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The Directors of your Company are pleased to present the 16th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2013.
For the financial year 2012-13, the Board has recommended dividend of Re. 0.50 per Equity Share of Rs. 2 i.e. 25% which will be paid after your approval at the ensuing Annual General Meeting. The dividend will absorb an amount of Rs.110.95 Crores, excluding Dividend Distribution Tax of Rs. 18 Crores.
CHANGES IN SHARE CAPITAL
The Paid up Share Capital of the Company on April 1, 2012 stood at Rs. 4,252,866,364 divided into 2,126,433,182 Equity Shares of Rs. 2 each.
During the year under report, further Equity Shares were issued and allotted as under;
(i) 28,445,567 Equity Shares of Rs. 2 each to the holders who opted for conversion of their Bonds under FCCB-IV Scheme @ Rs. 77.50 per share (including premium of Rs. 75.50 per share).
(ii) 64,204,810 Equity Shares of Rs. 2 each to Qualified Institutional Buyers under Qualified Institutions Placement Issue allotted on February 6, 2013 @ Rs. 83 per share (including premium of Rs. 81 per equity share).
Thus, as on March 31, 2013, the Paid-up Equity Share Capital of the Company stood increased to Rs. 4,438,167,118 divided into 2,219,083,559 Equity Shares of Rs. 2/- each.
FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
During the year under report, following developments pertaining to FCCBs took place:
Issue of FCCB - IV on September 7, 2012-5.75% FCCBs-IV were issued by the Company on September 7, 2012 for a total size of US $ 150 million to part pay the redemption of FCCB-III. These FCCBs, with maturity date of September 8, 2017, are convertible into equity shares of Rs. 2 each @ Rs. 77.50 per share (including premium of Rs. 75.50 per share). As on March 31, 2013, the outstanding amount against FCCB-IV was US $ 110.40 Million (i.e. 73.60%).
Redemption of FCCB - III on September 12, 2012 - Zero coupon FCCB-III issued on September 11, 2007 (with an issue size of US $ 400 million) and having an outstanding aggregate amount of US $ 354.475 Million as on the maturity date i.e. September 12, 2012 were redeemed at a premium of 47.701% on the due date, thus resulting into a total outflow in US$ 523.563 Million.
Redemption of FCCB - II on March 9, 2013 - 0.5% FCCB-II, issued on March 9, 2006 (with a issue size of Euro 165 million) and having an aggregate outstanding amount of Euro 0.255 million as on the maturity date i.e. March 9, 2013 were redeemed at a premium of 32.071% on the due date, resulting in an outflow of Euro 0.337 Million.
As reported earlier, FCCBs-I (Issue size US $ 100 million) had already been redeemed on February 17, 2010.
Thus the Company presently has only one series of outstanding FCCB i.e. FCCB - IV, aggregating US $ 110.40 million.
The particulars about conversion, outstanding amount, coupon, listing etc. of all past and present FCCBs are detailed in para 26 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 @ 7 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 on December 19, 2009.
During 2012-13, 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 which would be transferred 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.
1.0 ENGINEERING DIVISION
1.1 Works completed
1.1.1 During the year, following works have been completed:
(i) Zirakpur-Parwanoo Highway from Km 39.860 to Km 67.000 of NH - 22 in the States of Himachal Pradesh, Punjab and Haryana.
(ii) Yamuna Expressway [earlier known as Taj Expressway] (six lane165 km) connecting Noida & Agra and related activities in Uttar Pradesh.
(iii) Civil and Structural work, Residential Complex, Mechanical fabrication and erection and electrical fabrication, erection and installation for Grinding Plant at Bokaro of Bokaro Jaypee Cement Limited.
1.1.2 Prequalifications / Bids Under submission
Your Company has 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. For this work, the application has been submitted as Consortium with JAL as lead member; and
(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
1.1.3 Your company has also been prequalified to participate in the tenders/ bids for the following works:
(i) Construction of Head Race Tunnel from RD
1529m to RD 13950m (Lot-2) of 600 MW Tawang - I Hydroelectric Project in Arunanchal Pradesh;
(ii) Construction of Balance Civil Works related to Concrete Dam, Diversion Works, Intake and 1.35 Km. HRT of Vyasi Hydroelectric Project in District Dehradun, Uttarakhand
(iii) 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
(iv) 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.
2.0 CEMENT DIVISION
The operative capacity of the group as a whole is 32.55 MTPA and the capacity under implementation is 2.75 MTPA. The above would take the Group's total capacity to 35.30 MTPA including JVs capacity, which will make Jaypee Group the 3rd largest Cement producing group in India.
2.1 Operational Performance (JAL)
During the year the Company successfully completed unit 2 of Jaypee Sidhi Cement Plant at Bhagwar, Madhya Pradesh which is currently under Trial run and would be commissioned during the first quarter of FY 2013-14.
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 Palace Hotel & Convention Centre, Agra hosted several prestigious conferences, including "Partnership Summit 2013" organized by CII.
Jaypee Greens Golf & Spa Resort hosted successfully several prestigious conferences of corporate houses. India's first world renowned "Six Senses Spa" is operational at the Resort and carved a niche in the industry. Jaypee Greens Golf & Spa Resort has emerged as a destination of choice for international and domestic tourists looking for a product of international standards and quality in Noida and Greater Noida. Prestigious Car Companies like Audi, Mercedes, Porsche, Tata Motors etc organized car launch events and conferences at Jaypee Greens Golf & Spa Resort.
Jaypee Greens Golf & Spa Resort has been conferred with the prestigious GeoSpa aisaSpa India Awards 2012 for Six Senses Spa as "Most Luxurious Spa (Resort)" and again another prestigious Golden Star Awards as "Most Admired Golf Resort" of the year. LABREZZA, an Italian Restaurant at Jaypee Greens Golf & Spa Resort nominated for "Best Italian Restaurant" by HT Crystal Awards 2012 -2013.Jaypee Greens Golf & Spa Resort hosted the prestigious events for NDTV Life Style Awards and Auto Build Steering Wheel Awards as hospitality partner.
Jaypee Golf Course hosted the international events "Avantha Masters 2013"as largest European tournament event with participation of 66 top international golfers and 50 Indian top golfers like Jeev Milka Singh and Jyoti Randhawa.
"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 hosted "India Fiesta Latina - World Salsa Congress" with participation by 33 International teams and attended by the gathering of 2500 people. Atlantis has emerged as Sports Academy Destination. Yuvraj Singh, Cricket for Excellence (YSCE), Cricket Academy under the supervision of celebrity Yuvraj Singh conducting coaching for more than 100 students. Bhaichung Bhutia Football School (BBFS), the Soccer Academy under the supervision of Bhaichung Bhutia, Former Captain - Indian Soccer Team conducting coaching on Soccer.
"Jaypee DelCourt", A Town Centre offers 27 well appointed rooms for corporate entrepreneurs, expats, business and leisure stays.
Jaypee Greens Golf & Spa Resort, Atlantis-The Club & Jaypee DelCourt hosted and rendered world class services to the Formula One Management, F-1 Race Drivers and renowned celebrities from across the world during the Formula-1 and related events in October, 2012.
Yamuna Expressway, being the finest and longest expressway built by the company has changed the pattern of international and domestic tourists in Agra and Delhi - NCR. This has benefitted Jaypee Greens Golf & Spa Resort at Greater Noida and Jaypee Palace Hotel & Convention Centre, Agra due to patronage by the tourists visiting Agra from Delhi - NCR.
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).
The Hotel division of the company has made significant progress in the hotel business by constant endeavour, striving tirelessly and keeping the staff and executives motivated and enthusiastic to combat the emerging new challenges to establish a distant niche in the hotel industry.
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, Town Centre, etc. The project has received an overwhelming response from investors.
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 numerous Graham Cooke designed golf facilities, Super specialty medical centers, educational facilities, landscaped parks and lakes, various recreational facilities and entertainment hubs and commercial centers.
During the year the Company could complete 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 Kristal Court and Kasa Blanca. Your Company also launched developed plots under residential segment at Mirzapur, Distt. Gautam Budh Nagar and Agra.
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 faster pace and is expected to be completed soon.
Jaypee Greens Sports City
Jaypee Greens Sports City located on the Yamuna Expressway spread over 5000 acres, is the latest project launched by Jaypee Greens and comprises of India's first International Motor racing track, International standard cricket stadium, a 15.7 kms 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 yet another race in October, 2012. 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 are being developed at a faster pace, the Company has during the year launched certain new products -Country Home-II, Bougainvilleas, Greencrest homes and a specific product - Buddh Circuit studios for the affordable housing segment, which received a very encouraging response from the Customers.
Backed by a strong team of Architects, Engineers and Marketers the Company is poised to launch many more new projects in the coming year.
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 94.74 Mn units and Rs. 38.19 crores against 91.26 Mn units and Rs. 35.57 crores respectively in the year 2011-12.
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. The management control of these three JVCs are vested with your company. Under the JVAs, your company shall be the mine developer for all the three JVCs.
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 your 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.
Project activities relating to mine development have been completed in the case of the first JVC i.e. MPJML. Various statutory approvals and clearances from concerned authorities are in place. After having received prior approval of Ministry of Coal and stage II (final) Forest Clearance from Ministry of Environment and Forest, the Company has executed the Mining lease in February 2013. Further, to ensure availability of appropriate administrative & functional support, the required infrastructural facilities have been created which included construction of base camp, commissioning of 5 MVA Electric Sub Station, obtaining licence to store and use explosives etc. Construction of Coal Handling Plant (CHP) and Railway siding is in progress and will be completed by end of July 2013.
The Mine at the Coal Block has, since, been opened on 19th April 2013 after giving Notice of opening of Mine to the DG Mine Safety.
The second JVC viz MPJCL is in advance stage of mine development with various clearances from the concerned authorities in place. Approval for execution of Mining lease for this Coal Block has been received. Identification of land in non-coal bearing area for construction of infrastructure facilities, such as, Base Camp, Electric Sub-Station, Coal Handling Plant, Coal Silo, has been completed.
The third JVC viz MPJCFL has received Environmental Clearance on 2nd January 2013 and Forest Clearance (stage II) is expected shortly. Further, grant of previous approval for the Mining Lease has been received and Land acquisition is in progress.
C. ENERGY 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 Refused 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 industry located around Chandigarh.
D. DIVERSIFICATION INITIATIVES
Company's other diversification initiatives include setting-up of pit-head based Thermal Power Station, construction of Expressways, development of Sports Complex, Fertilizer business, Aviation, Healthcare and Agri business. These are being implemented through different subsidiaries of the Company. Details of these initiatives are furnished under the heading Subsidiaries.
During the year under report, your Company had following 22 subsidiaries which are engaged in different business activities:
1. Jaiprakash Power Ventures Limited
2. Jaypee Arunachal Power Limited
3. Jaypee Powergrid Limited
4. Sangam Power Generation Co. Limited
5. Prayagraj Power Generation Co. Limited
6. Jaypee Meghalaya Power Limited
7. Bhilai Jaypee Cement Limited
8. Bokaro Jaypee Cement Limited
9. Gujarat Jaypee Cement & Infrastructure Limited
10. Jaypee Cement Corporation Limited
11. Jaypee Assam Cement Limited
12. Jaypee Infratech Limited
13. Jaypee Ganga Infrastructure Corporation Limited.
14. Himalyan Expressway Limited
15. Jaypee Agra Vikas Limited
16. Jaypee Sports International Limited
17. Jaypee Cement Cricket (India) Limited (w.e.f 20.10.2012)
18. Jaypee Cement Hockey (India) Limited (w.e.f 05.11.2012)
19. Jaypee Fertilizers & Industries Limited
20. Himalyaputra Aviation Limited
21. Jaypee Healthcare Limited (w.e.f 30.10.2012)
22. Jaiprakash Agri Intiatives Company Limited (w.e.f 25.03.2013)
The first financial year of Jaypee Cement Cricket (India) Limited, Jaypee Cement Hockey (India) Limited and Jaypee Healthcare Limited will close on 31.03.2014. Accordingly, the accounts of remaining 19 subsidiaries have been consolidated with the accounts of your Company.
The status of the aforesaid subsidiaries is as under:
POWER AND RELATED BUSINESS
1. JAIPRAKASH POWER VENTURES LIMITED (JPVL)
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) 1000 MW Jaypee Karcham Wangtoo Hydro Power Plant in Himachal Pradesh; and
iv) 500 MW - Phase I (of 1200 MW) Jaypee Bina Thermal Power Plant in Madhya Pradesh.