The Directors are pleased to present the 72nd Annual Report of the Companytogether with the Audited Financial Statements for the year ended 31" March 2017.
The financial highlights for the year under report are as under:
| ||Current Year Ended 31.03.2017 ||Previous Year Ended 31.03.2016 (12 months- April 2015 to March 2016) ||Previous Year Ended 31.03.2016 (15 months- January 2015 to March 2016) |
|Gross Turnover ||35280 ||42386 ||52131 |
|Profit before Interest Depreciation Exceptional Items &Tax [PBIDT} ||1949 ||3537 ||4431 |
|Less :Interest ||1147 ||1058 ||1326 |
|Less : Depreciation ||2219 ||1884 ||2580 |
|(Loss)/Proflt after Interest & Depreciation but before Exceptional Item &Tax ||(1417) ||595 ||525 |
|(Loss)/Proflt from ordinary activities before Tax ||(1417) ||595 ||525 |
|(Loss)/Net Profit for the year ||(1417) ||595 ||525 |
|Balance brought forward from previous year ||(3146) ||(3741) ||(3671) |
|Less : Provision for Mines Reclamation ||(117) ||- ||- |
|(Loss) Carried Over ||(4680) ||(3146) ||(3146) |
(Previous figures have been regrouped wherever necessary)
"As per Tax audit record.
The Gross turnover of the Company during the year under report at t 35280lakhs was lower by about 20% against the turnover oft 42386 lakhs during the corresponding12 months period in the previous year.
The PBDIT has turned into negative as compared with the previous year. The reason isexplained in Management Discussions and Analysis forming part of the Report. DIVIDEND
In view of the accumulated losses your Directors does not recommend any dividend onShare Capital.
The paid -up Equity Share Capital as on 31st March 2017 was t 14137 lakhs.The Company has neither issued shares with differential rights as to dividend voting orotherwise nor issued shares to the Employees or Directors of the Company.
No disclosure is required under Section 67(3)(C) of the Act in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid Section are not applicable.
PRODUCTION AND SALES
Production and Sales during the year under review are as under:
(In lakhs MT)
| ||Current Year Ended 31.03.2017 ||Previous Year Ended 31.03.2016 (12 months- April 2015 to March 2016) ||Previous Year Ended 31.03.2016 (1S months- January 2015 to March 2016) |
|Production:- || || || |
|- Clinker ||7.26 ||7.74 ||9.97 |
|- Cement ||8.49 ||9.90 ||12.08 |
|Sales: || || || |
|- Cement ||g Rs. H8.54 ||9.77 ||11.97 |
During the year under review Cement production was 8.49 lakhs MT as against 9.90 lakhsMT during corresponding 12 months period in previous year. Clinker production was 7.26lakhs MT as against 7.74 lakhs MT during corresponding 12 months period in previous year.This decreased performance is mainly due to sluggish market conditions resulting intolower demand and stoppages of production.
There has not been any change in the nature of the business of the Company.
Your Company has neither accepted any deposits during the year under report nor did anydeposits remain unpaid or unclaimed at the end of the year.
LOANS GUARANTEES AND INVESTMENTS
Your Company has neither given any loan or guarantee nor has made any investment duringthe year under report attracting the provisions of Section 186 of the Companies Act 2013.
NUMBER OF MEETINGS
The details of number of Meetings of the Board and committees thereof held during thefinancial year 2016-2017 forms part of the Corporate Governance Report.
As stipulated in Section 134 (3) (c) read with sub section 5 of the Companies Act2013 Directors subscribe to the
ended 31 March 2017 the applicable Accounting Standards have been followed along withproper 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 as at 31st March 2017 and theprofit and loss of the Company for that Year;
(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 of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts of the Company on a going concernbasis;
(e) the Directors have laid down adequate internal financial control to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
POLICY ON DIRECTORS'APPOINTMENT & REMUNERATION
The Company has a "Nomination and Remuneration Committee of Directors" inplace for nomination and appointment of Directors Senior Management Key ManagerialPersonnel and other employees in Senior Management category who directly reports to CEOof the Company and also process of deciding their remuneration. The Committee reviews andrecommend to the Board the payment of remuneration to said Directors Key ManagerialPersonnel and other employees in Senior Management category who directly reports to CEOof the Company.
The Board of Directors of the Company follows the criteria for determiningqualification positive attributes independence of Directors as per Nomination andRemuneration Policy and all appointments are in compliance with said policy and otherapplicable policies ofVotorantim Group and of the Company. Directors are appointed/re-appointed with the approval of the Members for a term in accordance with theprovisions of the law and the Articles of Association. The initial appointment of CEO andWhole-time Director is generally for a period of three years. All Directors other thanIndependent Directors are liable to retire by rotation unless otherwise specificallyprovided under the Articles of Association or under any statute or terms of appointment.One third of the Directors who are liable to retire by rotation retire at every annualgeneral Meeting and are eligible for re-appointment.
CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES Details of Contracts/arrangement withthe Related Parties are appearing under Note no. 32b and form part of this report. Allrelated party transactions that were entered into during the year under report were onarm's length basis and were in the ordinary course of business. The related partytransactions made by the Company with Promoter Company have no potential conflict withthe interest of the Company at large.
Related Party Transactions are placed before the Audit Committee as also to the Boardwherever required for approval. The Policy on Related Party Transactions as approved bythe Board is uploaded on the Company's website. The Company's management ensures totaladherence to the approved Policy on Related Party Transactions to establish Arm's LengthBasis without any compromise. Pursuant to the provisions of Section 188(1) of theCompanies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 particulars ofmaterial contracts and arrangements entered between the Company and the Related Partiesare annexed hereto as Annexure A. MATERIAL CHANGES AND COMMITMENTS There have notbeen any material changes and commitments affecting the financial position of the Companybetween the end of the financial year of the Company as on 31st March 2017 andthe date of this report i. e. 21st April 2017. CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO Information relating toconservation of Energy Technology Absorption and Foreign Exchange Earning and Outgorequired under Section 134 (3) (m) of the Companies Act 2013 are annexed hereto as AnnexureB and form part of this report.
PARTICULARS OF EMPLOYEES AND REMUNERATION
a) Disclosure pertaining to the remuneration and other details as required underSection 197(12) of the Act and the Rules framed thereunder are annexed hereto as AnnexureC.
During the year under review no employees other than Whole-time Director were inreceipt of remuneration of not less than Rs. 75 Lakhs or Rs. 6.25 Lakhs per month duringany part of the year. Though certain details on remuneration in respect of said Whole-timeDirectors are provided in Corporate Governance Report and forms part of this Report interm of Section 136 of the Act the Report and Account are being sent to the Members andothers entitled thereto excluding the aforesaid annexure which is available forinspection by the Members at the Registered Office of the Company during business hours onworking days of the Company up to the date of the ensuing Annual General Meeting.
b) Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for nomination and appointment of Directors Senior Management KeyManagerial Personnel and their remuneration. The details of Remuneration Policy is statedin the Corporate Governance Report and annexed hereto as Annexure D.
The details of remuneration paid to the Managerial Personnel forms part of theCorporate Governance Report.
The Board of Directors of the Company follows the criteria for determiningqualification positive attributes
Independence of Directors as per Nomination and Remuneration Policy and allappointments are in compliance with said policy and the Board Diversity Policy of theCompany.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place Sexual Harassment Policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.The internal committee has been set up to redress complaints received regarding sexualharassment. All employees are covered under this policy. During the year under review theCompany has not received any complaints of sexual harassment.
RISK MANAGEMENT POLICY
The Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing / mitigating the same. Your Company hasinstitutionalized the process for identifying minimizing and mitigating risks which isperiodically reviewed.
CORPORATE SOCIAL RESPONSIBILITY [CSR]
Your Company aims to remain essential to the society with its social responsibilitystrongly connected with the principle of sustainability an organization based not only onfinancial factors but also on social and environmental consequences. It is responsibilityof your Company to practice its corporate values through its commitment to grow in asocially and environmentally responsible way while meeting the interest of Stakeholders.
The Company was the first industrial unit in the region who started providing freedrinking water free medical amenities with free service of Maternity and Child Healthnot only to its employees but to all nearby villagers whosoever residing in the radius ofmore than 15 KMs.
As required under Section 135 of the Companies Act 2013 and to demonstrate theresponsibilities towards Social upliftment in structured way the Company has formed aPolicy. Details of the policy CSR Committee CSR spent during the year forms part of CSRReport and annexed hereto as Annexure E.
The CSR Committee is supported by an Executive Committee comprising of senior officersof the Company from different departments.
Ms.Meike Albrecht Non-Executive and Non-Independent Director of the Company retiresby rotation at the ensuing Annual General Meeting pursuant to the provisions of Section152 of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 and the Articles of Association of your Company and beingeligible has offered herself for re-appointment as the Director. A brief resume of Ms.Meike Albrecht is attached to the Notice for the ensuing Annual General Meeting.
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 of the Companies Act 2013 and provisions of the ListingRegulations stating that they meet the criteria of independence as provided therein.
DETAILS OF KEY MANAGERIAL PERSONAL (KMP)
During the year under report Mr. MV Ramaswamy succeeded Mr. Arun Kamra and appointedas Chief Financial Officer (CFO) and as one of the key managerial personnel of the Companyw.e.f. 3rd November 2016. Mr. Arun Kamra ceased to be a CFO of the Companyeffective from 24th May 2016 though he was associated with the Company as afull time employee till 30th September 2016.
The Board has adopted a "Policy on Evaluation of Performance of Directors and theBoard" pursuant to the provisions of the Companies Act 2013 and Regulation 27(2) ofSEBI (LODR) Regulations 2015. In terms of this Policy the Board has carried out anevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Nomination and Remuneration Committees.
Statutory Auditors and their Report
M/s. Price Waterhouse Chartered Accountants were appointed as the Statutory Auditorsof the Company at the 70th Annual General Meeting held on 20th May2015 until the conclusion of the 75th Annual General Meeting (AGM) to be heldin 2020 subject to the ratification by the shareholders at each AGM till the year 2020.
M/s. Price Water House has confirmed their willingness and eligibility under Section141 of the Act and the rules framed thereunder for ratification of their appointment asAuditors of the Company.
The Audit Committee and the Board of Directors recommended the ratification ofappointment of Price Waterhouse as Statutory Auditors of the Company for the financialyear 2017-18.
The Auditors' Report to the shareholders for the year under review does not contain anyqualification.
Cost Auditors and Cost Audit Reports
Pursuant to Section 148 of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee appointed M/s. Kiran J. Mehta & Co. CostAccountants as the Cost Auditors of the company for the financial year 2017-18 and hasrecommended to the Shareholders the ratification of remuneration to Cost Auditors. M/sKiran J Mehta & Co. have confirmed that their appointment is within the limits of thesection 139 of the Companies Act 2013 and have also certified that they are free fromany disqualifications specified under Section 141 of the Companies Act 2013.
The Audit Committee has also received a certificate from the Cost Auditor certifyingtheir independence and arm's length relationship with the Company. Cost Audit Report forthe financial year 2015-16 was filed with the Ministry of Corporate Affairs on 30thSeptember 2016 vide SRN No. G12909164
Secretarial Auditor and Secretarial Audit Report
The Board had appointed M/s Manoj Hurkat & Associates Company Secretaries inWhole-time Practice to carry out Secretarial Audit under the provisions of Section 204 ofthe Companies Act 2013 for the financial year 2016-17. The report of the SecretarialAuditor is annexed as Annexure F to this Report. The report does not contain anyqualification.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are annexed as Annexure G to thisReport.
During the year under review the Company has successfully completed the process ofobtaining approval of its Members through Postal Ballot on 12th January 2017on the Special Resolution for approval of Remuneration of Mr. KK Rajeev Nambiar as CEO& Whole-time Director.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has adequate internal financial control whichare constantly monitored by Finance Department.
The Finance Department monitors and evaluates operating systems accounting proceduresand policies at all locations of the Company. Based on the report of external InternalAuditors the Audit Committee/ Board initiate corrective action in respective areas andthereby strengthen the controls.The scope functioning periodicity and methodology forconducting internal audit is as per terms agreed by the Audit Committee in consultationwith the Internal Auditor and as approved by the Board. During the year under review M/s.Ernst & Young has acted as Internal Auditors of the Company. Significant auditobservations and corrective actions thereon are periodically presented to the AuditCommittee of the Board.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy which is in compliancewith the provisions of Section 177(10) of the Companies Act 2013 and SEBI (LODR)Regulations 2015. The details of the Whistle Blower Policy is explained in the CorporateGovernance Report and also posted on the website of the Company.
CODE OF CONDUCTTO REGULATE MONITOR AND REPORT TRADING BY INSIDERS
In terms of SEBI (Prohibitions of InsiderTrading) Regulations 2015 the Company hasadopted a Code of Conduct (Code) to Regulate Monitor and ReportTrading by Insiders. AnyInsiders (as defined in Code) including designated employees and their relatives areinter-alia prohibited from trading in the shares and securities of the Company or counselany person during any period when the"unpublished price sensitive information"are available with them.
The Code also requires pre-clearance for dealing in the Company's shares and prohibitsdealing in Company's shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed.
CORPORATE GOVERNANCE REPORT
The Corporate Governance Report forms an integral part of this Report and is annexedhereto as Annexure H together with the Certificate from the Practicing CompanySecretary regarding compliance with the requirements of Corporate Governance as stipulatedin Part C of Schedule V to the SEBI (Listing Obligations & Disclosure Requirement)Regulations 2015.
Your Company encourages and provides regular training to employees to improve skills.Your Company has performance appraisal system for senior employees and junior managementstaff. In-house news-letters provide forum for information sharing. Rewarding individualsfor their contribution is part of motivation towards Excellence. More details on thissection is forming part of Management Discussion and Analysis Report.
HEALTH AND SAFETY/ INDUSTRIAL RELATIONS
The Company continues to accord high priority to health and safety of employees at alllocations. During the year under review the Company conducted safety training programsfor increasing disaster preparedness and awareness among all employees at the plant.Training programs and mock drills for safety awareness were also conducted for allemployees at the plant. Safety Day was observed with safety competition programs with aimto imbibe safety awareness among the employees at the plant.
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
Your Directors state that no disclosure or reporting is required in respect offollowing items as either there were no transactions on these items or these items are notapplicable to the Company during the year under review:
1) No material changes and commitments if any affecting the financial position of theCompany occurred between the end of the financial year of the Company i.e. 31stMarch 2017 and the date of this report.
2) No Company have become or ceased to be Subsidiary Associate or joint venture of theCompany during the year under review.
3) No significant and material orders were passed by the regulators or courts ortribunals which impact the going concern status and Company's operations in future.
We believe in sustainable development. We regard social economic and environmentalresponsibility as integral element of our business.
Your Company is IS014001 Environment Management system Certified and adhere to OHSAS18001 standards of Safety and Occupational Health. Professional Environment Auditors suchas Det Norske Veritas the State Pollution Board's certified auditors and EnvironmentalSystem Auditors conduct periodic in-depth environmental audit on our plant. The AuditReports validate our commitment to environmental conservation. Large scale plantations inthe mines plant colonies and surrounding areas provide a lush green cover and arereflection of our respect for the environment.
Your Directors are thankful to the Central and State Government DepartmentsOrganizations and Agencies for their continued guidance and co-operation. The Directorsare grateful to all valuable Stakeholders Dealers Vendors Banks and other businessassociates for their excellent support and help rendered during the year. The Directorsalso acknowledged the commitment and valued contribution of all employees of the Company.
Your Directors wish to place on record their appreciation for the support and guidanceprovided by its Parent Company Votorantim Cimentos.
| ||For and on behalf of the Board |
|Sven Erik Oppelstrup Madsen ||K.K. Rajeev Nambiar |
|Director ||CEO & Whole-Time Director |
|Place : Mumbai || |
|Date : 21st April 2017 || |