Your directors have pleasure in presenting their Report for thefinancial year ended 31 st March 31 2021.
The Audited Financial Statements (both Standalone and Consolidated) forthe year ended March 31 2021 and the report of the Auditors thereon are being circulatedwith this report. The salient features of the financial results are as follows:
(Rs. in lakhs)
| ||2020-21 ||2019-20 |
|Total Revenue ||194191.80 ||132480.76 |
|Profit Before Tax ||22304.26 ||6935.59 |
|Provision for Tax (including deferred tax) ||7856.97 ||1839.88 |
|Profit for the Year ||14447.29 ||5095.71 |
|After Tax || || |
|Transfer to General Reserve ||5000.00 ||3500.00 |
|Dividend per Equity Share (Face value of Rs.10/ each) ||4.00 ||2.50 |
|Earnings per Equity Share (EPS) ||32.65 ||11.26 |
Performance Review & State of Company's Affairs
Your Directors are pleased to report a record performance during theyear under review which witnessed a 46.6% growth in total revenue 183% in profits aftertax.
A major part of the growth was accounted for by the Cement Divisionwhich registered a gross Turnover of Rs.1681.39 Crores which was higher by 52% incomparison with the previous year. Higher capacity utilization and better pricerealization coupled with operational efficiencies contributed to this improvedperformance. The Boards Division improved its Turnover by around 5% at Rs.131.81 Croresduring the year under review (Previous Year Rs.125.92 Crores). The generation of hydelpower during the year was slightly improved by 0.71% at 37.06 million units compared to36.80 million units in the previous year. The Ready Mix Concrete division improved itsTurnover by 21% at 101.39 Crores compared to Rs.83.84 Crores in the previous year. TheReadymade Doors division registered a Turnover of Rs 11.72 Crores compared toRs.1.51 Crores in the previous year an increase of 675% during the year under review.
Acquisitions / Joint Ventures
During the year under review your company acquired 100% of the sharecapital of Tern Distilleries Private Limited (TDPL) from United Spirits Ltd (USL)Bangalore. The acquisition was mainly to utilize the land of TDPL near Visakhapatnam forestablishment of a new grinding unit. The existing distillery unit of TDPL has been closedfor over two years and action has been initiated to dispose of the existing plant andmachinery. As already reported last year the Joint Venture agreement with QuingdaoXinguangzheng Steel Structure Co Ltd. China has been terminated. NCL GuangzhengStructures Ltd the Joint Venture Company formed pursuant to the above agreement exists asa 100% subsidiary of this company without any operations. Your Board is contemplatingapplying for striking off the company from the Registrar of Companies.
COVID-19 and its impact
The lockdown announced by the Union Government and various stategovernments due to COVID 19 affected the overall economy during the year under review.However with some meticulous planning and co-ordination with the State Governmentsenabled the company to minimize its impact. Without compromising on steps to safeguard thehealth of the personnel your company has been able to keep the operations going andorganize transportation and supply of cement to major government projects. The Company waswell prepared to meet the increased demand upon easing of the lockdown restrictions. Theinitiatives taken by the company to control costs prioritize capex improve theproductivity and increase in capacity utilization of cement and RMC units resulted inhealthy cash flows and profits.
While your company has been able to tide over the challenges posed bythe first and second wave of COVID 19 it is difficult to assess the possible intensity ofthe expected 3rd wave of the pandemic and its impact on the company'sperformance.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OFTHE COMPANY
Order for Supply of pre-painted steel windows and door frames to APSHC
Your Directors are pleased to report that your company in consortiumwith NCL Buildtek Ltd has bagged an order worth Rs.1863 Crores for supply of Pre-painted(GI) Steel Window Frame with Glazed Shutters and GI Powder Coated Door Frames to theAndhra Pradesh State Housing Corporation Ltd (APSHC) as part of its implementation of the"Navaratnalu-Pedalandariki Illu Scheme" of the Government of Andhra Pradesh.Your company has a 50% share in the consortium. The order has a tough time-line of 12months for execution. Successful completion of the order has the potential tosignificantly contribute to the profitability during the current financial year.
During the year under review the Company received the sanction of aterm loan of Rs.90.00 Crores from HDFC Bank to set up ongoing Cement grinding Unit nearVisakhapatnam. Axis Bank and HDFC Bank have sanctioned additional working capitalfacilities amounting to Rs.25.00 Crores and Rs.19.60 Crores respectively under ECGLSScheme. The existing working capital facilities from Axis Bank and HDFC Bank werepartially taken over by Bank of Baroda
Operations and new projects Waste Heat Recovery Power Project
The 8.00 MW Waste Heat Recovery Captive Power project set up at a totalcost of around Rs.100 Crores at Mattapalli in Suryapet has become operational from March2021. The generation of power from this project will reduce the cost of power which willbe reflected from the current financial year 2021-22
The expansion of Line 1 upgradation works at Mattapalli (V) in Suryapetdistrict in Telangana State is under progress.
A facility for manufacture of Sandwich Panel Board has been set up atMattapalli and trail runs are in progress. The expansion of lamination line unit atMalkapur near Hyderabad and Sandwich Panel Board unit at Paontasahib in Himachal Pradeshare under implementation.
Ready Mix Concrete Units (RMC)
During the current year your company has commenced establishment oftwo more RMC units at Visakhapatnam and Hyderabad and erection of machinery is in advancedstage of completion.
To coincide with the 40th year of its existence and keeping in view theimproved performance your Directors are pleased to propose a final dividend of 40% forthe financial year 2021-22. This includes the two interim dividends aggregating to 30%already paid to the shareholders. This has been the best ever dividend declared in asingle year in the history of the company.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134 (3) (c) of theCompanies Act 2013 and on the basis of the information furnished to them by theconcerned accounting professionals your Directors confirm that:
I. All applicable accounting standards have been followed in thepreparation of annual accounts and that there are no material departures.
II. The Directors selected such accounting policies and 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 31stMarch2021and profit of the Company for the year ended on that date.
III. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities.
IV. The Directors prepared the Annual Accounts on a going concernbasis.
V. Proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively.
VI. Appropriate systems were devised to ensure compliance with theprovisions of all applicable laws were in place and were adequate and operatingeffectively.
DIRECTORS AND KEY MANAGERIAL PERSONS (KMP) Independent Directors
During the year under review your Company had five independentdirectors. Persons from diverse fields of expertise and experience have been invited tojoin the Board as Independent Directors to ensure that the company gets the optimumbenefit of wisdom and expertise.
Mr.V.S.Raju (Corporate Laws) Mr.Kamlesh Gandhi (Investment Banking)Dr.R.Kalidas (Technology) and Lt.General (Retd) T.A.Dcunha (Materials Management &Logistics) and Mrs. Sudha Reddy (woman entrepreneur) constitute the current team ofIndependent Directors. Mrs. Rashida Hatim Adenwala resigned from the Board w.e.f 29thOctober 2020. Mrs. P.Sudha Reddy has been inducted as additional Director with effectfrom 4th January 2021 as recommended by the Nomination and RemunerationCommittee. Proposal to appoint her as Independent Director is being placed before theensuing Annual General Meeting for approval of the shareholders. Your company follows apolicy of total transparency and proactive information flow to the Independent Directorsin order to avail the optimum benefit of their experience and expertise.
The Independent Directors also actively participate in the Board andCommittee proceedings and offer constructive suggestions which are implemented by thecompany after deliberations in the full Board. Apart from this the Independent Directorshold separate meetings and evaluate the performance of the Board and individual directors- Executive and Non Executive. The feedback on the evaluation of varied attributes isfurnished to the company on a confidential basis.
The terms and conditions of appointment of independent directors are asper Schedule IV of the Act. They have submitted declarations that each of them meets thecriteria of independence as provided and in Section 149(6) of the Act and there has beenno change in their status as independent director during the year.
There were four Executive Directors namely Mr. K Ravi ManagingDirector Mr.K.Gautam Joint Managing Director MrsRoopa Bhupatiraju ExecutiveDirector and Mr. N G V S G Prasad ED & CFO. Mr.K.Ravi Managing Director and Mr. N GV S G Prasad
ED & CFO have been re-appointed for a period of five w.e.f 1stJanuary 2021 as recommended by the Nomination and Remuneration Committee. Mr.K.GautamExecutive Director was elevated as Joint Managing Director and appointed for a period offive years w.e.f 1st January 2021 on the recommendation of Nomination andRemuneration Committee. In acknowledgement of the leadership provided by the managingexecutive directors the Board has decided to appoint them for a fresh tenure and / orrevise their compensation package. Proposals for their appointment / re-appointment andrevised remuneration are being placed before the ensuing Annual General Meeting forapproval of the shareholders. Apart from what has been detailed in the foregoing paragraphsthere was no change in the key managerial personnel of the Company during the year under.Mr.T. Arun
Kumar is the Company Secretary & Compliance Officer and NodalOfficer under IEPF Rules
Non Executive Directors
Mr. Vindodrai V Goradia Mr. P N Raju Mr. Ashven Datla and Mrs. PoojaKalidindi are the non executive directors in the Board constitution as on the date of thisReport.
Retirement by Rotation
Mr.P N Raju and Mr.N G V S G Prasad retire by rotation at the ensuingAnnual General Meeting and are eligible for re-appointment. Particulars ofDirectors whose appointment / re-appointment sought are given in Annexure A-1 tothis Report as part of the Report on Corporate Governance under SEBI (LODR) Regulations2015.
During the year under review Seven Board meetings were held on 12thJune 2020 30th June 2020 14th August 2020 28thSeptember 2020 9th November 2020 4th January 2021 and 8thFebruary 2021. The maximum time gap between any two consecutive meetings was within theperiod prescribed under the Companies Act 2013.
Committees of the Board
The Board has constituted various committees as required under theCompanies Act 2013 and SEBI (LODR) Regulations 2015. The details of such Committees aregiven in Annexure A' as a part of the report on CorporateGovernance.
Plans for Orderly Succession for appointments to Board etc
Your Board of Directors is fully satisfied that plans are in place fororderly succession for appointments to the Board and to senior management positions.
A separate report of compliance with the provisions relating toCorporate Governance as required SEBI (LODR) Regulations 2015 is enclosed as AnnexureA' and forms part of this Report.
BUSINESS RESPONSIBILITY REPORT
A per the notification dated 26 th December 2019 issuedunder Regulation 34(1) of SEBI LODR) Regulation 2019 (amendment) SEBI had mandatedinclusion of Business Responsibility Report (BRR) as part of the Annual Report for top1000 listed entities based on market capitalization as on March 31st of everyfinancial year. Business Responsibility
Report is enclosed as Annexure B' which forms a partof this Directors' Report.
The company has a system of constantly identifying and monitoring therisks that the company may be exposed to. A Risk Management Committee headed byIndependent Director as Chairman one Independent Director and two other Non ExecutiveDirectors are in place. As and when required the Committee reviews various risks andsteps taken to manage the risks. The Board is of the opinion that there are no elements ofrisks that may threaten the existence of the Company. However the new wave of Covid-19pandemic the possible re-imposition of lockdowns to contain the virus by stategovernments and diminishing policy support threaten to undermine growth. Kindly referPoint No.37 of notes to financial statements on financial risks.
Particulars of Loans Guarantees or Investments under section 186 ofthe Companies Act 2013
The company has not granted any loans given any guarantees during theyear which would be covered under section 186 of the Companies Act 2013.
As already reported your company acquired 100% equity stake in TernDistilleries Private Limited (TDPL) from United Spirits Ltd (USL) during the year underreview for a total consideration of Rs. 30 Crores.
Related Party Transactions
All Related Party Transactions entered during the financial year2020-21 were in ordinary course of business and at arm's length basis. Your Companydid not enter into Material Related Party Transactions during the year under review.Transactions entered into with the related parties are pursuant to the omnibus approvalgranted are reviewed and approved by the Audit Committee and the Board of Directors onquarterly basis. Pursuant to Section 134 (3) (h) of the companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 the details of the Related PartyTransactions are contained in Annexure A-2 to this Report.
Management Discussion and Analysis Report
The Management Discussion & Analysis Report is annexed as AnnexureC' to this Report.
Consolidated Financial Statement
The Consolidated Financial Statement has been prepared in accordancewith Indian Accounting Standards (Ind AS) as per the Companies (Indian AccountingStandards) Rules 2015 notified under Section 133 of the Companies Act 2013 and otherrelevant provisions of the Companies Act 2013.
Litigations ordersDuring the year under review no significant werepassed by any regulatory/statutory authorities or courts / tribunals against the companyimpairing its going concern status and operations in future.
The company paid an amount of Rs.10000/-(plus taxes) under protestwith regard to the penalty imposed by NSE under Regulation 44(3) of SEBI (LODR)Regulations 2015 on the perceived delay in filing voting results within 48 hours ofconclusion of postal ballot. The Company has contested the same stating that the timelineprescribed in Regulation 44(3) is not applicable to postal ballot.
Corporate Social Responsibility (CSR) Activities
The company has a CSR Committee as prescribed by the Statute withDr.R.Kalidas Independent Director as Chairman. The Committee also includes one Executiveand one Independent Director. The CSR Committee meeting was held on 23rd March2021 and reviewed the CSR Policy and CSR activities. Under the provisions of Section 135of the Companies Act 2013 an amount of Rs.136.34 Lakhs was required to be spent on CSRactivities for the financial year 2020-21. Your directors are glad to report that the CSRexpenditure incurred during the year towards education and health care exceeded themandatory requirement. The total CSR expenditure was Rs.161.53 Lakhs. The details of theCSR activities during the year under review are listed in Annexure D to thisReport.
Subsidiaries and Joint Ventures
Your Company has no Associates or Joint Ventures as on the date of theReport except as above. The Company has two wholly owned subsidiaries namely NCLGuangzheng Structures Limited and Tern Distilleries Private Limited both of which arecurrently non operational as already reported. As reported elsewhere in this Report yourcompany has entered into a consortium partnership agreement with NCL Buildtek Ltd. forsupply of pre-painted steel windows and doorframes to Andhra Pradesh State HousingCorporation Ltd. (APSHC).Your company has a 50% share in the said joint venture.
Investor Education & Protection Fund
The Company has transferred an amount of Rs.19.81 Lakhs relating toDividends on the shares transferred to the Investor
Education & Protection Fund for the financial year 2019-20 and2020-21.
The details relating to Fixed Deposits are as follows:
As on 31st March 2021 Rs.6842.50 Lakhs of Public Depositswere outstanding. The Company has repaid all the matured deposits that have been claimedand there have been no defaults in payment of interest or repayment of principal. Thedetails of deposits received from the directors / relatives of directors during the yearunder review in terms of MCA
Notification No.GSR 695 (E) dated 15th September 2015 areas under:
|Name of the Director / Relative of Director ||Amount (Rs.in Lakhs) ||Inter-se Relationship 1 |
|1 Mr. Kamlesh Suresh Gandhi ||35.00 ||Chairman |
|2 Mr. Vinodrai.V.Goradia ||20.00 ||Director |
|3 Mrs. Roopa Bhupatiraju ||4.50 ||Daughter of Mr. K.Ravi-MD |
|4 Mr. K.Ravi ||115.00 ||Managing Director |
|5 Mrs. K.Sailaja ||52.00 ||Wife of Mr. K.Ravi-MD |
|6 Mrs. Charulatha V.Goradia ||10.00 ||Wife of Mr. V.V.Goradia |
|7 Master B.Arjun ||16.40 ||Son of Mrs. Roopa Bhupatiraju- ED |
|8 Baby Anika Bhupatiraju ||7.00 ||Daughter of Mrs. Roopa Bhupatiraju- ED |
|9 Mr. R.Kiran ||30.00 ||Son of Mr.R.Kalidas-Director |
|10 Mr. R.Arun ||18.00 ||Son of Mr.R.Kalidas-Director |
|11 Mrs. N.Sita Mahalakshmi ||7.50 ||Mother of Mr. N G V S G Prasad-ED & CFO |
|12 Ms. N.Suchitra Katyayani ||30.00 ||Daughter of Mr. N G V S G Prasad- ED & CFO |
|13 Ms. N.Chaitra Sarada ||30.00 ||Daughter of Mr. N G V S G Prasad- ED & CFO |
|14 Lt.Gen (Retd) T A DCunha ||45.00 ||Nil |
Particulars of Employees
The details of employees who have been in receipt of remunerationenvisaged by Section 197 of the Companies Act 2013 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial personnel) vide MCA Notification dated 30thJune 2016 are annexed as
Annexure - E to this Report.
M/s Venugopal & Chenoy who have been re-appointed as StatutoryAuditors at the last Annual General Meeting held in 2019 have accepted the appointment fora period of three years. They have confirmed that they are not disqualified fromcontinuing as auditors of the company.
The Notes on the financial statements referred to in the IndependentAuditor's Report are self explanatory. The Auditor's report does notcontain any qualification reservation adverse remark.
M/s S.R. and ASSOCIATES Cost investments or developments Accountantshave been reappointed to conduct the cost audit pertaining to Cement as well as RMC of thecompany for the year 2020-21. They have been reappointed by the Board of expenditureDirectors inas Cost Auditors of the Company for the Financial Year 2021-22. Theremuneration of the cost auditors is required to be ratified by the members in terms ofthe relevant Rules. Accordingly the matter is being placed before the Members forratification at the ensuing Annual General Meeting.
The Cost Audit Report for the financial year ended March 31st2020 was duly filed 08/09/2020.
M/s. A J Sharma & Associates Company Secretaries have beenappointed to conduct the Secretarial Audit of the Company. The Secretarial AuditReport pursuant to the provisions of Section 204 of the Companies Act 2013 is attachedas Annexure - F to this Report. The observations of the Report do not call for anyexplanation as envisaged by Section 204(3) of the said Act.
Awards / Certifications
Great Place to Work 2021
Your Company is proud to state that "Great Place to Work"Organization renewed its certification as a "Great Place to Work" during theyear from November 2020 to October 2021. This reflects the confidence reposed byemployees about the work atmosphere and the recognition accorded to them as partners inprogress.
Indian Cement Review
Indian Cement review Magazine awarded fastest growing cement company inIndia 2021 to the company
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
The Company has constituted an Internal Complaints Committee onPrevention of Sexual Harassment at workplace for women in the line with the requirementsof the The Sexual Harassment of Women at Workplace (Prohibition Prevention andRedressal) Act 2013 and the Rules made there under and had complied with provisions madeunder the said Act. During the year under review there were no references or complaintspursuant to the aforesaid Act.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Particulars required under Section 134 (3) (M) of the Companies act2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 are furnished under Annexure- G which forms part of this Report. Your Company continues to be conscious of theneed for conservation of energy and wherever feasible effective steps for energyconservation are taken. inThere were no significant this regard during the year underreview. The technology procured for the various operating Divisions has been fullyabsorbed. There was no significant
& Development warranting a special mention in this Report.
Extract of Annual Return
Pursuant to the provisions of Section 92 of the Companies Act 2013 andRules framed there under the extract of the Annual Return in form MGT-9 is annexedherewith as
Annexure - H Ministry of Corporate Affairs on and forms part ofthis Report.
Your directors wish to place on record their appreciation of thesupport and co-operation extended by Axis Bank HDFC Bank SBI Bank of India Bank ofBaroda and Central and State Government Departments Dealers Stockists Consumers andDepositors.
Your directors also wish to place on record their appreciation of theenthusiastic support received from the shareholders. Your directors have pleasure inacknowledging the excellent co-operation received from the team of dedicated executivesand employees who have contributed handsomely to the operations of the company.
|For and on behalf of the Board |
|Kamlesh Gandhi Chairman |
|Din: 00004969 |
|Place: Hyderabad |
|Date: 13th August 2021 |