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Company director report

Dear Shareholders

Your Directors have pleasure in presenting Sixth Annual Report of the Company togetherwith the Audited Balance Sheet as at 31st March 2016 and the Statement of Profit &Loss for the year ended on that date.


Your Company has five subsidiaries including step-down subsidiaries namely CementManufacturing Company Limited (CMCL) Star Cement Meghalaya Limited (SCML) MeghaTechnical & Engineers Private Limited (MTEPL) Meghalaya Power Limited (MPL) and NEHills Hydro Limited (NHHL). CMCL along with its subsidiaries operates integrated Cementplants in the State of Meghalaya and Assam with a combined installed capacity of 2.87MMTPA of Cement and 2.54 MMTPA of cement clinker. MPL is in the business of powergeneration and operates 51 MW Thermal Power Plant in the State of Meghalaya. NHHL isexploring possibilities of power generation in the North Eastern Part of India. The reporton the financial position of the Company’s Subsidiaries for the year ended 31stMarch 2016 in Form AOC 1 is attached and marked as Annexure - 1 to thisreport.

Your Company does not have any Associate or Joint Venture.

A Policy has been formulated for determining the Material Subsidiaries of the Company.The said Policy has been posted on the Company’s website at the weblink:


Amidst mixed global economic landscape India stands out as a haven of stability and anoutpost of opportunity. Its macro-economy remains stable founded on the Government’scommitment to fiscal consolidation and low inflation. Country’s economic growth hasremained the highest in the world helped by a reorientation of Government spendingtowards needed public infrastructure and have been accomplished in the face of globalheadwinds and a second successive season of poor rainfall. During the Financial Year2015-16 India as an economy fared well as compared to most of the developing economies asalso compared to developed economies. The signs of consolidation of Indian Economy whichstarted reflecting during October-December Quarter of FY 2014-15 were sustained andconfirmed during the year under review. As against 7.2% of GDP growth during FinancialYear 2014-15 Indian Economy is expected to register GDP growth rate of 7.6% during the FY2015-16. Despite a weak monsoon for a second consecutive year agriculture and foodproduction both grew although marginally over previous year. Improvement in privateconsumption was witnessed largely on account of a pickup in urban consumption while ruralconsumption remained subdued as a result of two consecutive weak monsoons. Governmentconsumption growth also stayed tepid as the Central Government boosted capital expenditureand curtailed current expenditure. Increase in capital expenditure undertaken by theCentral Government helped investment growth to improve further during the year underreview as compared to previous Financial Year.

Inflationary pressures were largely under control mainly on account of sharp fallwitnessed in the prices of oil as also on account of base rate effect and softening offood prices.

As against this Global economic growth slowed in FY 2015-16 to its weakest pace sincethe year 2008-09. This was mainly led by slower growth in emerging economies. China’sreal GDP growth was witnessed at 6.9% during the year 2015 which is one of the slowest inlast 25 years reflecting a weaker growth in country’s industrial sector. Growth inother emerging economies also slowed in 2015 and more particularly in commodity producingcountries. All major developed economies are expected to see the growth momentum pickingup. Despite expectations of a more robust recovery developed economies continue to faceconsiderable headwinds from the legacies of the global financial crisis including subduedemployment levels elevated private and public sector debt and financial sectorfragilities.

In the backdrop of above Indian Economy is expected to pick up further growth momentumduring the ensuing Financial Year helped by the Government’s strengthening of publicsector banks’ capital and operations private investment benefitting from corporatedeleveraging the financing of stalled projects and an uptick in bank credit.


Cement is major business vertical for subsidiaries of your Company. India is one of thelargest producer of Cement in world and only second to China. It accounts for nearly 8% ofthe total global production having close to 400 Million MT per annum installed capacity.The cement industry capacity doubled in the last decade with about 70 Million MT added inthe last three years alone. Cement being a bulk commodity is a freight intensiveindustry and transporting it over long distances can prove to be uneconomical. This hasresulted in cement being largely a regional play with the industry divided into five mainregions viz. North South West East and the Central Region. The Southern region of Indiahas the highest installed capacity accounting for about one-third of the country’stotal installed cement capacity.

On the consumption side India has witnessed sustained growth in cement consumptionsince 2001. However consumption growth has slowed down in last 4-5 years mainly onaccount of a slump in housing infrastructure and commercial sector. The gap in the pacebetween capacity additions and actual demand has led to an excess capacity situation inthe industry resulting in sub-optimal utilization rates.

On Per Capita consumption front cement in India still remains substantially low atabout 195 kg which is less than 50% as compared with the world average and thus underlinesthe tremendous scope for growth in the Indian cement industry in the long term.

Cement is a cyclical commodity with a high correlation with GDP. The housing sector isthe biggest demand driver of cement accounting for about two-thirds of the totalconsumption. The other major consumers of cement include infrastructure commercialconstruction and industrial construction.

First half of FY 2015-16 witnessed slowdown in consumption and demand growth. Howeversecond half of the Financial Year started with up-tick in demand which furtherconsolidated during the last quarter of the Financial Year. Housing sector is the majordemand driver. The slow growth in cement sector is expected to remain a short-termphenomenon with the Government’s focus on constructing 50 million houses under‘Housing for All’ scheme by 2022. Government’s other initiatives such as100 smart cities AMRUT cities affordable housing as well as initiatives undertakentowards development of ports roads bridges freight corridor etc. are likely to providefurther impetus to cement demand in India. This also gets reflected with Government’sintention to unshackle the impediments in economic and infrastructural growth. The yearsahead are expected to bring more cheers for Indian Cement Industry.

On the cost front power fuel and logistic costs are the major cost drivers. Costquality and availability of coal are major cost driver for power as well as fuel so far ascement industry is concerned. Indian cement industry continued to face challenges on thisfront both in terms of quality as well as prices. However with all time low Baltic DryIndex (BDI) the landed cost of imported Petroleum Coke has been seen to be more costeffective for cement industry in terms of its cost as well as consistency in qualityparameters. With unblocking of coal blocks and Governments intent to bring perceptibledifference in power supply situation both in terms of quantity and quality it isexpected that in years to come the challenges currently being faced by Indian cementindustry will be eased out.

In the backdrop of opportunities in Housing and Infrastructure sectors India as aneconomy presents a promising future for cement industry.


East India which comprises of States of West Bengal Bihar Jharkhand and Orrisa aswell as eastern most North Eastern Region comprising of contiguous Seven Sister Statesnamely Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland and Tripura andHimalayan State Sikkim is endowed with opportunities. North East India is 8% of land sizeof India where around 4% of Indian populace resides. The region offers a uniqueagglomeration comprising varied cultures languages and dialects different forms ofbelief and worship and diverse ways of life. Topography of North Eastern Region (NER)presents a panoramic view and an awe-inspiring landscape. Within these fascinating andfabulous environment of NER rich potential wealth of mineral resources have been lyinguntapped ready to be exploited for the benefit of the people and economy. Despite beingendowed with vast natural resources in terms of forests biological diversityhydroelectricity and petroleum the region has remained largely underdeveloped on accountof poor infrastructure and limited connectivity both within the region as well as withthe rest of the country. The region connected to the rest of India by a narrow stretch ofland called the ‘chicken’s neck’ needs infrastructure to support. LargeHydro potential that exists in NER and if exploited has potential to export power to thepower deficit Northern and Western regions of the country. This under development of theregion presents a lot of opportunities for industrial and infrastructure growth within theregion. Development of infrastructure such as roads communications and electricity supplyto remote hilly area will result in better quality of life. The improvement in powergeneration will in turn help in establishing industries by annulling the effects of hightransportation costs. Owing to proximity of the region with neighboring countries such asBangladesh and Myanmar the region has potential of augmenting trade.

On the socio-economic front the region stands way below in comparison with the rest ofIndia. Underdeveloped infrastructure has been one of major bottlenecks in development ofregion on socio-economic front. During recent years the Government has taken several stepsto overcome these infrastructural bottlenecks to induce sustainable development in theregion. The strong focus on roads airports and hydropower developments are some of thekey steps in this direction.

Realizing these opportunities subsidiary of your Company CMCL started setting up itsfirst cement plant in the State of Meghalaya of NER with a very small capacity of 0.3Million MT more than a decade ago and started its commercial operations during later partof the FY 2004-05. The product and brand was well accepted in the markets of North East.Looking at the potential of the market your subsidiary Company kept on adding thecapacity which has reached to the level of 2.54 Million MT per annum of Cement Clinker andaround 2.87 Million MT of Cement in North East alone. With passage of time yoursubsidiary has been able to spread its foot print in the entire North Eastern region interms of its distribution network and enjoys a premium brand reputation commanding highestmarket share in North Eastern Region. Owing to the vast opportunities markets of NorthEastern Region continued to remain the focus market for the products of your subsidiaries.

During the year under review the region witnessed infrastructure growth story gettingrealized on the ground with two major highway projects dedicated to NER on 1st May 2015.Shillong Bye-pass Highway Project and four-lane Jorabat – Barapani section of NH-40was opened for public on its completion. This has helped decongest the traffic in the cityof Shillong from trucks and heavy vehicles coming from or moving towards North Easternparts of Assam Mizoram and Tripura apart from significant reduction in travel time andalso ease of logistic operations for cement industry like your Company’s subsidiarieshaving factories in Meghalaya. Much awaited broad gauge conversion work of Silchar-Lumdingrailway line on a stretch of 210 Kms was completed and opened for Goods and PassengerTraffic during the year under review. Similarly the capital town of the landlocked Stateof Tripura appeared on a broad-gauge railway network connecting Tripura with the rest ofthe country. The project consists of 79 major bridges 340 minor bridges and 21 tunnels.The rail line brings Assam’s underdeveloped but strategically important Barak Valleyas well as State of Tripura on the broad gauge map. During the year under review theState of Arunachal Pradesh was presented with second Broad Gauge connectivity with thecommissioning of Balipara – Bhalukpong gauge conversion project. Similarly NorthLakhimpur – Murkongselek sections were converted into broad-gauge during the yearunder review. Commissioning of newly converted North Lakhimpur – Murkongselek sectionmarked the completion of Rangiya – Murkongselek Gauge Conversion project running allalong the North Bank of Brahmaputra. There are other major railway projects which are on afast track of completion.

All the above developments are expected to provide better connectivity for goods andpassenger traffic for overall benefit of public residing in these States and presents apromising future for cement industry in North East Region as also for economy of theregion.

Simultaneous with expanding its horizon in the markets of North Eastern Region yoursubsidiary which started its network expand in the markets of West Bengal and Bihar duringthe latter part of Financial Year 2013-14 has further consolidated its presence in thesemarkets during the year under review. States of West Bengal and Bihar have also remainedunder developed as compared to rest of India and has tremendous growth opportunities ininfrastructure and housing sector two major demand drivers of cement. During the yearunder review the subsidiary Company has successfully driven the marketing campaign inthese States to bring the recall of its brand "STAR CEMENT" at the top ofpeople’s mind. Looking at opportunities in these markets subsidiary Company hasfurther augmented its capacity in form of arrangements with grinding units in the State ofWest Bengal.


Despite slowdown in cement demand in rest of the country growth in cement demand inNER was close to country’s GDP growth rate. During the year under review cementdemand in NER has grown by more than 7% over previous Financial Year. Over a period oftime cement import to NER from outside region has also reduced considerably. During theyear under review less than 15% of cement was imported in the region from outside asagainst more than 17% during previous Financial Year. During the year under review yoursubsidiary companies were able to sale 1703415 MT of cement in the markets of NER asagainst 1498380 MT during the FY 2014-15 and thus recording a growth of 13.7% overprevious year.

Your Directors are pleased to report that markets of West Bengal and Bihar where thebrand "STAR CEMENT" has been relatively a new player as compared to itspositioning in the markets of North Eastern Region has fared well during the year underreview. Your subsidiary companies have been able to sale 926280 MT of cement during theFinancial Year 2015-16 in these markets as against 670871 MT during the Financial Year2014-15 registering a growth of 38% over previous year. To augment its capacity further inthese markets your subsidiary has made arrangements with one more grinding unit in theState of West Bengal during the year under review. With this arrangement subsidiary hasgrinding arrangement of close to 1 Million MT of cement per annum. The capacityaugmentation will help further in cutting down the logistic time to make the productavailable in these markets.

In line with its endeavor to focus trade segment of the business your subsidiariescontinued adding dealer and retail network across length and breadth of the North EastRegion as well as in the States of West Bengal and Bihar to make its foot prints morevisible in these markets. At the close of the fiscal your subsidiaries had dealer andretail network of more than 6000 spread across entire North East Region and 4000 in theStates of West Bengal and Bihar on consolidated basis.

During the year under review your subsidiary Company CMCL has undertaken variousmarketing initiatives in order to make the brand "STAR CEMENT" morevisible and attain top of mind recall. In the markets of North Bengal and Bihar theylaunched its premium product "Star Anti-Rust Cement". Marketing Campaigncalled "Kismat Ki Bori" was launched in various markets of North EasternRegions and outside the region too. During the year under review your subsidiary’sbranding initiative in form of "Largest Idol of Goddess Durga" was a hugesuccess story.

To make the brand more visible in remote areas a block level branding campaign wasundertaken. In addition they conducted various knowledge sharing events mainly related toconstruction techniques in form of "Engineers’ Workshop" and "StarTech" to impart training to engineers. Your subsidiary also conducted more than50 "Mason Certification Programme" wherein masons were trained and theirconstruction skills were certified jointly by your subsidiary Company and localengineering institutes. These initiatives has helped them to promote the brand "STARCEMENT" in a more effective manner in these markets and has also resulted intocreation of better informed category of masons and engineers.


During the year under review the performance of Meghalaya Power Limited a step downsubsidiary of the Company was very optimistic. The power generation has increased to1831.14 Lacs units as compared to 1679.23 Lacs units recorded in the previous year.During the Financial year 2015-16 the Company has posted PBT of Rs. 1472.07 Lacs and PATof Rs. 1082.84 Lacs as against Rs. 1287.39 Lacs and Rs. 544.66 Lacs respectivelyrecorded in the previous Financial Year.


In the backdrop of initiatives being undertaken by the Central Government in form of"Housing for All’ and "Affordable Housing" in the urban and ruralhousing sector and initiatives in the areas of "Amrut and Smart Cities"Development of Ports Roads and Highways dedicated Freight Corridors Gauge conversionProjects undertaken by Railways development in the area of alternative source of energyvis Hydro and Solar Power and other infrastructure projects is expected to boost Cementand Power Demand in the region where subsidiaries of your Company operates as well as inother parts of the country too.

India’s economy being too much dependent upon vagaries of monsoon rains play animportant factor which determines commodity demand growth including cement. Cement andpower industry being majorly dependent upon availability of quality coal at affordablecost remains to be a concern. However recent initiatives in the areas of unblocking ofcoal mines as also all-time low Baltic Dry Index (BDI) making availability of PetroleumCoke at a cheaper cost with high consistency in quality is expected to address the concernto a great extent.

Your Company having business operations through its subsidiaries only the Company hasevolved a risk management framework to identify assess and mitigate the key risk factorsof the business of its Subsidiaries impacting your Company’s performance. The Boardof the Company is kept informed about the risk management of the Company.


The highlights of the financial performance of the Company for the Financial Year ended31st March 2016 and previous Financial Year are as under: (Rs. in Lacs)

Consolidated Standalone
Particulars 2015-16 2014-15 2015-16 2014-15
Net Sales/ Income 171644.98 143121.01 2375.38 0.10
Profit Before Depreciation Interest & Tax 39931.24 43584.75 2225.93 (138.55)
Depreciation (17149.21) (22374.29) - -
Interest and Finance Charges (8336.77) (8738.47) (0.01) (0.03)
Exceptional Items (53.14) 1.83 - -
Profit Before Tax 14392.13 12473.82 2225.92 (138.58)
Tax Expenses (551.06) (480.13) 44.56 -
Profit after Tax before Minority Interest 13841.06 11993.69 2270.48 (138.58)
Less: Minority Interest (4643.59) (3650.03) - -
Net profit after Minority Interest 9197.48 8343.66 - -
Surplus in the Statement of Profit & Loss:
At the beginning of the year 44838.24 37165.12 41.61 180.20
Add: Profit for the year 9197.48 8343.66 2270.48 (138.58)
-Less: Interim Dividend on Equity Shares 2221.73 - 2221.73 -
-Less: Tax on Interim Equity Dividend - - - -
-Less: Tax on Proposed Equity Dividend - 670.55 - -
-Less: Transfer to General Reserve Balance at the end of the year 51813.98 44838.24 90.36 41.61


The paid up Equity Share Capital as on March 31 2016 was Rs. 2221.73 Lacs. During theyear under review the Company has not issued any shares with differential voting rightsnor granted stock options or sweat equity shares.


In terms of requirement of Section 134 (3) (a) of the Companies Act 2013 the extractof the Annual return in form MGT-9 is annexed herewith and marked Annexure-2.


During the year seven (7) Board meetings and five (5) Audit Committee meetings wereconvened and held. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013. The details of the Board meetings and theCommittee meetings are provided in the Corporate Governance Report.


During the year under review a meeting of Independent Directors was held on 21stMarch 2016 wherein the performance of the Non-Independent Directors and the Board as awhole was reviewed. The Independent Directors at their meeting also inter-alia assessedthe quality quantity and timeliness of flow of information between the Company managementand the Board of Directors of the Company.


The composition and terms of reference of the Audit Committee Nomination andRemuneration Committee and Stakeholders Relationship Committee have been furnished in theCorporate Governance Report forming part of this Annual Report. There has been no instancewhere the Board has not accepted the recommendations of the Audit Committee and Nominationand Remuneration Committee.


The Company has a Whistle Blower Policy/ Vigil Mechanism as required under Section 177of the Companies Act 2013 and as per Listing Obligations and Disclosures RequirementsRegulations 2015 formulated by Securities and Exchange Board of India (SEBI). The Vigil(Whistle Blower) mechanism provides a channel to the employees and Directors to report tothe management concerns about unethical behavior actual or suspected fraud or violationof the Code of Conduct or policy. The mechanism provides for adequate safeguards againstvictimization of employees and Directors to avail the mechanism and also provide fordirect access to the Chairman of the Audit Committee in exceptional cases. The said policymay be referred to at the Company’s website at the weblink:


Pursuant to requirement of Section 134 (3) (c) read with Section 134 (5) of theCompanies Act 2013 the Directors hereby confirm and state that:

• In the preparation of Annual Accounts the applicable Accounting Standards havebeen followed along with the proper explanation relating to material departures if any.

• The Directors have selected such accounting policies and have applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2016and of the profit of the Company for the year under review.

• The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

• The Directors have prepared the annual accounts on going concern basis.

• The Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

• The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.


All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013. Mr. ManindraNath Banerjee Mr. Santanu Ray Mr. Mangilal Jain and Mrs. Plistina Dkhar are IndependentDirectors on the Board of your Company. In the opinion of the Board and as confirmed bythese Directors they fulfil the conditions specified in Section 149 of the Act and theRules made thereunder about their status as Independent Director of the Company.


In order to enable the Independent Directors to perform their duties optimally theBoard has devised a familiarization programme for the Independent Directors to familiarizethem with the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. They areperiodically updated about the development which takes place in the Company. TheIndependent Directors have been issued Letter of Appointment setting out in detail theterms of appointment duties responsibilities and commitments etc. The familiarizationprogram is available on the Company’s website under the weblink:


The Board has framed a Remuneration Policy for selection appointment and remunerationof Directors Key Managerial Personnel and Senior Management Employees. The remunerationpolicy aims to enable the Company to attract retain and motivate highly qualified membersfor the Board and at other executive levels. The remuneration policy seeks to enable theCompany to provide a well-balanced and performance-related compensation package takinginto account shareholder interests industry standards and relevant Indian corporateregulations. The details on the same are given in the Corporate Governance Report.


M/s. Kailash B. Goel & Co. Chartered Accountants (Firm Registration no. 322460E)Statutory Auditors of the Company will retire at the conclusion of the ensuing AnnualGeneral Meeting of the Company. Being eligible they have offered themselves forre-appointment and have confirmed that their appointment if made will be in accordanceto the provisions of Section 141 read with Section 139 of the Companies Act 2013 and therules framed there under for re-appointment of auditors. The Board on recommendation ofthe Audit Committee recommends the appointment of M/s. Kailash B. Goel & Co. asStatutory Auditors of the Company for a period of 5 (five years) from the date of ensuingAnnual General Meeting subject to approval of their appointment by the shareholders in theensuing Annual General Meeting and ratification of their appointment in Annual GeneralMeetings to be held subsequent to ensuing Annual General Meeting during the tenure oftheir appointment.

Members are requested to consider and approve their appointment as Statutory Auditorsof the Company and are also requested to empower the Board of Directors for fixation ofAuditor’s Remuneration.

The notes to the accounts referred to in the Auditors’ Report are self-explanatoryand therefore do not call for any further comments.


Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Manoj Kumar Banthia Practicing Company Secretary of M/s. MKB &Associates a firm of Company Secretaries in Practice to undertake the Secretarial Auditof the Company. The Secretarial Audit Report is annexed herewith marked Annexure-3.The report is self-explanatory and do not call for any further comments.


During the year under review your Company has not given any loan or guarantee to anyperson falling under ambit of Section 186 of the Companies Act 2013.

Details of Investments covered under the provisions of Section 186 of the CompaniesAct 2013 are given in the notes to the Financial Statements.


During the year under review there were no materially significant related partytransactions made by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the Company atlarge.

A policy on ‘Related Party Transactions’ has been devised which may bereferred to at the Company’s website at the weblink:


During the year under review no amount was transferred to reserves.


During the year your Company has declared an interim dividend of Rs. 1.00 per equityshare. In order to conserve resources for future operations your Directors do notrecommend any final dividend for the year ended March 31 2016.


As the Company does not have any direct business operations there is nothing to reportunder this segment.


During the year under review there was no Foreign Exchange Earning and Out-go.


Your Company’s Corporate Social Responsibility (CSR) Policy is committed towardsimproving the quality of life of communities by working on four thrust areas -employability education health and environment.

Company’s Corporate Social Responsibility Committee is headed by Mr. SajjanBhajanka Director of your Company and consists of members as stated below:

Sl. No. Name Category Chairman/ Members
1. Mr. Sajjan Bhajanka Non-Independent Chairman
2. Mr. Hari Prasad Agarwal Non-Independent Member
3. Mr. Mangilal Jain Independent Member

Annual Report on CSR as required to be annexed in terms of requirement of Section 135of Companies Act 2013 and rules framed thereunder is annexed herewith and marked Annexure-4.

The CSR Policy of the Company is available on the Company’s website under theweblink: admin/docs/csr-policy.pdf


In compliance with the Companies Act 2013 and as per Listing Obligations andDisclosures Requirements Regulations 2015 formulated by Securities and Exchange Board ofIndia (SEBI) the Company has adopted a policy for evaluation of performance of the Boardof Directors. The Board follows a formal mechanism for the evaluation of the performanceof the Board as well as Committee.

A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board’s functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.

The Nomination and Remuneration Committee at its meeting established the criteria basedon which the Board will evaluate the performance of the Directors.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board on parameters such as level of engagement andcontribution independence of judgment safeguarding the interest of the Company and itsminority shareholders etc. The performance evaluation of the Non-Independent Directorsand Board as a whole was also carried out by the Independent Directors.

The Directors expressed their satisfaction over the evaluation process and resultsthereof.


During the year under review Mr. Sanjay Agarwal will retire by rotation and beingeligible offers himself for re-appointment. In view of his considerable experience yourDirectors recommend his re-appointment as a Director of the Company.

The shareholders have ratified the appointment of Mr. Manindra Nath Banerjee Mr.Santanu Ray Mr. Mangilal Jain and Mrs. Plistina Dkhar as Independent Directors at theAnnual General Meeting held on 20th September 2014 for a period of five years.

The following personnel are the Key Managerial Personnel of the Company:

1. Mr. Sanjay Kumar Gupta - Chief Executive Officer

2. Mr. Dilip Kumar Agarwal - Chief Financial Officer

3. Mr. Debabrata Thakurta - Company Secretary


The Company values the integrity and dignity of its employees. The Company has put inplace a ‘Policy on Prevention of Sexual Harassment’ as per the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 ("SexualHarassment Act"). We affirm that adequate access has been provided to anycomplainants who wish to register a complaint under the policy. No complaint was receivedduring the year.


The Consolidated Financial Statements of the Company have been prepared in accordanceto requirements of Accounting Standards (AS-21) as prescribed by the Institute ofChartered Accountants of India and has been included as a part of this Annual Report.

The detailed financial statements and audit reports of each of the subsidiaries of theCompany are available for inspection at the Registered Office of the Company during officehours between 11 A.M. and 1 P.M. As per the provisions of Section 136 of the CompaniesAct 2013 separate audited financial statements of its subsidiaries are being placed onits website: and the Company will arrange to send thefinancial statements of the subsidiaries upon written request from the shareholders totheir registered address.


During the year under report the Company has not accepted any deposits from public orfrom any of the Directors of the Company or their relatives falling under ambit of Section73 of the Companies Act 2013.


During the year under review there have been no material orders passed by theRegulators/Courts impacting materially the going concern status or future operations ofthe Company.

There were no material changes and commitments affecting the financial position of theCompany during the period under review.


The Company maintains comprehensive internal control system commensurate with the sizeof its operations and monitoring procedure for all the major processes to ensurereliability of financial reporting timely feedback on achievement of operational andstrategic goals compliance with policies procedures laws and regulations safeguardingof assets and economical and efficient use of resources.

The Internal Audit Department of the Company periodically reviews the effectiveness andefficacy of Internal Control Systems and procedures. Audits are finalized and conductedbased on internal risk assessments. Significant deviations from the standard proceduresare brought to the notice of the Board periodically and corrective measures arerecommended for implementation. All these steps facilitate timely detection of anyirregularities frauds and errors and early remedial measures to be undertaken so that nomonetary losses are sustained. Significant audit observations if any and correctiveactions thereon are presented to the Audit Committee of the Board.


The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand no reportable material weakness in the design or operations were observed. The Companyhas policies and procedures in place for ensuring proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information.


Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of Companies Act 2013 and Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith and marked Annexure-5.


The Company has no employee whose remuneration exceeds the limit prescribed underSection 197 of the Companies Act 2013 read with Rule 5(2) of The Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.


The Company has complied with the corporate governance requirements as stipulated underthe Listing Obligations and Disclosures Requirements Regulations 2015 formulated bySecurities and Exchange Board of India (SEBI). A separate section on corporate governancealong with a certificate from the auditors confirming the compliance is annexed and formspart of the Annual Report. This certificate will be forwarded to the Stock Exchanges alongwith the Annual Report of the Company.


As required under Regulation 17(8) of the Listing Obligations and DisclosuresRequirements Regulations 2015 formulated by Securities and Exchange Board of India(SEBI) the CEO/CFO certification has been submitted to the Board and a copy thereof iscontained in this Annual Report.


Ministry of Corporate Affairs has permitted Companies to send copies of Annual reportNotices etc. electronically to the email IDs of shareholders. Your Company has arrangedto send the soft copies of these documents to the registered email IDs of theshareholders wherever applicable. In case any shareholder would like to receive physicalcopies of these documents the same shall be forwarded upon receipt of written request inthis respect.


The Company has always provided a congenial atmosphere for work to all sections ofsociety. It has provided equal opportunities of employment to all irrespective to theircaste religion color marital status and sex. The Company believes that human capital ofthe Company is its most valuable assets and its human resource policies are alignedtowards this objective.

The Company focuses on enhancing organizational performance by focusing on quickgrievance resolution mechanisms and maintaining cordial relations with employees andworkmen across all levels. The relation amongst its employees remained harmonious and theyear under review remained free from any labor unrest.

Your Directors are pleased to report that during the year under review directsubsidiary of your Company M/s. Cement Manufacturing Company Limited (CMCL) wasawarded with

Certificate of Appreciation in recognition for the valuable contribution towards"Best HR Practices in Employee Engagement" held by National HRD Network (NHRDN) inBhubaneswar on 29th January 2016 followed by HR & Leadership Award in the area of"Excellence in Employee Engagement" by ABP News on 16th February 2016 atMumbai.

During the year under report there has not been any material change in HumanResources Industrial Relations and number of people employed.


Your Directors are pleased to report that during the year under review your Companywas awarded ET Bengal Corporate Awards 2016 under category "Fastest GrowingCompany above

Rs. 1000 Crs." on 23rd January 2016 at Kolkata. Your power Subsidiary M/s.Meghalaya Power Limited (MPL) was awarded with First Prize in National EnergyConservation Awards 2015 by Ministry of Power Government of India under <100 MWThermal Power Plants category at a ceremony held at New Delhi on 14th December 2015.


Statements in this report describing the Company’s objectives expectations orpredictions may be forward looking within the meaning of applicable securities laws andregulations. Actual results may differ materially from those expressed in the statement.Important factors that could influence the Company’s operations include: global anddomestic demand and supply conditions affecting selling prices new capacity additionsavailability of critical materials and their cost changes in Government policies and taxlaws economic development of the country and other factors which are material to thebusiness operations of the Company.


Your Directors take this opportunity to express their deep sense of gratitude to theBanks Central and State Governments and their departments and the Local AuthoritiesCustomers Vendors Business partners/associates and Stock Exchanges for their continuedguidance and support.

Your Directors would also like to place on record their sincere appreciation for thecommitment dedication and hard work put in by every member of the Company and recognizetheir contribution towards Company’s achievements. Your Directors express theirgratitude to the shareholders of the Company for reposing their confidence and trust inthe Management of the Company.

For and on behalf of the Board of Directors
Place: Kolkata Sajjan Bhajanka
Date: 3rd May 2016 Chairman
(DIN: 00246043)

Annexure 1 to Directors’ Report


(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014) Statement containing salient features of the financialstatement of subsidiaries

Part "A": Subsidiaries

Sl. No. Name of the subsidiary Cement Manufacturing Company Limited Megha Technical & Engineers Pvt Limited Star Cement Meghalaya Limited Meghalaya Power Limited NE Hills Hydro Limited
1 Reporting period for the subsidiary concerned if different from the holding company’s reporting period N.A N.A N.A N.A N.A
2 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. N.A N.A N.A N.A N.A
3 Share capital 4192.14 2734.64 2981.78 1713.06 7.00
4 Reserves & surplus 53006.55 21622.11 43037.29 9164.31 -
5 Total Assets 149465.79 29271.45 84789.95 30079.88 7.33
6 Total Liabilities 149465.79 29271.45 84789.95 30079.88 7.33
7 Investments 23878.43 2983.33 - - 2.70
8 Turnover 148433.04 14800.01 52854.90 11052.69 -
9 Profit before taxation 5586.06 735.41 6802.19 1472.07 -
10 Provision for taxation (44.30) 250.70 - 389.23 -
11 Profit after taxation 5630.36 484.71 6802.19 1082.84 -
12 Proposed Dividend - - - - -
13 % of shareholding 70.48 70.48 70.48 35.94 70.48

The following information shall be furnished:-

1 Names of subsidiaries which are yet to commence operations : NE Hills Hydro Limited 2Names of subsidiaries which have been liquidated or sold during the year : Not Applicable

Part "B": Associates and Joint Ventures

The Company does not have Associate / Joint Venture hence the requirement under thispart is not applicable to the Company.

For and on Behalf of the Board of Directors
Dilip Kumar Agarwal Sajjan Bhajanka
Chief Financial Officer Director
Debabrata Thakurta Hari Prasad Agarwal
Place: Kolkata Company Secretary Director
Date: 3rd May 2016 DIN : 00266005