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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
OPEN 7.55
PREVIOUS CLOSE 7.55
VOLUME 1
52-Week high 7.55
52-Week low 0.00
P/E 0.06
Mkt Cap.(Rs cr) 13
Buy Price 9.00
Buy Qty 200.00
Sell Price 7.55
Sell Qty 760.00
OPEN 7.55
CLOSE 7.55
VOLUME 1
52-Week high 7.55
52-Week low 0.00
P/E 0.06
Mkt Cap.(Rs cr) 13
Buy Price 9.00
Buy Qty 200.00
Sell Price 7.55
Sell Qty 760.00

Panyam Cements & Mineral Industries Ltd. (PANYAMCEM) - Director Report

Company director report

To

Dear Members

The Board of Directors with the authorization of Resolution Professional (RP) ofthe Company presents to the Members the 65th Annual Report of the Companytogether with the Audited Financial Statements for the Financial Year ended 31stMarch 2021.

SALIENT FEATURES OF THE REPORT

The National Company Law Tribunal Amaravati Bench ("NCLT") by itsorder dated May 14th 2020 ("Admission Order") has orderedthe commencement of CIRP in respect of the Company under the provisions of the Insolvencyand Bankruptcy Code 2016 ("Code"). Pursuant to the Admission Order andin accordance with Section 16 of the Code Mr. Bhrugesh Amin was appointed as an InterimResolution Professional ("IRP") and the appointment as ResolutionProfessional ("RP") was subsequently approved by the Committee ofCreditors of the Company on June 26th 2020. The Hon'ble NCLT Amravati Benchhas approved the Resolution Plan submitted by Resolution Applicants vide Order dated June25 2021. The Hon'ble NCLT Amravati Bench has also approved the constitution andappointment of Mr. Bhrugesh Amin as monitoring agent of Monitoring Committee until closingdate to supervise implementation of the Resolution Plan.

FINANCIAL RESULTS

(Rs .In lakhs)

Particulars Year ended March 31 2021 Year ended March 31 2020
Revenue from Operations - -
Other Income 183.92 1436.59
Total Revenue 183.92 1436.59
Profit before Interest and Depreciation -449.12 -794.61
Less: Interest and Finance charges 1134.94 8777.95
Less: Depreciation and Amortisation 514.42 672.35
Profit / (Loss) before Exceptional Items and Tax -2098.47 -10244.91
Add Exceptional Items on transfer of Wire Division Land - -5544.94
Property under Joint Development Agreement
Profit / Loss (-) before tax -2098.47 -15789.85
Less Provision for Income Tax (Earlier years) - -
Net Loss after tax -2098.47 -15789.85
Net gains / (Loss) on FVTOCI equity securities 0.61 -505.80
Total Comprehensive Income for the period (TCI) -2097.86 -16295.65

OPERATIONS:

The company has not operated during the financial year 2020-21. The company has stoppedoperations at the plant from December 2018.

DIVIDEND:

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.

FIXED DEPOSITS:

The Company has not accepted any Fixed Deposit during the year and there are no fixeddeposits outstanding as on 31st March 2021.

INSURANCE:

The assets of the Company are adequately insured.

INDUSTRIAL RELATIONS:

Company's Industrial Relations continue to be harmonious and cordial.

EMPLOYEES:

Your Directors wish to place on record their sincere appreciation of the whole-heartedcooperation extended and the valuable contribution made by the employees at all levels.

AUDITORS:

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 ofthe 66th Annual General Meeting to be held in 2021-22. Interms of theprovisions of the Act your ratification to their appointment as Statutory Auditors ofyour Company is being sought at the ensuing AGM and forms part of the Notice convening theAGM. The said Statutory Auditors have confirmed that they are not disqualified to act asAuditor and are eligible to hold office as Auditors of your Company.

AUDITOR'S REPORT:

Regarding Qualified Opinion:

(a) As reported in the audit report the Company has outstanding inter-corporate loansas at 31.03.2021 in its group or associate entities the auditors were unable to obtainaudit evidence. There has been instances of no response or in adequate response due tolack of manpower in those entities. The Board has advised the management team to look intothe process and get the requisite confirmations from respective entities during thecurrent financial year 2021-22.

(b) As reported in the audit report the Company has outstanding trade receivable as at31.03.2021 which are classified as doubtful the auditors were unable to obtain auditevidence. There has been instances of no response or in adequate response due to lack ofmanpower 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 2021-22.

(c) As reported in the audit report the company has not carried physical verificationfor the Inventory due to lack of manpower and non - availability of staff. This is notedfor compliance in subsequent years.

(d) As reported in the audit report the company has not carried physical verificationfor the Property Plant & Equipment and Capital work in progress due to lack ofmanpower and non - availability of staff. This is noted for compliance in subsequentyears.

(e) Wherever amounts are substantial efforts are being made to obtain externalconfirmation from the vendors banks financial institution and government authorityregarding trade payable but unable to succeed for the same.

(f) As part of the Corporate Insolvency Resolution process the claims from Financialand Operational creditors are being filed and further being admitted rejected or pendingverification. We are unable to comment on the liability that may arise due to suchadmittance to the extent unrecorded/unreconciled with the books of accounts and itsconsequential impact on financial statements as on reporting date.

(g) 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.

COST AUDIT:

Cost Audit will not be applicable from the financial year 2020-21 since the turnoverof the company during the last financial year is below the statutory threshold asprescribed under the respective provisions of the Companies Act 2013 and Cost Audit rulesmade there under.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the ResolutionProfessional (RP) has appointed M/s. B S S & Associates Hyderabad PracticingCompany Secretaries to conduct Secretarial Audit for the FY 2020-21. The Secretarial AuditReport for the financial year ended March 31st 2021 is annexed to this Reportas Annexure II. The qualification/ remarks made in the Secretarial Audit Report areself-explanatory.

DIRECTORS:

The Board is suspended with effect 14th May 2020 as per the orders of NCLT.Subsequently Mrs. Aravinda Rani Women Director resigned w.e.f. 28th February2021. The NCLT vide its order No. 187/7 (AMR)/2019 dated 14th May 2020 whileadmitting the petition has appointed Mr. Bhrugesh Amin as Interim Resolution Professional.

INDEPENDENT DIRECTORS

The Board is suspended. Further the term of 5 years of Independent Directors hasexpired and they ceased to be the directors of the Company.

BOARD EVALUATION:

Since the powers of the Board of Directors have been suspended w.e.f. 14thMay 2020 pursuant to the orders of Hon'ble National Company Law Tribunal (NCLT)Amaravati Bench dated 14th May 2020 evaluation of the Board has not takenplace.

VIGIL MECHANISM:

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'sweb site at the link http://www.panyamcements.com.

KMPS OTHER THAN DIRECTORS:

As of March 31st 2021 in accordance with the provisions of the CompaniesAct 2013 and Listing Agreement with the Stock Exchange Mr. S. Sreedhar Reddy ManagingDirector has been designated as the KMP of the Company.

MEETINGS OF THE BOARD AND AUDIT COMMITTEE:

Since the powers of the Board stood suspended with effect from 14th May2020 i.e. the date of commencement of the Corporate Insolvency Resolution Process("CIRP") and continued to remain so for the period under review no Boardmeetings were held during the financial year.

The roles and responsibilities of the Board and the committees were fulfilled by theResolution Professional Mr. Bhrugesh Amin in accordance with the provisions of thesection 23 of the Insolvency Bankruptcy Code 2016.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As your Company has been incurring losses the conditions contained in Section 135 ofthe Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy)Rules 2014 are no longer applicable. Hence there is no requirement with respect tocompliance of the said section 135.

CORPORATE GOVERNANCE:

Your Directors reaffirm their continued commitment to good corporate governancepractices. A separate report on Corporate Governance is incorporated as Annexure IV 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: -

That in the preparation of the annual Accounts the applicable accounting standards hadbeen followed with proper explanation and that there were no materials departures.

i. 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.

ii. 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.

iii. That the annual financial statements have been on a going concern basis.

iv. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.

v. That systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013.

The Company has zero tolerance towards sexual harassment at the workplace 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)Rules2014 are set out in the Annexure I and forms part of the report.

LISTING AGREEMENT:

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 1st2015. Accordingly all listed entities were required to enter intothe Listing Agreement within 6 months from the effective date. The Company entered intoListing Agreement with BSE Limited on 29th February 2016 wherein the Equity Shares andNonConvertible Bonds issued by the Company are listed.

The Equity shares/Non-Convertible Debentures of the Company are listed on the BSELimited and the annual listing fee was not paid. Consequently the trading of shares onBSE was suspended.

RISK MANAGEMENT

A Special Team with Senior 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 AnnexureIII 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 havingvide exposure in their fields having independence as defined in the Act to be availablefor appointment as Director (The Committee always keeps a list of eminent persons havingindependence available for the Company's requirement depending upon vacancy on the Board).As regards remuneration payable to Whole time Directors including Chairman and ManagingDirector the Board will take collective decision within the parameter of various statutesincluding the Companies Act 2013 and Listing Agreement. The Committee will follow theCompany's policy to discharge its duties whenever necessity arises. It will not be out ofplace to mention that the set policy being followed since inception of the Company toensure 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:

Pursuant to the amendments to Section 134(3)(a) and Section 92(3) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 the AnnualReturn (Form MGT-7) for the financial year ended March 31 2021 is available on theCompany's website and can be accessed at www.panyamcements.com.

CAUTIONARY STATEMENT:

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's operations include demand supply conditions finished goodsprices cyclical demand and pricing in your Company's principal markets change inGovernment regulations tax regimes economic developments within India in which yourcompany conducts business and other factors such as litigation and labour negotiations.Your company is not obliged to publicly amend modify or revise any forward-lookingstatements on the basis of any subsequent development information or events orotherwise.

ACKNOWLEDGMENTS:

The Management of the Company would like to express their sincere appreciation for thecooperation and assistance received from shareholders bankers financial institutionsregulatory bodies and other business constituents during the year under review. TheManagement of the Company also wish to place on record their deep sense of appreciationfor the commitment displayed by all executives officers and staff of the Company duringthe financial year.

By Order of the Board of Directors For Panyam Cements & Mineral Industries Ltd
(S. SREEDHAR REDDY)
Place: Nandyal Managing Director
Date: 03 December 2021 DIN No.01440442

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