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Mangalam Cement Directors Report, Mangalam Cement Reports by Directors
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Mangalam Cement

BSE: 502157|NSE: MANGLMCEM|ISIN: INE347A01017|SECTOR: Cement - Major
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Directors Report Year End : Mar '18    Mar 17

Dear Members,

The Directors have pleasure in presenting the 42nd Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2018. The summarized Financial Results are given below:

1. FINANCIAL RESULTS (Rs, in Lacs)

Current Year ended 31st March, 2018

Previous Year ended 31st March, 2017

Net Sales/ Income from operations

112532.47

104885.70

Operating Profit / (Loss) before interest, Depreciation

and Tax and other amortisations (“EBIDTA”)

11044.22

13827.71

Less:

Depreciation and Amortisation Expenses

4421.11

4,031.46

(Net of transfer from Revaluation Reserve)

Finance Costs

4727.28

4748.94

Tax Expenses (net)

757.64

1383.84

9906.03

10164.24

Net Profit / (Loss) for the year

1138.19

3663.47

Other Comprehensive Income (net of tax)

(0.38)

(227.71)

Total Comprehensive Income (after tax)

1137.81

3435.76

2. DIVIDEND

We recommend a dividend of Re. 0.50/- (Paisa Fifty Only) per equity share of Rs, 10/- each for the year ended 31 st March, 2018. The total outgo in this respect will be Rs, 160.64/- Lacs including corporate dividend tax.

3. OVERALL PERFORMANCE

The Performance of the Company has been comprehensively covered in the Management Discussion and Analysis, which forms a part Directors'' Report.

4. MANAGEMENT DISCUSSION & ANALYSIS

In term of the provision of Regulation 34 (2) (e) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Management Discussion and Analysis forms the part of this Report.

5. RENEWABLE ENERGY

The Company owns 13 Wind Turbines with a total capacity of 13.65 MW. Total Generation from all the turbines together during the year was 156.10 lacs Kwh.

6. CAPTIVE THERMAL POWER PLANT

Your Company has a present requirement of 33MW of power and is 100% self-sufficient through its own generation. Total generation during the year was 1816.37 lacs Kwh.

7. NEW PROJECTS

During the period under review, the Board approved setting up of a 11 MW Waste Heat Recovery plant at existing factory at Morak, Kota.

8. FINANCE

During the period under review, the Company has issued Commercial Paper (CP) to the tune of Rs, 150.00 Crores. The instruments are rated CARE A1 ” by Credit Analysis & Research Ltd., the Credit Rating Agency.

The Directors has also approved the issuance of Non-Convertible Debentures on private placement basis for an amount up to Rs, 250.00 Crores in one or more tranches.

9. RISK MANAGEMENT

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Company has developed a risk management policy and identified risks and taken appropriate steps for their mitigation for more details, please refer to the Management Discussion and Analysis set out in this Annual Report.

10. CREDIT RATINGS

Your Directors are pleased to inform you that Credit Analysis & Research Ltd. (CARE) reaffirmed the rating of ''CARE AA-''(Double A minus) assigned for long term facilities. The ''CARE AA'' rating is considered to offer a high degree of safety regarding timely servicing of financial obligations and indicates that such borrowings carry low credit risk. CARE assigns'' '' orsigns to be shown after the assigned rating (wherever necessary) to indicate the relative position within the band covered by the rating symbol.

CARE has also re-affirmed its ''CARE A1 '' (A one Plus) rating assigned to the Company''s short term facilities. This is the highest rating for short term facilities and indicates a strong capacity for timely payment of short term debt obligations and carries the lowest credit risk.

Further, CARE has re-affirmed its ''CARE A1 '' (A one Plus) rating assigned to the Company''s Commercial Paper issuance.

11. INSURANCE

Adequate insurance cover has been taken for the properties of the Company including buildings, plant and machinery and inventories.

12. EXTRACT OF THE ANNUAL RETURN

The Extract of Annual Return in Form MGT-9 as required under Section 134(3)(a) of the Companies Act, 2013 is set out at Annexure-1 which forms part of this report.

13. DETAILS OF BOARD MEETINGS

The Board of Directors met 4 times in the year 2017-18. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

14. DIRECTORS

In accordance with the provision of Section 152 (6) and pursuant to the Articles of Association of the Company, Shri Anshuman Vikram Jalan, Executive Director of the Company, (DIN: 01455782)retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his re-appointment. Details of the proposal for his appointment are given in the Notice of the Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed under subsection (6) of Section 149 of the Companies Act, 2013.

The details of programmes for familiarisation of independent Directors with the Company, their roles, rights, responsibility in the Company, nature of the industry in which the Company operates and other related matters are put on the website of the Company at the link:

http://www.mangalamcement.com/pdf/familiarisation_pro

gramme.pdf.

15. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134 (5) of the Companies Act, 2013 and to the best of their knowledge & belief and according to the information and explanations obtained your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;

b) such accounting policies have been selected and applied consistently and judgments and estimates made 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 year and of the profit of the Company for that 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;

d) the annual accounts have been prepared on a going concern basis;

e) internal financial controls were followed by the Company and they are adequate and are operating effectively; and

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

16. KEY MANAGERIAL PERSONNEL

The following employees were the Key Managerial Personnel of the Company during the year under review:

(i) Smt. Vidula Jalan, Executive Director

(ii) Shri Anshuman Vikram Jalan, Executive Director

(iii) Shri Yaswant Mishra, President (Corporate) & CFO and

(iv) Shri Swadesh Agrawal, Asst. Vice President & Company Secretary

17. REMUNERATION TO DIRECTORS & KEY MANAGERIAL PERSONNEL

(i) The Ratio of the remuneration of each Director to the median remuneration of employees of the Company for the year ended 31st March, 2018 are

Sr

No.

Name of Director/CEO/CFO/ Company Secretary

Designation

Ratio of remuneration to median remuneration of the Employee of the Company

Percentage increase in the remuneration for the Financial Year 2017-18

1

Smt. Aruna Makhan

Independent and NonExecutive Director

1.98

-26%

2

Shri N. G. Khaitan

Independent and NonExecutive Director

1.50

-31%

3

Shri Gaurav Goel

Independent and NonExecutive Director

1.61

-24%

4

Shri K. C. Jain

Non-Executive Director

1.52

-34%

5

Smt. Vidula Jalan

Executive Director

31.46

-6%

6

Shri Anshuman Vikram Jalan

Executive Director

34.77

8%

7

Shri Yaswant Mishra

President (Corporate) & CFO

NA

8%

8

Shri Swadesh Agrawal

Asst. Vice President & Company Secretary

NA

11%

Median remuneration of the Employees of the Company during the financial year: Rs, 4.54 lacs.

(ii) Percentage increase in the median remuneration of employees in the financial year 2017-18 is 4.02%.

(iii) There are 1007 Permanent Employees on the rolls as on 31st March, 2018 of the Company.

(iv) Explanation w.r.t average increase in remuneration and Company''s performance:

Net Profit for the financial year ended March 31,2018 was Rs, 1,138.19 lacs as compared to Rs, 3,663.47 lacs in the previous year. The increase in median remuneration was 12.15%.

(v) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: The total remuneration of Key Managerial Personnel (KMP) increased by 3.78%. Net Profit was Rs, 1,138.19 lacs as compared to Rs, 3,663.47 lacs in the previous year. Increase in remuneration of KMP (net) is collective result of talent bought to table, Company''s business interest, industry standards and applicable regulatory framework.

(vi) Variations in the market Capitalization of the Company and PE Ratio

a. The market capitalization as on 31 st March, 2018 was Rs, 82,857 lacs. (Rs, 85,780 lacs as on 31st March, 2017).

b. Price Earnings ratio of the Company as at 31st March, 2018 : 72.86 (as at 31st March, 2017: 23.42).

c. Percent increase over / decrease in the market

quotations of the shares of the company as compared to the rate at which the company came out with the last public offer in the year: The company has not made any public issue or rights issue of securities in the recent past, so comparison have not
been made of current share price with public offer price. The Company''s shares are listed on BSE Ltd. and National Stock Exchanges of India Ltd.

(vii) Average Percentile increase in the Salaries of the Employees other than Managerial Personnel in financial year 2017-18 is 8.23% as compared to 3.78% increase in the Managerial Remuneration for the same period. Increase in salary in FY 2017-18 is mainly due to annual increment.

(viii) Key Parameters for any variable component of remuneration availed by the Directors are considered by the Board of Directors based on the performance of the Company, recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

(ix) The ratio of the remuneration of the highest paid Director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year is 95.55%.

(x) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

18. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 (4) and Rule 8 of the Companies (Corporate Social Responsibility Policy), Rules, 2014, a report on CSR containing particulars in the specified format is attached at Annexure-2.

The Composition of the Corporate Social Responsibility Committee (CSR) is as under

Name of the Member

Category

Smt. Vidula Jalan, Chairperson

Executive Director

Shri A. V. Jalan

Executive Director

Shri Gaurav Goel

Independent & Non

Fxpcirtivf! Direct nr

The Corporate Social Responsibility (CSR) Policy as approved by the Board is uploaded on the Company''s website at the web link:http://www.mangalamcement.com/pdf/policy/ corporate_social_responsibility_policy.pdf

19. AUDITORS''REPORT

The Auditors'' Report to the shareholders does not contain any qualification, reservation or adverse remark.

20. STATUTORY AUDITORS

M/s. Singhi & Co., Chartered Accountant, (Firm Registration Number 302049E),who are Statutory Auditors of the Company were appointed as the Statutory Auditors for a term of 5 years at the last Annual General Meeting of the Company. They have confirmed their eligibility under Section 141 of the Companies Act, 2013, and the Rules framed thereunder, for appointment as the Auditors of the Company. The Board recommends to the Shareholders ratification for their term of appointment as mentioned above at the ensuing Annual General Meeting of the Company. Such ratification will be obtained every year during their term of appointment.

21. COST AUDITOR AND COST AUDIT REPORT

In terms of the provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. J. K. Kabra & Co., Cost Accountants, New Delhi as the Cost Auditors, to conduct the cost audit of your Company. The Company has recommended their remuneration to shareholders for their ratification at the ensuing Annual General Meeting.

Your Company has maintained cost audit records pursuant to section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, in respect of the manufacturing activities are required. The cost audit report for the financial year 2016-17 was filed with the Ministry of Corporate Affairs on 06th September, 2017.The Report

does not contain any qualification, reservation or adverse remark.

22. SECRETARIAL AUDIT

Pursuant to Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Company had appointed M/s. P. Pincha & Associates, Company Secretaries, Jaipur as Secretarial Auditor of the Company for the Year 2017-18.

The Secretarial Audit Report for the financial year 2017-18 forms part of this report as Annexure - 3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Board has re-appointed Mr. Pradeep Pincha of M/s P Pincha & Associates, Practicing Company Secretary as secretarial auditor of the Company for the financial year 2018-19.

23. LOANS. GUARANTEES OR INVESTMENT

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes forming part of the financial statements.

24. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES

All the related party transactions are entered into at arm''s length in the ordinary course of business and are in compliance with the applicable provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no material significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have a potential conflict with the interests of the Company.

The Related Party Transaction Policy as approved by the Board is uploaded on the Company''s website at the web link:http://www.mangalamcement.com/pdf/policy/ related_party_transaction_policy.pdf

25. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the name and other particulars of employees are to be set out in the Directors'' Report as an addendum or annexure thereto.

However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company and others entitled thereto, excluding the aforesaid information about the employees. Any Member who is interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A Statement containing the information required by Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, is set out in the statement at Annexure-4 hereto and forms part of this Report.

27. 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, relating to corporate governance.

A report on Corporate Governance is enclosed at Annexure-5 hereto and forms part of this Annual Report. The Auditors certificate on compliance with the provision of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 relating to Corporate Governance is annexed to the Report on Corporate Governance.

28. COMPOSITION OF AUDIT COMMITTEE

In line with the provisions of Section 177 (8) of the Companies Act, 2013, the composition of the Committee is as below:

Name of Member

Category

Shri N. G. Khaitan -

Independent & Non-

Chairman

Executive Director

Smt. Aruna Makhan

Independent & Non Executive Director

Shri Gaurav Goel

Independent & NonExecutive Director

Shri K. C. Jain

Non-Executive Director

29. VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The mechanism under the policy has been appropriately communicated within the organization. The Whistle Blower Policy is available on the website of the Company.

30. PERFORMANCE EVALUATION

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance and that of the individual Directors as well as of its Committees. The evaluation criteria, inter-alia, covered various aspects of the Board''s functioning including its composition, execution and performance of specific duties, obligations and governance.

The performance of individual directors was evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders, time devoted, etc. The Directors expressed their satisfaction with the evaluation process.

The Independent Directors met on 12th February, 2018 to review the performance evaluation of the Non - Independent Directors and the entire Board of Directors. The Independent Directors are well satisfied with the functioning of the Board, its various committees and of the performance of the other Non-Executive and Executive Directors.

31. KEY PARAMETERS FOR APPOINTMENT OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The Nomination and Remuneration Committee has formulated a detailed policy for appointment of directors, key managerial personnel and senior management personnel, which is designed to attract, motivate and retain best talent.

This policy applies to directors, senior management including its Key Managerial Personnel (KMP) and other employees of the Company. The compensation strategy revolves around getting the best talent in the market. The remuneration of the Executive Directors and KMPs including the senior management personnel of the Company is recommended by the Nomination and Remuneration Committee based on the Company''s remuneration structure taking into account factors such as level of experience, qualification and suitability. The Company generally pays remuneration by way of salary, perquisites and allowances (fixed component), incentive remuneration and/or commission (variable components).

Remuneration by way of commission to the Non-Executive Directors is decided by the Board as permitted by the Companies Act, 2013 in line with the approval granted by shareholders.

32. NOMINATION AND REMUNERATION POLICY

The Company has in place a formal Nomination and Remuneration Policy formulated as per the provisions of Section 178(3) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The extract of the policy is attached at Annexure - 6 to this Report.

33. INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial control systems, commensurate with the size and complexity of its operations, to ensure proper recording of financial and monitoring of operational effectiveness and compliance of various regulatory and statutory requirements.

34. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

During the year under review, the Company has not received any compliant under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

35. ENVIRONMENT, HEALTH AND SAFETY

Environment, Health and Safety (EHS) is one of the primary focus areas for your Company. Your Company''s EHS policy is to consider compliance to statutory EHS requirements as the minimum performance standard and is committed to go beyond and adopt stricter standards wherever appropriate.

Your Company have planted over 10,230 saplings to ensure a dense green belt around the plant and mine areas. Company encourage its employees and their families to actively participate in our plantation drives.

Your Company conducted regular health camps to monitor the health of farmers and educate them about disease prevention and care. Company also provided financial assistance to several hospitals and also adopted CHC Morak under a scheme of the Government of Rajasthan and assisted its maintenance and refurbishment. Your Company organised healthcare camps for specially-abled people. A team of specialised doctors, in collaboration with the Government of Rajasthan made the event successful.

Activities

No. of Patient(s)

OPD

12443

Periodic Health Check Up

1362

Pulse Polio Drive

1886

Audiometry

162

In your Company safety is of utmost importance and a culture of safety is brought in, not just for the Company''s staff but also for contract workers, raw material suppliers and transporters etc. through training programs /communications.

36. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs, 12,24,336/- during the financial year 2017-18 to the Investor Education and Protection Fund established by the Central Government in compliance with section 125 of the Companies Act, 2013. The said amount represents unclaimed dividends which were lying with the Company for a period of 7 years from their respective due dates of payment. Prior to transferring the aforesaid sum, the Company has sent reminders to the shareholders for submitting their claims for unclaimed dividend.

Further, in terms of Section 125(6) of the Companies Act,

2013 read with Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, the Company has transferred 105708 equity shares in respect of which dividends have remained unclaimed for a period of seven consecutive years to the IEPF Account established by the Central Government.

37. PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from the public within the meaning of section 2(32) and 74 of the Companies Act, 2013 during the year and as such, no amount of principal or interest on deposit was outstanding as of the balance sheet date.

38. CASH FLOW ANALYSIS

In conformity with the provision of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a cash flow statement for the financial year ended 31 st March 2018 forms part of the audited accounts.

39. AWARDS

Your Directors are pleased to inform that the Company has received the following awards during the year 2017-18;

- 18th National Award for Excellence in Energy Management 2017 for Energy Efficient Unit, received on 01.09.2017 from Confederation of Indian Industry (CM), Hyderabad.

- National Award for Best Improvement in Energy Performance in Manufacture of Blended Cements 2015 16, received on 08.12.2017 from National Council for Cement and Building Materials (NCBM), New Delhi.

- National Award for Best Improvement in Thermal Energy performance in 2016-17, received on 08.12.2017 from National Council for Cement and Building Materials (NCBM), New Delhi.

- Certificate of Excellence in Best Employer 2016 Awards Competition in the Category of Large Scale Industries (Cement/Chemicals/Process Group) for Excellence in Maintaining Harmonious Employer-Employee Relations, Effective Productivity Levels, Skill Development Innovation & Corporate Social Responsibility, received on 24.11.2017 from the Employers'' Association of Rajasthan, Jaipur.

- Certificate of Honour -1 st Prize in the field of Reclamation & Rehabilitation under the Group A-l (Fully Mechanized, Production More than 2 Million (MT) Mines, received on

13.01.2018 in 28th Mines Environment and Mineral Conservation Week

- Certificate of Honour - 3rd Prize in the field of Mineral Conservation under the Group A-l (Fully Mechanized, Production More than 2 Million (MT) Mines, received on

13.01.2018 in 28th Mines Environment and Mineral Conservation Week

- Certificate of Honour -1 st Prize in the field of Poster Competition under Employees Categoryon 13.01.2018 in 28th Mines Environment and Mineral Conservation Week

40. ACKNOWLEDGEMENTS

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

Aruna Makhan, Director N G Khaitan, Director

Gaurav Goel, Director K C Jain, Director

New Delhi Vidula Jalan, Executive Director

15th May, 2018 A V Jalan, Executive Director

Source : Dion Global Solutions Limited
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