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Hemadri Cements Ltd.

BSE: 502133 Sector: Industrials
NSE: N.A. ISIN Code: INE07BK01011
BSE 05:30 | 01 Jan Hemadri Cements Ltd
NSE 05:30 | 01 Jan Hemadri Cements Ltd

Hemadri Cements Ltd. (HEMADRICEMENTS) - Director Report

Company director report

Dear Members

Your Directors herein present the Company's 39th Annual Report and theAudited Financial Statements of the Company for the FY ended 3 lbt March 2021.

FINANCIAL RESULTS

The performance of the Company for the F Y ended 3 lbt March 2021 is asgiven below: FINANCIAL HIGH LIGHTS FOR THE YEAR: (Rs. In Lakhs)

Particulars Year ended 2020-21 Year ended 2019-20
Gross Turnover 9586.83 7052.44
Profit /(loss) before interest depreciation and tax 593.47 228.52
Less Interest 8.05 79.57
Profit/(Loss) before depreciation and tax 585.42 148.95
Less Depreciation 194.11 105.83
Profit / (Loss) before Tax 391.31 43.12
Tax Expenses:
Current Tax 148.71 0.00*
Deferred Tax 122.24 29.32**
Profit / (Loss) after Tax 120.36 13.80
Other Comprehensive income 1.06 (7.97)
Total Comprehensive Income 121.43 5.83

* adjusted against MAT credit ** includes excess provision reversed

PERFORMANCE OF THE COMPANY

The turnover of your Company for the FY 2020-21 was Rs.9586.83 Lakhs despite increasedsupply over demand and addition of large capacity by major cement producers. The prices ofcement remained muted as per the study of Rating Agencies like ICRA India Ratings andCRISIL. This had also curtailed the growth in operating profits across the sector. Theimpact of pandemic (Covid-19) was also felt in the overall performance of the Company.

Besides the general industry scenario there was sluggishness in demand for cement inthe Andhra Pradesh market which continued to have its impact on the cement prices andfurther the sand problem in Andhra Pradesh impacted the construction industryinfrastructure growth etc. which

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had a cascading effect on the cement industry which had thereby resulted in low pricingand weakened demand. However the factors like optimisation of cost of production andother fixed costs and proactive marketing efforts viz. focus on micro markets marketingre-organization and holding of regular meetings with the dealers had all helped yourCompany in achieving the present numbers.

The detailed discussion and analysis of performance is elaborated in the ManagementDiscussion Analysis which forms part ofthis Report.

DIVIDEND

Your Directors do not recommend any dividend for the FY 2020-21 since your Companywould need to plough back the profits for funding maintenance of the existing plant moreso during the prevailing pandemic situation and also for meeting future growth anddevelopment plans.

BOARD OF DIRECTORS

As on 31st March 2021 Your Company had 5 (five) Directors on its Board ofwhom 4 (four) are Independent Directors and 1 (one) is Executive Director.

Appointment and resignation of Directors / Key Managerial Personnel

During the year under review in accordance with Section 152 of the Companies Act 2013Mr. P. Ravi Whole time Director retires by rotation and being eligible offers himselffor being reappointed at this Annual General Meeting. Notice of the 39th AGMincludes an item for his reappointment.

Mr. Sivaraman Vivekandan Murugan has resigned from the Board with effect from27/02/2021. The Directors place on record their appreciation for his valuable contributionas member of the Board and other Committees.

The Board of Directors of the Company had appointed Dr. Sivasamy Raju as an AdditionalDirector and categorised as Independent Director with effect from 31/03/2021. Notice ofthe 39th AGM included an item for his regularization as a Director andrequesting approval of the Shareholders for appointment as an Independent Director.

A brief resume of the said Directors is given below

Name Mr.P.Ravi Dr. Sivasamy Raju
DIN 00675665 06961330
Age 54 years 54 years
Qualification MBA MBBS MD
Date of first appointment on the Board 26.11.2010 31.03.2021
Shareholding in the Company Nil 200 Shares
List of other Directorships held Given under Related PartyTransactions 1. M/s. Trac Media Private Limited 2. M/s. SRM Hotels Private Limited
Membership / Chairmanship of other committees Given under Corporate Governance Report Given under Corporate Governance Report

Mr. Badri Narayanrao Dabbir (DIN:01180539) an Independent Director of the Companywould be attaining the age of 75 years in the month of April 2022 and his term as anIndependent Director is upto year 2024 (AGM). In this regard consent of the Shareholdersto continue him as an Independent Director notwithstanding he attains the age of 75 yearsin the month of April 2022 during his 2nd term of re-appointment is requested.39th AGM Notice contains an item for his continuation as an IndependentDirector.

Declaration by the Independent Directors

The Company has received declaration from the Independent Directors of the Companyconfirming that they continue to meet the criteria of independence as prescribed underSection 149(6) ofthe Companies Act 2013 and Regulation 16(1) (b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

Key Managerial Personnel

The Key Managerial Personnel (KMP) of the Company as on 31.03.2021 as per Section2(51) and Section 203 ofthe Companies Act 2013 are:-

1. Sri P. Ravi Chairman & Whole Time Director

2. Sri C. Mohanakrishna CFO

Changes in KMP's during the FY2020-21:

1. Resignation of Mr. Sivaraman Vivekanandan Murugan (CEO) with effect from 27/02/2021

2. Resignation of Mrs. Hema Nagarajan (Company Secretary) with effect from 27/02/2021

The Directors place on record their appreciation for their valuable contributions asKMP of the Company.

The Board of Directors has appointed Mr. Sanjay D Mukherjee as a Chief ExecutiveOfficer of the Company with effect from 1st July 2021.

Number of Meetings of the Board of Directors

The Board met Four times during the financial year 2020-21 on 29.06.2020 27.08.202005.11.2020 and 11.02.2021. The intervening gap between any two meetings was within theperiod prescribed under the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. More details of the Board meetings have beenprovided in the 'Report on Corporate Governance' found elsewhere in the Annual Report.

Formal Annual Evaluation

The Board had carried out performance evaluation of itself its Committees and each ofthe Directors (without participation of the concerned director). Independent Directorscollectively evaluated the Board's performance performance of the Chairman and othernon-independent Directors. The Nomination and Remuneration Committee also reviewed theperformance of the Board its Committees and of the Directors.

The performance evaluation concluded on the note that each of the individual directorsCommittees and the Board as a whole were contributing towards the common goal of theCompany and to improve the efficiency and performance of the organization in its entirety

RISK MANAGEMENT POLICY

The Audit Committee also functions as the Risk Management Committee and the Board alsotakes the responsibility in overseeing the risk management plan of the Company. The RiskManagement Policy facilitates in identifying the risks associated with the operations ofthe Company and in giving suitable measures / solutions to mitigate the same. Risksidentified in the business and functions are systematically addressed through mitigatingactions on a continuous basis.

VIGIL MECHANISM

The Whistle Blower Policy of the Company provides a mechanism for employees / BoardMembers and others to raise "good faith concerns" about violation of anyapplicable law/ Code of Conduct of the Company and also provides for direct access to theChairman of the Audit Committee. The functioning of the Vigil mechanism is reviewed by theAudit Committee from time to time.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Your Company is not required to contribute to the CSR activities as per the extantprovisions of the Companies Act 2013. However your Company has generally beencontributing to the welfare of the villages in and around the registered office of theCompany without any mandatory obligation.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

There were no loans guarantees or investments exceeding the limits specified underSection 186 ofthe Companies Act 2013 during the year under review.

PUBLIC DEPOSITS

The Company has not invited or accepted any fixed deposits from the public asstipulated under the provisions ofthe Companies Act 2013.

RELATED PARTY TRANSACTIONS

The Audit Committee provides omnibus approval on an annual basis for all related partytransactions and the said transactions are also placed on a quarterly basis before theAudit Committee and the Board during which all interested directors abstain fromparticipation in such discussions. All related party transactions entered into during theyear under review were in the ordinary course of business on arm's length basis and werein compliance with the applicable provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The details of the related party transactions entered into during the year are given inthe financial statements ofthe Company and in Form AOC 2 in Annexure III which forms partofthis Report.

AUDITORS Statutory Auditor

In accordance with the provisions of the Companies Act 2013 and the rules framed thereunder M/s.B.Purushottam & Co. Chartered Accountants Chennai having RegistrationNo.002828S were appointed as Statutory Auditor of the Company at the AGM held on27.09.2019 for a term of five consecutive years till the conclusion ofthe 42ndAGM.

Internal Auditor

The Board has approved the appointment of M/s.DPV Associates Chartered AccountantsChennai as the Internal Auditor of the Company to conduct the internal audit during theyear under review. The areas of audit are being taken up in consultation with the InternalAuditor and as per the recommendations of the Audit Committee. The Internal Auditobservations are discussed with senior officials and are placed before the Audit Committeeand suitable actions are taken as directed by the said Committee.

Secretarial Auditor

The Board has appointed Mrs. Sindhuja Practising Company Secretary as the SecretarialAuditor to conduct the Secretarial Audit of the Company during the year under review. TheSecretarial Audit Report forms part of this report and is found elsewhere in the AnnualReport.

MATERIAL CHANGES

There were no material changes and commitments affecting the financial position of theCompany that occurred between the end of the Financial Year of the Company i.e. 31stMarch 2021 Further there were no significant or material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.

LISTING

As on the date of this report the Company is listed with the Bombay Stock Exchange.However trading of the shares is suspended and the Company's shares remain in"Suspended Mode" vide Notice of BSE -20200205-11 dated 05th February2020 and the company is in process to bring the company back to trading platform.

CORPORATE GOVERNANCE

The Company has been adhering to the principles of Corporate Governance as laid down inthe Companies Act 2013 and also the SEBI (LODR) Regulations 2015. A separate section onCorporate Governance is given elsewhere in this Report.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return of the Company is placed on the Website of the Companyand link to the same is http://www.hemadricements.com/annual_reports.php and also attachedto this Report as Annexure- II.

CONSERVATION OF ENERGY

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as required to be disclosed under Section 134 (3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is provided inAnnexure I to this Report forming an integral part of this report.

COMPLIANCE WITH OTHER APPLICABLE LAWS

The Compliance Report of the Secretarial Auditor provides that the Company is compliantwith all the relevant and necessary applicable laws. In specific the Company has notreceived any complaints or no cases have been filed pursuant to the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the directors to the best oftheir knowledge and ability confirm that-

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets ofthe company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis; and

(e) the directors have laid down proper internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively.

(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CAUTIONARY STATEMENT

Statements in the Director's Report and the Management Discussion & Analysis Reportdescribing the Company's objectives expectations or forecasts may be forward lookingwithin the meaning of applicable laws. Actual results may differ materially from thoseexpressed in the statement. Important factors that could influence the Company'soperations include global and domestic demand and supply conditions affecting sellingprices raw material availability and prices changes in government regulations tax lawseconomic developments within the country and other factors such as litigation andindustrial relations.

ACKNOWLEDGMENTS

The Directors wish to place on record their appreciation for the support andcooperation which the Company continues to receive from various departments of the Stateand Central Governments from its customers shareholders suppliers and Bankers. TheDirectors also commend the continuing commitment and dedication of the employees at alllevels which has been critical for the Company's success.

For and on behalf of the Board of Directors

sd/-
Place: Chennai P.Ravi
Date: 14.08.2021 Chairman
DIN: 00675665

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