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Updated:01 Aug, 2014, 15:59 PM IST

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Updated:01 Aug, 2014, 15:58 PM IST

DIRECTORS' REPORT:

To

The Members,

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.

DIVIDEND

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. 

OPERATIONS

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

Operations

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.

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 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.

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)

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) 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. 

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

ENERGY GENERATION FROM JAYPEE BINA THERMAL POWER PLANT 

 Phase I comprising of two units of 250 MW each of coal based Jaypee Bina Thermal Power Plant located at Village Sirchopi, Distt. Sagar (M.P) has been fully commissioned on 31st August, 2012 and Unit II of 250 MW was commissioned on 7th April, 2013.

JPVL is supplying 70% of the installed capacity for Phase–I on long term basis, to Govt. 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.

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 the year 2014. Supplies from L&T– MHI and Larsen & Toubro Limited for Boiler, Steam Turbine and Generator respectively 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 through Amelia (North) and Dongri Tal–II Coal Blocks. 

The Financial Closure of the project has already been achieved. As on 31st March, 2013, an amount of approx. Rs. 7,737 crores was incurred on the implementation of Project.

AWARD

JPVL has been awarded Certificate of Merit 'For Most Admired Emerging Infrastructure Company in Power' at the 5th KPMG–Infrastructure Today Awards, 2013, New Delhi.

VERIFIED EMISSION REDUCTIONS (VERs)

JPVL 1000 MW Jaypee Karcham Hydro Power Plant has been registered by United Nations Framework Convention on Climate Change (UNFCCC) as a CDM project w.e.f. 12th April, 2012 for ten years upto 11th April, 2022. The process for issuance of CERs for the first period from 12.04.2012 to 31.07.2012 is in progress.

DIVERSIFICATION TO SET–UP CEMENT GRINDING UNITS 

JPVL has decided to diversify its operations by setting up Cement Grinding Units at Nigrie (4 MTPA) and Bina (2MTPA) to optimally utilize the fly ash to be generated by Company's thermal power plants. Necessary action has been initiated in that direction.

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. JPVL 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 clearance from the Ministry of Environment and Forest is in process.

For 500 MW Hirong Hydro–electric Project, CEA has accorded Techno– Economic Concurrence on 10th April, 2013. The Environmental/Forest Clearence for the project is yet to be accorded.

As on 31st March, 2013 an aggregate amount of appox. Rs. 228 crores has been spent on the aforesaid two projects.

3. JAYPEE POWERGRID LIMITED (JPL)

Jaypee Powergrid Limited (JPL), a joint venture of Jaiprakash Power Ventures Limited and Power Grid Corporation of India Limited (a Central Government Power Utility Undertaking) has set up a 213 Km long 400 Kv Quad–Bundle Conductor Double Circuit Transmission Line for evacuation of power from the pothead yard of 1000 MW Karcham Wangtoo plant in the state of Himachal Pradesh to Abdullapur in the state of Haryana and LILO the existing Baspa–Jhakri Double circuit line.

Transmission system has been put under commercial operations w.e.f. 1st April, 2012. Capitalized value of tangible assets as on 31st March, 2013 aggregate to Rs. 995.98 crores.

The cumulative availability of transmission system for FY 2012–13 was 99.69%.

4. SANGAM POWER GENERATION CO. 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, received by the land owners. SPGCL has approached UPPCL for amicable settlement for closing the agreement(s) and payment of dues with UPPCL and the matter is under discussion.

5. PRAYAGRAJ POWER GENERATION CO. LIMITED (PPGCL)

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

All Statutory/Regulatory approvals required for the project are in place. Financial Closure has been achieved. The supplies from BHEL for Boiler, Turbine and Generator are in progress and the progress on the implementation of project is satisfactory.

An expenditure of approx. Rs. 6394 crores has been incurred on the implementation of the project till 31st March, 2013.

6. JAYPEE MEGHALAYA POWER LIMITED (JMPL)

Jaypee Meghalaya Power Limited (JMPL) was incorporated by Jaiprakash Power Ventures Limited 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 H.E.P in the Kynshi River Basin on BOOT (Build, Own, Operate and Transfer) basis. JPVL alongwith its associates will ultimately hold 74% of the equity of JMPL and the balance 26% will be held by the Government of Meghalaya.

The field work of survey & investigation and EIA studies 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.

As on 31st March, 2013, an aggregate amount of approx. Rs. 8.50 crores has been spent on the projects.

CEMENT BUSINESS

7. BHILAI JAYPEE CEMENT LIMITED (BJCL)

The Clinkerisation plant of BJCL, a joint venture between JAL & SAIL at Satna continued to function satisfactorily with 100% utilization of installed capacity. However, Bhilai grinding unit's capacity utilization remained at sub–optimal level due to lesser availability of slag from Bhilai Steel Plant.

During the period under report, comprising a period of six months, the Company has achieved a gross turnover of Rs. 454 crore, as against Rs. 1116 crore during the Financial Year 2011–12 which comprised a period of 18 months. The working results of BJCL for the year under report (6 months) resulted in an operating profit of Rs. 55.46 crore as against Rs. 72.86 crore during the previous year (18 months).       

With the positive signs as above, BJCL is hopeful that once the grinding unit is able to operate at full capacity, the Company would be in a position to improve its financial position further.

8. BOKARO JAYPEE CEMENT LIMITED (BOJCL)

The Grinding Unit of BOJCL, a joint venture between JAL & SAIL, at Bokaro, Jharkhand achieved an overall capacity utilization of 59% during the year under report. Lower production level was due to lesser availability of slag from Bokaro Steel Plant. Slag supply position, however, gradually started improving in the last quarter of the year and the unit achieved 85% capacity utilization in the month of March 2013. Considering the recent trend of supply, BOJCL is hopeful that during 2013–14 slag availability is likely to improve which would enable the grinding unit to achieve a higher capacity utilisation.

Despite lower capacity utilization, the Company has achieved a gross turnover of Rs. 627.36 crores during the year under report, backed by a strong brand image and resultant higher realization for its product. The turnover increased by 130.49% over previous year's turnover.

9. 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 GJCIL. However pending necessary approval from the Government of Gujarat, the Government land is yet to be acquired. The matter is under persuasion with the State Government.

Further activities on Project implementation can commence after acquisition of Government land.

10. JAYPEE CEMENT CORPORATION LIMITED (JCCL)

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

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

11. JAYPEE ASSAM CEMENT LIMITED (JACL)

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), Jaypee Assam Cement Limited has been formed, as a special purpose vehicle, initially as wholly–owned subsidiary of JAL. The same shall be converted as a Joint Venture Company (JVC) with JAL and AMDC as JV partners having a shareholding ratio of 82:18 between themselves, as per the Shareholders' Agreement. 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 was allotted by Dima Hasao Autonomous Council (DHAC) on 30 years lease basis to Jaiprakash Associates Limited (JAL) for the project of JACL. Necessary payment in this regard to DHAC was made by JAL as a promoter of JACL. 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. JACL had deployed necessary resources in right earnest for setting–up the 2 Mn tpa cement plant with a 35 MW captive power plant. For getting environment clearance for the proposed project, JACL 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.

JACL was, however, compelled to suspend all project activities since January 2012 due to adverse security situation resulting in loss of precious human life after abduction of one of the Senior Executives of the Company, as reported last year. JACL is in touch with concerned authorities for resumption of project activities as and when the security situation is improved.

EXPRESSWAYS AND RELATED BUSINESS

12. JAYPEE INFRATECH LIMITED (JIL)

The Yamuna Expressway has commenced its commercial operation and was opened for Public w.e.f. 09.08.2012 and the toll collection commenced from 16.08.2012. The vehicular movements and revenue generation till date is satisfactory.

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, Distt. Gautam Budh Nagar and Agra and has sold 527 million sq. feet of area as of 31.03.2013.

13. 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 the undertaking from JGICL that the Company would revive the Bank Guarantee, when the project gets environmental clearance.

14. HIMALYAN EXPRESSWAY LIMITED (HEL)

HEL was incorporated as a Special Purpose Vehicle (SPV) for the implementation of Zirakpur–Parwanoo Expressway Project in the States of Punjab, Haryana and Himachal Pradesh. The Expressway connecting the three states has become operational and the toll collection at the rates approved by the National Highways Authority of India (NHAI) has started with effect from 6th April, 2012.

15. JAYPEE AGRA VIKAS LIMITED (JAVL)

Jaypee Agra Vikas Limited 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.

During the year under report, the project almost halted as Agra Development Authority has not been able to fulfill its obligation in respect of 'Condition Precedent' viz handing over of 90% of ROW Land to Company by December 31, 2011. Due to change in State Government policies, there is a rethinking on the project.

SPORTS AND RELATED BUSINESS

16. JAYPEE SPORTS INTERNATIONAL LIMITED (JSIL)

Jaypee Sports International Limited was incorporated on 20th October, 2007. It was allotted around 1100 Ha of land for development of Special Development Zone (SDZ) with sports as core activity by Yamuna Expressway Industrial Development Authority (YEA). This area is inclusive of 100 Ha of land to be used for Abadi Development. The 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 First Indian Grand Prix from 28th to 30th October, 2011. The success of the event was acknowledged by winning of many awards and accolades.

During the year under report, JSIL once again successfully hosted Formula One, Grand Prix from 26th to 28th October, 2012. Besides this, many other events to promote sports of motor bike and cycles were conducted at the Buddh International Circuit (BIC) and major events included: Auto Cross Event (21st to 23rd December, 2012), Gautam Singhania Track Day (10th & 11th January, 2013), General Motors Car Launch (22nd & 23rd January, 2013), Tata Motors Car Launch (27th to 29th January, 2013), Lamborghini Track Days (22nd to 24th February, 2013).

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.

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

JCCIL was incorporated on 20th October, 2012, as wholly owned subsidiary of Jaypee Sports International Limited {JSIL} to undertake the business of Cricket Sport. It obtained the certificate of Commencement of business on 23rd October, 2012. The first financial year of JCCIL shall close on 31.03.2014.

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

JCHIL was incorporated on 5th November, 2012, as 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 shall close on 31.03.2014.

JCHIL entered into the Franchisee Agreement with Hockey India League [HIL] for the Team "Jaypee Punjab Warriors". The team consisted of exceptional players like Jaap Stockmann, Jamie Dwyer, Robert Hammond, Dharamveer Singh, S.V.Sunil and Mark Knowles. HIL was conducted between 14th January–10th February, 2013 in the five cities namely New Delhi, Jalandhar, Ranchi, Mumbai & Lucknow. Match schedule consisted of 12 preliminary matches and two play–off matches. The performance of the team was well appreciated.

FERTILIZER AND RELATED BUSINESS

19. JAYPEE FERTILIZERS & INDUSTRIES LIMITED (JFIL)

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 Limited (DIL) which was approved by the Board of Industrial and Financial Reconstruction (BIFR) in January, 2012.

Pursuant to the scheme, the said fertilizer undertaking stands vested in Kanpur Fertilizers & Cement Ltd (KFCL). in which your Company is making investments through Jaypee Uttar Bharat Vikas Pvt. Ltd. (JUBVPL). JUBVPL is a joint venture company (with equal participation) of your Company and ISG Traders Ltd., an investment arm of DIL.

It is expected that KFCL will start the production of Urea under the brand name "Jaypee Chand Chaap Urea" by the end of May, 2013.

AVIATION BUSINESS

20. HIMALYAPUTRA AVIATION LIMITED (HAL)

HAL was incorporated as a wholly–owned subsidiary of your Company, pursuant to the Shareholders' approval accorded on July 19, 2011, 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 acquired some flying machines for its operations and obtained necessary permits to operate the same. HAL is taking steps to acquire more flying machines and other assets for its business operations.

HEALTHCARE BUSINESS

21. 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). JHCL is developing a state–of–the–art 504 bed multi–speciality hospital in village Shahpur Bangur, Noida, UP, which is expected to be launched in the current financial year. The First financial year of JHL shall close on 31.03.2014

AGRI BUSINESS

22. JAIPRAKASH AGRI INITIATIVES COMPANY LIMITED (JAICO)

JAICO was acquired by Jaypee Cement Corporation Limited (JCCL), a wholly owned subsidiary of the Company on 25th March, 2013 to diversify into agri business. Currently JAICO has set up a Soya and Mustard processing plant at Rewa, Madhya Pradesh known as 'Jaypee Oilseeds Processing Complex' which is unique in its approach and has facilities to handle all types of products and by–products from Soya and Mustard.

JAICO has also launched a dairy project which will source 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 plans to 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, 2013 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, your Company is poised for sustained growth and the outlook is bright.

DIRECTORATE

During the period under report, Shri R. K. Singh ceased to be a Whole–time Director of the Company on completion of his tenure of 5 years on October 14, 2012 but continued to be a Director on the Board of the Company, w.e.f. 15th October, 2012. The Board places on record its appreciation for the valuable contribution of Shri R.K. Singh during his tenure as Whole–time Director of the Company and expressed the confidence that the benefit of his experience would continue to be available to the Company as a Director.

Shri Ranvijay Singh was re–appointed as a Whole–time Director of the Company for a further period of 5 years w.e.f. December14, 2012.

Further S/Shri Pankaj Gaur, V.K Chopra, B. Samal, Sunny Gaur, and B.K. Goswami 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, 2013 stood at Rs. 2355.57 Crores. Deposits of Rs. 21.78 Crores due for repayment on maturity remained unclaimed by the Depositors as on March 31, 2013, most of which were subsequently claimed / renewed.

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, 2013 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.

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 2012­13. The Secretarial Audit Report for the financial year ended March 31, 2013 forms part of the Annual Report.

The Board has further re–appointed M/s Chandrasekaran Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2013–14.

Cost Auditors:

For the financial year 2012–13, the Board of Directors of the Company had re–appointed, after recommendations of the Audit Committee, M/s. J.K. Kabra & Co., Cost Accountants, (Firm's Registration No. 2890), as Cost Auditors 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, as amended, the cost audit report relating to the Cement Products & Wind Power for the financial year ended March 31, 2012, had been duly filed with the Cost Audit Branch of the Ministry of Corporate Affairs. In terms of The Companies (Cost Accounting Records) Rules 2011, as amended, the Compliance Report for the financial year March 31, 2012 as applicable has been duly filed.

For the financial year 2013–14, the Board of Directors of the Company have re–appointed, on the recommendations of the Audit Committee, M/s. J.K. Kabra & Co., as Cost Auditors of the Company for auditing the cost accounts in respect of 'Cement Product' and 'Wind Power'. 

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. Further, the Company is implementing, in a phased manner, recommendations contained in the Corporate Governance Voluntary Guidelines, 2009 issued by Ministry of Corporate Affairs, Government of India, details of which are given under the head 'Voluntary Guidelines on Corporate Governance" in the Corporate Governance Report forming part of this Report.

BUSINESS RESPONSIBILITY REPORT

In terms of new 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, 2013:

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, 2013 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 04, 2013