Panyam Cements & Mineral Industries Ltd.
|BSE: 500322||Sector: Industrials|
|NSE: PANYAMCEM||ISIN Code: INE167E01029|
|BSE 00:00 | 22 Oct||Panyam Cements & Mineral Industries Ltd|
|NSE 05:30 | 01 Jan||Panyam Cements & Mineral Industries Ltd|
|BSE: 500322||Sector: Industrials|
|NSE: PANYAMCEM||ISIN Code: INE167E01029|
|BSE 00:00 | 22 Oct||Panyam Cements & Mineral Industries Ltd|
|NSE 05:30 | 01 Jan||Panyam Cements & Mineral Industries Ltd|
Your Directors have pleasure in presenting the 63rd Annual Report and AuditedStatements of Accounts for the year ended 31st March 2019:
The company has produced 191335 M.Tonnes of cement during the year 2018-19 asagainst 458469 M. Tonnes produced during the previous year. The company has stoppedoperations at the plant from December 2018 due to severe working capital constraints.The market conditions have continued at the same level as was prevailing in the last year.The gross sales for the year under report was Rs. 8829.16 lakhs as against Rs. 21219.08lakhs in the previous year. The Net Loss after tax for the year was Rs.6739.30 lakhs asagainst Net Loss of Rs. 3143.76 lakhs in the last year.
As stated in our last year's Annual Report the developer Greenage Griha Nirman PrivateLimited (formerly known as Bhimshankar Realtors Private Limited) has Completed theconstruction of all the ten blocks of the apartment The land owner's share of 15apartments are pending for registration of sale deeds.
MODERNISATION OF THE CEMENT UNIT:
As stated in our last year Annual Report the modernization works for improving theefficiency and productivity to reduce the operational costs and cutting down of logisticshas been put on hold to stabilize the operations of the unit due to non-operation of theplant and paucity of funds.
The Close Circuit System for Cement Mills is under implementation which will reducethe power consumption and improve the Quality. However this implementation is currentlypaused due to shortage of funds.
Your Directors regret their inability to recommend any dividend on Equity Shares inview of the carry forward losses. Consequently the payment of dividend in respect ofRedeemable "C" Cumulative Preference Shares held by the Financial Institutionsalso has been passed over.
The Company has not accepted any Fixed Deposit during the year and there are no fixeddeposits outstanding as on 31st March 2019.
The assets of the Company are adequately insured.
CURRENT YEAR PROSPECTS:
As earlier mentioned the operations of the Company have been stopped due to workingcapital constraints. The management has been continuously putting its efforts to raiseadditional capital in the Company and also seek requisite waivers/reliefs from theCentral/State Governments.
CONVERSION OF WARRANTS:
As already informed in the last year's Annual Report the Board of Directors of theCompany at their meeting held on 1st March 2017 have issued and allotted 843060 EquityShares to the said allottees subject to the approval of the same by the BSE. The companyhas already submitted an application to BSE for listing of the said shares and the same ispending before BSE
Company's Industrial Relations continue to be harmonious and cordial.
Your Directors wish to place on record their sincere appreciation of the whole-heartedco-operation extended and the valuable contribution made by the employees at all levels.
Pursuant to the provisions of Section 139 of the Act and the Companies (Audit andAuditors) Rules 2014 M/s. K.S.Rao & Co. Chartered Accountants Hyderabad (FirmRegistration No: 003109S) had been appointed as Statutory Auditors of your Company for aterm of five years commencing from the company's financial year 2017-18 to hold the officefrom the conclusion of the 61st Annual General Meeting till the conclusion of the 66thAnnual General Meeting to be held in 2021-22. In terms of the provisions of the Act yourratification to their appointment as Statutory Auditors of your Company is being sought atthe ensuing AGM and forms part of the Notice convening the AGM. The said StatutoryAuditors have confirmed that they are not disqualified to act as Auditors and are eligibleto hold office as Auditors of your Company.
Regarding Qualified Opinion:
a) The statutory auditors have opined that a material uncertainty exists that maycast significant doubt on the entity's ability to continue as a going concern. due todefault in repaying borrowings that were due during the year the company has been unableto conclude renegotiations or obtain replacement financing and there are arrears ofstatutory dues. The Board believes that the management has been continuously putting itsefforts to revive the operations of the Company and also raise money either in the form ofadditional borrowings or additional capital in order to meet and fulfil its financialobligations in a phased manner. The Board hopes that the management efforts would yieldresults either during the last quarter of current financial year 2019-20 or during thenext financial year 2020-21.
b) The comment made by auditors with respect to the treatment of investment made by theCompany in equity shares of M/s. S.P.Y Agro Industries Limited is not accounted as perInd-AS 28 "Investments in Associates and Joint Ventures" for the reason thatthere is no significant influences over M/s.S.P.Y.Agro Industries Limited as disclosedunder Note 4 (a) of financial statements which is self explanatory.
c) As regards non-provision of gratuity superannuation and leave encashment liabilityon actuarial valuation as per Ind-AS19 Employee Benefits and it is provided on theretirement of employees on a consistent basis and the liability is not ascertained. whichis self explanatory.
d) As reported in the audit report the Company has outstanding inter-corporate loansas at 31.3.2019 in its group or associate entities the auditor's were unable to obtainaudit evidence. There has been instances of no response or inadequate response due to lackof man power in those entities. The Board has advised the management team to look into theprocess and get the requisite confirmations from respective entities during the currentfinancial year 2019-20.
Cost Audit will not be applicable for the financial year 2019-20 since the turnover ofthe company during the last financial year is below the statutory threshold as prescribedunder the respective provisions of the Companies Act 2013 and Cost Audit rules madethereunder.
The Board has appointed M/s. GMVDR Associates Practising Company Secretaries toconduct Secretarial Audit for the FY 2018-19. The Secretarial Audit Report for thefinancial year ended March 31 2019 is annexed to this Report as Annexure II. Thequalification/remarks made in the Secretarial Audit Report are self-explanatory.
In terms of the Articles of Association of the Company Smt. V. Aravinda Rani willretire by rotation at the ensuing Annual General Meeting and being eligible offerthemselves for re-appointment.
Sri V.Suresh Kumar and Sri V.Ramnath have resigned as Directors of the Company witheffect from 30th March 2019. The Board wishes to place on record its appreciation for thevaluable services rendered by the said Directors.
The Company has received necessary declaration from all the Independent Directors underSection 149(7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013.
The Board evaluated the effectiveness of its functioning and that of the Committees andindividual Directors by seeking their inputs on various aspects of Board/CommitteeGovernance.
The aspects covered in the evaluation included the contribution to and monitoring ofcorporate governance practices participation in the long term strategic planning and thefulfillment of Directors' obligation and fiduciary responsibilities including but notlimited to active participation at the Board and Committee Meetings.
The Chairman of the Board has one-on-one meetings with the independent directors andthe Chairman of the Nomination and Remuneration Committee had one-on one meetings with theExecutive and Non-Executive Directors. These meetings were intended to obtain Directors'inputs on effectiveness of Board/Committee processes.
The Board considered and discussed the inputs received from the Directors.
Further the independent Directors at their meeting reviewed the performance of BoardExecutive and Non Executive Directors.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics and Compliance Task Force comprisingSenior Executives of the Company Protected disclosures can be made by a whistle blowerthrough an e mail or a letter to the Task Force or to the Chairman of the Audit Committee.The Policy on Vigil Mechanism and whistle blower policy may be accessed on the company'swebsite at the link http://www.panyamcements.com.
APPOINTMENT OF WOMAN DIRECTOR
To comply with the requirements of Section 149(1) of the Companies Act 2013 read withlisting Agreement executed with BSE Limited Mrs. V. Aravinda Rani was appointed as aNon-Executive Woman Director on the Board of the Company with effect from August 13 2014.
KMPS OTHER THAN DIRECTORS:
As of March 31 2019 in accordance with the provisions of the Companies Act 2013 andListing Agreement with the Stock Exchange Mr. S.Sreedhar Reddy Managing Director Mr. S.Nageswara Reddy Chief Financial Officer and Mrs. Divya Yadav Company Secretary have beendesignated as the KMPs of the Company.
MEETINGS OF THE BOARD
The Board of Directors of your company met six times during the year to deliberate onvarious matters. Further details on the Board of Directors are provided in the CorporateGovernance Report forming part of this Annual Report.
The Audit Committee was reconstituted during the year with the following members viz.Mr. S. Panduranga Rao Mr. P. Jayarama Reddy and Mrs. V. Aravinda Rani. The Committeecomprises of majority of independent Directors with Mr. S. Panduranga Rao being theChairman. Sri S. Sreedhar Reddy Managing Director and Sri S. Nageswara Reddy ChiefFinancial Officer are the permanent invites. Further details relating to the AuditCommittee are provided in the Corporate Governance Report forming part of this AnnualReport.
During the year all the recommendations made by the Audit Committee were accepted bythe Board.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of the provisions of Section 135 read with Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors of your Company hasreconstituted the Corporate Social Responsibility("CSR") Committee which isChaired by Smt V Aravinda Rani. The other members of the Committee are Sri S. SreedharReddy and Sri P.Jayarama Reddy. Your company also has in place a CSR Policy which isaccessible on your Company's website: viz.panyamcements.com.
The Company has taken various Corporate Social Responsibility (CSR) activity around thefactory site since its inception. The Company has taken appropriate steps to the possibleextent to implement CSR activities for the development of areas surrounding the company inparticular and other areas in general.
In view of the in adequate net profits during the last three years the company couldnot spent any amount on CSR activities during the year.
Your Directors reaffirm their continued commitment to good corporate governancepractices. A separate report on Corporate Governance is incorporated as Annexure V as apart of the Directors' Report. Further as a part of the report "ManagementDiscussion and Analysis" has also been furnished.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:-
i. That in the preparation of the annual Accounts the applicable accounting standardshad been followed with proper explanation and that there were no materials departures.
ii. That the Directors had selected such accounting policies applied consistently andmade judgment and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theloss of the Company for the year.
iii. That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
iv. That the annual financial statements have been on a going concern basis.
v. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
vi. That systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITIONAND REDRESSAL) ACT 2013.
The Company has zero tolerance towards sexual haras ment at the work place and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules there under. The Companyhas no such cases of sexual harassment at workplace.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO:
Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under section 134 (3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 are set out in the Annexure I and forms part of thereport.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforce ability. The said regulations were effectiveDecember 1 2015. Accordingly all listed entities were required to enter into the ListingAgreement within 6 months from the effective date. The Company entered into ListingAgreement with BSE Limited on 29th February 2016 wherein the Equity Shares andNon-Convertible Bonds issued by the Company are listed.
The Equity/Non-Convertible Debentures of the Company are listed on the BSE Limited andthe annual listing fee is being paid.
A Special Team with Senor Executives has been formed which has been entrusted with theresponsibility to assist the Managing Director in (a) Over seeking and approving theCompany's enterprise risk management frame work and (b) Overseeing that all the risksthat the operation faces such as strategic financial credit market liquidity securityproperty IT legal regulatory reputational and other risks have been identified andassessed and there is an adequate risk management infrastructure in place capable ofaddressing those risks.
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organizational structures processes standards code of conduct and behaviorstogether form the Management and business the Company.
The Company has introduced several improvements to Integrated Enterprise RiskManagement Internal controls Management and Assurance frameworks and processes to drivea common integrated view of risks optimal risk mitigation responses and efficientmanagement of internal control and assurance activities. This integration is enabled byall three being fully aligned across country wide Risk Management Internal Control andInternal Auditor methodologies and processes.
CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and at an arm's lengthbasis. During the year the Company had not entered into any contract/ arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
There are no materially significant related party transactions that may have potentialconflict with interest of the Company at large. Please refer to Form No. AOC-2 in AnnexureIV for the details of related party contracts or arrangements.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Except S.P.Y Agro Industries Limited an Associate Company the Company is not havingany Subsidiaries and Joint Ventures.
COMPANY' S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES.
The Nomination and Remuneration Committee has been constituted by the Board in itsmeeting held on 30th March 2015 to ensure the appointment of persons having vide exposurein their fields having independence as defined in the Act to be available for appointmentas Director (The Committee always keeps a list of eminent persons having independenceavailable for the Company's requirement depending upon vacancy on the Board). As regardsremuneration payable to Whole time Directors including Chairman and Managing Director theBoard will take collective decision within the parameter of various statutes includingCompanies Act 2013 and Listing Agreement. The Committee will follow the Company's policyto discharge its duties whenever necessity arises. It will not be out of place to mentionthat the set policy being followed since inception of the Company to ensure transparency.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There were no material changes and commitments if any affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which the financial statements relate and the date of the report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
ANNUAL RETURN IN FORM MGT-9 FORMAT:
In terms of the provisions of Section 92(3) of the Companies Act 2013 read with theCompanies (Manag ment and Administration) Rules 2014 an extract of the Annual Return ofyour company for the financial year ended 31st March 2019 is given in Annexure III.
Statements in the Management Discussion and Analysis Report describing the Company'sobjectives expectations or predictions may be "forward looking statements"within the meaning of applicable securities laws and regulations. Actual results coulddiffer materially from those expressed or implied. Important factors that could make adifference to your company Company's operations include demand supply conditions finishedgoods prices cyclical demand and pricing in your Company's principal markets change inGovernment regulations tax regimes economic developments within India within in whichyour company conducts business and other factors such as litigation and labournegotiations. Your company is not obliged to publicly amend modify or revise any forwardlooking statements on the basis of any subsequent development information or events orotherwise.
Your Directors are happy to acknowledge the financial assistance given to the Companyby the Banks Institutions Debenture Holders Stakeholders and business associates. YourDirectors also express their thanks to the Central and State Government Departments fortheir co-operation and support and look forward to their continued support in future. Wethank our employees for their contribution to your company's performance. We applaud themfor their super levels of competence dedication and commitment to your company.