 'Conditions Precedent'. As per the decision taken by ADA, the Company has received part refund of the advance given to ADA for acquisition of land and balance amount is expected to be received by September, 2014.

SPORTS AND RELATED BUSINESS

18. JAYPEE SPORTS INTERNATIONAL LIMITED (JSIL)

Jaypee Sports International Limited (JSIL) was incorporated on 20th October, 2007. It was allotted around 1100 Ha. of land for development of Special Development Zone (SDZ) with sports as a core activity by Yamuna Expressway Industrial Development Authority (YEA). This area is inclusive of 100 Ha of land to be used for Abadi Development. This core activities are Motor Race Track, suitable for Holding Formula One race and setting up a Cricket stadium of International Standard to accommodate above 1,00,000 spectators and others.

The Motor Race Track known as Buddh International Circuit (BIC) was completed well in time and JSIL successfully hosted the three Indian Grand Prix held in October, 2011, October, 2012 & October, 2013. The success of the event was acknowledged by winning of many awards and accolades.

JSIL is trying its best to generate revenue by placing Buddh International Circuit (BIC) as one stop destination for various games, launching promotional activities like motor cars, bikes and other products.

JSIL has also made significant progress in development of non core area planned for group housing, plots, multi storey flats, commercial area, institutional area, roads, open space and other social activities.

19. JAYPEE CEMENT CRICKET (INDIA) LIMITED (JCCIL)

Jaypee Cement Cricket (India) Limited (JCCIL) was incorporated on 20th October, 2012, as a wholly owned subsidiary of Jaypee Sports International Limited for the purpose of managing activity relating to Cricket playing in any format by way of franchise or otherwise. It obtained the certificate of commencement of business on 23rd October, 2012. The first financial year of JCCIL has closed on 31st March, 2014.

20. JAYPEE CEMENT HOCKEY (INDIA) LIMITED (JCHIL)

Jaypee Cement Hockey (India) Limited (JCHIL) was incorporated on 5th November, 2012, as a wholly owned subsidiary of Jaypee Sports International Limited (JSIL) to undertake the business of Hockey Sport. It obtained the certificate of commencement of business on 12th November, 2012. The first financial year of JCHIL has closed on 31st March, 2014.

JCHIL entered into the Franchisee Agreement with Hockey India League [HIL] for the Team "Jaypee Punjab Warriors". HIL was conducted between 14th January – 10th February, 2013 in the five cities namely Delhi, Jalandhar, Ranchi, Mumbai & Lucknow & between 25th January, 2014 to 23rd February, 2014 in six cities namely New Delhi, Chandigarh, Ranchi, Mumbai, Bhuvneshwar and Lucknow. The performance of the team was well appreciated.

FERTILIZER AND RELATED BUSINESS

21. JAYPEE FERTILIZERS & INDUSTRIES LIMITED (JFIL)

Jaypee Fertilizers & Industries Limited (JFIL) was incorporated as a wholly owned subsidiary of Jaiprakash Associates Limited to undertake the business of fertilizers and chemicals. The Company had participated as a strategic investor in the Rehabilitation Scheme (Scheme) of fertilizer undertaking of Duncans Industries Ltd. (DIL) which was approved by the Board for Industrial & Financial Reconstruction (BIFR) in January, 2012.

Pursuant to the Scheme, the said fertilizer undertaking (famous for 'Chand Chhap' Urea) stands vested in Kanpur Fertilizers & Cement Limited (KFCL), in which your Company is making investments through Jaypee

Uttar Bharat Vikas Private Limited (JUBVPL).

JUBVPL held 99.73% (approx.) equity shares of KFCL as on 31st March 2014. JUBVPL is a joint venture company (with equal participation) of your Company and ISG Traders Limited, an investment arm of DIL.

During the year under report, KFCL has converted feed stock from Naphtha to Natural Gas. Gas Supply Agreement has been entered into with Gail (India) Limited (GAIL) for supply of RLNG from Kanpur Terminal & CFA Kanpur and a Gas Transportation Agreement has also been signed with GAIL. Indian Oil Corporation has agreed to meet the 100% requirement of other POL products from its Plant at Kanpur such as HSD/MS/lubricants/greases, etc. The work for gas receiving station at the plant premises has already been completed.

Approval of the Ministry of fertilizer, Government of India has already been received in March, 2013 to commence production of Urea with Gas as feedstock.

After completion of NG conversion and Energy saving schemes, all three streams of the plant have started manufacturing Urea since December, 2013 onwards. Capital expenditure of Rs. 911.40 Crore towards revamping the plant has been incurred upto 31st March, 2014.

AVIATION BUSINESS

22. HIMALYAPUTRA AVIATION LIMITED (HAL)

Himalyaputra Aviation Limited (HAL)was incorporated as a wholly–owned subsidiary of your Company, to undertake the civil aviation business. HAL has obtained initial NOC from Ministry of Aviation to operate Non–Scheduled Air Transport Services.

During the year, HAL has taken steps to acquire more flying machines and other assets for its business operations.

HEALTHCARE BUSINESS

23. JAYPEE HEALTHCARE LIMITED (JHL)

Jaypee Healthcare Limited (JHCL) was incorporated on 30th October, 2012 as a wholly owned subsidiary of the Jaypee Infratech Limited (JIL) for the establishment of "Jaypee Hospital" with the vision of promoting world–class healthcare amongst the masses by providing quality and affordable medical care with commitment.

The Jaypee Hospital the flagship hospital of Jaypee Group, is located at Village Shahpur Bangur, NOIDA, U.P., which heralds the group's noble intention to enter the healthcare space.

This hospital has been planned and designed as a 1200 bedded tertiary care multi–speciality facility and is currently in the process of building and commissioning 525 beds in the first phase. It shall be operational by the second quarter of 2014. The first financial year of JHL has closed on 31st March, 2014.

AGRI BUSINESS

24. JAIPRAKASH AGRI INITIATIVES COMPANY LIMITED (JAICO)

Jaiprakash Agri Initiatives Company Limited (JAICO), was acquired by Jaypee Cement Corporation Limited, a wholly owned subsidiary of the Company on 25th March, 2013 to diversify into agri business.

The Company had set up soya and mustard processing plant at Rewa, Madhya Pradesh. Jaypee Oilseeds Processing Complex is unique in its approach and has facilities to handle all types of products and by–products from Soya and Mustard. However, in the current scenario, the production activities of Soya/ Mustard Oil have been suspended.

JAICO has also launched a dairy project which sources milk from villages along the Yamuna Expressway, that is, across Gautam Budh Nagar, Bulandshahr, Aligarh, Mathura and Agra. Work has begun on a milk–processing plant at Tappal. With the operation of this plant, JAICO will have its own brand of dairy products, including packaged milk, flavoured milk, long shelf–life milk, curd, drinkable yogurt, cheese spreads, ghee and butter.

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 Standards AS–21 "Consolidated Financial Statements" prescribed by the Institute of Chartered Accountants of India, form part of the Annual Report and Accounts.

In terms of the general exemption granted under Section 212 (8) of the Companies Act, 1956 by the Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated February 8, 2011, the Audited Balance Sheets as at March 31, 2014 of the subsidiaries of the Company have not been attached to the Balance Sheet of the Company. However, the requisite information in aggregate for each subsidiary including subsidiaries of subsidiaries has been disclosed in the consolidated Balance Sheet of the Company.

The annual accounts of the subsidiary companies and the related detailed information will be made available to the shareholders of the Company and subsidiary companies seeking such information. The annual accounts of the subsidiary companies will also be kept for inspection by any shareholders in Company's Head Office and also that of the subsidiaries. Further, the Company shall furnish a hardcopy of annual accounts of subsidiaries to any shareholder on demand. The Company has also uploaded the details of the accounts of individual subsidiary companies on its website i.e. www.jalindia.com .

The Directors are of the opinion that the subsidiaries and Joint Ventures of your Company have promising future.

OUTLOOK

Keeping in view the performance and future prospects of the Company's business, the expansions and diversifications being undertaken and the business of its subsidiaries coupled with the Company's resolve to reduce the debt, your Company is committed to enhance the shareholders' value.

DIRECTORATE

A. Cessation of Directorships:

Shri A.K. Sahoo, a nominee of LIC ceased to be on the Board of the Company w.e.f. May 23, 2013, consequent upon the withdrawal of his nomination by LIC.

In place of Shri A.K. Sahoo, LIC nominated Shri R.R. Dash as their nominee on the Board of the Company, who was co–opted as a Director w.e.f. July 29, 2013. However, Shri R.R. Dash ceased to be a Director due to his sad demise on October 22, 2013.

Shri B.K. Taparia, Independent Director ceased to be a Director on Board due to his sad demise on September 5, 2013.

Shri S.C. Gupta, Independent Director and Shri R.K.

Singh resigned from Directorship of the Company w.e.f. February 10, 2014 and May 27, 2014 respectively, due to their personal reasons.

Shri S.D. Nailwal, Whole–time Director of the Company has requested to step down from the office of Director on expiry of his current term i.e. w.e.f. June 30, 2014. Accordingly, he shall cease to be a Director on June 30, 2014 (afternoon).

The Board places on record its appreciation for the valuable contribution of the above Directors during their respective tenure on the Board of the Company.

B. Appointments of Directors:

Shri S.C. Rathi was appointed as a Nominee of LIC w.e.f. February 10, 2014 in place of Shri R.R. Dash.

Shri K.N. Bhandari was appointed as an Independent Director of the Company, liable to retire by rotation, w.e.f. February 10, 2014, in the casual vacancy caused due to cessation of Shri B.K. Taparia.

Shri Shiva Dixit was appointed as an Additional Director & Whole–time Director of the Company w.e.f. May 27, 2014. As Shri Shiva Dixit holds office of Director upto ensuing Annual General Meeting and the proposal for his appointment as a Director has been received from a shareholder, the same has also been included in the Notice of the Annual General Meeting for your approval.

Shri Sunil Kumar Sharma (Executive Vice Chairman), Shri Pankaj Gaur [Jt. Managing Director (Construction)] and Shri Sunny Gaur [Managing Director (Cement)] were re–appointed as such for a further period of five years w.e.f. March 18, 2014, July 1, 2014 and December 31, 2014 respectively. The proposed re–appointment and remuneration of Whole–time Directors is subject to approval of the shareholders which would be sought.

Appointment of Independent Directors:

The Board of Directors in their meeting held on May 27, 2014, based on the recommendation of the Nomination & Remuneration Committee, decided to seek approval of the shareholders to the reappointment of all the seven Independent Directors namely: Shri R.N. Bhardwaj, Dr. B. Samal, Shri V.K. Chopra, Ms. Homai A. Daruwalla, Shri S.C. Bhargava, Shri B.K. Goswami and Shri K.N. Bhandari on the Board of the Company as Independent Directors for a period of three consecutive years from the date of their appointment by the shareholders, the proposals whereof have been included in the Notice of the Annual General Meeting for your approval.

Such Independent Directors will not be liable to retire by rotation in view of the provisions of the Companies Act, 2013 and Rules framed there under.

C. Retirement by rotation:

Shri Rahul Kumar and Shri S.K. Jain, Directors would retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re–appointment. The proposals for their re–appointment have also 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, 2014 stood at Rs. 2157.38 Crores. Deposits of Rs. 23.73 Crores due for repayment on maturity remained unclaimed by the Depositors as on March 31, 2014, most of which were subsequently claimed. In view of the provisions of newly enforced Companies Act, 2013, the Company has, for the present, decided not to accept fresh Deposits/renew existing Deposits but repay the same.

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, as amended, 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 Board of Directors) Rules, 1988 for the year ended March 31, 2014 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 AND AUDITORS' REPORT

STATUTORY AUDITORS:

M/s. M.P. Singh & Associates, Chartered Accountants, Auditors of the Company shall retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re–appointment. Based on the recommendations of the Audit Committee, the Board recommends their appointment as Company's Auditors for a term of three consecutive financial years i.e. for 2014–15, 2015–16 & 2016–17. If appointed, they shall hold office from the conclusion of the ensuing Annual General Meeting till conclusion of the Annual General Meeting of the Company to be held in the year 2017, subject to ratification by the shareholders at every Annual General Meeting.

SECRETARIAL AUDITORS:

As a measure of good Corporate Governance practices being followed by the Company, M/s Chandrasekaran Associates, Company Secretaries, were voluntarily appointed to conduct the Secretarial Audit for the financial year 2013­14. The Secretarial Audit Report for the financial year ended March 31, 2014 forms part of the Annual Report.

Based on the recommendations of the Audit Committee, the Board has further re–appointed M/s Chandrasekaran Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2014–15 in compliance of the provisions of Section 204 of the Companies Act, 2013, which has made it mandatory for certain companies to appoint a Secretarial Auditor.

COST AUDITORS:

For the financial year 2013–14, the Board of Directors of the Company had re–appointed, on recommendations of the Audit Committee, M/s. J.K. Kabra & Co., Cost Accountants, (Firm's Registration No. 2890), as Cost Auditors, subject to the approval of the Central Government, for auditing the cost accounts in respect of 'Cement Product' and 'Wind Power'. Their appointment was approved by the Central Government. In terms of The Companies (Cost Audit Report) Rules 2011 read with Ministry of Corporate Affairs' General Circular No. 15/2011 [File No. 52/5/CAB–2011] dated April 11, 2011, the cost audit report relating to the 'Cement Products' & 'Wind Power' for the financial year ended March 31, 2013, alongwith the Compliance Report, as applicable, had been filed with the Cost Audit Branch of the Ministry of Corporate Affairs on 13th November, 2013 by the Cost Auditor against the due date of filing 27th September, 2013.

Based on the recommendations of the Audit Committee, the Board of Directors of the Company have re–appointed, M/s. J.K. Kabra & Co., as Cost Auditors of the Company for auditing the cost accounts in respect of applicable businesses of the Company for the financial year 2014–15. The requisite approval of the shareholders will be sought for the remuneration of the Cost Auditors.

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.

The Company is complying with the Corporate Governance norms laid down in Clause 49 of the Listing Agreement. The Company would also comply with the revised Clause 49 of the Listing Agreement as applicable from 1st October, 2014.

BUSINESS RESPONSIBILITY REPORT

In terms of Clause 55 of the Listing Agreement, a Business Responsibility Report (BRR), in the prescribed format, is annexed and forms part of this Annual Report describing the initiatives taken by the Company from an environmental, social and governance perspective, towards adoption of responsible business practices. The BRR as well as the Company's Policy on Sustainable Development are accessible on the Company's website www.jalindia.com .

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, certifications 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, 2014 :

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, 2014 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, Industrial Development Bank of India, 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 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

Executive Chairman

May 27, 2014