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Sagar Cements Ltd.

BSE: 502090 | NSE: SAGCEM |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE229C01013 | SECTOR: Cement - Mini

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report


Dear Members

The Directors are pleased to present their Thirty Seventh Annual Report together with the audited Stand-alone and Consolidated financial statements of the Company for the year ended 31st March, 2018.

To avoid repetition in the Directors'' Report and the Management Discussion and Analysis Report, the information under these reports is furnished below as a composite summary of the performance of the various aspects of the business of your company.

Financial Results

This discussion on the financial condition and results of operations of the Company should be read in conjunction with the Company''s audited stand-alone and consolidated financial statements and notes thereto for the year ended 31st March 2018, which are summarized below:

Rs, in Lakhs


Consolidated I





2016-17 1

Total income





Total expenses





Profit before tax





Total Tax





Profit after Tax





Other Comprehensive Income





Total Comprehensive Income





Basic & Diluted Earnings per share of Rs, 10 each





Higher capacity utilisation and growth in demand for cement in 2017-18 enabled your company to achieve its highest ever revenue from its stand-alone operations registering a growth of 23% over the previous year. On a consolidated basis, the total revenue crossed Rs, 1,000 crores during the year under report.


Dividend is recommended by your Board in the context of the Company''s overall profitability, free cash flow, capital requirements and other business needs as well as the applicable regulatory requirements.

In this background, an interim dividend of Rs, 2.50 (25%) per share on the 2,04,00,000 equity shares of Rs, 10/- was announced for the year 2017-18 on 26th October, 2017 and the same was paid on 16th November, 2017. Your Board has recommended a further dividend of Rs, 1.50 (15%) per share for the year 2017-18. The total dividend for the year 2017-18 would accordingly work out to Rs, 4/- (40%) per share, involving a sum of Rs, 9,82,11,840, which includes a sum of Rs, 1,66,11,840 towards dividend tax.

The above said further dividend of Rs, 1.50 per share, if approved by the shareholders at the ensuing Annual General Meeting, will be paid within 30 days of the said approval.

Transfer to reserves

As no transfer to any reserve is proposed, the entire balance available in the Profit and Loss Account is retained in it. Share Capital

The paid up share capital of the company is Rs, 20,40,00,000/- consisting of 2,04,00,000 equity shares of Rs, 10/- each and there was no change in share capital during the year under report.

Pursuant to the approval accorded by the Shareholders at their Extraordinary General Meeting held on 23.11.2016, your board in the year 2016-17 had raised a sum of Rs, 48.96 crores by preferential allotment of 6,11,986 equity shares of Rs, 10/- each at a premium of Rs, 790/- per share and by allotment of 24,00,000 equity shares of Rs, 10/- each at a premium of Rs, 710/- per share through Qualified Institutional Placement, to fund the expansion of grinding capacity of your unit at Bayyavaram from 0.3 million tons to 1.5 million tons, for setting up of a coal based power plant of 18 MW capacity at your Mattampally Unit and for meeting its other general corporate purposes from time to time. Your directors are happy to inform you of the successful completion of the expansion of the said grinding unit well ahead of the schedule. The setting up of the power plant, which is progressing well, is also expected to be completed by the end of March, 2019.

Industry Structure and Development

Cement being a basic building material used widely in housing and industrial sectors and in developing infrastructure, its per capita consumption is an important index for measuring the economic growth of a country. India being the world''s second largest producer of cement and because of its strong connection with other sectors such as construction, transportation, coal and power, cement industry occupies an important place in the economy, providing employment directly and indirectly to more than a million people.

One of the main features of the Indian cement industry is that the location of limestone reserves in some of its states has resulted in the formation of what is popularly known as cement clusters and Nalgonda in Telangana, where your company''s Mattampally unit is located, is one of such clusters . The proximity to coal deposits is also an important factor in setting up of a cement plant. Cement being a high bulk and low value commodity, competition also tends to be localized, since the cost of transportation of cement to distant markets often results in the product being uncompetitive in those distant markets.

Further, though the structure of Indian cement industry is considered to be a highly fragmented one, still 70 % of the total cement production is from its top 20 cement companies.

Apart from the ready availability of raw materials such as limestone and coal, the other factor contributing to the growth of this industry is increasing demand for cement emanating from the development in the infrastructure and construction sectors. In this connection, some of the recent major initiatives such as development of ''smart cities'' which are giving a push to the demand for cement, providing further boost to this sector, augur well for the industry.

Whether it is affordable housing, roads, highways or ''smart cities'', the entire industry has high hopes from the Government as far as infrastructure spending is concerned and on such hopes materializing, the industry will look up and hopefully grow by 8% in the current year.

Company''s stand-alone performance with reference to its operational performance:

Demand for cement is a derived demand, as it depends on growth of Infrastructure, construction and realty sectors, which were on the path of recovery after a slow-down witnessed in the later part of the year 2016-17 due to disruption caused by demonitisation. Further, revival of demand for cement in Telangana and Andhra Pradesh that was expected following the bifurcation of the erstwhile State of Andhra Pradesh is also now gaining momentum, easing the pressure on the pricing front, though only marginally. However, even as the infrastructure sector is slowly looking up, the housing segment, which is the biggest demand driver for cement is yet to resume its potential growth.

Viewed in the above background, the overall performance of your company on a stand-alone basis during the year 201718 in terms of production, sale, revenue and average net sales realization per ton of cement is satisfactory.

In terms of volume, your company achieved an increase of 28% and 30% in the cement production and sales respectively over the previous year which, aided by a marginal increase in average sales realization per tonne of cement by 4.5%, resulted in an increase of 23% in revenue and a 68% increase in the EBITA over the previous year.

1 Particulars



Cement Production in MTs



Cement Sales in MTs



Average Net Sales Realization per MT ('' )



Total Revenue ( '' in lakhs)



Subsidiaries, Joint Ventures and Associate Companies

In the year 2015, your company acquired the entire equity stake in BMM Cements Limited, which has now been renamed as Sagar Cements (R) Limited. This wholly-owned subsidiary has its cement plant of 1.00 Million MTs per annum capacity along with a coal based captive power plant of 25 MW capacity in Gudipadu Village in Ananthapur District, A.P.

After overcoming the initial constraint of operating at a very low capacity due to outsourcing lime stone at a higher cost for its cement production on account of lack of permission to extract the limestone available in its captive mines, this unit is now making use of the lime-stone available in the said captive mines after obtaining necessary permission therefor and is currently operating at around 70% capacity. Its power unit is operating at 87% capacity.

As you are aware, the cement produced by this subsidiary is sold under the brand name SAGAR CEMENT”. With this subsidiary further consolidating itself and improving upon its operations, the investments made by your company in this subsidiary will prove to be beneficial to your company in the long run.

Statement containing salient features of the financial statement of the above mentioned subsidiary has been given in Form AOC-1 in the Annexure 1 to this report.

Your Company does not have any Joint Ventures or Associate Companies.

Grinding Unit in Bayyavaram

We had earlier informed you of the acquisition of a grinding unit of 1,81,500 MT capacity at Bayyavaram in Visakhapatnam District in Andhra Pradesh and of the company''s plan to expand its capacity to 1.5 million tons. Your Directors are happy to inform you that the said expansion as earlier mentioned in this report has since been completed.

The acquisition of the above said grinding unit and the subsequent expansion of its capacity, enable your company to transport the surplus clinker available at its plant in Mattampally to the said unit, for grinding into slag cement to meet the demand in markets in Odisha, West Bengal and in the Vizag region of Andhra Pradesh where, with the identification of Vishakhapatnam and Kakinada in Andhra Pradesh and Bhubaneswar in Odisha for development as ''smart cities'' under the Prime Minister''s ''Smart Cities Mission'', the focus is currently more on the investments in their infrastructure sector.

Opportunities and threats:

Constraints on inputs:

The cement industry is a highly energy intensive sector. Energy, along with other raw materials mainly comprising coal and lime stone, forms a most critical component in the manufacture of cement. While your company does not face any problems with respect to the availability of limestone, it attaches high priority to keep its energy cost, which forms a significant portion of the input costs, to the minimum. This is sought to be achieved, among other means, by ensuring an optimum combination in the consumption of indigenous coal along with imported coal, which is relatively cheaper.

After successfully commissioning the Waste Heat Recovery Plant with an initial capacity of 6 MW capacity, which is presently operating at 8.50 MW capacity at its Mattampally plant, your company is now setting up a coal based plant of 18MW capacity at the said unit. Further, as your company is also keen on meeting its power requirement from renewable energy sources, apart from setting up of a solar power plant of 1 MW capacity at the said plant, it has recently acquired 2 mini hydel power units, one with a capacity of 4.3 MW on the Guntur Branch Canal and the other with a capacity of 4 MW in Lock-in-Sula in Kurnool District, both in Andhra Pradesh.

Your directors hope that the above measures would contribute to your company''s efforts in further optimizing its energy cost.

Freight cost

Cement being a freight-intensive industry, transportation of cement over long distances can be uneconomical and this has made it largely a regional play. As the logistics and the optimizing the freight cost continue to be the main area of concern with the distribution cost remaining a significant component in the cost structure notwithstanding the availability of a railway siding at your plant, your company is also weighing various other options available to it like setting up of grinding stations/full-fledged cement plants in distant areas where opportunities exist, to cater to the local market and this is sought to be achieved through routes like mergers, acquisitions, joint ventures, strategic marketing tie-ups and setting up of green field projects. As part of optimizing the freight cost, demand in the Eastern markets, which until recently was served by your company from its plant at Mattampally in Nalgonda District of Telangana is now being serviced from its plant at Bayyavaram in Visakhapatnam in A.P.

Lower demand

Housing sector which accounts for a major portion of cement demand is yet to pick-up in a big way both in Telangana and Andhra Pradesh, which are significant markets for your company. While the initiatives by the governments, like ''Smart Cities Mission'', ''affordable housing'' will help the construction, real estate, infrastructure and cement sectors in due course, the cement industry may have to wait for some more time to see any significant revival in demand in these states.

In the above circumstance, your company which has its major markets in Telangana, Andhra Pradesh and in the border areas of the other neighboring States, needs to look into expanding its Markets beyond these areas. However, the freight cost involved in moving the material from its plants at Mattampally and Bayyavaram to these areas, discourages it to do so, as the price of the locally produced cement in such areas would tend to be much cheaper.

As the company cannot afford any more to ignore the growing demand for cement in its neighboring states just because of the transportation cost involved in catering to these markets, apart from serving these markets from its own production, it buys cement in bulk from other sources located in these states and sell the same in the retail markets in those areas under the brand name ''Sagar Cement'', wherever there is cost advantage in doing so. It is hoped that this, apart from increasing the sales turnover of the company without incurring any additional capital expenditure and in turn improving its bottom line, would help it in popularizing its brand in new areas as well as in firmly establishing it in the areas where it might only have a token presence at present.

Impact of new entrants:

The Indian cement industry with its huge potential continues to attract the entry of global cement majors and encourages the strengthening of production bases by existing companies. This may lead to a substantial part of the cement capacity being controlled by a few players. Sagar Cements proposes to meet some of the challenges posed by this development, by focusing on cost reduction and by further improving its brand image, greater expenditure on advertising, strengthening its distribution networks as well as by other customer-focused initiatives. Apart from these, Sagar Cements is looking for opportunities to expand its market through strategic alliance and setting up of grinding stations, wherever viable.

Segment-wise /product-wise performance:

As your company operates in only one segment, namely manufacture and sale of cement, there is no other reportable segment or product.

Future outlook

The per capita consumption of cement is still very low in India and therefore there is a vast scope for growth in its demand on the long term. However, for such a real growth to happen, there should be an overall growth in investments in the real estate and infrastructure sectors. Since India is emerging as one of the fastest growing economies in the world, the future outlook for cement looks to be bright, provided government formulates growth oriented policies, so that our per capita cement consumption matches at least with some of the developing economies. Notwithstanding the plans to expand its market in other states, Telangana and Andhra Pradesh will continue to be the major markets for your Company. With the respective Governments in these states rightly focusing on the development of infrastructure along with the importance given by the Union Government for the development of National Highways, Rural and Urban Roads, Affordable Housing, Port Connectivity, Development of smart cities, etc., coupled with private agencies coming up with a slew of their own infrastructure development projects, demand for cement in these and their neighbouring states is expected to see a significant growth, which augurs well for your company, which, with its aggressive and innovative marketing duly supported by its well-motivated marketing personnel, is poised to grab the opportunity available in this scenario.

However, till such time that the above scenario becomes a reality, your company may have to continue to face the problems like rising input and distribution costs, despite the efforts being made by your company as mentioned above to mitigate the same.

The impact of the Goods and Services Tax rate has since been absorbed by the cement industry. The Company, on its part, will optimize the distribution/warehouse network under GST regime to further improve its operational efficiency.

Therefore, taking an overall view of the above, your Board is cautiously optimistic about the future outlook for your company.

Risk Management System:

Your Company attaches utmost importance to the assessment of internal risks and the management thereof in all its dealings. Your Company is constantly on the lookout for identifying opportunities to enhance its enterprise value. Keeping the need to minimize the risks associated with such efforts, every proposal of significant nature is screened and evaluated for the risks involved and then approved at different levels in the organization before implementation.

With a view to overcoming the risk of dependence upon any particular marketing segment or region, your Company is trying to reach out to a wider section of its ultimate consumers. As the cement industry is witnessing rapid additions to its capacity in Telangana and A.P., in order to mitigate the risk associated with it, Sagar Cements, whose revenue is mainly from sales in these two states, is looking for growth opportunities in other States as well, where infrastructure spending is set to get a boost.

Your Company has adequate system to manage the financial risks of its operations. This system is implemented through imposition of checks and balances on extending credit to the customers, audits like internal audit, statutory, cost and secretarial audit, all of which are periodically carried out through external firms, proper appraisal of major capital expenditure, adherence to the budget norms covering all areas of its operations and by adequate insurance coverage for the company''s facilities.

Internal Control System and its adequacy:

Your Board of Directors are satisfied with the adequacy of the internal control system currently in force in all major areas of operations of the Company, which is supported by an ERP and compliance management systems. Their audit committee assists the board of directors in monitoring the integrity of the financial statements, reservations, if any, expressed by the company''s auditors including, the financial, cost, internal and secretarial auditors and based on their inputs, your board is of the opinion that the company''s internal controls are adequate and effective.

Human resource development and Industrial Relations

Your Company continues to enjoy cordial relationship with all its personnel working at its Plants, Offices and on the field.

Your company is organizing training programmes wherever required for the employees concerned to improve their skill. Employees are also encouraged to participate in the seminars organized by the external agencies on the subjects related to the areas of their operations.

Your company continues to focus on attracting and retaining competent personnel and providing them with a holistic environment where they get opportunities to grow and realize their full potential. Your company is committed to providing all its employees with a healthy and safe work environment.

Sexual Harassment

Under the Sexual Harassment of Women at the work place (Prevention, Prohibition & Redressal) Act, 2013, your company has constituted an Internal Complaints Committee. No complaints were received or disposed off during the year under the above Act.

Awards and Recognitions

Your company has already achieved ISO Certification ISO 9001:2008 for Quality Management System Standard, ISO 14001:2004 for Environmental Management System Standard and OHAS 18001:2007 for Occupational Health and Safety Management System Standard.

As you are aware, your company''s Laboratory at its Plant in Mattampally is the recipient of the Accreditation by the National Accreditation Board for Testing and Calibration Laboratories (NABL), which is the sole accreditation body for testing and calibration of laboratories under the aegis of Department of Science and Technology, Government of India.

Directors Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, your board of directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. the directors have 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 year and of the profit of the company for that period;

iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the directors have prepared the annual accounts on a going concern basis;

v. the directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and operating effectively;

vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Directors and Key Managerial Personnel

In accordance with the provisions of Section 152 of the Companies Act, 2013, Dr.S.Anand Reddy and Shri John-Eric Fernand Pascal Cesar Bertrand will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Accordingly, the resolutions seeking the approval of the members for the said reappointments have been incorporated in the notice of the annual general meeting of the company.

Excepting Mrs. S.Rachana, who is a director in Panchavati Polyfibres Limited and in R.V.Consulting Services Private Limited, whose transactions with the company have been reported under the related parties disclosure under notes to the accounts, none of the non-executive directors has had any pecuniary relationship or transactions with the company, other than the receipt of sitting fee for the meetings of the Board and Committees thereof attended by them.

Independent Directors Declaration

The company has received the necessary declaration from each Independent Director in accordance with Section 149 (7) of the Companies Act 2013, that he meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act 2013.

Number of meetings of the board

Six (6) meetings of the board were held during the year 2017-18. Details of these meetings have been given in the corporate governance report, which forms part of the Annual Report.

Policy on directors'' appointment and remuneration and other details

The company''s policy on directors'' appointment and remuneration and other matters provided in Section 178 (3) of the Act have been disclosed in the corporate governance report.

Under Section 178 (3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the board has adopted a policy for nomination, remuneration and other related matters for directors and senior management personnel. A gist of the policy is available on the Companies website,

Board evaluation

The Board of directors have carried out an evaluation of its own performance and of its committees as well as its individual directors, on the basis of criteria such as composition of the board / committee structure, effectiveness, its process, information flow and functioning etc.


M/s. Deloitte Haskins & Sells, Chartered Accountants (FR No.008072S) were appointed as Statutory Auditors of the company by the company at the 34th Annual General Meeting held on 23rd September, 2015, to hold office from the conclusion of the said Annual General Meeting till the conclusion of the 39th Annual General Meeting. Though the said appointment was required to be ratified at every annual general meeting under Section 139, in accordance with the Companies Amendment Act 2017, enforced from 7th May, 2018 by Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every annual general meeting anymore.

Auditors'' Report and Secretarial Auditors'' Report

Auditors'' Report

The auditors'' report on the financial statements of the company is part of this report and it does not contain any qualifications, reservations or adverse remarks.

Secretarial Auditors'' Report

In accordance with Section 204 (1) of the Companies Act, 2013, the report furnished by the Secretarial Auditors, who carried out the secretarial audit of the company under the said Section, is given in the Annexure 2, which forms part of this report. There are no adverse remarks in the said report. Your company has complied with the Secretarial Standards applicable for holding Board and General Meetings.

Cost Auditors

M/s.Narasimha Murthy & Co., (FR No.000042) Cost Auditors of the company have been appointed as Cost Auditors of the company for the year ending 31st March, 2019. A resolution seeking shareholders'' ratification of the remuneration payable to the Cost Auditors has been included in the notice of the AGM. The reports submitted by the Cost Auditors are filed with the appropriate authorities.

Particulars of loans, guarantees

and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements at appropriate places. Transactions with related parties

None of the transactions with related parties falls under the scope of Section 188 (1) of the Act. Information on transactions with related parties pursuant to Section 134 (3) (h) of the Act read with rule 8 (2) of the Companies (Accounts) Rules, 2014 are given in Annexure-3 in Form AOC-2 and the same forms part of this report.

All related party transactions entered into during the financial year were on arms length basis and in the ordinary course of business. There were no materially significant related party transactions entered into by the company with the promoters, key management personnel or other designated persons that may have potential conflict with the interests of the company at large. All related party transactions had prior approval of the Audit Committee and were later ratified by the Board.

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) Policy of your company along with the initiative taken by it are set out in Annexure-4 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the company,

Extract of Annual Return

As provided under Section 92 (3) of the Act, an extract of annual return is given in Annexure-5 in the prescribed Form MGT-9, which forms part of this report, a copy of the same is also available on the company''s website

Particulars of Employees

The information required under Section 197 of the Act read with Rule 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules are given in the Annexure-6, which forms part of this report.

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year is as under:


Ratio to Median Remuneration

Non-Executive Directors *

Executive Directors

Shri S.Veera Reddy


Dr.S.Anand Reddy


Shri S.Sreekanth Reddy


*Non-Executive Directors are not paid any remuneration, other than sitting fee.

b. The percentage increase in the remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year is as under:

Director, Chief Executive Officer, Chief Financial Officer and Company Secretary

% increase in remuneration in the financial year

Shri O.Swaminatha Reddy

During the financial year, these directors were

Shri K.Thanu Pillai

not paid any remuneration, other than sitting

Shri T.Nagesh Reddy (APIDC Nominee)

fee, in which there was no increase

Shri John-Eric Fernand Pascal Cesar Bertrand

Shri V.H.Ramakrishnan


Shri S.Veera Reddy


Dr.S.Anand Reddy


Shri S.Sreekanth Reddy


Shri R.Soundararajan


Shri K.Prasad


c. The percentage increase in the median remuneration of employees in the financial year: 5.62%

d. The number of permanent employees on the rolls of Company: 507

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees in India received an annual increase of around 10%.

In order to ensure that remuneration reflects Company performance, the performance of the company is also one of the parameters for fixing the remuneration to the employees.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY 2017-18 ('' crores)


Revenue ('' crores)


Remuneration of KMPs (as % of revenue)


Profit before Tax (PBT) ('' crores)


Remuneration of KMP (as % of PBT)


g. Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year are as under:


March 31, 2018

March 31, 2017

% Change

Market capitalization (in Crores)




Price Earnings Ratio




h. Percentage increase or decrease in the market quotations of the shares of the company in comparison to the issue price at which the company came out with its last public offer:


March 31, 2018

June 22, 1992

% Change

Market Price in NSE


Not listed


Market Price in BSE




i. Average percentage 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.

The average annual increase was around 15.42% for personnel other than managerial personnel.

Increase in the managerial remuneration (Whole-time Directors) for the year was 101.21% (including commission). j. Comparison of remuneration of the each key managerial personnel against the performance of the Company:





Remuneration in FY2017-18 (lakhs)




Revenue (lakhs)


Remuneration as % of revenue




Profit before Tax (PBT) (lakhs)


Remuneration (as % of PBT)




k. The key parameters for any variable component of remuneration availed by the directors:

Commission is the only variable component which depends on profit earned by the comapny during the relevant year and the same is subject to approval of the shareholder/remuneration committee / Board and to other applicable regulatory approvals.

l. 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: None.

m. 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.

Other Disclosure requirements

A report on corporate governance together with auditors'' certificate thereon has been furnished as part of the Annual Report.

Policy on dealing with related party transactions is available on the website of the company (

The company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees of the company to report their genuine concerns. The provisions of this policy are in line with the provisions of the Section 177 (9) of the Act and the Listing Regulations and the same is available on the company''s web site.

Deposits from public

The company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Conservation of Energy, Technology absorption and Foreign Exchange Earnings and Outgo:

The particulars required under Section 134 (3) (m) of the Companies Act, 2013 have been provided in the Annexure 7, which forms part of the Report.


All the properties of the Company have been adequately insured.

Pollution Control

Your company is committed to keep the pollution at its plants within the acceptable norms and as part of this commitment, it has inter-alia, adequate number of bag filters in the plant.

Sub Committees of the Board

The Board has Audit Committee, Nomination and Remuneration Committee, Investment Committee, Corporate Social Responsibility Committee, Stakeholders'' Relationship Committee and Securities Allotment Committee. The composition and other details of these committees, have been given in the Report on the Corporate Governance forming part of the Annual Report.

Compliance Certificate

A certificate as stipulated under Schedule V (E) of the Listing Regulations from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance is attached to this Report along with a report on Corporate Governance.

Material changes and Commitments since the end of the Financial Year

There were no material changes or commitments between the end of the financial year and the date of this report. Cautionary Statement

Statements in these reports describing company''s projection statements, expectations and hopes are forward looking. Though, these expectations etc., are based on reasonable assumption, the actual results might differ.


Your Directors wish to place on record their appreciation of the valuable co-operation extended to your Company by its bankers and various authorities of the State and Central Government. They thank the Distributors, Dealers, Consignment Agents, suppliers and other business associates of your Company for their continued support. Your Board also takes this opportunity to place on record its appreciation of the contributions made by employees of your company at all levels and last but not least, of the continued confidence reposed by you in the Management.

For and on behalf of the Board of Directors

Hyderabad O. Swaminatha Reddy

19th July, 2018 Chairman

Director’s Report