Your Directors have pleasure in presenting their Report for the financial year endedMarch 31 2017.
The Audited Financial Statements for the year ended March 31 2017 and the report ofthe Auditors thereon are being circulated with this report. The salient features of thefinancial results are as follows:
(Rs. in lakhs)
| ||2016-17 ||2015-16 |
|Total Revenue ||116906.42 ||99748.01 |
|Profit Before Tax ||6165.78 ||6686.54 |
|Provision for Tax (including deferred tax) ||692.79 ||1378.63 |
|Profit for the year after tax ||5472.99 ||5307.91 |
|Transfer to General Reserve ||1000.00 ||434.20 |
Your Directors are pleased to report that your company has crossed the milestone of Rs.1000 crores during the year under review. The total revenue of Rs. 1169.06 croresrepresented a growth of over 17% compared to the previous year. Improvement in cementcapacity utilization and sales during the year under review contributed to the healthyperformance. The Boards Division also operated at 100% capacity and recorded a GrossTurnover of Rs.107.24 crores a marginal improvement over the turnover of Rs. 104.31crores achieved in the previous year.
However for the second year in succession the operations of the Energy Division wereadversely affected by the insufficient water inflows due to bad monsoon. Consequently thegeneration of hydel power during the year under review was only 7.91 million unitscompared to 12.89 million units in the previous year.
Despite the sub-optimal performance of the Energy Division your company has recorded athe profit after tax of Rs. 54.73 crores.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY
Issue of Non Convertible Debentures on Private Placement Basis
As reported last year your company has embarked upon a programme of raising Rs. 325crores to repay the term lenders and exit from the CDR mechanism and also to go aheadwith the capital expenditure for enhancement of capacities of the Cement and BoardsDivisions. So far the company raised an amount of Rs.220.00 Crores out of Rs.325.00 Croresenvisaged.
The utilization of the proceeds of the NCD Issue has been as follows:
Exit from CDR Mechanism:
An amount of Rs. 102 crores was used to repay the term loans to institutions and banksin full and exit the CDR mechanism.
Capital Expenditure and enhancement of capacities Cement Division
An outlay of Rs. 180 crores has been made for expansion of clinker capacity from 1.60MTPA to 2.60 MTPA and cement grinding capacity from 0.96 MTPA to 1.71 MTPA at SimhapuriSuryapet District Telangana. As on the date of this Report major civil works havealready been completed. Erection of Equipment is in advanced stage of completion. Trialruns are expected shortly.
An outlay of Rs. 35 crores has been made for setting up a third Boards Plant of 30000TPA capacity at Simhapuri Nalgonda District Telangana. Erection of machinery has beencompleted and the plant is ready for its trail runs.
Your Directors expect that the expansion projects to be completed by September 2017.
Ready Mix Concrete:
Apart from the enhancement of the capacity of clinker cement and boards one moreReady Mix Concrete unit was set up at Hyderabad and commenced its commercial operationsfrom 11th March2017.
Members are aware that the directors declared and paid an interim dividend @10% perEquity Share (i.e. Rs.1/- per Equity Share of Rs.10/- each) in February 2017. YourDirectors are pleased to recommend a final dividend of Rs.1.50 per share at the ensuingAnnual General Meeting thus bringing the total dividend for the year 2016-17 to Rs.2.50per share
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134 (3) (c) of the Companies Act 2013andon the basis of the information furnished to them by the concerned accountingprofessionals your Directors confirm that :
I. All applicable accounting standards have been followed in the preparation of annualaccounts and that there are no material departures
II. The Directors selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31st March 2017 and of the profit ofthe Company for the year ended on that date.
III. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities.
IV. The Directors prepared the Annual Accounts on a going concern basis.
V. Proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively.
VI. Appropriate systems were devised to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONS (KMP) Independent Directors
During the year under review your Company had five independent directors as stipulatedby Section 149(6) of the Companies Act 2013 namely Mr. R Anand Mr.M.Kanna ReddyMr.Kamlesh Gandhi Dr.R.Kalidas and Lt.General T.A.Dcunha(Retd).
Mr.M.Kanna Reddy resigned from the Board on health grounds with effect from 21stSeptember2016. Mr.V.S.Raju has been appointed by the Board on the 11th November
2016 as Independent Director to fill the vacancy caused by the resignation ofMr.M.Kanna Reddy. In terms of Section 161(1) of the Companies Act 2013 Mr. V S Raju holdsoffice till the date of the ensuing Annual General Meeting. A Special Resolution is beingproposed for fresh appointment of Mr.V.S.Raju as an Independent Director for tenure offive years.
The Company has received declarations from all the Independent Directors of the Companyunder Section 149(7) of the Companies Act 2013 confirming that they continue to meet thecriteria of independence asprescribed under sub-section (6) of Section 149 of theCompanies Act 2013 and Regulation 25 of the SEBI (LODR) Regulations 2015.
Mr.N.V.Suvarna resigned from the Board w.e.f 1st January
2017 upon reaching the age of 65 years.
Mr.K.Gautam who was appointed as Executive Director for a period of 3 years w.e.f.1stAugust 2014 has been reappointed by the Board for a further period of 5 years from 1stAugust 2017. A resolution is being proposed at the ensuing Annual General Meetingappointing Mr.K.Gautam as Executive Director.
The Board records its profound appreciation of the contribution made by Mr. M. KannaReddy and Mr. N.V.Suvarna as Independent Director and Executive Director respectively.
Mr. Ashven Datla and Mrs. Roopa Bhupatiraju retire by rotation at the ensuing AnnualGeneral Meeting and are eligible for reappointment. The necessary resolutions for there-appointment of Mr. Ashven Datla and Mrs.Roopa Bhupatiraju have been included in theNotice convening the ensuing AGM.
Particulars of Directors whose appointment/reappointment is sought are given inAnnexure A-1 to this Report as part of the Report on Corporate Governance under SEBI(LODR) Regulations2015.
During the year under review five Board meetings were held on 30th May 2016 29thJuly 2016 20th September 2016 11th November 2016 and 13th February 2017. Themaximum time gap between any two consecutivemeetings was within the period prescribedunder the Companies Act 2013.
Committees of the Board
The Board has constituted various committees as required under the Companies Act 2013and SEBI (LODR) Regulations2015. The details of such Committees are given in Annexure - Aas a part of the report on Corporate Governance.
Plans for Orderly Succession for appointments to Board etc;
Your Board of Directors is fully satisfied that plans are in place for orderlysuccession for appointments to the Board and to senior management positions.
A separate Report of compliance with the provisions relating to Corporate Governance asrequired SEBI (LODR) Regulations 2015 is enclosed as Annexure 'A' and forms part of thisReport.
The company has a system of constantly identifying and monitoring the risks that thecompany may be exposed to. A Risk Management Committee constituted headed by IndependentDirector as Chairman and three other Non Executive Directors as members. The Committee andits members reviews various risks and steps taken to manage the risks. The Board is of theopinion that there are no elements of risks that may threaten the existence ofthe Company.
Particulars of Loans Guarantees or Investments under section 186 of the CompaniesAct 2013
The company has not granted any loans given any guarantees or made any investmentsduring the year which would be covered under section 186 of the Companies Act 2013.
Related Party Transactions
Pursuant to Section 134 of the companies Act 2013 read with Rule 8(2) of the Companies(Accounts) Rules 2014 the contracts or arrangements entered in to by the company withrelated parties have been at arm's length and are in the ordinary course of business. Thedetails of the Related Party Transactions are contained in Annexure A-2 to this Report.
Management Discussion and Analysis Report
The Management Discussion & Analysis Report is annexed as Annexure B' to thisReport.
During the year under review no significant or material orders were passed by anyregulatory/statutory authorities
or courts/tribunals against the company impairing its going concern status andoperations in future.
Corporate Social Responsibility (CSR) Activities
The CSR Committee has been reconstituted w.e.f 13th February 2017 with Dr.R.KalidasIndependent Director as Chairman. The Committee also includes one Executive and oneNon-executive Director. The CSR Committee meeting was held on 12th February 2017 andreviewed the CSR Policy and CSR activities.
Under the provisions of Section 135 of the Companies Act 2013 an amount of Rs.24.70Lakhs is required to be spent on CSR activities recommended by the CSR Committee to Boardfor the FY 2016-17. However your Directors are glad to report that an amount of Rs.152.93Lakhs was spent towards CSR activities on a voluntary basis towards education and medicalduring the year under review. The details of the CSR activities during the year underreview are listed in Annexure - C to this Report.
Your Company has no subsidiaries Associates or Joint Ventures as on the date of theReport.
Investor Education & Protection Fund
The Company has transferred Rs.28.40 Lakhs relating to unpaid Dividend for theFinancial Year 2008-09 to the Investor Education & Protection Fund.
The details relating to Fixed Deposits are as follows:
As on 31st March 2017 Rs.4886.10 Lakhs of Public Deposits are outstanding. The Companyhas repaid all the matured deposits that have been claimed and there have been nodefaults in payment of interest or repayment of principal. The details of depositsreceived from the directors/relatives of directors during the year under review in termsof MCA Notification No.GSR695 (E) dated 15th September 2015 are as under:
|Name of the Director / Relative of Director ||Amount (Rs.in Lakhs) ||Inter-se Relationship |
|1 Mr.K.Ravi ||45.00 ||Managing Director |
|2 Mrs.Roopa Bhupatiraju ||4.50 ||Director |
|3 Master B.Arjun ||8.05 ||S/o Mrs. Roopa Bhupatiraju |
|4 Ms.D.Ananya ||2.00 ||D/o Mr.Ashven Datla |
|5 Ms.D.Katyayani ||1.00 ||D/o Mr.Ashven Datla |
|6 Ms.K.Sailaja ||1.00 ||W/o Mr.K.Ravi |
|7 Mr.R.Anand ||20.00 ||Chairman |
|8 Mr.Vinodrai.V.Goradia ||10.00 ||Director |
|9 Mrs.Charulatha V.Goradia ||10.00 ||W/o Mr.V.V.Goradia |
|10 Ms.N.Chaitra Sarada ||23.50 ||D/o Mr.N.G.V.S.G.Prasad |
Particulars of Employees
The details of employees who have been in receipt of remuneration envisaged by Section197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial personnel) vide MCA Notification dated 30th June 2016 isannexed as Annexure - D to this Report.
M/s Venugopal & Chenoy Chartered Accountants have been appointed as the statutoryauditors of the Company for a period of five years w.e.f 29th September 2014 subject toratification at ensuing Annual General Meeting.
M/s S.R.and ASSOCIATES Cost Accountants have been reappointed to conduct the costaudit pertaining to Cement as well as RMC of the company for the year 2016-17.
The Cost Audit Reports for the financial year ended March 31st 2016 were duly filedwith Ministry of Corporate Affairs on 26/08/2016
The Secretarial Audit Report pursuant to the provisions of Section 204 of the CompaniesAct 2013 is attached as Annexure - E to this Report. The observations of the Report areself contained and do not call for any explanation as envisaged by Section 204(3) of thesaid Act.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
During the year under review there were no cases filed pursuant to the aforesaid Act.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Your Company continues to be conscious of the need for conservation of energy andwherever feasible effective steps for energy conservation are taken.
There were no significant investments or developments in this regard during the yearunder review.
The technology procured for the fields of operation has been fully absorbed.
There was no significant expenditure in Research & Development warranting a specialmention in this Report.
The details of Foreign Exchange Earnings and outgo are as follows:
Earnings : Rs. 56.26 Lakhs Outgo : Rs. 1361.92 Lakhs Extract of Annual Return
Pursuant to the provisions of Section 92 of the Companies Act 2013 and rules framedthere under the extract of the Annual Return in form MGT-9 is annexed herewith asAnnexure 'F' and forms part of this Report.
Your Directors wish to place on record their appreciation of the support andco-operation extended by SBI Axis Bank IDBI Bank and Central and State GovernmentDepartments Dealers Stockists Consumers and Depositors.
Your Directors also wish to place on record their appreciation of the enthusiasticsupport received from the shareholders.
Your Directors have pleasure in acknowledging the excellent co-operation received fromthe team of dedicated executives and employees who have contributed handsomely to theoperations of the company.
For and on behalf of the Board
Chairman DIN :00040325
Place: Hyderabad Date: 14th August 2017