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Shiva Cement Ltd.

BSE: 532323 Sector: Industrials
NSE: N.A. ISIN Code: INE555C01029
BSE 11:56 | 23 Oct 12.25 0.61
(5.24%)
OPEN

11.64

HIGH

12.25

LOW

11.50

NSE 05:30 | 01 Jan Shiva Cement Ltd
OPEN 11.64
PREVIOUS CLOSE 11.64
VOLUME 259497
52-Week high 16.65
52-Week low 6.60
P/E
Mkt Cap.(Rs cr) 239
Buy Price 12.23
Buy Qty 100.00
Sell Price 12.25
Sell Qty 604.00
OPEN 11.64
CLOSE 11.64
VOLUME 259497
52-Week high 16.65
52-Week low 6.60
P/E
Mkt Cap.(Rs cr) 239
Buy Price 12.23
Buy Qty 100.00
Sell Price 12.25
Sell Qty 604.00

Shiva Cement Ltd. (SHIVACEMENT) - Director Report

Company director report

Dear Members

We are pleased to present 33rd Annual Report for the financial year ended on 31stMarch 2019. The operational performance during the year is as below.

Financial Performance ( Rs. lakhs)
Particulars 31/03/2019 31/03/2018
Turnover 2937.53 2603.95
Operating EBIDTA (691.78) (832.78)
Other Income 34.64 28.01
Finance Cost 1485.28 1378.83
Depreciation & Amortization 762.96 794.11
Profit/(Loss) before exceptional Item (2905.38) (2977.71)
Exceptional Items (see details below) 0.00 1011.41
Profit (Loss) before Taxation (2905.38) (3989.12)
Tax Expense/benefits (779.50) (879.67)
Profit (Loss) after Taxation (2125.88) (3109.45)

Highlights of performance :

The challenges for the Financial year 2018-19 were to consolidate the productionperformance improvement in the quality parameters of Cement and establishing the newbrand "Mahabal" in the market.

The outcome of above was Financial year 2018-19 ending with an increase in sales volumeof cement by 10% over the last year sales.

This year the company has utilized 53% of total installed capacity and produced 70586MT of Cement which is 9% more than the last year's cement production. However during theyear the company has produced 39732 MT clinker which is 7% lower than the last year'sclinker production.

During the year the company has borrowed '1477 lakhs and repaid '697.02 lakhs to itsholding company JSW Cement Limited. On the total cumulative borrowed funds of '13755.98lakhs the company has incurred interest cost amounting to '1437.62 lakhs during theyear. Current year's borrowed fund has been utilized for current operational expenditureand capital expenditure to the tune of '585.78 lakhs.

Transfer to Reserves

During the financial year under review the Board has not proposed to transfer anyamount to reserves.

Dividend

As your Company has incurred a net loss during the year your Directors have notrecommended any dividend for the year. Financial Statement :

The audited Financial Statements of the Company which form a part of this AnnualReport have been prepared in accordance with the provisions of the Companies Act 2013Regulation 33 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and the Indian Accounting Standards.

Holding Subsidiary & Associate Company :

Your Company has neither any subsidiary nor an associate company. The Company has aholding company as on 31st March 2019 namely JSW Cement Limited. The net worth of JSWCement Limited as on 31.03.2019 is '1293.84 crores

Fixed Deposits :

Your Company has neither accepted nor renewed any deposits within the meaning ofSection 73(1) of the Companies Act 2013 and the rules made there under during the periodunder review.

Extract of Annual Return :

The extract of Annual Return as provided under Section 92(3) of the Companies Act 2013and as prescribed in Form MGT-9 of the rules prescribed under chapter VII relating toManagement and Administration under the Companies Act 2013 is made available on theCompany's website and can be accessed from www.shivacement.com and forms a part of thisAnnual Report as Annexure A.

Share Capital :

There was no change in the authorized share capital of the Company during the yearunder review. The issued subscribed and paid up equity share capital of the Company as on31st March 2019 was '3900.00 Lakhs comprising 1950 Lakh Equity shares of '2/- each.

Board Meeting :

The Board meets to discuss and decide on Company/business policy and strategy apartfrom other business. A tentative date of the Board and Committee Meetings is circulated tothe Directors in advance to facilitate them to plan their schedule and to ensuremeaningful participation in the meetings. However in case of a special and urgentbusiness need the Board's approval is taken by passing resolutions through circulation aspermitted by law which are notified in next Board meeting.

During the year under review the Board of Directors have met four times on 21.04.201807.08.2018 12.11.2018 and 24.01.2019. The maximum interval between two meetings did notexceed 120 days as prescribed under Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ["SEBI(LODR)Regulations 2015"] and Secretarial Standard SS-1.

Directors' Responsibility Statement :

Pursuant to the provisions of section 134(5) of the Companies Act 2013 your Directorshereby state and confirm that :

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper 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 at the end of the financial year and ofthe profit and loss of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. the directors have prepared the annual accounts on a going concern basis; and

e. the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Declaration of Independence :

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the CompaniesAct 2013 and Regulation 16 of the SEBI (LODR) Regulations 2015.

Auditors

A. Statutory Auditors :

At the Company's 31st Annual General Meeting (AGM) held on September 21 2017 M/s ShahGupta &Co. Chartered Accountants (Firm Registration No. 109574W) Mumbai wereappointed as the Company's Statutory Auditors for a period of five consecutive yearsi.e.from the conclusion of the 31st AGM till the conclusion of the 36th AGM subject toratification if required by the members of the Company at every Annual General MeetingHowever the Ministry of Corporate Affairs vide its notification S.O. 1833(E) dated 07thMay 2018 notified the amendment in section 139 of the Companies Act 2013 pursuant towhich the appointment of Statutory Auditors is not required to be ratified by the membersevery year during the tenure of Statutory Auditors once approved by the members in theirAnnual General Meeting.

B. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Prakash Sahoo & Associates Practicing Company Secretaries RourkelaOdisha to undertake the Secretarial Audit of the Company. The Report of the SecretarialAudit Report in Form No. MR- 3 is appended as Annexure B.

C. Comments on auditors' report

There are no qualifications reservations or adverse remarks or disclaimers made byM/s. Shah Gupta & Co. Chartered Accountants Statutory Auditors in their AuditReport and by M/s. Prakash Sahoo & Associates Practicing Company Secretaries intheir secretarial audit report. The Auditors did not report any incident of fraud to theAudit Committee of the Company in the year under review.

Particulars of loans or guarantees given securities provided or investments made underSection 186 of the Companies Act 2013 :

During the year under review the Company has not given loans or guarantees securitiesprovided or investments made under Section 186 of the Companies Act 2013.

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013

All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and that provisions of Section 188 ofthe Companies Act 2013 and the rules made thereunder are not attracted. However thedisclosure in Form AOC-2 in terms of Section 134 of the Act is appended as Annexure C.

Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report.

Particulars regarding Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo

A statement containing necessary information as required under the Companies Act 2013is annexed hereto in Annexure-D. There were no foreign exchange transactions during theyear.

Company's policy on Directors' KMP & other employees' appointment and remuneration

The Policies of the Company on Directors KMP & other employees' appointmentincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided under sub-section (3) of section 178 is appended asAnnexure E to this Report. The Remuneration Policy is forming part of Corporate GovernanceReport and detailed policy has also been published on the website www.shivacement.com forinvestor's information.

Risk Management Policy

The Company has in place a Risk Management Policy to identify assess monitor andmitigate various risks to key business objectives. Major risks identified by thebusinesses and functions are systematically addressed by the Audit Committee. All risksare reviewed in the meetings of the Board of Directors. Risks related to internalcontrols compliances & systems are also reviewed in detail by the Audit Committee.The Risk Management Policy has also been published on website www.shivacement.com forinvestor's information.

Corporate Social Responsibility

The Company believes in inclusive growth to facilitate creation of a value based andempowered society through continuous and purposeful engagement with society around. Allthe CSR initiatives are approved by the CSR Committee in line with the CSR Policy. The CSRPolicy formulated is uploaded on the website of the Company at www.shivacement.com.

Vigil Mechanism

Pursuant to the provisions of Section 177 (9) of Companies Act 2013 the Board ofDirectors has established a committee to provide adequate safeguard against victimization& to protect interest of the directors and employees to report their genuine concerns.The Company has uploaded the code of conduct in relation to the employees & directorson its website (www.shivacement.com).

Evaluation of Board Committees and Board Members pursuant to provisionsof theCompanies Act 2013

Good Governance requires Boards to have effective processes to evaluate theirperformance. The evaluation process is a constructive mechanism for improvingeffectiveness of Board maximizing strengths and tackling weaknesses which leads to animmediate improvement in performance throughout the organization.

Evaluation by Independent Director

In terms of the Code for Independent Directors (Schedule IV) the IndependentDirector(s) on the Board of the Company shall evaluate performance of the Non-IndependentDirector(s) Board as a whole and review performance of Chairperson. Broad parameters forreviewing performance are based on the structured questionnaires related to composition ofBoard Function of Board Meeting attended by Board Members conflict of interestparticipation in discussion time contribution governance and ethical problem etc.

Evaluation by Nomination and Remuneration (NRC) Committee

Nomination and Remuneration committee constituted under section 178 of the CompaniesAct 2013 has been made responsible for carrying out evaluation of every Director'sperformance. The evaluation of individual Director focuses on contribution to the work ofBoard.

Evaluation by Board

The purpose of Board Evaluation is to achieve persistent and consistent improvement inthe governance of the Company at Board level with an intention to establish and followbest practices in Board Governance in order to fulfill fiduciary obligation to theCompany. The Board believes the evaluation will lead to a working relationship amongBoard members greater efficiency using the Board's time and increased effectiveness ofthe Board as governing body. A structured questionnaire was prepared covering all aspectsof the Board's and Committee's function for the evaluation of the Board and Committees.The evaluation of the Independent Directors was based on the range of the criteria likeindependent judgment strategy performance and risk management; skill knowledge andFamiliarity about the Company professional advice attendance in Board and Committeemeeting etc.

Significant and material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company's operations in future.

There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's future operations.

Adequacy of Internal Financial Controls :

The Board of Directors in consultation with Internal Auditors have laid down theInternal Financial Controls Framework commensurate with the size scale and complexity ofits operations. The Internal Audit Team quarterly monitors and evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies. Based on the report of internal audit functionprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. Audit observations and corrective actions thereon are presentedto the Audit Committee of the Board.

Directors and Key Managerial Personnel :

Mr.Rajendra Prasad Gupta (DIN- 01325989) Non-Executive Director of your Company shallretire by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-appointment at the ensuing Annual General Meeting of the Company.

During the year under review Mr. Kashi Prasad Jhunjhunwala (DIN: 01005691) Ms. SutapaBanerjee (DIN- 02844650) and Mr. D.K. Senapati (DIN: 03449031) resigned from theDirectorship of the Company w.e.f 29.03.2019 30.03.2019 and 11.04.2019 respectively. TheBoard places on record its sincere appreciation for the valuable guidance and contributionmade by Mr. Kashi Prasad Jhunjhunwala Ms. Sutapa Banerjee and Mr. D.K. Senapati duringtheir tenure as Directors on the Board of Directors of the Company. Further Mr. SanjaySharma and Ms. Sudeshna Banerjee were appointed as Additional Independent Directors witheffect from 23rd April 2019

There were no changes in other directors and Key Managerial Personnel during the year.

Corporate Governance

Your Company has complied with the requirements of Regulation 17 to 27 of the SEBI(LODR) Regulations 2015 on Corporate Governance. Pursuant to Schedule V of the SEBI(LODR) Regulations 2015 Report on Corporate Governance along with the Auditors'Certificate on its compliance is annexed separately to this Annual Report

Management Discussion and Analysis Report

The Management Discussion and Analysis Report on the operations of the Company for theyear under review as required under Schedule V of the the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 is provided in a separate section and formspart of this Annual Report.

Human Resources

The Company is maintaining cordial and healthy relations with its employees. Employeesat all levels are extending their full support. The Company has strong faith in potentialof human resources. It believes in the creative abilities of the people; those work forthe Company. It believes in the participatory management.

E-Voting Platform

In compliance with provisions of Section 108 of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 your Company is registered withNSDL for E-Voting services to set up an electronic platform to facilitate shareholders tocast vote in electronic form to exercise their right of voting at General Meetings /business to be transacted by means of voting through e-voting or ballot paper as providedunder the Companies Act 2013.

Particulars of Employees

The provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are notapplicable as none of the employees were in receipt of remuneration exceeding the limitsspecified therein.

Awards & Recommendations

The Company was awarded with First Prize in "Annual Mines Safety WeekCelebration-2018".

Business Responsibility Report

As stipulated under the Listing Agreement the Business Responsibility reportdescribing the initiatives taken by the Company from environmental social and governanceperspective has been described in this Annual Report.

Environmental & Social Obligation

Environment Clearance for Cement Plant: The existing Environment Clearance for plantcapacity to produce 0.825 million MT Clinker and 1.05 million MT Cement was valid up to23rd May 2018. The Ministry of Environment and Forest (MoEF) & Climate Change (CC)vide their letter dated 15th June 2018 has extended validity of the EC for a period of 3years i.e. upto 22nd May 2021.

Consent to Establish to produce 0.825 million MT Clinker and 1.05 million MT Cement hasbeen granted by Odisha State Pollution Control Board (OSPCB) on 8th March 2018 and isvalid up to 7th March 2023.

NOC for Groundwater withdrawal: Central Ground Water Authority (CGWA) has approved ourapplication for 688 M3/day of groundwater for cement plant and No Objection Certificate(NOC) No. CGWA/NOC/IND/ORIG/2018/3874 for ground water abstraction to M/s Shiva CementLimited has been granted. The NOC start date is 20th July 2018 and is valid upto 19th July2020.

Disclosure under section 54(1) (d) of the Companies Act 2013 :

The Company has not issued sweat equity shares during the year under review and henceno information as pursuant to section 54(1)(d) of the Companies Act 2013 read with Rule8(13) of the Companies (Share Capital and Debentures) Rules 2014 is furnished.

Disclosure under section 67(3) of the Companies Act 2013

The Company has not passed any special resolution pursuant to Section 67(3) of theCompanies Act 2013 hence no disclosure is required to be made.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013:

The Company has a policy on Prevention of Sexual Harassment at workplace. The policyhas been framed as per "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" and an internal Committee has been constitutedfor redressal of the complaints.

Acknowledgements

Your directors place on record their sincere appreciation to the governmentauthorities Bankers NBFCs consultants shareholders employees suppliers &contractors of the Company for the co-operation and support extended to the Company.

Cautionary Statement

Statements in the directors' report and the management discussion & analysisdescribing company's objectives expectations or predictions may be forward-lookingstatement within the meaning of applicable laws and regulations. Although we believe ourexpectation is based on reasonable assumption actual results may differ materially fromthose expressed in the statement. Important factors that could influence the company'soperations include: global and domestic demand and supply conditions affecting sellingprices new capacity additions availability of critical materials and their cost changesin government policies and tax laws economic development of the country and such otherfactors which are material to the business operations of the company.

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