Anjani Portland Cement Ltd Directors Report.

Your Directors take pleasure in presenting the Thirty Sixth Annual Report and the Audited Accounts of the Company for the year ended March 31,2020.

FINANCIAL RESULTS

( in Lakhs)

Current Year Ended 31/03/2020 Previous Year Ended 31/03/2019
Revenue from Operations (Gross) 40,893 43,747
Profit before Interest, Depreciation 8,393 5,750
Less: Interest 33 172
Less: Depreciation 2,004 1,913
Profit/(Loss) Before Tax 6,356 3,665
Provision for Taxation including deferred Tax 2,321 1,349
Profit/(Loss) After Tax 4,035 2,316
Appropriations
Dividend 632.14 505.71
Dividend Distribution Tax 129.94 103.95

DIVIDEND

Your Directors have recommended a final dividend of 5 /- per equity share (subject to deduction of tax at source) for the financial year 2019-20. The Dividend subject to the approval of the shareholders at the ensuing Annual General Meeting will be paid within the time as stipulated in the Companies Act, 2013. The dividend will absorb an amount of 1264.28 lakhs.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to reserves out of profits for the financial year 2019-20.

PERFORMANCE OF THE COMPANY

CEMENT

PRODUCTION in M.T SALES in M.T
Cement 8,29,656 10,50,330*

including 2,24,098 MT of traded cement

CAPTIVE POWER PLANT

The Gross power generation from the 16MW Captive Thermal Power Plant during the year under review was 765.11 lakh units as against 928.73 lakh units in the previous year, with an auxiliary consumption of 60.12 lakh units as against 72.25 lakh units in the previous year. The Net generation for the current year was 704.99 lakh units as against 856.48 lakh units last year, of the net units generated in the current year 697.74 lakh units were captively consumed and 7.25 lakh units were sold.

OPERATIONS

This is covered under the topic Management Discussion and Analysis.

INTERNAL FINANCIAL CONTROLS WITH RESPECT TO FINANCIAL STATEMENTS

Based on the compliance systems established and maintained by the Company, the work performed by the internal, statutory, secretarial auditor and external consultants including the audit of internal financial controls over financial reporting by statutory auditors along with the Companys self-assessment procedures the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year ended March 31,2020.

DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance along with the Management Discussion and Analysis Statement as required under the Listing Regulations forms part of this report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. V. Subramanian and Mr. P. Gopal, Independent Directors having completed their term of five years have conveyed their inability to continue for a second term with effect from May 15, 2019.

Mr. N. Venkat Raju was appointed as Additional Director and Managing Director of the Company at the Board of Directors Meeting held on January 24, 2020, subject to approval of shareholder in ensuing Annual General Meeting ("AGM"). Accordingly, necessary resolution approving his appointment as Managing Director is set out as Item No. 6 to the Notice of the AGM for the approval of the members.

Mr. A. Subramanian, having completed his tenure as the Managing Director on January 18, 2020 is continuing as Non-Executive Director of the Company effective from January 19, 2020.

Further, in compliance with the Companies Act, 2013 Mr. V. Palaniappan and Mr. A. Subramanian, NonExecutive Directors retires by rotation and being eligible offers themselves for re-appointment.

All the Independent Directors have given their declarations stating that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Listing Regulations.

During the period, Mrs. Anu Nair, Company Secretary (KMP) and Compliance Officer of the Company resigned effective from October 1 2, 201 9 and Mr. Rohit Taparia has been appointed as Company Secretary and Compliance Officer effective from April 01,2020.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Nomination and Remuneration policy enumerates the policy on Directors Appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director. Other details pertaining to the Nomination and Remuneration Committee have been provided in the Corporate Governance section of this Annual Report.

The Nomination and Remuneration policy of the Company is available on the Companys website, at http://www.anianicement.com/investor/corporateqovernance/Nomination_Remuneration_Policy1.pdf.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company.

AUDITORS

a) Statutory Auditors: The Statutory Auditors of your Company M/s Ramanatham & Rao have been re-appointed as Statutory Auditors for a second term of five years at the AGM held in year 2019. Further, in terms of the Notification issued by the Ministry of Corporate Affairs dated May 07, 2018, the proviso requiring ratification of the Auditors appointment by the shareholders at each AGM has been omitted.

b) Secretarial Auditor: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit for the financial year 2019-20, has been carried out by Mrs. Shailashri Bhaskar, Practising Company Secretary and continues to be the Secretarial Auditor for the Financial Year 2020-21.

c) Cost Auditor: In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Board of Directors, based on the recommendation of the Audit Committee, has appointed M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, as Cost Auditor of the Company for conducting the Cost Audit for the Financial Year 2020-21, on a remuneration of 200,000/- (Two Lakhs only) plus applicable taxes and out of pocket expenses. A resolution seeking Members ratification for the remuneration payable to the Cost Auditor forms part of the Notice of 36th Annual General Meeting. The company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, and accordingly such accounts and records are made and maintained.

The Auditors report and Secretarial Audit Report do not contain any qualifications, reservations or adverse remarks. Report of the Secretarial Auditor is annexed as Annexure V and is a part of this report.

AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report which is a part of this Report. During the year, all recommendations of the Audit Committee were accepted by the Board.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has fulfilled its obligation towards Corporate Social Responsibility for the financial year 2019-20, by spending a sum of 86,96,636 during the year. The report on CSR activities as required under Section 135 of the Companies Act, 2013 is given as Annexure IV, forming part of this Report. The CSR policy is available on the Companys website. For other details regarding the CSR committee please refer to the Corporate Governance Report.

RISK MANAGEMENT POLICY

The management of the Company is spearheaded by a Whole Time Managing Director and risk assessment and mitigation, forms a concurrent part of the management process. Periodical reviews of various operational, marketing and legal parameters affecting the Company, as per the Risk Management Policy is conducted and risk management and mitigating procedures are adopted on a continuous basis.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has in place a Whistle Blower Policy with a view to provide a platform for the directors and employees to report genuine concerns or grievances. The policy is available on http://www.anjanicement. com/investor/corporateqovernance/ViqilMechanism.pdf

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

The Company has framed Anti Sexual Harassment Policy. The same is available on the website of the Company at www.anjanicement.com. Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaint was filed during the financial year 2019-20.

BUSINESS RESPONSIBILITY REPORT

SEBI, vide its Notification no. No. SEBI/LAD-NRO/GN/2019/45 dated December 26, 2019, SEBI LODR (Fifth Amendment) Regulation, 2019, had mandated inclusion of Business Responsibility Reports(BRR) as part of the Annual Reports for top 1000 listed entities based on market capitalization as on March, 31 of every financial year. A detailed report on your Companys sustainability initiatives is published in the Business Responsibility Report which is forming part of Annual Report. The BRR describes the initiatives taken by the Company from an environment, social and governance perspective.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as provided under Sub-Section (3) of Section 92 of the Companies Act, 2013 ( the "Act") is enclosed as Annexure I in the prescribed form MGT-9 and forms part of this Report.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met Six times during the Financial Year 2019-20. The details of Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is within the stipulated time frame prescribed in the Companies Act, 2013 and SEBI (LODR) Regulations.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There have been no loans, guarantees and investments under Section 186 of the Act during the financial year 2019-20.

TRANSACTIONS WITH RELATED PARTIES

All related party transactions are entered on arms length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013. There are no materially significant related party transactions made by the Company with Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. In terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars of the material contract or arrangement entered into by the Company with related parties as referred to in Section 188 in form AOC-2 is attached as Annexure II of this report. However, the details of the transactions with the Related Parties are provided in the Companys financial statements in accordance with the Accounting Standards. Further, shareholders approval is obtained pursuant to Section 188 of the Companies Act, 2013 and Regulation 23(4) of the SEBI (LODR) Regulation, 2015 in AGM 2019 for company to enter into Material Related Party transactions with Chettinad Cement Corporation Private Limited ("CCCPL"). In the ensuing AGM it is proposed to fix a maximum aggregate value of 200 Crore per financial year starting from F.Y. 2020-21 for a period of three financial years for the Material Related Party Transactions. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes affecting the financial position of the Company. However, production and sales went down since last week of March 2020, due to breakout of the COVID-19 pandemic in the entire country due to which the Company had to temporarily suspend operations in its manufacturing unit / plant in the state of Telengana from March 23, 2020 to April 29, 2020 in compliance with order issued by the Government of Telangana and Central Government guidelines.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

a) Transfer of Unclaimed Dividend: As required under Section 124 of the Act, the Unclaimed Dividend amount aggregating to 6,81,016/- pertaining to the financial year ended on March 31, 2012 lying with the Company for a period of seven years was transferred during the financial year 2019-20, to the Investor Education and Protection Fund established by the Central Government.

b) Transfer of shares to IEPF: As required under Section 124 of the Act, 31,600 equity shares, in respect of which dividend has not been claimed by the members for seven consecutive years or more, have been transferred by the Company to the Investor Education and Protection Fund Authority (IEPF) during the financial year 2019-20. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.

Mr. Rohit Taparia, Company Secretary has been appointed as Nodal Officer of the Company effective from June 29, 2020.

PARTICULARS OF REMUNERATION

The information required under Section 197 of the Act and the Rules made there-under, in respect of employees of the Company, is as follows:-

The ratio of the remuneration of each director to the median remuneration of the employees of the

Company for the financial year;

Directors Ratio to Median Remuneration
Non-Executive Directors
Mrs. V. Valliammai

-

Mr. A. Subramanian (from 19.01.2020)

-

Mr. RM. Palaniappan (from 16.05.2019)

-

Mr. V. Palaniappan (from 16.05.2019)

-

Dr.(Mrs.) S.B. Nirmalatha

-

Mr. P Gopal (upto 15.05.2019)

-

Mr. V. Subramanian (upto 15.05.2019)

-

Executive Directors
Mr. N. Venkat Raju (from 24.01.2020) 2.41 times
Mr. A. Subramanian (upto 18.01.2020) 8.29 times

The median remuneration of the employees of the Company for the financial year 2019-20 is 4.85 lakhs.

The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer Company Secretary or Manager, if any, in the Financial year;

Directors Percentage Increase in Remuneration
Non-Executive Directors
Mrs. V. Valliammai

-

Mr. A. Subramanian (from 19.01.2020)

-

Mr. RM. Palaniappan (from 16.05.2019)

-

Mr. V. Palaniappan (from 16.05.2019)

-

Dr.(Mrs.) S.B. Nirmalatha

-

Mr. P Gopal (upto 15.05.2019)

-

Mr. V. Subramanian (upto 15.05.2019)

-

Executive Directors
Mr. N. Venkat Raju (from 24.01.2020)

-

Mr. A. Subramanian (upto 18.01.2020)

-

CFO and CS
Mr. M.L. Kumavat 7.50
Mrs. Anu Nair 12.00

The percentage increase in the median remuneration of employees in the financial year 2019-20 is 15.11%.

The number of permanent employees on the rolls of Company: 278.

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

On an average, salaries of employees increased by 11.52%.

There has been no change in the managerial remuneration for the year under consideration.

Statement containing Particulars of Employees pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing Particulars of Employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on all working

days (except Saturdays), up to the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such Statement may write to the Company Secretary at the Registered Office of the Company.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATORS, COURTS, TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN THE FUTURE

There has been no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations.

BOARD EVALUATION

Based on the parameters set out by the Nomination and Remuneration Committee the Board of Directors carried out an annual evaluation of its own performance, including that of its Committees and Individual Directors. Further, in a separate meeting of Independent Directors, the performance of non-independent directors, the Board as a whole and the Chairperson of the Company were evaluated. Performance of the independent Directors was evaluated by the entire Board excluding the directors being evaluated.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under 134 (3)(m) of the Companies Act, 2013 and the Rules prescribed thereunder are set out in Annexure III to this report.

SUBSIDIARY COMPANIES

Your Company has no subsidiaries within the meaning of Section 2(6) of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:-

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures are made from the same.

b) Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the period;

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

d) The annual accounts have been prepared on a going concern basis.

e) Appropriate Internal Financial Controls have been laid down and followed and such internal financial controls are adequate and operating effectively.

f) Proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

IMPACT OF COVID-19 PANDEMIC

The COVID-19 pandemic has resulted in a significant decrease in the economic activities across the country, on account of lockdown that started on March 23, 2020. The Government has ordered temporarily closure of all non-essential businesses, imposed restrictions on movement of goods/ material, travel etc. Further, Company had to temporarily suspend and close its operations in its Cement manufacturing Unit in the state of Telangana from March 23, 2020 to April 29, 2020 in order to control the community transmission/spread of Covid-19 pandemic. Looking at the nature of business, these restrictions had substantially reduced our manufacturing operations.

Your Company has implemented Work from Home Policy for its offices wherever possible. Further, strict COVID protection protocol have been implemented at all workplaces including the Plant. The workers are being provided mask during work, work place are getting sanitized regularly, reduced number of workers operating in shifts so that work place is not over crowded at one time etc. and if required, may close down its operation on directions from central/state government.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company.

ACKNOWLEDGEMENT

The Board of Directors wish to thank all the shareholders, statutory bodies and departments of the State and Central Government and Bankers, Suppliers, Customers and all employees for their valuable support to the Company.

On Behalf of the Board of Directors
Mrs. V Valliammai
Place: Chennai Chairperson & Director
Date: June 29, 2020 DIN: 01197421