DIRECTORS' REPORT : To The Members Your Directors have pleasure in presenting the 59lh Annual Report and Audited Statements of Accounts for the year ended 31s1 March, 2015 OPERATIONS: The company has produced during the year 2014-15, 2,45,779 M.Tonnes of cement as against 1,40,298 M. Tonnes produced during the previous year. The performance of the Company has improved during the second half of the financial year. The major factor for improved performance was due to favourable market conditions and manufacture of slag cement. The gross sales for the year under report was Rs. 11265.10 lakhs as against Rs.6175.91 lakhs in the previous year. The Net Loss after tax for the year was Rs.1515.54 lakhs as against net loss (before exceptional income of Rs. 3246.78 Lakhs and net loss of Rs. 425.81 lakhs in the previous year after exceptional income of Rs. 2820.97 Lakhs. As stated in our last year Annual Report, the developer Greenage Griha Nirman Private Limited (formerly known as Bhimsankar Realtors Private Limited) has completed the first phase of construction of four blocks and the remaining six blocks in second phase will be completed before 31st December, 2015. MODERNISATION OF THE CEMENT UNIT: The modernization works for improving the efficiency and productivity to reduce the operational costs and cutting down of logistics has been shelved to stabilize the operations of the unit. DIVIDEND: Your Directors regret their inability to recommend any dividend on Equity Shares in view of the carry forward losses. Consequently the payment of dividend in respect of Redeemable "C Cumulative Preference Shares held by the Financial Institutions also has been passed over. FIXED DEPOSITS: The Company has not accepted any Fixed Deposit during the year and there are no fixed deposits outstanding as on 31st March, 2015. INSURANCE: The assets of the Company are adequately insured. CURRENT YEAR PROSPECTS: The efforts taken by the management to improve the performance of the company has started yielding improved results. We expect that the demand for cement during the current financial will also continue due to initiatives by the new Government such as housing for all, smart cities, Swachh Bharat campaign, infrastructure spending, concrete road initiatives and an increase in allocation of funds to states are likely to see a positive impact on the Cement Industry. INDUSTRIAL RELATIONS: Company's Industrial Relations continue to be harmonious and cordial. EMPLOYEES: Your Directors wish to place on record their sincere appreciation of the whole-hearted co operation extended and the valuable contribution made by the employees at all levels. AUDITORS: M/s. Brahmayya & Co., Chartered Accountants, Adoni, were appointed as Statutory Auditors of the Company for a term of 3 years upon the recommendation of the Audit Committee at its meeting held on 13th August, 2014 by the Board in its meeting held on 13th August, 2014, subject to the members ratification every year to comply with the Section 143 of the Companies Act, 2013. Accordingly, a resolution for ratification by the members will be placed at the ensuing Annual General Meeting and will be effective upto the next Annual General Meeting. AUDITOR'S REPORT: As regards non-provision of gratuity, superannuation and leave encashment liability on actuarial valuation, it is provided on retirement of employees on a consistent basis and the liability is not ascertained. As regards non-remittance of undisputed statutory dues as mentioned in para vii(a) of Annexure to Auditors' Reportand dues to banks as mentioned in para (ix) of the An nexure to the Report, the Company is clearing the statutory dues in a faced manner and dues to banks were paid after 31-03-2015. COST AUDIT: The Cost Audit is not applicable for the financial year 2014-15, as the Gross Turnover of the Company was below Rs.100.00 crores during the previous financial year pursuant to Section 148 of the Companies Act, 2013. In accordance with the Companies (Cost Audit Report) Rules, 2011, the Cost Audit Report in XBRL for the financial year ended 31st March, 2014 was filed vide SRN NO.S37744216 with the Ministry of Corporate Affairs, New Delhi. DIRECTORS: In terms of the Articles of Association of the Company, Dr.R.K.Prasad Sunkara and Smt. V.Aravinda Rani will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Sri A.V. Narasimha Reddy has resigned as a Director of the Company on 20th April, 2015. The Board placed on record its appreciation for his active participation and advice during the deliberations of Board and Audit Committee during his tenure of office. Pursuant to provisions of 149, 152 and other applicable provisions, if any of the Companies Act, 2013 read with schedule IV to the Act, Sri Jayarama Reddy Pedireddygari (DIN NO.07053207) was appointed as an Independent Director of the Company to hold the said office for a period of five years with effect from 30th Otober, 2014 to 29th October, 2019. KMPS OTHER THAN DIRECTORS: In accordance with the provisions of the Companies Act, 2013 and Listing Agreement with the Stock Exchange, Sri S.Nageswara Reddy has been appointed as Chief Financial Officer of the Company w.e.f.30th March, 2015. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility statement, it is hereby confirmed: a) that in preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the statement of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review; c) that the Directors have 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. d) that the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a "going concern" basis. AUDIT COMMITTEE: The Audit Committee continues to function to comply with the provisions of Clause 49 of the Listing Agreement and other statutory provisions. The Audit Committee was reconstituted with the following members Sri P.Jayarama Reddy, Sri V.Ramnath and Sri A.V.Narasimha Reddy. Sri P.Jayarama Reddy is the Chairman of the Audit Committee. The Audit Committee met four times during last year and reviewed the Internal Audit Reports and quarterly results. CORPORATE GOVERNANCE: Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your company was in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchange relating to Corporate Governance. A separate report on Corporate Governance is incorporated along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and are given separately as a part of the Directors' Report. Further as a part of the report, "Management Discussion and Analysis" has also been furnished. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO: The information required under section 134(3)(1) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 with respect to these matters are set out in the Annexure I and forms part of the report. COMPLIANCE WITH LISTING AGREEMENT: Clause 43A: The Equity/Preference Shares of the Company are listed on the Bombay Stock Exchange Limited and the annual listing fee was paid to the said Stock Exchange for the financial year 2015-16 on 3rd May, 2015. Cash Flow statement is attached as Annexure II and forms part of this report. Statement concerning development and implementation of Risk Management Policy of the Company. A Special Team with Senor Executives has been formed which has been entrusted with the responsibility to assist the Managing Director in (a) Over seeking and approving the Company's enterprise risk management frame work, and (b) Overseeking that all the risks that the operation faces such as strategic, financial, credit market, liquidity, security, property, ITJegal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Management and business the Company. The Company has introduced several improvements to Integrated Enterprise Risk Management, Internal controls, Management and Assurance frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. This integration is enabled by all three being fully aligned across country wide Risk Management, Internal Control and Internal Auditor methodologies and processes. Details of Policy developed and implemented by the Company on its Corporate Responsibility initiatives The Company has taken various Corporate Social Responsibility (CSR) activity around the factory site since its inception. The Company has taken appropriate steps to the possible extent to implement CSR activities for the development of areas surrounding the company in particular and other areas in general. A well documented CSR Policy has been drafted by a Team of Senior Executives of the Company and the same was approved by the Board in its meeting held on 30th March, 2015. Particulars of Contracts or Arrangements made with Related Parties: During the course of its business, the company is dealing with the Group Companies which are Related Parties pursuant to Section 188 of the Companies Act, 2013. According to Standard 18 and clause 49 of the Listing Agreement for Sale, Purchase, Lease Rental Transactions, services availed / provided and monetary value of the transactions are mentioned in notes to Accounts Point No.25.9 to comply with Accounting Standards 18 and other applicable provisions of the Companies Act, 2013. All the Related party transactions were on arm-length. Extraction or comments on qualifications, reservations or adverse remarks or disclosures made by the Auditors and the Practicing Company Secretary in their Reports Statutory Auditors of the Company and the Practicing Company Secretary, who have conducted statutory audit and Secretarial Audit have not made any adverse comments on the activities of the Company for the financial year 2014-15. Company's Policy relating to Directors appointment, payment of Remuneration and discharge of their duties. The Nomination and Remuneration Committee has been constituted by the Board in its meting held on 30th March, 2015 to ensure the appointment of persons having vide exposure in their fields, having independence as defined in the Act to be available for appointment as Director (The Committee always keeps a list of eminent persons having independence available for the Company's requirement depending upon vacancy on the Board). As regards remuneration payable to Wholetime Directors including Chairman and Managing Director, the Board will take collective decision within the parameter of various statutes including Companies Act, 2013 and Listing Agreement. The Committee will follow the Company's policy to discharge its duties whenever necessity arises. It will not be out of place to mention that the set policy being followed since inception of the Company to ensure transparency. Internal Financial Controls: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. Secretarial Auditor: The Board has appointed M/s.GM.V.D.R. and Associates, Practicing Company Secretaries to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith The Secretarial Auditor Report does not contain any qualification, reservation or adverse remark. Annual Return in Form MGT-9 format: The details of Annual Return in MGT-9 format is enclosed Subsidiaries, Joint Ventures and Associate Companies:. The Company is not having any Subsidiaries, Joint Ventures and Associated Company. Declaration of Independent Directors: The Company has received the necessary declaration from each Independent Directors in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Evaluation: The Board evaluated the effectiveness of its functioning and that of the Committees and individual Directors by seeking their inputs on various aspects of Board/Committee Governance. The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long term strategic planning and the fulfillment of Directors' obligation and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee Meetings. The Chairman of the Board has one-on-one meetings with the independent directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with the Executive and Non-Executive Directors. These meetings were intended to obtain Directors' inputs on effectiveness of Board/Committee processes. The Board considered and discussed the inputs received from the Directors. Further, the independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and Non-Executive Directors. Disclosure as per the Sexual Harassment of Women at workplace{Prevention, Prohibition and Redressal) Act, 2013. The Company has zero tolerance towards sexual harassment at the work place and 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 thereunder. The Company has no such cases of sexual harassment at workplace. Vigil Mechanism: The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics and Compliance Task Force comprising Senior Executives of the Company, Protected disclosures can be made by a whistle blower through an e mail or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on Vigil Mechanism and whistle blower policy may be accessed on the company's website at the link <http://www.panyamcements.com>. ACKNOWLEDGEMENTS: Your Directors are happy to acknowledge the financial assistance given to the Company by the Banks. Your Directors also express their thanks to the various Central and State Government Departments and the shareholders for their support and help extended during the year. By Order of the Board of Directors For Panyam Cements & Mineral Industries Ltd S. SREEDHAR REDDY Managing Director Place: Nandyal Dt:- 12th August, 2015 |