p r cements ltd Directors report

P.R. CEMENTS LIMITED ANNUAL REPORT 2011-2012 DIRECTORS REPORT Your Directors have the pleasure of presenting this 27th Annual Report along with the Audited Financial Statements and the Auditors Report thereon for the Financial Year ended 30th June 2012. FINANCIAL PERFORMANCE: (Rs.) Particulars 2011-12 2010-11 Gross Total Income 212,066,703 206,424,767 Expenses 200,001,566 232,056,716 Profit/(Loss) before financial expenses, depreciation and taxation 12,065,138 25,631,949 Depreciation 6,719,856 33,587,272 Net Profit 12,065,138 160,437,762 BIFR: Members are aware that the net worth of the Company had been completely eroded and the Company was registered as sick industrial Company vide No. 57/2000 with BIFR. Honble BIFR approved the rehabilitation Scheme filed with it and passed the final order on 8th June, 2011 to implement the said Rehabilitation Scheme. And the Company is implementing the Scheme and approaching different government authorities to seek the grants and reliefs as directed by Honble BIFR in the Rehabilitation Package. DIVIDEND: Your Directors could not recommend any dividend for the financial year due to accumulated losses. DIRECTORS During the year Mr. Vangala Reddy Shyam Sunder and Mr. Venkateswara Rao Gudipudi retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Mr. Ch. Ramesh Babu has been submitted resignation to the office of the Director. Details of Directors seeking re appointment at the forthcoming AGM (In Pursuance of Clause 49 (IV) (G) (i) of the Listing Agreement) Particulars Vangala Shyam Sunder Reddy Date of Birth 08/08/1966 Date of Appointment 26/12/2011 Expertise in specific Excellent academic record with the high functional areas level proficiency and legal acumen and have more than 18 years of rich experience in the field of civil construction in India. Qualifications B.A. L.L.B. No. of Shares held as on March 31, 2011 Nil Directorships held in other companies (excluding private 2 limited and foreign companies) Particulars Gudipudi Venkateswara Rao Date of Birth 12/01/1959 Date of Appointment 26/12/2011 Expertise in specific functional Vast experience in general management areas of Companies. Qualifications B.Com, L.L.B. No. of Shares held as on March 31, 2011 Nil Directorships held in other companies 3 DIRECTORS RESPONSIBILITY STATEMENT: The Directors of your Company hereby report:- (i) That in the preparation of Annual Accounts for the year ended 30th June, 2012, the applicable accounting standards except AS-15, have been followed along with the proper explanation relating to material departures. (ii) That the directors have 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 at the end of the financial year ended 30th June, 2012 and of the profit and loss of the company for that period. (iii) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. (iv) That the directors have prepared the annual accounts on a going concern basis. FIXED DEPOSITS: During the Financial year, company has not accepted any deposits falling with the preview of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975. AUDITORS: M/s. Rambabu & Co, Chartered Accountants, the Statutory Auditors of your Company, who retires at the conclusion of the ensuing Annual General Meeting, and being eligible, expressed their willingness for re- appointment. The board recommends their re-appointment. AUDITORS QUALIFICATION: With regard to Point No. 9(b) of Annexure to Auditors Report, the outstanding sales tax amounts to old period during the period when the Company became sick and the Honble BIFR ordered the Department to consider the waiver of the same and the same is pending before the Authorities. PARTICULARS OF EMPLOYEES: There are no employees drawing remuneration exceeding the limits as specified under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO: 2011-12 2010-11 Conservation of Energy - Electricity - Purchased Units in Lakhs 6,555,746 7,286,713 - Total Rupees in Lakhs 28,047,839 32,914,043 - Rate per Unit 4.28 4.52 - Own Generation Nil Nil - Power Consumption for MT (in units) 97.35 103.94 Research and Development Nil Nil Technology Absorption Nil Nil Foreign Exchange Earnings and Outgo Nil Nil SECRETARIAL COMPLIANCE CERTIFICATE: Certificate from the Practicing Company Secretary as stipulated in Section 383A of the Companies Act, 1956 read with the Companies (Compliance Certificate) Rules, 2001, attached as Annexure-I to the Directors Report. MANAGEMENT DISCUSSION AND ANALYSIS: Management Discussion and Analysis is set out separately for the information of the shareholders in Annexure-II of the Directors Report CORPORATE GOVERNANCE: A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges is set out separately for the information of the shareholders in Annexure-III. ACKNOWLEDGEMENTS: Your Directors take this opportunity to record their appreciation for the continuous support and co-operation extended by the customers and bankers. The Directors also acknowledge the confidence reposed by the investors and shareholders in the Company. For and on behalf of the Board Date : 14.11.2012 K.S.N. PRASAD Place: Hyderabad MANAGING DIRECTOR ANNEXURE - I: FORM (See Rule 3) COMPLIANCE CERTIFICATE: C.No. L26940AP1984PLC005157 Cert. No. 0002201-2011 Authorized Capital: Rs.6,00,00,000 Paid up Capital: Rs.3,79,25,000 To The Members, M/s. P R CEMENTS LIMITED 29-13-28, Kaleswar Rao Road, Suryaraopet, Vijayawada-520002, Andhra Pradesh. I have examined the registers, records, books and papers of M/s. P R CEMENTS LIMITED (the company) as required to be maintained under the Companies Act, 1956 (the act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 30th June, 2012. In my opinion and to the best of my information and according to the information provided and examinations carried out by me and explanations furnished to me by the company, its officers and agents, I certify that in respect of the aforesaid financial year: 1. The Company has kept and maintained all registers as stated in Annexure A to this certificate, as per the provisions and the rules made there under and all entries therein have been recorded. 2. The Company has duly filed forms and returns as stated in Annexure B to this certificate, with the Registrar of Companies, Andhra Pradesh. 3. The Company being Public Limited Company during the period under review has minimum prescribed paid up share capital. 4. The Board of Director duly met 4 (Four) times on 12.08.2011, 14.11.2012, 14.02.2012 and 14.05.2012 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. 5. The company has closed its register of Members, and/or Debenture holders, however, not complied the provisions of the Act. 6. The Annual General Meeting for the financial year ended on 30/06/2011 was held on 26/12/2011 after giving due notice to the members of the company and the resolution passed thereat were duly recorded in Minutes Book maintained for the purpose. 7. No extra ordinary meetings were held during the financial year. 8. Based on representations, the Company has not advanced any loan to any loan to its directors and/or persons or firms or companies falling within the purview of Sec. 295 of the Act during the Financial Year under review. 9. Based on representations, the Company has not entered into any contracts falling within the purview of Sec. 297 of the Act during the Financial Year under review. 10. The company has made necessary entries in the register maintained under Sec.301 of the Act. 11. Based on representations, there were no instances falling within the purview of section 314 of the Act, the Company has not obtained any approvals from the Board of Directors, members or central Government. 12. The Company has not issued any duplicate share certificates during the financial year under review. 13. The company has: i. Duly delivered all certificates on lodgment thereof for transfer. ii. Not deposited any amount in a separate Bank account as no dividend was declared during the financial year. iii. Not posted any warrants to any member of the Company as no dividend was declared during the financial year. iv. No amounts lying with it in unpaid dividend account or any application money due for refund, matured deposits, matured debentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of seven years or more. v. Duly complied with requirements of Section 217 of the Act for the financial year under review. 14. The Board of Directors of the company is duly constituted; Mr. G. Venkateswara Rao, Mr. Vangala Reddy Shyam Sunder and Mr. Yarabolu Venkata Ramana Reddy were newly appointed as a Directors of the Company and Mr. Ch. Ramesh Babu, Mr. Bala Reddy Gopu, Directors of the Company were liable to retire by rotation, re-appointed as Directors in 26th Annual General Meeting held on 26th December, 2011; Mr. Ch. Ramesh Babu resigned in the Board Meeting held on 14th February, 2012 and the Company has filed respective forms with the Registrar of Companies, Hyderabad in this regard. 15. The Company has not appointed Managing Director, Whole-time Director/Manager during the financial year under review. 16. The appointment of sole selling agents was not made during the year. 17. As per the information provided no approvals were required to be obtained during the year from the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as may be prescribed under the various provisions of the Act. 18. The directors have disclosed their interest in other firms or Companies to the Board of Directors pursuant to the provisions of the Act and the rules made there under. 19. The company has not issued any shares during the financial year. 20. The company has not bought back shares during the financial year ending 30/06/2012. 21. The company has not redeemed preference shares/debentures during the year. 22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited/accepted any deposits including any unsecured loans falling within the purview of Section 58A of the Act, during the financial year 2011-12 24. The amount borrowed by the company from directors, members, public, financial institutions, banks and others during the financial year ending 30/06/2012 is within the borrowing limits of the company. 25. The company has not made loans and investments or given guarantees or provided securities to other bodies corporate. 26 The company has not altered the provisions of the memorandum with respect to situation of the companys registered office from one state to another during the year. 27. The company has not altered the provisions of the memorandum with respect to the objects of the company during the year. 28. The company has not altered the provisions of the memorandum with respect to name of the company during the year. 29. The company has altered the provisions of the memorandum with respect to share capital by increasing the Authorised capital of the company during the year under review and duly complied with the relevant provisions of the Act. 30. The company has altered its articles of association with respect to Authorised Capital during the period under review and duly complied with relevant provisions of Act. 31. As per the information provided no prosecution was initiated against or no show cause notice was received by the company for alleged offences under the Act and no fines and penalties or any other punishment imposed on the company. However additional fee was collected on the documents filed with delay. 32 The company has not received any security deposit from its employees during the year. 33. As per the information available the company has not created any provident fund for its employees or class of employees and hence the provisions of Sec 418 are not applicable. Place: Hyderabad Karra SVS Sastry Date : 14/11/2012 Practicing Company Secretary C.P. No. 11331 ANNEXURE A Registers as maintained by the Company: 1. Share Transfer Register U/s. 108 of the Companies Act, 1956 2. Register of Members and Index u/s.150 of the Companies Act, 1956 3. File regarding Annual Returns u/s. 163 4. Minutes of Board Meetings and General Meetings u/s. 193 5. Books of Accounts u/s. 209 6. Register of Contract in which Directors are interested u/s.301 7. Register of Directors u/s. 303 8. Register of Directors Shareholding u/s. 307 9. Register of charges 10. Fixed Assets Register 11. Other Registers ANNEXURE B Return and Documents filed with Register of companies: The Company has filed following Forms with the Registrar of Companies, Andhra Pradesh. Sl. Forms/Returns Section Purpose Remarks No. 1. Form-32 303 Resignation of Filed with ROC with Director normal Fees on 21/02/2012 2. Form-32 303 Appointment of Filed with ROC with Directors additional Fees on 25/01/2012 3. Form-5 97 Increasing Filed with ROC with Authorized Capital normal Fees on 25/01/2012 4. Form-23 192 Special Resolution Filed with ROC with normal Fees on 25/01/2012 5. Annual Return 159 As on 30/06/2011 Filed with ROC with Form-20B Additional Fees on 19/03/2012 Place: Hyderabad Karra SVS Sastry Date : 14/11/2012 Practicing Company Secretary C.P. No. 11331 ANNEXURE-II MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC REVIEW INDIAN ECONOMY: The Indian economy has undergone a tough phase in the year 2011-12. The growth was impacted by both the deteriorating global economy and various domestic issues like high interest rates, inflation, infrastructure constraints, lack of political consensus and liquidity crunch among others. Besides, a fragile external account has caused depreciation of rupee in the backdrop of volatile global risk sentiment. Indian GDP growth is restricted to 6.5% (at factor costs) in financial year 2011-12. OUTLOOK: The Union Budget 2012-13 has announced measures to augment the supply side response of the economy to maintain price stability and growth. The service sector comprising 57% of GDP is expected to come down from 9.4% in 2011-12 to 8.7% in 2012-13 on account slackening demand from hotels, transportation, communication, community, social and personal services. The industrial segment on the other hand is expected to improve from 4.5% in 2011-12 to 5.6% in 2012-13 on account of expected money easing by RBI. The agricultural sector is expected to clock in a flat growth of 3% in 2012-13 in the event of normal monsoon. Considering these domestic factors and a mild improvement in global macro- economic scenario, the GDP growth is expected to return back to the levels of 7% in 2012-13 INDUSTRY STRUCTURE AND DEVELOPMENTS: The financial year 2011-12 has been one of great challenges to the Indian Economy. The challenge of sustaining the economic growth amid constraints of price stability ultimately resulted in the slowdown in growth to less than 7% after nearly five years of consistent growth. The Agriculture and Services sector continued to show healthy growth and the slowdown can be fully attributed to the Industries sector. But considering the turmoil in major world economies, India still can be said to be in a more healthy scenario poised for an upward movement in growth. The Cement Industry showed a reduced growth of around 7% in tune with the reduced Industrial growth. Cement production and dispatches during the financial year 2011-12 grew by about 6.50%. The capacity grew by about 2.5%, but the capacity utilization was again less than 80%. OPPORTUNITIES, THREATS, RISKS, CONCERNS AND OUTLOOK: It has been estimated that by 2016-17, the Demand for Cement in India would be to the tune of 407 Million Tonnes based on the estimate that the economy would grow at the rate of 9% during the XII Plan period of 2012-13 to 2016- 17. This entails a growth chart for Cement Industry in excess of 10%. The Cement Industry has been actively advocating concretizing/White Topping of roads in the country as Cost effective in terms of longevity and economical in maintenance. The Central and State Governments is fast realizing the benefits of Concrete Roads/White topping and it is expected that Indian Roads in the future would be increasingly concrete. Notwithstanding any major volatility in the world economy and its cascading effect in the Indian Economy, the future looks to augur well for the Indian Industry and Cement in particular. Your Company is primarily engaged in manufacture and sale of OPC 53 Grade Cement. The plant is strategically located at Yepala Madhavaram of Mallacheruvu Mandal of Nalgonda District, A.P and, it is nearly 228 Kms from Hyderabad and 28 Kms from Kodada on the Hyderabad-Vijayawada National high way, and having easy access to supply all over AP, Chennai, Karnataka and Orissa markets. The plant is having a capacity of 300TPD, operating with Vertical Shaft Kiln Technology. The major strength of the company is for its high quality of the product and its location. In spite of acute power cuts, the Company has achieved 68 % production capacity. 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 the transactions which ensures that every transaction is properly authorized and executed according to the norms. The Company has developed an in-house Internal Audit Department which is contributing to the continuous process of sharpening the Internal Control mechanism by introduction of various concurrent audit systems and facilitating regular evaluation of the system by the management. INDUSTRIAL RELATIONS: The Employees at all ranks of the Company have been extending their fullest co-operation for the smooth conduct of the affairs of the Company and maintenance of cordial Industrial relations. The Directors wish to place on record their appreciation to the employees of the Company at all levels. CAUTIONARY STATEMENT: 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 the Companys operations include global and domestic supply and demand conditions affecting the selling prices of finished goods, availability of inputs and their prices, changes in the government regulations, tax laws, economic developments within the country and outside and other factors such as litigations and Industrial relations. The Company assumes no responsibility in respect of the forward looking statements which may undergo changes in the future on the basis of subsequent developments, information or events.