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Your Directors take pleasure in presenting the Thirty Fourth Annual Report and the Audited Accounts of the Company for the year ended March 31, 2018.
FINANCIAL RESULTS AND STATE OF COMPANYS AFFAIRS
( Rs in Lakhs)
|Year Ended||Year Ended|
|Revenue from Operations (Gross)||37,359||36,010|
|Profit before Interest, Depreciation||6,068||8,369|
|Profit/(Loss) Before Tax||3,568||5,719|
|Provision for Taxation including deferred Tax||1,224||1,231|
|Profit/(Loss) After Tax||2,344||4,488|
|Debenture Redemption Reserve||0.00||500|
|Dividend Distribution Tax||51.48||51.48|
Your Directors have recommended a final dividend of Rs 2/- per equity share for the financial year 2017-18. The Dividend subject to the approval of the shareholders at the ensuing AGM, will be paid within the time stipulated as per the Companies Act, 2013. The dividend will absorb an amount of Rs 609.66 lakhs, including Dividend Distribution Tax of Rs 103.95 lakhs.
PERFORMANCE OF THE COMPANY
|PRODUCTION in M.T||SALES in M.T|
This is covered under the topic Management Discussion and Analysis.
MANAGEMENT DISCUSSION AND ANALYSIS Industry Structure and Developments
In 2017 the world economy has shown a growth of over 3.5%, a very promising growth trajectory. However in the long term any positive growth will have to be substantiated with suitable trade and investment policies. The Indian scenario has also been promising and almost in line with the growth of the world economy. With the effects of the GST and demonetization being wiped away slowly the Indian economy with a GDP growth of 6.3 percent has signaled a turnaround for the Country.
Opportunities, Threats, Risks, Concerns and Outlook
Budget 2018-19 has announced a setting up of affordable housing fund of Rs 25,000 crores under the National Housing Bank . This will be utilized to provide relief on interest rates for housing schemes. Under Prime Minister Awas Scheme Rural, 51 lakhs houses in year 2017-18 and 51 lakh houses during 2018-19 work to be constructed exclusively in rural areas. In urban areas the assistance has been sanctioned to construct 37 lakh houses. The keen interest of the Government in infrastructure development along with the above signals a definite turnaround in the fortunes of the Cement Industry.
However having said this, with the additional capacities that have come up in various states, both greenfield and brownfield, have created a scenario of extreme competition in the Cement Industry. The excess supply situation thus created would further adversely impact the price realisation. The ever increasing cost of pet coke and coal has also added to the stifling scenario in the Cement Industry. Without substantial increase in demand in the last few years, the Cement industry has been facing a twin fold blow, by not being able to absorb its fixed cost completely due to lower capacity utilizations and dealing with reducing price realization.
Segment wise or Product Performance
The Company has following business segments, which are its reportable segments during the year. These segments offer different products and services, and/or managed separately because they require different technology and production processes.
|Reportable Segment||Product/ Services|
|Cement||Manufacturing and trading of cement|
|Power plant||Generation of power|
Year ended March 31, 2018
Year ended March 31, 2017
|Less : Inter Segment Revenue||(4,976)||(4,976)||(961)||(961)|
|Total Revenue from Operations||37,359||-||37,359||36,010||-||36,010|
|Segment Result (Profit Before Tax||3,069||1,124||4,193||6,663||-||6,663|
|and Interest) from each Segment|
|Less : Interest||(625)||(944)|
|Total Profit Before Tax||3,568||5,719|
|Capital Employed (Segment||
As at March 31, 2018
As at March 31, 2017
|Assets - Segment Liabilities)|
Internal Control System and their adequacy
The Company has got an adequate system of internal control in place commensurate with the size of its operation and is properly designed to protect and safeguard the assets of the Company. There is a proper system for recording all transactions which ensures that every transaction is properly authorized and executed according to norms.
The Company has also appointed M/s M. Bhaskara Rao & Co., Chartered Accountants as Internal Auditors to conduct the Systems and Compliance Audit of the Company.
Financial Performance in comparison to Operational Performance
In the Financial year 2017-18, the Companys production level touched 9.18 lakh tons, which reflects a growth of 8.10% year on year.
The volume of Cement sales was at 9.27 lakh tons recording a growth of 9.05%. This was mainly because of significant efforts made by the Company in Andhra Pradesh and Telangana cement market. Even in the face of a reduction in sales realization, cement sales revenue grew 3.75% to 37,359 lakhs, mainly on account of increased sale volumes. Though the Company rationalized its finance costs during the year by repaying its first installment of NCD (which became due for repayment during the year) through internal accrual and efficient utilization of working capital limits, decrease in cement price realization coupled with steep hike in coal prices lowered the PBT of the Company by 37.61%.
Material Development in Human Resources/Industrial Relations front, including number of people employed
The Industrial relation during the current year has been cordial and contributed to mutual development. The number of personnel in direct employment of the Company are 276.
Captive Power Plant
The Gross power generation from the 16MW Captive Thermal Power Plant during the year under review was 821.29 lakh units as against 184.88 lakh units in the previous year, with an auxiliary consumption of 68.87 lakh units as against 16.30 lakh units in the previous year. The Net generation for the current year was 752.42 lakh units as against 168.58 lakh units last year.
INTERNAL FINANCIAL CONTROLS WITH RESPECT TO FINANCIAL STATEMENTS
M/s M. Bhaskara Rao & Co., Chartered Accountants, conduct the Internal Audit for your Company. Along with the Companys self-assessment procedures the Internal auditors on a regular basis check on the internal financial controls developed to ensure that they are working effectively and give the Management opinions in case of improvements required.
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 Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
A detailed report on Corporate Governance as required under the Listing Regulations is provided as Annexure VI and forms part of this report.
DIRECTORS AND kEY MANAGERIAL PERSONNEL
The Board of Directors at their meeting held on May 25, 2017 appointed Mrs. V. Valliammai, as an Additional Director in an Independent position. The appointment was approved by the shareholders at the Thirty Third Annual General meeting held on September 8, 2017.
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.
The Nomination and Remuneration policy enumerates the policy on Directors Appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director. The policy is given as Annexure I forming part of this Report. The policy is also available on the Companys website, www.anjanicement.com.
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.
a) Statutory Auditors: Your Company at its Thirty Second Annual General Meeting held on September 9,2016 had appointed M/s Ramanatham & Rao, Chartered Accountants (Firm Registration Number S-2934) as Statutory Auditors of the Company up to the conclusion of the Thirty Fifth Annual General Meeting at a remuneration as may be fixed by the Board of Directors and Audit Committee in consultation with the Auditors thereof.
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 has been carried out by Mrs. Shailashri Bhaskar, Practising Company Secretary.
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 2018-19, on a remuneration as mentioned in the Notice of 34th Annual General Meeting. A resolution seeking Members ratification for the remuneration payable to the Cost Auditor forms part of the Notice of 34th Annual General Meeting and the same is recommended for your consideration and ratification.
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 RECOMMENDATION
During the year, all recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
During the year under review your Company has fulfilled its obligation towards Corporate Social Responsibility by spending a sum of Rs 76,80,483 during the year. The report on CSR activities as required under Section 135 of the Companies Act, 2013 is given as Annexure II, forming part of this Report. The CSR policy is available on the Companys website, www.anjanicement.com.
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 procedures. Periodical reviews of various operational, marketing and legal parameters affecting the Company is conducted and risk management and mitigating procedures are adopted on a continuous basis.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE.
Your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention, Prohibition and Redressal) Act 2013 and the rules framed there under. The details of the Policy are uploaded on the website of the Company www.anjanicement.com.
No complaint was filed during the financial year 2017-18.
Your Company had in November, 2014, allotted 600 Rated, Taxable, Secured, Guaranteed, Listed Redeemable Non-Convertible Debentures of the Face Value of Rs 10,00,000 each (Rupees Ten Lakhs Only) for a total size of Rs 60 crores (Rupees Sixty Crores Only), structured in form of two different series of Rs 30 crore (Thirty crore only) each on a Private Placement basis.
Pursuant to the Information memorandum 300 debentures were redeemed on November 14, 2017, subsequently the remaining 300 debentures were redeemed on April 13, 2018. The Company now has no outstanding debentures as on the date of this report.
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 IV 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 five times during the Financial Year 2017-18. The details of Board Meetings are provided in the Corporate Governance Report. The intervening gap 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 2017-18.
TRANSACTIONS WITH RELATED PARTIES
The Company has not entered into contract / arrangements with related parties pursuant to provisions of Section 188 (1) of the Act read with Section 134(h) of the Act, in the financial year 2017-18.
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 and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statement relates and the date of the report.
PARTICULARS OF REMUNERATION
The information required under Section 197 of the Act and the Rules made thereunder, 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|
|Mrs. V. Valliammai||-|
|Mr. P. Gopal||-|
|Mr. V. Subramanian||-|
|Dr. (Mrs.) S.B. Nirmalatha||-|
|Mr. A. Subramanian||13.01 times|
The median remuneration of the employees of the Company for the financial year 2017-18 is Rs 3.69 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:
|Name of Person||Percentage Increase in Remuneration|
|Mrs. V. Valliammai||-|
|Mr. P. Gopal||-|
|Mr. V. Subramanian||-|
|Dr. (Mrs.) S. B. Nirmalatha||-|
|Mr. A. Subramanian||-|
|CFO and CS|
|Mr. M.L. Kumavat||18|
|Mrs. Anu Nair||18|
The percentage increase in the median remuneration of employees in the Financial year 2017-18 is 16.53%.
The number of permanent employees on the rolls of Company: 276.
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 13.52%.
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), upto 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.
The Nomination and Remuneration Committee set out the parameters based on which Board carried out an annual evaluation of the performance of the Board, Committees and Individual Directors. Some of the parameters for the same were effective communication, adequacy of knowledge, investment of time etc. The Board as a group discussed, evaluated and graded themselves on the parameters provided. The performance of the Board, Committees and Individual Directors was found to be satisfactory and was found helping the Company in improving its performance.
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.
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.
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.
Statements made in this report, including those stated under the caption "Management Discussion and Analysis" describing the Companys objectives, expectations or projections may constitute "forward looking statements" within the meaning of applicable securities laws and regulations.
Important factors that could influence Companys operations include global and domestic supply and demand conditions affecting the selling price of finished goods, availability of inputs and their prices, changes in government regulations, tax laws, economic developments within the country and outside and other factors such as litigations and Industrial relations.
The Company assumes no responsibilities in respect of the forward looking statements which may undergo changes in the future on the basis of subsequent developments, information or events.
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
|A. Subramanian||Mrs.V. Valliammai|
|Place: Chennai||Managing Director||Director|
|Date: August 8, 2018||(DIN: 06693209)||(DIN: 01197421)|