Your directors have pleasure in presenting the 37th Directors' Report on thebusiness and operations of your company for the financial year ended 31st March2019.
FINANCIAL HIGHLIGHTS :
| ||Amount in lacs |
|Particulars ||Year ended |
| ||31.03.2019 ||31.03.2018 |
|Sales and Other Income ||4133.98 ||2178.90 |
|EBIDTA ||535.62 ||540.40 |
|Finance Cost ||351.02 ||350.37 |
|Depreciation ||28.75 ||121.27 |
|Profit before Tax ||404.63 ||68.77 |
|Extraordinary Items ||248.78 ||0 |
|Provision for taxation: || || |
|Current Tax ||0 ||0 |
|Deferred Tax ||0 ||0 |
|Profit after Tax ||404.63 ||68.77 |
|Add: Other Comprehensive Income ||(5.24) ||(5.04) |
|Total Comprehensive Income for the year ||399.39 ||63.72 |
The Company focused on its Refractories business and its allied products. The operationof Refractories and Monolythics at Narketpally Nalgonda District Telangana State hasbeen stabilized and the Company has been making efforts to improve the performance.
The income from operations is Rs.413397609/- as against Rs.217889717/- for thecorresponding previous year. The profit before tax stood at Rs. 39938682/- as againstRs. 6372146/-for the previous year. The profit after tax stood at Rs. 39938682/- asagainst Rs. 6372146/- for the corresponding period. The Basic Earnings Per Share for theyear ended 31.03.2019 is Rs.0.85 as against Rs. 0.14 for the corresponding previous yearended 31.03.2018.
Your Directors did not recommend dividend for the financial year 2018-19.
The Company has not accepted or invited any Deposits and consequently no deposit hasmatured / become due for re-payment as on 31st March 2019.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FIANNCIAL POSITIO OF THE COMPANY:
There are no material changes and commitments affecting the financial position of theCompany which occurred between the end on the financial year to which the financialstatements relate and the date of this report.
PARTICULARS OF DIRECTORS AND KEY MANEGERIAL PERSONNEL:
In accordance with the provisions of Section 152(6) of the Companies Act 2013 and theArticles of Association of the Company Sri. Suresh Silumula Director of the Companyretire by rotation at this Annual General Meeting and being eligible offer themselves forreappointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Furtherthere has been no change in the circumstances which may affect their status as independentdirector during the year.
The brief particulars of the Directors seeking appointment / re-appointment at thisAnnual General Meeting are being annexed to the Corporate Governance Report as requiredunder Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forming part of this Annual Report.
During the year none of the directors have ceased to be directors.
Key Managerial Personnel
There is no change in the key managerial personnel during the year.
Board evaluation and assessment
Evaluation of all Board members is done on an annual basis. The evaluation is done bythe Board Nomination and Remuneration committee and Independent Directors with specificfocus on the performance and effective functioning of the Board and individual Directors.
Pursuant to the provisions of the Companies Act 2013 the Board has carried outperformance evaluation taking into consideration of various aspects of the Board'sfunctioning composition of Board and its Committees execution and performance ofspecific duties obligations and governance. The Performance of evaluation of IndependentDirectors was completed. The Performance evaluation of Chairman and the Non-IndependentDirectors was carried out by the Independent Directors. The Board of Directors expressedtheir satisfaction with evaluation process.
Policy on directors' appointment and remuneration and other details
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy which lays down a framework in relation to selection appointment andremuneration to directors key managerial personnel and senior management of the Company.The Company's policy on directors and KMP appointment and remuneration and other mattersprovided in section 178(3) of the Act have been disclosed in the corporate governancereport which forms part of the directors' report.
Number of Board Meetings during the year
During the year 4 meetings of the Board and 4 meetings of Audit Committee wereconvened and held the details of which form part of the report on corporate governance.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments covered under Section 186 of theCompanies Act 2013 have been disclosed as notes in the financial statements.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. All Related Party Transactions are placed before theAudit Committee as also the Board for approval where ever required. Prior omnibusapproval of the Audit Committee is obtained for the transactions which are of aforeseeable and repetitive nature. A statement giving details of the related partytransactions entered into pursuant to the omnibus approval so granted are placed asnecessary before the Audit Committee and the Board of Directors. The Company has developeda Policy on Related Party Transactions for the purpose of identification and monitoring ofsuch transactions. The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:
There are no significant and material orders passed by the Regulators/ Courts thatwould impact the going concern status of the Company and its future operations.
AUDITORS AND OBSERVATIONS
Pursuant to provisions of Section 139 of theCompanies Act 2013 and the rulesframedthereunder M/s. GMK Associates charteredAccountants were appointed asstatutoryauditors of the Company from the conclusionof 33rd AGM held on 30thSeptember 2015 fora period of 5 years i.e. till the conclusion ofAGM to be held inthe year 2020 of the Company.
However thepresent auditors have expressed their unwillingness to be continued asStatutory Auditors of the Company.The Board has approached M/s.VMM&Co CharteredAccountants and they have expressed their willingness to be appointed as StatutoryAuditors of the Company. They have provided an eligibility certificate confirming thatthey have complied with conditions as stipulated under section 141 of the Companies Act2013 if appointed. Accordingly requisite resolution forms part ofthe notice conveningthe AGM.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr.M.Naga Kishore Company Secretaries in Practice to undertake the SecretarialAudit of the Company for the Financial Year 2018-19. The Report of the Secretarial Auditorfor Financial Year 2018-19 is annexed herewith as "Annexure-I".
Internal auditors of the Company have done audit and their report is reviewed by theAudit Committee from time to time.
Qualification and Remarks
The auditors' report contain qualifications with respect to payment of Statutory dues.
Secretarial Auditors' report contain qualifications reservations or adverse remarks.
The Management is taking necessary steps to mitigate / reduce the same.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12):
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not covered under the criteria mentioned in the provisions of CompaniesAct 2013.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Regulation 34 read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a report on ManagementDiscussion & Analysis is presented in a separate section and forms part of the AnnualReport.
The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance enunciated in provisions of SEBI (LODR) Regulations 2015.
A report on Corporate Governance pursuant to the provisions of Corporate GovernanceCode stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forms part of the Annual Report. Full details of the various board committees arealso provided therein along with Auditors' Certificate regarding compliance of conditionsof corporate governance and forms integral part of this Report.
EXTRACT OF ANNUAL RETURN (MGT 9)
The extract of the annual return in Form MGT 9 as required under the provisions ofsection 92 of the Act is enclosed as Annexure - II.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOFINANCIAL STATEMENT:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company (with its inherent weakness) work performed bythe internal statutory and secretarial auditors including the audit of internal financialcontrols over financial reporting by the Statutory Auditors and the reviews performed bymanagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring the period ended on 31st March 2019.
The Board of the Company has framed a policy to implement and monitor the riskmanagement plan for the Company and ensuring its effectiveness. The Board oversees theRisk Management process including risk identification impact assessment effectiveimplementation of the mitigation plans and risk reporting. The Audit Committee hasadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behaviour the company has adopted a vigil mechanism policy.
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/functional capabilities in order tomeet future talent requirement.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the company for that period;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the company andsuch internal financial controls are adequate and operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided in theAnnexure- III forming part of this Report.
PARTICULARS RELATING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in its premises through various policies and practices. Companyalways endeavours to create and provide an environment that is free from discriminationand harassment including sexual harassment.
Your Company has adopted a policy on Prevention of Sexual Harassment at Workplace whichaims at prevention of harassment of employees and lays down the guidelines foridentification reporting and prevention of undesired behaviour.
Internal Complaints Committee has been set up to redress complaints received regardingsexual harassment. All associates of the company are covered under this policy. There wereno complaints received under the policy during 2018-19.
PARTICULARS OF EMPLOYEES
The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
PARTICULARS OF REMUNERATION
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given below:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year
|Executive Directors remuneration ||Ratio to Median |
b. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year: There is no increaseduring the year.
c. There is percentage increase in the median remuneration of employees in thefinancial year: NIL
d. The number of permanent employees on the rolls of Company: 2
e. 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: There is noincrease in the remuneration / salaries during the year.
f. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration paid to Key Managerial Personnel is as per theremuneration policy of the Company.
Your Directors wish to place on record their appreciation to employees at all levelsfor their hard work dedication and commitment. The enthusiasm and unstinting efforts ofthe employees have enabled the Company to remain stable despite increased competitionfrom several existing and new players.
The Board desires to place on record its sincere appreciation for the support andcooperation that the Company received from the suppliers customers strategic partnersBankers Auditors Registrar and Transfer Agents and all others associated with theCompany. The Company has always looked upon them as partners in its progress and hashappily shared with them rewards of growth. It will be the Company's endeavor to build andnurture strong links with trade based on mutuality respect and co-operation with eachother.
|By order of the Board |
|SATYANARAYANA KAPUGANTI |
|(DIN: 07959357) |
|Place : Hyderabad |
|Date : 14th August 2019 |