DIRECTORS' REPORT Dear Shareholders Your Directors present the 70th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2014. FINANCIAL PERFORMANCE The Gross turnover of the Company during the year under report at Rs. 46,045 lacs was higher by about 24% against the turnover of Rs. 37,263 lacs in previous year. Increased volume supported with the increase in unit realization has contributed significantly. The PBIDT has turned in to positive as compared with the previous year. It would have been much better but for the reasons explained under Management Discussions and Analysis, forming part of the Report. PRODUCTION AND SALES Production and Sales during the year under review are as under: Output of the Clinker and Cement during the year 2014 was 6.99 lacs MT and 10.04 lacs MT respectively as against 7. 30 lac MT and 8.94 lac MT in 2013. Clinker production during the year under report was much lower than budgeted due to frequent stoppage of process during the period April 2014 till August, 2014. It had adversely affected the productivity. The Company had taken major steps for stability and improvement in Clinker production. The positive impact from the initiatives taken by your Company is expected to be felt from the year 2015 onwards. Your Company had produced ever highest Cement production at 10.04 lacs MT during the year. There has not been any change in the nature of the business of the Company. DIVIDEND In view of the accumulated losses Your Directors does not recommend any dividend on Share Capital. NUMBER OF THE MEETINGS OF THE BOARD The details of the Board meetings held during the year 2014 are as under: a. Meetings of the Board of Directors: Date of the meeting Place of the Meeting 27th February, 2014 Mumbai 23rd April, 2014 Digvijaygram 12th August, 2014 Mumbai 12th November, 2014 Mumbai b. Meetings of the Audit Committee of Directors: Date of the meeting Place of the Meeting 27th February, 2014 Mumbai 23rd April, 2014 Digvijaygram 12th August, 2014 Mumbai 12th November, 2014 Mumbai c. Meetings of the Nomination and Remuneration Committee of Directors: Date of the meeting Place of the Meeting 27th February, 2014 Mumbai 23rd April, 2014 Digvijaygram Meeting of the Corporate Social Responsibility Committee of Directors: Date of the meeting Place of the Meeting 14th October, 2014 Digvijaygram Meeting of the Stakeholders Relationship Committee of Directors: Date of the meeting Place of the Meeting 27th February, 2014 Mumbai 12th November, 2014 Mumbai DIRECTORS' RESPONSIBILITY STATEMENT As stipulated in Section 134 (3) (c) read with sub section 5 of the Companies Act, 2013, Directors subscribe to the "Directors Responsibility Statement" and confirm that: (a) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; (b) the Directors had 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 2014 [as on 31st December 2014] and the profit and loss of the Company for that year; (c) 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; (d) the Directors had prepared the annual accounts of the Company on a going concern basis; (e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operational effectively; and (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DECLARATION BY INDEPENDENT DIRECTORS Declaration given by Independent Directors meeting the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 is received and taken on record. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Company has a "Nomination and Remuneration Committee of Directors" in place. The Committee reviews and recommend to the Board for remuneration for Directors and key Managerial personnel and other employee up to one level below of Whole Time Director. The Company does not pay any remuneration to the Directors of the Company other than sitting fee for attending the meetings of the Board and Committees of the Board. Non-executive Director do not take any sitting fee for attending such meetings. Remuneration to the Whole-time Director is governed under the relevant provisions of the Act and approvals. AUDITORS' REPORT The observations made in the Auditors' Report are self-explanatory and do not call for any further comments u/s 134(3)(f) of the Companies Act, 2013 LOANS, GUARANTEES OR INVESTMENTS Your Company has neither given any loan or guarantee nor has made any investment during the year under report attracting the provisions of Section 186 of the Companies Act, 2013. DEPOSITS Your Company has neither accepted any deposits during the year under report nor did any deposits remain unpaid or unclaimed at the end of the year. CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES Details of Contracts/arrangement with the Related Parties are appearing under note no. 33b and form part of this report. All related party transactions that were entered into during the year under report were on arm's length basis and were in the ordinary course of business. The related party transactions made by the Company with Promoter Company, have no potential conflict with the interest of the Company at large. Related party Transactions are placed before the Audit Committee as also to the Board for approval. The Policy on Related party Transactions as approved by the Board is uploaded on the Company's website. The Company management ensures total adherence to the approved Policy on Related Party Transactions to establish Arm's Length Basis without any compromise. MATERIAL CHANGES AND COMMITMENTS There have not been any material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company as on 31st December, 2014 and the date of this report i. e. 25th February, 2015. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 134 (3) (m) of the Companies Act, 2013 are annexed and form part of this report. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In term of Section 136 of the Act, the Report is being sent to all shareholders and others entitled thereto, excluding the aforesaid information and the said particulars are available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. The members interested in obtaining such particulars may write to the Company Secretary. RISK MANAGEMENT POLICY The Company is aware of the risks associated with the business. It regularly analyses and takes corrective actions for managing / mitigating the same. Your Company's Risk management framework ensures compliance with the provisions of Clause 49 of the Listing Agreement. Your Company has institutionalized the process for identifying, minimizing and mitigating risks which is periodically reviewed. Some of the risks identified and been acted upon by your Company are: Securing critical resources; ensuring sustainable plant operations; ensuring cost competitiveness including logistics; completion of CAPEX; maintaining and enhancing customer service standards and resolving environmental and safety related issues. CORPORATE SOCIAL RESPONSIBILITY [CSR] Your Company aims to remain essential to the society with its social responsibility, strongly connected with the principle of sustainability, an organization based not only on financial factors, but also on social and environmental consequences. It is responsibility of your Company to practice its corporate values through its commitment to grow in a socially and environmentally responsible way, while meeting the interest of Stakeholders. Your Company had contributed and still contributing towards development of public facilities like opening of Education Centers, Health Centers, improvement in living standard and upliftment of communities comprising weakest section of Rural section with no access to basic amenities. As required under Section 135 of the Companies Act, 2013 and to demonstrate the responsibilities towards Social upliftment in structured way, the Company has formed a Policy to conduct the task under CSR with following composition: A. Members of the Committee: 1. Mr. A. K. Chhatwani - Independent Director 2. Mr. A. Kumaresan - Independent Director 3. Mr. Chai Singh Jasol - Whole-Time Director 4. Mr. S. N. Malpani - Secretary to the Committee The Committee is supported with an Executive Committee comprising of senior officers of the Company from different departments. B. Activities undertaken by the Committee: As stipulated under Schedule VII of the Companies Act, 2013, the Company has undertaken following activities under CSR compliance: 1. Promotion of education and education facilities up-gradation. 2. Promoting gender equality and empowering women. 3. Combating human immune - deficiency virus acquired immune deficiency syndrome, malaria and other disease. 4. Ensuring environmental sustainability. During the year under report, the Company has spent a sum of Rs. 17.30 lacs towards CSR activities in line with the compliance with Section 135 of the Companies Act 2013. DIRECTORS/KEY MANAGERIAL PERSONNEL Mr. Osvaldo Ayres Filho, a Director of the Company has resigned from the office of Director. The casual vacancy caused by his resignation is filled up by the Board of Directors by co-opting Mr. Persio Morassutti in his place. Your Board takes this opportunity to acknowledge the efforts and the contributions of Mr. Osvaldo to the Company during his tenure on the Board. Mr. Carlos Eduardo de Arruda Boggio, a Director is retiring by rotation, and being eligible, offer himself for reappointment. Mr. A. K. Chhatwani and Mr. A. Kumaresan the Independent directors of the Company were appointed by the Company at the Sixty-ninth Annual General Meeting held on 23rd April, 2014. Their appointment was liable to retire by rotation. As per the provisions of Section 149 and 152 of the Companies Act, 2013 ("the Act"), effective from 1st April, 2014 Independent Directors shall not be liable to retirement by rotation. Accordingly appointment of the existing Independent Directors under Section 149 of the Act and Clause 49 of the Listing Agreement to hold office for 5 (Five) consecutive years for a term is recommended for consideration and approval by the members. A brief resume of the above mentioned Directors being appointed are attached to the Corporate Governance Report. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committee. During the year under report, the Independent Directors met on 14th October, 2014 inter alia, to discuss: • Performance evaluation of Non Independent Directors and Board of Directors as a whole; • Performance evaluation of the Chairman of the Company; • Evaluation of the quality of flow of information between the Management and Board for effective performance by the Board. AUDITORS Your Directors request you to appoint Auditors for current accounting year and fix up their remuneration. M/s. Price Waterhouse, Chartered Accountants, Mumbai, the existing Auditors of the Company retiring at the ensuing Annual General Meeting are available for a fresh term and have furnished certificate of their eligibility for re-appointment. Auditor's appointment is proposed for a period of five consecutive years from the conclusion of the 70th Annual General meeting, in line with the provisions of Section 139 of the Companies Act, 2013 and relevant Rules thereunder. COST AUDITORS Pursuant to Section 148 of the Companies Act, 2013, your Directors, on the recommendation of the Audit Committee of Directors, have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31st December, 2015. The Board recommends for ratification of remuneration payable to the Cost Auditors. HUMAN RESOURCES Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In-house news letters provide forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence. CORPORATE GOVERNANCE A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report. ENVIRONMENT REPORT Environment conservation - A way of life We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business. Your Company is ISO 14001 Environment Management system Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Board's certified auditors and Environmental System Auditors conduct periodic in-depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation. Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment. ACKNOWLEDGEMENT The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Company's employees. For and on behalf of the Board Sven Erik Oppelstrup Director Madsen Chain Singh Jasol Whole-Time Director Place : Digvijaygram Date : 25th February, 2015 |