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Anjani Portland Cement Directors Report, Anjani Cement Reports by Directors
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Anjani Portland Cement

BSE: 518091|NSE: APCL|ISIN: INE071F01012|SECTOR: Cement - Mini
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Directors Report Year End : Mar '17    Mar 16

The Directors take pleasure in presenting the Thirty Third Annual Report and the Audited Accounts of the Company for the year ended March 31, 2017.

- FINANCIAL RESULTS:

(Rs, in Lakhs)

Current Year Ended 31/03/2017

Previous Year Ended 31/03/2016

Revenue from Operations(Gross)

36,010

31,944

Profit before Interest, Depreciation

8,369

8,300

Less: Interest

944

1,584

Less: Depreciation

1,706

2,312

Profit/(Loss) Before ax

5,719

4,404

Provision for Taxation including deferred Tax

1,231

2,425

Profit/(Loss)after Taxation

4,488

1,979

Appropriations

Debenture Redemption Reserve

500

500

Dividend

252.86

---

Dividend Distribution Tax

51.48

---

- INDIAN ACCOUNTING STANDARDS

The Company has adopted Indian Accounting Standards (Ind AS) as per the notification issued by the Ministry of Corporate Affairs .The Company has published financials using Ind AS for the year ended March 31, 2017 along with the comparable figures as on March 31, 2016 and opening Statement of Assets and Liabilities as on April 1, 2015.

- DIVIDEND

Your Directors have recommended a final dividend of Rs,1/- per equity share for FY 2016-17. The Interim Dividend of Rs,1/- per equity share was paid in the month of September, 2016. The Final Dividend subject to the approval of the shareholders at the ensuing AGM, will be paid within the time stipulated as per the Companies Act, 2013 . The total dividend for the financial year, including the proposed Final Dividend, amounts to Rs, 2/- per equity share and will absorb Rs, 608.67 lakhs, including Dividend Distribution Tax of Rs, 102.95 lakhs.

- PERFORMANCE OF THE COMPANY

PRODUCTION in M.T

SALES in M.T

Cement

8,49,656

8,49,933

OPERATIONS

This is covered under the topic Management Discussion and Analysis.

- MANAGEMENT DISCUSSION AND ANALYSIS

- Economy and Developments

In 2016-17 the world economy showed a very moderate increase. The global economy for a long time has been bearing the brunt of the sluggish pace in global investment and adding to the woes have been the diminishing growth of world trade. For the April 2016-March 2017 period, the Indian economy advanced 7.1 percent, in line with the estimate but below 8 percent in the previous year. However as compared to the world economy the Indian economy has shown a positive trend.

The demonetization move by the Government in December 2016 had a short term adverse impact on the Indian economy. For the first time in over a decade the production volume in the Industry showed a decline. However the Cement Industry was quickly able to recover from this disturbance and was probably one of the sectors to show the quickest recoveries.

- Opportunities, Threats, Risks, Concerns and Outlook

The Union Budget 2017-18 has been considered as a very optimistic budget especially for the infrastructure sector. With the PM Awaas Yojana, there will be one crore houses to be made for the homeless, the allocation for the same has increased from Rs, 15,000 crore to Rs, 23,000 crore.

Infrastructure and Rural development as in the last year has been a focus in the current year as well which will definitely boost the demand for cement.

The prices of coal and petcoke have risen sharply in the past six months, leading to higher fuel costs, which is a matter of high concern for the Cement Industry.

However considering the Government''s constant endeavor towards infrastructural development, the best days for the Cement Industry are not far away

- Segment wise or Product Performance

The Company has only one business segment and that is manufacturing and sale of cement. Given below are the variety - wise production figures for the financial year 2016-17.

Grades of Cement

Quantity in M.T

OPC-43 grade and 53 grade

6,26,679

PPC

2,09,883

RHPC

13,094

- 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 transactions which ensures that every transaction is properly authorized and executed according to norms.

The Company has also appointed M/s M. Bhaskara Rao & Co., Chartered Accountants as Internal Auditors to conduct the Systems and Compliance Audit of the Company.

- Financial Performance in comparison to Operational Performance

In the Financial year 2016-17, the Company''s production level touched 8.50 lakh tons, which reflects a growth of 12.20% year on year.

The volume of Cement sales was at 8.5 lakh tons recording a growth of 11.80%. This was mainly because of significant efforts made by the Company in Andhra Pradesh and Tamilnadu cement market.

Cement Sales revenue grew 12.66% to Rs, 35,981 lakhs mainly on account of increased sale volumes and also due to better price realization.

Company continued to maintain its cost streamlining efforts during the year. The continued efforts resulted in bringing down the variable costs at slightly lower levels as compared to previous year.

The Company rationalized its finance costs during the year by repaying its term loan through internal accrual and efficient utilization of working capital limits.

Depreciation cost during the year was lower as compared to previous year as major part of Plant & Machinery (Line I) was depreciated fully during previous year based on useful life as provided in Part C of Schedule II to the Companies Act, 2013.

As a result of combined effect on account of growth in cement volumes, cost rationalization and improved price realization, profit before tax of Company was up by 29.86% to Rs, 5719 lakhs.

- Material Development in Human Resources/Industrial Relations front, including number of people employed.

The Industrial relation during the current year has been cordial and contributed to mutual development.

The number of personnel in direct employment of the Company are 277.

- FIXED DEPOSITS:

Your Company has not accepted any deposits from the public, or its employees during the year under review and there are no outstanding Fixed Deposits at the end of the financial year 2016-17.

- CAPTIVE POWER PLANT

Tha Captive Power Plant was commissioned in January 2017. The Gross power generation for the year under review was 184.88 lakh units, out was which 16.30 lakh units were auxiliary consumed and the balance of 168.58 lakh units were captively consumed by the Cement plant.

- CHANGE OF STATUS OF HOLDING COMPANY

With effect from May 3, 2017, the status of the Holding Company was changed to a Private Limited Company pursuant to the conversion of the same being approved by its Shareholders and the National Company Law Tribunal.

- LISTING ON NATIONAL STOCK EXCHANGE OF INDIA LIMITED

The Equity shares of our Company are listed on the BSE Limited. The Board of Directors were of the opinion that, NSE of India Limited being the largest exchange in the country and having trading platforms all over the country, it would be considered advisable to list the Company''s shares on the NSE of India Limited so as to create more visibility. In pursuance of this, the shares of the Company were listed on the NSE of India Limited on April 10, 2017.

- REPORT ON CORPORATE GOVERNANCE

A report on Corporate Governance is given as an Annexure to this Report.

- STATUTORY AUDITORS

At the 32nd AGM of the Company, of M/s Ramanatham & Rao, Chartered Accountants (Firm Registration Number (S-2934) were appointed as Statutory Auditors for a period of three consecutive years. As required under the Companies Act, 2013, the appointment of the auditors will be placed before the shareholders for their ratification at every Annual General Meeting. Accordingly a resolution seeking ratification from Members is included as Item no. 4 of the Notice convening the Annual General meeting.

- COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its cement activity is required to be subject to Cost Audit. Your Directors have appointed M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad to audit the cost records of the Company for the financial year 2017-18 on a remuneration of Rs,1,75,000/- (Rupees One Lakh Seventy Five Thousand Only) . As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in the Annual General meeting for their ratification. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad is included as Item no. 5 of the Notice convening the Annual General meeting.

The Cost Audit Report for the Financial year 2015-16 due to be filed with Ministry of Corporate Affairs within a period of 180 days from the close of the financial year, had been filed on September 26, 2016. The Cost Audit Report for the Financial year 2016-17 would be filed within the period mentioned in the Companies (Cost Record and Audit) Rules 2014.

- REQUIREMENT UNDER THE COMPANIES ACT, 2013

A. DIRECTORS AND KEY MANAGERIAL PERSONNEL

There has been no change in the composition of the Directors and the Key Managerial Personnel for the Financial year ended March 31, 2017.

B. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013.

Your Company 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 framed there under. The details of the Policy are uploaded on the website of the Company.

No complaint was filed during the financial year 2016-17.

C. EXTRACT OF ANNUAL RETURN

The extract of Annual Return as provided under Sub-Section (3) of Section 92 of the Companies Act, 2013 ( the “Act) is enclosed as an Annexure in the prescribed form MGT-9 and forms part of this Report.

D. NUMBER OF MEETINGS OF THE BOARD

6 meetings of the Board of Directors of the Company were held during the year. For detail of the meetings, please refer to the Corporate Governance Report, which forms part of this Report.

E. INDEPENDENT DIRECTORS DECLARATION

The Board has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 (Section 149(6)) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

F. POLICY OF DIRECTORS'' APPOINTMENT AND REMUNERATION

Company''s policy on Directors ''appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered in the Corporate Governance Report which forms part of this Report.

Further, information about elements of remuneration package of individual directors is provided in the extract of Annual Return as provided under Section 92(3) of the Act, is enclosed in the prescribed form MGT-9 and forms part of this Report. The Nomination and Remuneration Policy of the Company is available on the Company''s website: www.anjanicement.com

G. AUDITORS AND SECRETARIAL AUDITORS REPORT

There are no disqualifications, reservations or adverse remarks or disclaimers in the Auditors and Secretarial Auditors Report. The Report of the Secretarial Auditor as conducted by Mrs. Shailashri Bhaskar, Practising Company Secretary is given as an Annexure which forms part of this report.

H. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There have been no loans, guarantees and investments under Section 186 of the Act during the financial year 2016-17.

I. RELATIONSHIP BETWEEN DIRECTORS

None of the Directors are related to each other within the meaning of the term “relative as per Section 2(77) of the Act.

J. TRANSACTIONS WITH RELATED PARTIES

The Company has not entered into contract / arrangements pursuant to provisions of Section 188 (1)of the Act.

The Company however has entered into related party transactions pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These transactions were material in nature and appropriate shareholder approval pursuant to Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been obtained at the Annual General Meeting of the Company held last year

K. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company.

L. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments affecting the Financial position of the Company which have occurred between the end of the Financial Year to which the financial statement relates and the date of the report.

M. RISK MANAGEMENT POLICY

The management of the Company is spearheaded by a Whole Time Managing Director and risk assessment and mitigation, forms a concurrent part of the management procedures. Periodical reviews of various operational, marketing and legal parameters affecting the Company is conducted and risk management and mitigating procedures are adopted on a continuous basis.

N. POLICY ON CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, The Corporate Social Responsibility Policy has been approved by the Board of Directors of the Company. The report on CSR is given as an Annexure and forms part of this report.

The Company was required to spend an amount of Rs,19.51 Lakhs in CSR activities during the financial year 2016- 17, as per the provisions of 135(5) of the Companies Act, 2013 and the Company has spent an amount of Rs, 24.49 Lakhs during the year.

O. PARTICULARS OF REMUNERATION

The information required under Section 197 of the Act and the Rules made there-under, in respect of employees of the Company, is as follows:-

a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year;

Directors

Ratio to Median Remuneration

Non-Executive Directors

Mr. P. Gopal

-

Mr. V Subramanian

-

Dr.(Mrs.) S.B. Nirmalatha

-

Executive Directors

Mr. A. Subramanian

15.51 times

The median remuneration of the employees of the Company for the financial year 2016-17 is Rs, 3.09 lakhs.

b) The percentage increase in remuneration of each Director, Chief Executive Offcer, Chief Financial Offcer Company Secretary or Manager, if any, in the Financial year;

Name of Person

Percentage Increase in Remuneration

Non-Executive Directors

Mr. P Gopal

-

Mr. V. Subramanian

-

Dr. (Mrs.) S. B. Nirmalatha

-

Executive Directors

Mr. A. Subramanian

-

CFO and CS

Mr. M.L. Kumavat

-

Mrs. Anu Nair

16

c) The percentage increase in the median remuneration of employees in the Financial year 2016-17 is 8.75%.

d) The number of permanent employees on the rolls of Company: 277.

e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

On an average, salaries of employees decreased by 3.47%.

There has been no change in the managerial remuneration for the year under consideration.

f) The key parameters for any variable component of remuneration availed by the directors;

Nil

g) Affirmation that the remuneration is as per the remuneration policy of the Company

The Company affirms that remuneration is as per the remuneration policy of the Company.

h) Statement containing Particulars of Employees pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing Particulars of Employees, which is available for inspection by the Members 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 interested in obtaining a copy of such Statement may write to the Company Secretary at the Registered Office of the Company.

P FORM FOR DISCLOSURE OF PARTICULARS OF CONTRACTS/ARRANGEMENTS ENTERED INTO BY THE COMPANY WITH RELATED PARTIES REFERRED TO IN SUBSECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 INCLUDING CERTAIN ARM''S LENGTH TRANSACTIONS UNDER THIRD PROVISO THERETO.

There were no related party transactions pursuant to the provisions of Section 188(1) of the Act.

Q. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATORS, COURTS, TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATION IN THE FUTURE

There is no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations.

R. BOARD EVALUATION

The Board evaluated the performance of the Board, Committees and Individual Directors based on the under mentioned parameters

EVALUATION OF THE BOARD

- Development of suitable strategies and business plans at appropriate time and its effectiveness;

- Implementation of robust policies and procedures;

- Size, structure and expertise of the Board;

- Overview of the Financial Reporting Process, including Internal Controls;

- Willingness to spend time and effort to learn about the Company and its business; and

- Awareness about the latest developments in the areas such as corporate governance framework, financial reporting, industry and market conditions.

EVALUATION OF THE COMMITTEES

- Discharge of its functions and duties as per its terms of reference;

- Process and procedures followed for discharging its functions;

- Effectiveness of suggestions and recommendations received;

- Size, structure and expertise of the Committee; and

- Conduct of its meetings and procedures followed in this regard.

EVALUATION OF THE INDIVIDUAL DIRECTORS

The performance evaluation of the Director mentioned below was done by the entire Board excluding the person being evaluated.

- Display of leadership qualities i.e. correctly anticipating business trends, opportunities, and priorities affecting the Company''s prosperity and operations;

- Establishment of an effective organization structure to ensure that there is management focus on key functions necessary for the organization to align with its mission; and

- Managing relationships with the Board, management team, regulators, bankers, industry representatives and other stakeholders.

- Participation at the Board / Committee meetings;

- Commitment (including guidance provided to senior management outside of Board/ Committee meetings);

- Effective deployment of knowledge and expertise;

- Integrity and maintaining of confidentiality;

- Independence of behavior and judgment;

S. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO:

The particulars as prescribed under 134 (3)(m) of the Companies Act, 2013 and the Rules prescribed there under are set out in Annexure to this report.

T. SUBSIDIARY COMPANIES

Your Company has no subsidiaries within the meaning of Section2(6)oftheCompaniesAct,2013.

U. DIRECTORS RESPONSIBILITY STATEMENT:

As required under Section 134(5) of the Companies Act, 2013, the Directors here by confirm that

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures are made from the same.

b) Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the period;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013,for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) The annual accounts have been prepared on a going concern basis.

e) Appropriate Internal Financial Controls have been laid down and followed and such internal financial controls are adequate and operating effectively.

f) Proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

- CAUTIONARY STATEMENT:

Statements made in this report, including those stated under the caption “Management Discussion and Analysis describing the Company''s objectives, expectations or projections may constitute “forward looking statements within the meaning of applicable securities laws and regulations.

Important factors that could influence Company''s operations include global and domestic supply and demand conditions affecting the selling price of finished goods, availability of inputs and their prices, changes in government regulations, tax laws, economic developments within the country and outside and other factors such as litigations and Industrial relations.

The Company assumes no responsibilities in respect of the forward looking statements which may undergo changes in the future on the basis of subsequent developments, information or events.

- ACKNOWLEDGEMENT:

The Board of Directors wish to thank all the shareholders statutory bodies and departments of the State and Central Government and Bankers, Suppliers, Customers and all employees for their valuable support to the Company.

On Behalf of the Board of Directors

A. Subramanian V. Subramanian

Place: Chennai Managing Director Director

Date: August 9, 2017 (DIN : 06693209) (DIN 06693099)

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