Your Directors take pleasure in presenting the Thirty Fourth Annual Report and theAudited Accounts of the Company for the year ended March 31 2018.
FINANCIAL RESULTS AND STATE OF COMPANY'S AFFAIRS
( Rs in Lakhs)
| ||Current ||Previous |
| ||Year Ended ||Year Ended |
| ||31/03/2018 ||31/03/2017 |
|Revenue from Operations (Gross) ||37359 ||36010 |
|Profit before Interest Depreciation ||6068 ||8369 |
|Less: Interest ||625 ||944 |
|Less: Depreciation ||1875 ||1706 |
|Profit/(Loss) Before Tax ||3568 ||5719 |
|Provision for Taxation including deferred Tax ||1224 ||1231 |
|Profit/(Loss) After Tax ||2344 ||4488 |
|Appropriations || || |
|Debenture Redemption Reserve ||0.00 ||500 |
|Dividend ||252.86 ||252.86 |
|Dividend Distribution Tax ||51.48 ||51.48 |
Your Directors have recommended a final dividend of Rs 2/- per equity share for thefinancial year 2017-18. The Dividend subject to the approval of the shareholders at theensuing AGM will be paid within the time stipulated as per the Companies Act 2013. Thedividend will absorb an amount of Rs 609.66 lakhs including Dividend Distribution Tax ofRs 103.95 lakhs.
PERFORMANCE OF THE COMPANY
| ||PRODUCTION in M.T ||SALES in M.T |
|Cement ||918441 ||926810 |
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 growthtrajectory. However in the long term any positive growth will have to be substantiatedwith suitable trade and investment policies. The Indian scenario has also been promisingand almost in line with the growth of the world economy. With the effects of the GST anddemonetization being wiped away slowly the Indian economy with a GDP growth of 6.3 percenthas 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 25000crores under the National Housing Bank . This will be utilized to provide relief oninterest rates for housing schemes. Under Prime Minister Awas Scheme Rural 51 lakhshouses in year 2017-18 and 51 lakh houses during 2018-19 work to be constructedexclusively in rural areas. In urban areas the assistance has been sanctioned to construct37 lakh houses. The keen interest of the Government in infrastructure development alongwith 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 variousstates both greenfield and brownfield have created a scenario of extreme competition inthe Cement Industry. The excess supply situation thus created would further adverselyimpact the price realisation. The ever increasing cost of pet coke and coal has also addedto the stifling scenario in the Cement Industry. Without substantial increase in demand inthe last few years the Cement industry has been facing a twin fold blow by not beingable to absorb its fixed cost completely due to lower capacity utilizations and dealingwith reducing price realization.
Segment wise or Product Performance
The Company has following business segments which are its reportable segments duringthe year. These segments offer different products and services and/or managed separatelybecause they require different technology and production processes.
|Reportable Segment ||Product/ Services |
|Cement ||Manufacturing and trading of cement |
|Power plant ||Generation of power |
|Particulars || |
Year ended March 31 2018
Year ended March 31 2017
| ||Cement ||Power ||Total ||Cement ||Power ||Total |
|Segment Revenue ||37359 ||4976 ||42335 ||36010 ||961 ||36971 |
|Less : Inter Segment Revenue || ||(4976) ||(4976) || ||(961) ||(961) |
|Total Revenue from Operations ||37359 ||- ||37359 ||36010 ||- ||36010 |
|Segment Result (Profit Before Tax ||3069 ||1124 ||4193 ||6663 ||- ||6663 |
|and Interest) from each Segment || || || || || || |
|Less : Interest || || ||(625) || || ||(944) |
|Total Profit Before Tax || || ||3568 || || ||5719 |
|Capital Employed (Segment || |
As at March 31 2018
As at March 31 2017
|Assets - Segment Liabilities) || || || || || || |
|Segment Assets ||27787 ||8185 ||35972 ||27863 ||8054 ||35917 |
|Segment Liabilities ||13389 ||110 ||13499 ||14796 ||698 ||15494 |
Internal Control System and their adequacy
The Company has got an adequate system of internal control in place commensurate withthe size of its operation and is properly designed to protect and safeguard the assets ofthe Company. There is a proper system for recording all transactions which ensures thatevery transaction is properly authorized and executed according to norms.
The Company has also appointed M/s M. Bhaskara Rao & Co. Chartered Accountants asInternal 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 Company's production level touched 9.18 lakh tonswhich 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 wasmainly because of significant efforts made by the Company in Andhra Pradesh and Telanganacement market. Even in the face of a reduction in sales realization cement sales revenuegrew 3.75% to `37359 lakhs mainly on account of increased sale volumes. Though theCompany rationalized its finance costs during the year by repaying its first installmentof NCD (which became due for repayment during the year) through internal accrual andefficient utilization of working capital limits decrease in cement price realizationcoupled 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 ofpeople employed
The Industrial relation during the current year has been cordial and contributed tomutual 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 yearunder review was 821.29 lakh units as against 184.88 lakh units in the previous year withan auxiliary consumption of 68.87 lakh units as against 16.30 lakh units in the previousyear. The Net generation for the current year was 752.42 lakh units as against 168.58 lakhunits last year.
INTERNAL FINANCIAL CONTROLS WITH RESPECT TO FINANCIAL STATEMENTS
M/s M. Bhaskara Rao & Co. Chartered Accountants conduct the Internal Audit foryour Company. Along with the Company's self-assessment procedures the Internal auditors ona regular basis check on the internal financial controls developed to ensure that they areworking effectively and give the Management opinions in case of improvements required.
During the year under review your Company has neither accepted nor renewed anydeposits from the public within the meaning of Section 73 of the Companies Act 2013 andthe Companies (Acceptance of Deposits) Rules 2014.
A detailed report on Corporate Governance as required under the Listing Regulations isprovided 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 wasapproved by the shareholders at the Thirty Third Annual General meeting held on September8 2017.
All the Independent Directors have given their declarations stating that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015. In the opinion of the Board they fulfill the conditionsof independence as specified in the Act and the Listing Regulations.
The Nomination and Remuneration policy enumerates the policy on Directors Appointmentand remuneration including criteria for determining qualifications positive attributesindependence of a director. The policy is given as Annexure I forming part of this Report.The policy is also available on the Company's website www.anjanicement.com.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Directors and members of Senior Management have affirmed compliance with the Codeof Conduct for Directors and Senior Management of the Company.
a) Statutory Auditors: Your Company at its Thirty Second Annual General Meeting held onSeptember 92016 had appointed M/s Ramanatham & Rao Chartered Accountants (FirmRegistration Number S-2934) as Statutory Auditors of the Company up to the conclusion ofthe Thirty Fifth Annual General Meeting at a remuneration as may be fixed by the Board ofDirectors and Audit Committee in consultation with the Auditors thereof.
b) Secretarial Auditor: Pursuant to the provisions of Section 204 of the Companies Act2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Secretarial Audit has been carried out by Mrs. Shailashri Bhaskar Practising CompanySecretary.
c) Cost Auditor: In terms of the provisions of Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Board ofDirectors based on the recommendation of the Audit Committee has appointed M/s NarasimhaMurthy & Co. Cost Accountants Hyderabad as Cost Auditor of the Company forconducting the Cost Audit for the Financial Year 2018-19 on a remuneration as mentionedin the Notice of 34th Annual General Meeting. A resolution seeking Member's ratificationfor the remuneration payable to the Cost Auditor forms part of the Notice of 34th AnnualGeneral Meeting and the same is recommended for your consideration and ratification.
The Auditor's report and Secretarial Audit Report do not contain any qualificationsreservations or adverse remarks. Report of the Secretarial Auditor is annexed as AnnexureV 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 towardsCorporate Social Responsibility by spending a sum of Rs 7680483 during the year. Thereport on CSR activities as required under Section 135 of the Companies Act 2013 is givenas Annexure II forming part of this Report. The CSR policy is available on the Company'swebsite www.anjanicement.com.
RISK MANAGEMENT POLICY
The management of the Company is spearheaded by a Whole Time Managing Director and riskassessment and mitigation forms a concurrent part of the management procedures. Periodicalreviews of various operational marketing and legal parameters affecting the Company isconducted 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 sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. The details of the Policy are uploaded on the website of the Companywww.anjanicement.com.
No complaint was filed during the financial year 2017-18.
Your Company had in November 2014 allotted 600 Rated Taxable Secured GuaranteedListed Redeemable Non-Convertible Debentures of the Face Value of Rs 1000000 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 aPrivate Placement basis.
Pursuant to the Information memorandum 300 debentures were redeemed on November 142017 subsequently the remaining 300 debentures were redeemed on April 13 2018. TheCompany 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 theCompanies Act 2013 ( the "Act") is enclosed as Annexure IV in the prescribedform 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. Theintervening gap between two meetings of the board is within the stipulated time frameprescribed 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 Actduring the financial year 2017-18.
TRANSACTIONS WITH RELATED PARTIES
The Company has not entered into contract / arrangements with related parties pursuantto provisions of Section 188 (1) of the Act read with Section 134(h) of the Act in thefinancial year 2017-18.
MATERIAL CHANGES AND COMMITMENTSIF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year to which thefinancial 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 inrespect of employees of the Company is as follows:-The ratio of the remuneration of eachdirector to the median remuneration of the employees of the Company for the financialyear:
|Directors ||Ratio to Median Remuneration |
|Non-Executive Directors || |
|Mrs. V. Valliammai ||- |
|Mr. P. Gopal ||- |
|Mr. V. Subramanian ||- |
|Dr. (Mrs.) S.B. Nirmalatha ||- |
|Executive Directors || |
|Mr. A. Subramanian ||13.01 times |
The median remuneration of the employees of the Company for the financial year 2017-18is Rs 3.69 lakhs.
The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary or Manager if any in the Financial year:
|Name of Person ||Percentage Increase in Remuneration |
|Non-Executive Directors || |
|Mrs. V. Valliammai ||- |
|Mr. P. Gopal ||- |
|Mr. V. Subramanian ||- |
|Dr. (Mrs.) S. B. Nirmalatha ||- |
|Executive Directors || |
|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 year2017-18 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 themanagerial personnel in the last Financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: On anaverage salaries of employees increased by 13.52%.
There has been no change in the managerial remuneration for the year underconsideration.
Statement containing Particulars of Employees pursuant to Section 197 (12) of theCompanies Act 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report. However as per theprovisions of Sections 134 and 136 of the Companies Act 2013 the Report and FinancialStatements are being sent to the Members and others entitled thereto excluding theStatement containing Particulars of Employees which is available for inspection by theMembers 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 interestedin obtaining a copy of such Statement may write to the Company Secretary at the RegisteredOffice of the Company.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATORS COURTS TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN THE FUTURE
There has been no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations.
The Nomination and Remuneration Committee set out the parameters based on which Boardcarried out an annual evaluation of the performance of the Board Committees andIndividual Directors. Some of the parameters for the same were effective communicationadequacy of knowledge investment of time etc. The Board as a group discussed evaluatedand graded themselves on the parameters provided. The performance of the Board Committeesand Individual Directors was found to be satisfactory and was found helping the Company inimproving 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 Rulesprescribed thereunder are set out in Annexure III to this report.
Your Company has no subsidiaries within the meaning of Section 2(6) of the CompaniesAct 2013.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act 2013 the Directors herebyconfirm that: a. In the preparation of the annual accounts the applicable accountingstandards have been followed and that no material departures are made from the same.
b. Appropriate accounting policies have been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitsof the Company for the period. c. Proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities. d. The annual accounts have been prepared on agoing concern basis. e. Appropriate Internal Financial Controls have been laid down andfollowed and such internal financial controls are adequate and operating effectively. f.Proper systems to ensure compliance with the provisions of all applicable laws and suchsystems are adequate and operating effectively.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
Statements made in this report including those stated under the caption"Management Discussion and Analysis" describing the Company's objectivesexpectations or projections may constitute "forward looking statements" withinthe meaning of applicable securities laws and regulations.
Important factors that could influence Company's operations include global and domesticsupply and demand conditions affecting the selling price of finished goods availabilityof inputs and their prices changes in government regulations tax laws economicdevelopments within the country and outside and other factors such as litigations andIndustrial relations.
The Company assumes no responsibilities in respect of the forward looking statementswhich may undergo changes in the future on the basis of subsequent developmentsinformation or events.
The Board of Directors wish to thank all the shareholders statutory bodies anddepartments of the State and Central Government and Bankers Suppliers Customers and allemployees 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) |