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Mangalam Cement Ltd.

BSE: 502157 Sector: Industrials
NSE: MANGLMCEM ISIN Code: INE347A01017
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VOLUME 1839
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OPEN 211.00
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VOLUME 1839
52-Week high 479.55
52-Week low 174.00
P/E
Mkt Cap.(Rs cr) 559
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mangalam Cement Ltd. (MANGLMCEM) - Director Report

Company director report

for the year ended 31 st March 2018

Dear Members

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

1. FINANCIAL RESULTS (Rs in Lacs)

Current Year ended 31st March 2018 Previous Year ended 31st March 2017
Net Sales/ Income from operations 112532.47 104885.70
Operating Profit / (Loss) before interest Depreciation
and Tax and other amortisations ("EBIDTA") 11044.22 13827.71
Less:
Depreciation and Amortisation Expenses 4421.11 4031.46
(Net of transfer from Revaluation Reserve)
Finance Costs 4727.28 4748.94
Tax Expenses (net) 757.64 1383.84
9906.03 10164.24
Net Profit / (Loss) for the year 1138.19 3663.47
Other Comprehensive Income (net of tax) (0.38) (227.71)
Total Comprehensive Income (after tax) 1137.81 3435.76

2. DIVIDEND

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

3. OVERALL PERFORMANCE

The Performance of the Company has been comprehensively covered in the ManagementDiscussion and Analysiswhich forms a part Directors' Report.

4. MANAGEMENT DISCUSSION & ANALYSIS

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

5. RENEWABLE ENERGY

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

6. CAPTIVE THERMAL POWER PLANT

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

7. NEW PROJECTS

During the period under review the Board approved setting

up of a 11 MW Waste Heat Recovery plant at existing factory at Morak Kota.

8. FINANCE

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

The Directors has also approved the issuance of Non- Convertible Debentures on privateplacement basis for an amount upto Rs 250.00 Crores in one or more tranches.

9. RISK MANAGEMENT

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has developed a risk managementpolicy and identified risks and taken appropriate steps for their mitigation for moredetails please refer to the Management Discussion and Analysis set out in this AnnualReport.

10. CREDIT RATINGS

Your Directors are pleased to inform you that Credit Analysis & Research Ltd.(CARE) reaffirmed the rating of 'CARE AA- '(Double A minus) assigned for long termfacilities. The 'CARE AA' rating is considered to offer a high degree of safety regardingtimely servicing of financial obligations and

indicates that such borrowings carry low credit risk. CARE assigns'+' orsigns to beshown after the assigned rating (wherever necessary) to indicate the relative positionwithin the band covered by the rating symbol.

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

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

11. INSURANCE

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

12. EXTRACT OF THE ANNUAL RETURN

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

13. DETAILS OF BOARD MEETINGS

The Board of Directors met 4 times in the year 2017-18. The details of the boardmeetings and the attendance of the Directors are provided in the Corporate GovernanceReport.

14. DIRECTORS

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

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

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

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

gramme.pdf.

15. DIRECTORS' RESPONSIBILITY STATEMENT

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

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

b) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the financial year and of the profit ofthe Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

16. KEY MANAGERIAL PERSONNEL

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

(i) Smt. Vidula Jalan Executive Director

(ii) Shri Anshuman Vikram Jalan Executive Director

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

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

17. REMUNERATION TO DIRECTORS & KEY MANAGERIAL PERSONNEL

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

Name of Director/CEO/CFO/ Company Secretary Designation Ratio of remuneration to median remuneration of the Employee of the Company Percentage increase in the remuneration for the Financial Year 2017-18
Smt. Aruna Makhan Independent and Non- Executive Director 1.98 -26%
Shri N. G. Khaitan Independent and Non- Executive Director 1.50 -31%
Shri Gaurav Goel Independent and Non- Executive Director 1.61 -24%
Shri K. C. Jain Non-Executive Director 1.52 -34%
Smt. Vidula Jalan Executive Director 31.46 -6%
Shri Anshuman Vikram Jalan Executive Director 34.77 8%
Shri Yaswant Mishra President (Corporate) & CFO NA 8%
Shri Swadesh Agrawal Asst. Vice President & Company Secretary NA 11%

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

(ii) Percentage increase in the median remuneration of employees in the financial year2017-18 is 4.02%.

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

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

Net Profit for the financial year ended March 312018 was ? 1138.19 lacs as comparedto ? 3663.47 lacs in the previous year. The increase in median remuneration was 12.15%.

(v) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company: The total remuneration of Key Managerial Personnel (KMP)increased by 3.78%. Net Profit was Rs. 1138.19 lacs as compared to Rs. 3663.47 lacs inthe previous year. Increase in remuneration of KMP (net) is collective result of talentbought to table Company's business interest industry standards and applicable regulatoryframework.

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

a. The market capitalization as on 31 st March 2018 was ? 82857 lacs. (? 85780 lacsas on 31st March 2017).

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

c. Percent increase over / decrease in the market

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

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

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

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

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

18. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

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

Name of the Member Category
Smt. Vidula Jalan Chairperson Executive Director
Shri A. V. Jalan Executive Director
Shri Gaurav Goel Independent & Non Fxecutive Director

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

19. AUDITORS'REPORT

The Auditors' Report to the shareholders does not contain any qualificationreservation or adverse remark.

20. STATUTORY AUDITORS

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

21. COST AUDITOR AND COST AUDIT REPORT

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

Your Company has maintained cost audit records pursuant to section 148 of the CompaniesAct 2013 read with The Companies (Cost Records and Audit) Rules 2014 in respect of themanufacturing activities are required. The cost audit report for the financial year2016-17 was filed with the Ministry of Corporate Affairs on 06th September 2017.TheReport

does not contain any qualification reservation or adverse remark.

22. SECRETARIAL AUDIT

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

The Secretarial Audit Report for the financial year 2017-18 forms part of this reportas Annexure - 3. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

The Board has re-appointed Mr. Pradeep Pincha of M/s P Pincha & AssociatesPracticing Company Secretary as secretarial auditor of the Company for the financial year2018-19.

23. LOANS GUARANTEES OR INVESTMENT

Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes forming part of the financialstatements.

24. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES

All the related party transactions are entered into at arm's length in the ordinarycourse of business and are in compliance with the applicable provisions of the Act and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. There are nomaterial significant related party transactions made by the Company with PromotersDirectors or Key Managerial Personnel etc. which may have a potential conflict with theinterests of the Company.

The Related Party Transaction Policy as approved by the Board is uploaded on theCompany's website at the web link.

25. PARTICULARS OF EMPLOYEES

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

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

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

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

27. CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governancepractices. During the year under review your Company was in compliance with theprovisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015relating to corporate governance.

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

28. COMPOSITION OF AUDIT COMMITTEE

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

Name of Member Category
Shri N. G. Khaitan - Independent & Non-
Chairman Executive Director
Smt. Aruna Makhan Independent & Non Executive Director
Shri Gaurav Goel Independent & Non- Executive Director
Shri K. C. Jain Non-Executive Director

29. VIGIL MECHANISM

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

30. PERFORMANCE EVALUATION

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

The performance of individual directors was evaluated on

parameters such as level of engagement and contribution independence of judgementsafeguarding the interest of the Company and its minority shareholders time devoted etc.The Directors expressed their satisfaction with the evaluation process.

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

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

The Nomination and Remuneration Committee has formulated a detailed policy forappointment of directors key managerial personnel and senior management personnel whichis designed to attract motivate and retain best talent.

This policy applies to directors senior management including its Key ManagerialPersonnel (KMP) and other employees of the Company. The compensation strategy revolvesaround getting the "best talent in the market". The remuneration of theExecutive Directors and KMPs including the senior management personnel of the Company isrecommended by the Nomination and Remuneration Committee based on the Company'sremuneration structure taking into account factors such as level of experiencequalification and suitability. The Company generally pays remuneration by way of salaryperquisites and allowances (fixed component) incentive remuneration and/or commission(variable components).

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

32. NOMINATION AND REMUNERATION POLICY

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

33. INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial control systems commensurate withthe size and complexity of its operations to ensure proper recording of financial andmonitoring of operational effectiveness and compliance of various regulatory and statutoryrequirements.

34. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

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

35. ENVIRONMENT HEALTH AND SAFETY

Environment Health and Safety (EHS) is one of the primary focus areas for yourCompany. Your Company's EHS policy is to consider compliance to statutory EHS requirementsas the minimum performance standard and is committed to go beyond and adopt stricterstandards wherever appropriate.

Your Company have planted over 10230 saplings to ensure a dense green belt around theplant and mine areas. Company encourage its employees and their families to activelyparticipate in our plantation drives.

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

Activities No. of Patient(s)
OPD 12443
Periodic Health Check Up 1362
Pulse Polio Drive 1886
Audiometry 162

In your Company safety is of utmost importance and a culture of safety is brought innot just for the Company's staff but also for contract workers raw material suppliers andtransporters etc. through training programs /communications.

36. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of 7 1224336/- during the financial year 2017-18 tothe Investor Education and Protection Fund established by the Central Governmentincompliance with section 125 of the Companies Act 2013. The said amount representsunclaimed dividendswhich were lying with the Company for a period of 7 years from theirrespective due dates of payment. Prior to transferring the aforesaid sum the Company hassent reminders to the shareholders for submitting their claims for unclaimed dividend.

Further in terms of Section 125(6) of the Companies Act 2013 read with InvestorEducation and Protection Fund (IEPF) Authority (Accounting Audit Transfer and Refund)Rules the Company has transferred 105708 equity shares in respect of which dividends haveremained unclaimed for a period of seven consecutive years to the IEPF Account establishedby the Central Government.

New Delhi 15th May 2018

37. PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from the public within themeaning of section 2(32) and 74 ^

of the Companies Act 2013 during the year and as such no amount of principal orinterest on deposit was outstanding as of the balance sheet date.

38. CASH FLOW ANALYSIS

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

39. AWARDS

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

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

• National Award for Best Improvement in Energy Performance in Manufacture ofBlended Cements 2015- 16 received on 08.12.2017 from National Council for Cement andBuilding Materials (NCBM) New Delhi.

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

• Certificate of Excellence in Best Employer 2016 Awards Competition in theCategory of Large Scale Industries (Cement/Chemicals/Process Group) for Excellence inMaintaining Harmonious Employer-Employee Relations Effective Productivity Levels SkillDevelopment Innovation & Corporate Social Responsibility received on 24.11.2017 fromthe Employers' Association of Rajasthan Jaipur.

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

13.01.2018 in 28th Mines Environment and Mineral Conservation Week

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

13.01.2018 in 28th Mines Environment and Mineral Conservation Week

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

40. ACKNOWLEDGEMENTS

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

Your Directors sincerely convey their appreciation to customers shareholders vendorsbankers business associates regulatory and government authorities for their continuedsupport.

Aruna Makhan Director

N G Khaitan Director

Gaurav Goel Director

K C Jain Director

Vidula Jalan Executive Director

A V Jalan Executive Director