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Directors Report of Panyam Cements & Mineral Industries Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the 59th Annual Report and Audited Statements of Accounts for

the year ended 31st March, 2015:

FINANCIAL RESULTS :

(Rs.in lakhs)

Year ended Year ended 31st March 31st March 2015 2014

Income:

Gross Sales of manufactured products .. 11265.10 6175.91

Less: Excise Duty and Sales Tax .. 2366.79 1410.83

Net Sales of manufactured products .. 8898.31 4765.08

Other Income .. 523.13 457.53

Total .. 9421.44 5222.61

Profit( ) / (Loss) (-) before Interest and Depreciation 256.39 (-)1292.06

Less: Interest and Finance charges .. 1179.43 1293.22

Less: Depreciation .. 592.50 661.50

Net Profit ( ) / (Loss) (-) before exceptional and Extra-Ordinary Items and Tax (-) 1515.54 (-) 3246.78

Add:Exceptional Items on transfer of Wire Division Land property under Joint Development Agreement - 2820.97

Extra - Ordinary Items - -

Net Profit( ) / (Loss) (-) / before Tax (-) 1515.54 (-) 425.81

Provision for - Income Tax for the year (MAT) - 0.00

Deferred Tax Liability - 0.00

Net Profit / (Loss) after tax (-) 1515.54 (-) 425.81

Loss Brought Forward from previous year (-)1950.65 (-)1524.84

Depreciation on Fixed Assets whose useful life is over (-)22.37 -

Loss carried to Balance Sheet (-) 3488.56 (1950.65)

OPERATIONS:

The company has produced during the year 2014-15, 2,45,779 M.Tonnes of cement as against 1,40,298 M. Tonnes produced during the previous year. The performance of the Company has improved during the second half of the financial year. The major factor for improved performance was due to favourable market conditions and manufacture of slag cement.

The gross sales for the year under report was Rs. 11265.10 lakhs as against Rs.6175.91 lakhs in the previous year. The Net Loss after tax for the year was Rs.1515.54 lakhs as against net loss (before exceptional income of Rs. 3246.78 Lakhs and net loss of Rs. 425.81 lakhs in the previous year after exceptional income of Rs. 2820.97 Lakhs.

As stated in our last year Annual Report, the developer Greenage Griha Nirman Private Limited (formerly known as Bhimsankar Realtors Private Limited) has completed the first phase of construction of four blocks and the remaining six blocks in second phase will be completed before 31st December, 2015.

MODERNISATION OF THE CEMENT UNIT:

The modernization works for improving the efficiency and productivity to reduce the operational costs and cutting down of logistics has been shelved to stabilize the operations of the unit.

DIVIDEND:

Your Directors regret their inability to recommend any dividend on Equity Shares in view of the carry forward losses. Consequently the payment of dividend in respect of Redeemable "C" Cumulative Preference Shares held by the Financial Institutions also has been passed over.

FIXED DEPOSITS:

The Company has not accepted any Fixed Deposit during the year and there are no fixed deposits outstanding as on 31st March, 2015.

INSURANCE:

The assets of the Company are adequately insured.

CURRENT YEAR PROSPECTS:

The efforts taken by the management to improve the performance of the company has started yielding improved results.

We expect that the demand for cement during the current financial will also continue due to initiatives by the new Government such as housing for all, smart cities, Swachh Bharat campaign, infrastructure spending, concrete road initiatives and an increase in allocation of funds to states are likely to see a positive impact on the Cement Industry.

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-hearted co operation extended and the valuable contribution made by the employees at all levels.

AUDITORS:

M/s. Brahmayya & Co., Chartered Accountants, Adoni, were appointed as Statutory Auditors of the Company for a term of 3 years upon the recommendation of the Audit Committee at its meeting held on 13th August, 2014 by the Board in its meeting held on 13th August, 2014, subject to the members ratification every year to comply with the Section 143 of the Companies Act, 2013. Accordingly, a resolution for ratification by the members will be placed at the ensuing Annual General Meeting and will be effective upto the next Annual General Meeting.

AUDITOR'S REPORT:

As regards non-provision of gratuity, superannuation and leave encashment liability on actuarial valuation, it is provided on retirement of employees on a consistent basis and the liability is not ascertained. As regards non-remittance of undisputed statutory dues as mentioned in para vii(a) of Annexure to Auditors' Report and dues to banks as mentioned in para (ix) of the Annexure to the Report, the Company is clearing the statutory dues in a faced manner and dues to banks were paid after 31-03-2015.

COST AUDIT:

The Cost Audit is not applicable for the financial year 2014-15, as the Gross Turnover of the Company was below Rs.100.00 crores during the previous financial year pursuant to Section 148 of the Companies Act, 2013. In accordance with the Companies (Cost Audit Report) Rules, 2011, the Cost Audit Report in XBRL for the financial year ended 31st March, 2014 was filed vide SRN No.S37744216 with the Ministry of Corporate Affairs, New Delhi.

DIRECTORS:

In terms of the Articles of Association of the Company, Dr.R.K.Prasad Sunkara and Smt. V.Aravinda Rani will retire by rotation at the ensuing Annual General Meeting and being

eligible offer themselves for re-appointment. Sri A.V. Narasimha Reddy has resigned as a Director of the Company on 20th April, 2015. The Board placed on record its appreciation for his active participation and advice during the deliberations of Board and Audit Committee during his tenure of office.

Pursuant to provisions of 149, 152 and other applicable provisions, if any of the Companies Act, 2013 read with schedule IV to the Act, Sri Jayarama Reddy Pedireddygari (DIN NO.07053207) was appointed as an Independent Director of the Company to hold the said office for a period of five years with effect from 30th October, 2014 to 29th October, 2019.

KMPS OTHER THAN DIRECTORS:

In accordance with the provisions of the Companies Act, 2013 and Listing Agreement with the Stock Exchange, Sri S.Nageswara Reddy has been appointed as Chief Financial Officer of the Company w.e.f.30th March, 2015.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility statement, it is hereby confirmed:

a) that in preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the statement of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a "going concern" basis.

AUDIT COMMITTEE:

The Audit Committee continues to function to comply with the provisions of Clause 49 of the Listing Agreement and other statutory provisions. The Audit Committee was reconstituted with the following members Sri P.Jayarama Reddy, Sri V.Ramnath and Sri A.V.Narasimha Reddy. Sri P.Jayarama Reddy is the Chairman of the Audit Committee. The Audit Committee met four times during last year and reviewed the Internal Audit Reports and quarterly results.

CORPORATE GOVERNANCE:

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your company was in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchange relating to Corporate Governance.

A separate report on Corporate Governance is incorporated along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and are given separately as a part of the Directors' Report. Further as a part of the report, "Management Discussion and Analysis" has also been furnished.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO:

The information required under section 134(3)(1) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 with respect to these matters are set out in the Annexure I and forms part of the report.

COMPLIANCE WITH LISTING AGREEMENT: Clause 43A:

The Equity/Preference Shares of the Company are listed on the Bombay Stock Exchange Limited and the annual listing fee was paid to the said Stock Exchange for the financial year 2015-16 on 3rd May, 2015.

Cash Flow statement is attached as Annexure II and forms part of this report.

Statement concerning development and implementation of Risk Management Policy of the Company.

A Special Team with Senor Executives has been

formed which has been entrusted with the responsibility to assist the Managing Director in (a) Over seeking and approving the Company's enterprise risk management frame work, and (b) Over seeking that all the risks that the operation faces such as strategic, financial, credit market, liquidity, security, property, IT,legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Management and business the Company. The Company has introduced several improvements to Integrated Enterprise Risk Management, Internal controls, Management and Assurance frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. This integration is enabled by all three being fully aligned across country wide Risk Management, Internal Control and Internal Auditor methodologies and processes.

Details of Policy developed and implemented by the Company on its Corporate Responsibility initiatives

The Company has taken various Corporate Social Responsibility (CSR) activity around the factory site since its inception. The Company has taken appropriate steps to the possible extent to implement CSR activities for the development of areas surrounding the company in particular and other areas in general. A well documented CSR Policy has been drafted by a Team of Senior Executives of the Company and the same was approved by the Board in its meeting held on 30th March, 2015.

Particulars of Contracts or Arrangements made with Related Parties:

During the course of its business, the company is dealing with the Group Companies which are Related Parties pursuant to Section 188 of the Companies Act, 2013. According to Standard 18 and clause 49 of the Listing Agreement for Sale, Purchase, Lease Rental Transactions,

services availed / provided and monetary value of the transactions are mentioned in notes to Accounts Point No.25.9 to comply with Accounting Standards 18 and other applicable provisions of the Companies Act, 2013. All the Related party transactions were on arm-length.

Extraction or comments on qualifications, reservations or adverse remarks or disclosures made by the Auditors and the Practicing Company Secretary in their Reports

Statutory Auditors of the Company and the Practicing Company Secretary, who have conducted statutory audit and Secretarial Audit have not made any adverse comments on the activities of the Company for the financial year 2014-15.

Company's Policy relating to Directors appointment, payment of Remuneration and discharge of their duties.

The Nomination and Remuneration Committee has been constituted by the Board in its meting held on 30th March, 2015 to ensure the appointment of persons having vide exposure in their fields, having independence as defined in the Act to be available for appointment as Director (The Committee always keeps a list of eminent persons having independence available for the Company's requirement depending upon vacancy on the Board). As regards remuneration payable to Wholetime Directors including Chairman and Managing Director, the Board will take collective decision within the parameter of various statutes including Companies Act, 2013 and Listing Agreement. The Committee will follow the Company's policy to discharge its duties whenever necessity arises. It will not be out of place to mention that 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 to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Secretarial Auditor:

The Board has appointed M/s.G.M.V.D.R. and Associates, Practicing Company Secretaries to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith The Secretarial Auditor Report does not contain any qualification, reservation or adverse remark.

Annual Return in Form MGT-9 format:

The details of Annual Return in MGT-9 format is enclosed Subsidiaries, Joint Ventures and Associate Companies:.

The Company is not having any Subsidiaries, Joint Ventures and Associated Company.

Declaration of Independent Directors:

The Company has received the necessary declaration from each Independent Directors in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Evaluation:

The Board evaluated the effectiveness of its functioning and that of the Committees and individual Directors by seeking their inputs on various aspects of Board/Committee Governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long term strategic planning and the fulfillment of Directors' obligation and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee Meetings.

The Chairman of the Board has one-on-one meetings with the independent directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with the Executive 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 Board, Chairman of the Board and Non-Executive Directors.

Disclosure as per the Sexual Harassment of Women at workplace(Prevention, Prohibition and Redressal) Act, 2013.

The Company has zero tolerance towards sexual harassment at the work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

The Company has no such cases of sexual harassment at workplace. Vigil Mechanism:

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics and Compliance Task Force comprising Senior Executives of the Company, Protected disclosures can be made by a whistle blower through 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's website at the link http://www.panyamcements.com.

ACKNOWLEDGEMENTS:

Your Directors are happy to acknowledge the financial assistance given to the Company by the Banks. Your Directors also express their thanks to the various Central and State Government Departments and the shareholders for their support and help extended during the year.

By Order of the Board of Directors

For Panyam Cements & Mineral Industries Ltd

S. SREEDHAR REDDY

Managing Director

Place: Nandyal

Dt:- 12th August, 2015


Mar 31, 2013

To The Members

The Directors have pleasure in presenting the 57th Annual Report and Audited Statements of Accounts of the Company for the year ended 31st March, 2013:

FINANCIAL RESULTS :

(Rs.in lakhs)

Year ended Year ended 31st March 31st March 2013 2012

Income:

Gross Sales of Manufactured Products 13300.89 21857.06

Less:Excise Duty and Sales Tax 3074.87 4607.00 ---- -----

Net Sales of Manufactured Products 10226.02 17250.06

Other Income 553.13 507.10

Other Operating Revenue - State Incentives 0.00 367.06

---- ----

Total Revenue 10779.15 18124.22

---- ----

Profit before Interest and Depreciation 41.92 3897.64

Less: Interest and Finance charges 1260.51 1380.54

Less: Depreciation 808.67 839.88

---- ----

Net Profit ( )/(Loss)(-) before Exceptional and Extra-Ordinary items and Tax (-) 2027.26 1677.22

Add: Exceptional Items 4276.00 0.00

---- ----

Net Profit before extra - ordinary items and tax 2248.74 1677.22

Extra-Ordinary items 0.00 0.00

Net Profit/(Loss) for the year before tax 2248.74 1677.22

Provision for- Income Tax for the year (MAT) 500.00 350.00

Deferred Tax Liability 0.00 413.94

---- ----

Net Profit/(Loss) after tax 1748.74 913.28

Loss Brought Forward from previous year (-) 3273.58 (-) 4186.86

---- ----

Loss carried to Balance Sheet (1524.84) (3273.58)

OPERATIONS:

The performance of the Company during the year severely affected due to power cuts imposed by APCPDCL and non-operation of the plant continuously due to shortage of working capital. The company has produced during the year 2012-13, 2,88,421 M.Tonnes of cement as against 4,68,677 M.Tonnes produced during the previous year.

The gross sales for the year under report was Rs.13300.89 lakhs as against Rs. 21857.06 lakhs in the previous year. The net profit before tax for the year was Rs. 2248.74 lakhs as against net profit of Rs. 1677.22 lakhs in the previous year. The increase in the net profit for the year was mainly on account of sale of property under Joint Development to the extent of possession given by the developer and sale deeds executed of Rs.4276.00 lakhs considered as Exceptional Item.

As reported in the last year Annual Report, the developer Greenage Griha Nirman Private Limited (formerly known as Bhimsankar Realtors Private Limited) has received Occupancy Certificate from Bangalore Development Authority in respect of four blocks i.e. Alpine, Birch, Juniper and Oak and the sale deeds were executed for 165 flats (as against 203 flats allotted to the company) during the financial year 2012-13. The remaining 38 flats will be registered during the current financial year 2013-14 after completion of 2nd phase of construction of apartments.

MODERNISATION OF THE CEMENT UNIT:

During the year 2012-13, the modernization works are under progress. We have placed an order with Alstom India Ltd., for supply of a new raw mill with a capacity of 150 M.Tonnes per hour and we have paid an advance of Rs.105.00 lakhs against the total Raw Mill cost of Rs. 1500.00 lakhs. The erection works will be completed by end of December 2013. Further, the company has already spent an amount of Rs. 1207.00 lakhs for formation of railway track inside the plant from Bugganipalli Railway Station and we have received approvals for formation of track from the Director Traffic Planning, Railway Board, New Delhi. The formation work will be completed by end of December, 2013. The modification work for Closed circuit Cement Raw Mills is under progress.

DIVIDEND:

Your Directors regret their inability to recommend any dividend on Equity Shares in view of the carry forward losses. Consequently the payment of dividend in respect of Redeemable "C" Cumulative Preference Shares held by the Financial Institutions also has been passed over.

PUBLIC DEPOSITS:

The Company has not accepted any public deposits under Section 58-A and 58AA of the Companies Act, 1956.

CURRENT YEAR PROSPECTS:

The management is taking extraneous efforts to improve the performance of the company during the current financial year. The cement market is picking up owing to higher demand from semi-urban and rural infrastructure, apart from railways, ports, airports, IT Sector, irrigation projects, shopping malls, multiplexes etc.

AUDITOR''S REPORT:

As regards non-provision of gratuity, superannuation and leave en-cashment liability on actuarial valuation, it is provided on retirement of employees on a consistent basis and the liability is not ascertained.

As regards non-remittance of undisputed statutory dues as mentioned in para (ix) (b) of Annexure to Auditors'' Report and interest dues to debenture holders and Banks and term loans dues to Banks as mentioned in para (xi) of the Annexure to the Report, the Company is clearing the statutory dues in a phased manner and interest dues to one of the debenture-holders are under negotiations with the party and term loan dues to Banks were cleared in currrent financial year 2013-14.

EMPLOYEES :

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

There are no employees drawing remuneration more than the sum prescribed pursuant to Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDITORS:

M/s. Brahmayya & Co., Chartered Accountants, Adoni, the Company''s statutory auditors retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Dr.R.K.Prasad Sunkara and Sri S.P.Y.Reddy will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re appointment.

During the year under report, Sri D.Krishna Mohan has resigned as a Director of the Company and the company will place on records its appreciation for the valuable services rendered by him as a Director of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility statement, it is hereby confirmed:

a) that in preparation of the accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the statement of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the accounts for the financial year ended 31st March, 2013 on a "going concern" basis.

AUDIT COMMITTEE:

The Audit Committee consists of Sri A.V. Narasimha Reddy, A.Sreenivasulu Reddy and A. Sathya Bhushana Rao. Sri A. Sreenivasulu Reddy is the Chairman of the Audit Committee. All are independent and non executive directors.

The Audit Committee met four times during last year and reviewed the Internal Audit Reports and quarterly results.

CORPORATE GOVERNANCE :

The company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of clause 49 to the Listing Agreement with the Stock Exchange are complied.

A separate report on Corporate Governance is incorporated along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and are given separately as a part of the Directors'' Report. Further as a part of the report, "Management Discussion and Analysis" has also been furnished.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO:

The information required under section 217(2)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 with respect to these matters are set out in the Annexure I and forms part of the report.

COMPLIANCE WITH LISTING AGREEMENT:

Clause 43A:

The Equity/Preference Shares of the Company are listed on the Bombay Stock Exchange Limited and the annual listing fee was paid to the said Stock Exchange.

Cash Flow statement is attached as Annexure II and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are happy to acknowledge the financial assistance given to the Company by the Banks. Your Directors also express their thanks to the various Central and State Government Departments and the shareholders for their support and help extended during the year.



By Order of the Board of Directors

For Panyam Cements & Mineral Industries Ltd

Place: Nandyal S.P.Y. REDDY

Dt:- 27th May, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the 56th Annual Report and Audited Statements of Accounts for the year ended 31st March, 2012:

FINANCIAL RESULTS :

(Rs.in lakhs)

Year ended Year ended 31st March 31st March 2012 2011

Income:

Gross Sales 21857.06 15826.53

Less:Excise Duty and Sales Tax 4607.00 3251.01

Net Sales 17250.06 12575.52

Other Income 507.10 453.25

State Incentives 367.06 -

Total 18124.22 13028.77

Profit before Interest and Depreciation 3905.95 923.90

Less: Interest and Finance charges 1380.54 792.45

Less: Depreciation 839.88 505.16

Net Profit( )/(Loss)(-) before Extra-Ordinary and 1685.53 (-) 373.71

Prior period expenses/income(net)

Add/Less: Prior period expenses/lncome(Net) (-) 8.31 (-) 7.49

Net Profit/(Loss) for the year before tax 1677.22 (-) 381.20

Provision for- Income Tax for the year (MAT) 350.00 -

Deferred Tax Liability 413.94 -

Net Profit/(Loss) after tax 913.28 (-) 381.20

Loss Brought Forward from previous year (-) 4186.86 (-) 3805.66

Loss carried to Balance Sheet (3273.58) (4186.86)

OPERATIONS:

The performance of the Company during the year under review was satisfactory. The company has produced during the year 2011-12, 4,68,677 M.Tonnes of cement as against 4,01,072 M.Tonnes in the previous year representing an increase of 17%. The company has achieved higher production during the year under review on account of completion of Modernisation of Kiln No.1 increasing its capacity from 550 TPD to 1800 TPD with effect from 10th August, 2011.

The gross sales for the year under report was Rs. 21857.06 lakhs as against Rs.15826.53 lakhs in the previous year representing an increase of 38%. The net profit before tax for the year was Rs.1677.22 lakhs as against net loss of Rs. 381.20 lakhs in the previous year. The increase in the profit was mainly on account of higher volume of production and better realization due to gradual increase in demand and price.

The Developers of our Bangalore property, Ms.Bhimsankar Realtors Private Limited/ Greenage Griha Nirman Private Limited have completed the construction works of four blocks under phase I and the builder has applied for Occupation Certificate on inspection of the flats by the Bangalore Development Authorities. On receipt of Occupancy Certificate, the Sale Deeds in respect of the prospective buyers will be executed during the current financial year 2012-13.

MODERNISATION OF THE CEMENT UNIT :

During the year 2011 -12, the modernization of Kiln No.1 for increasing its capacity from 550 TPD to 1800 TPD was completed and the kiln was commissioned on 10th August, 2011. The Modernisation project cost was partly financed by Indian Overseas Bank and State Bank of Hyderabad.

DIVIDEND:

Your Directors regret their inability to recommend any dividend on Equity Shares in view of the carry forward losses. Consequently the payment of dividend in respect of Redeemable "C" Cumulative Preference Shares held by the Financial Institutions also has been passed over.

PUBLIC DEPOSITS:

The Company has not accepted any public deposits under Section 58-A and 58AA of the Companies Act, 1956.

CURRENT YEAR PROSPECTS:

The working of the Cement Unit is satisfactory and the management is contemplating on reduction of consumption cost of power and fuel. But the power cuts during the summer season may affect the performance of the Company. The cement market is picking up owing to higher demand from semi-urban and rural infrastructure, apart from railways, ports, airports, IT Sector, irrigation projects, shopping malls, multiplexes etc.

Further, the company has taken up expansion of existing capacity of crushers, Raw Mill, Cement Mills, Packing Plant and railway siding to improve the efficiency, productivity, reduce operational costs and cutting down logistics costs etc. The cost of the project is estimated at Rs. 56.19 crores. The said project is partly financed by State Bank of India, State Bank of Hyderabad and Indian Overseas Bank. The project works are under progress and it is expected to be completed by the end of the current year i.e. 2012-13.

AUDITOR'S REPORT:

As regards non-provision of gratuity, superannuation and leave encashment liability on actuarial valuation, it is provided on retirement of employees on a consistent basis and the liability is not ascertained.

As regards non-remittance of undisputed statutory dues as mentioned in para (ix) (b) of Annexure to Auditors' Report and interest dues to debenture holders as mentioned in para (xi) of the Annexure to the Report, the Company is clearing the statutory dues in a phased manner and interest dues to one of the debenture-holders are under negotiations with the party.

EMPLOYEES:

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

There are no employees drawing remuneration more than the sum prescribed pursuant to Section 217 (2 A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDITORS:

M/s. Brahmayya & Co., Chartered Accountants, Adoni, the Company's statutory auditors retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Sri V. Ramnath and Sri D. Krishna Mohan will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility statement, it is hereby confirmed:

a) that in preparation of the accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the statement of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the accounts for the financial year ended 31st March, 2012 on a "going concern" basis.

AUDIT COMMITTEE:

The Audit Committee consists of Sri D. Krishna Mohan, Sri. A.V.Narasimha Reddy, A. Sreenivasulu Reddy and A. Sathya Bhushana Rao. Sri D. Krishna Mohan is the Chairman of the Audit Committee. All are independent and non executive directors. The Audit Committee met four times during last year and reviewed the Internal Audit Reports and quarterly results.

CORPORATE GOVERNANCE:

The company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of clause 49 to the Listing Agreement with the Stock Exchange are complied. A separate report on Corporate Governance is incorporated along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and are given separately as a part of the Directors' Report. Further as a part of the report, "Management Discussion and Analysis" has also been furnished.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING OUTGO:

The information required under section 217(2)(e) of the Companies Act,1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules,1988 with respect to these matters are set out in the Annexure I and forms part of the report.

COMPLIANCE WITH LISTING AGREEMENT: Clause 43A :

The Equity/Preference Shares of the Company are listed on the Bombay Stock Exchange Limited and the annual listing fee was paid to the said Stock Exchange.

Cash Flow statement is attached as Annexure II and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are happy to acknowledge the financial assistance given to the Company by the Banks. Your Directors also express their thanks to the various Central and State Government Departments and the shareholders for their support and help extended during the year.

By Order of the Board of Directors

For Panyam Cements & Mineral Industries Ltd

S.P.Y. REDDY

Chairman Place: Nandyal

Dt:- 30th May, 2012


Mar 31, 2011

To

The Members

The Directors present the 55th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2011:

FINANCIAL RESULTS :

(Rs.in lakhs)

Year ended Year ended 31st March 31stMarch 2011 2010

Income :

Gross Sales 15826.53 15943.90

Other Income 453.25 956.59

State Incentives - 447.67 16279.78 17348.16

Profit before interest and depreciation 913.75 3905.28

Less : Interest 782.30 1212.14

Less :Depreciation 505.16 338.84

Net Profit before Deferred Revenue Expenses and prior period (-) 373.71 2354.30 expenses / income

Less : Deferred Revenue Expenses Written off - 282.85

Less : Prior Period Expenses / Income 7.49 17.46

Net Profit / (Loss) for the year before Tax (-) 381.20 2053.99

Provision for Tax - Income Tax for the year - 600.00

Net profit / (Loss) after Tax (-) 381.20 1453.99

Loss brought forward from previous year (-) 3805.66 (5259.65)

Loss carried to Balance Sheet (4186.86) (3805.66)

OPERATIONS:

The performance of the Cement Unit during the year under review was satisfactory. The company has produced during the year 2010-11 4,01,072 M.Tonnes of cement as against 4,33,034 M.Tonnes in the previous year, registering a capacity utilization of 76% as against 82% in the previous year. During the first half year of 2010-11, there was reduction in production and turnover of cement due to low realizations and recession in the market.

The gross sales for the year under report was Rs.15826.53 lakhs as against Rs.15943.90 lakhs in the previous year. The net loss for the year was Rs.381.20 lakhs as against net profit after tax of Rs. 1453.99 lakhs in the previous year. The marginal decrease in turnover for the year 2010-11 was on account of lower volume of sales due to sluggishness in the open market during the first two quarters of the financial year under review. Further there was steep fall in the sale prices of cement due to recession during the first two quarters of the year 2010-11 and thereby for the first half year ended 30.09.2010 the Company incurred a net loss of Rs.879.37 lakhs as against net profit of Rs.1624.25 lakhs in previous half year ended 30th September, 2009. However the prices were supportive during last two quarters of the financial year 2010-11. The company has reported a net profit of Rs.498.17 lakhs for the second half of the year 2010-11.

During the year 2010-11, the Developers, M/s.Bhimsankar Realtors Private Limited (Greenage Griha Nirman Private Limited) have completed the construction works of four blocks upto 13th floor and the remaining floors construction work is under progress. We have been informed that the first phase of properties will be handed over by March, 2012.

MODERNISATION OF THE CEMENT UNIT:

During the year 2010-11, the modernization of Kiln No.1 for increasing its capacity from 550 M.Tonnes per day to 1800 M.Tonnes per day was under trial runs and due to technical problems the kiln was not stabilized. The production of Kiln No.I will be commenced during second quarter of the current financial year. The Modernisation project was financed by Indian Overseas Bank and State Bank of Hyderabad.

DIVIDEND:

Your Directors regret their inability to recommend any dividend on Equity Shares in view of the current year and carry forward losses. Consequently the payment of dividend in respect of Redeemable "C" Cumulative Preference Shares held by the Financial Institutions also has been passed over.

PUBLIC DEPOSITS:

The Company has not accepted any public deposits under Section 58-A and 58AA of the Companies Act, 1956.

CURRENT YEAR PROSPECTS:

The working of the Cement Unit is satisfactory and the management is contemplating on reduction of consumption cost of power and fuel.

Cement sales continued its momentum during the current financial year. The National Highway Authority of India is planning to take up new highway projects. Further, the infrastructure industry, housing and ports are going to enhance the cement consumption in the coming years. The company expects good demand for cement from other sectors also and over-all the consumption is expected to ease the company's marketing bottlenecks.

Further, the company has successfully completed the Modernisation of Kiln I for increasing the production. In order to meet the requirements of the kiln at enhanced capacity of 1800 TPD, the management has taken all steps to improve the efficiency, productivity and reduce operational costs, create better environment, reduced energy levels and cutting down logistics costs etc. The cost of the project is estimated at Rs. 56.19 crores. The said project was financed by State Bank of India, State Bank of Hyderabad and Indian Overseas Bank. The project works are under implementation.

AUDITOR'S REPORT:

As regards non-provision of gratuity liability on actuarial valuation in respect of Cement Division employees, the gratuity liability is provided on retirement of employees on a consistent basis.

As regards non-remittance of undisputed statutory dues as mentioned in para (ix) of Annexure to Auditors' Report and interest dues to debenture holders as mentioned in para (xi) of the Annexure to the Report, the Company is clearing the statutory dues in a phased manner and interest dues to one of the debenture holders are under negotiations with the party.

EMPLOYEES:

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

There are no employees drawing remuneration more than the sum prescribed pursuant to Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDITORS:

M/s. Brahmayya & Co., Chartered Accountants, Adoni, the Company's statutory auditors retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Sri A.V.Narasimha Reddy and Sri S.PYReddy will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The Board has co-opted Sri V.Suresh Kumar, who has obtained degree B.E. in Computer Science and M.Sc, in Physics from BITS Pilani, as an Additional Director of the company on 30th May, 2011 and holds office upto the conclusion of the ensuing Annual General Meeting.

The Board has also co-opted Sri A.Sreenivasulu Reddy, who has obtained degree in Engineering (ECE) from S.V. University, as an Additional Director of the company on 30th May, 2011 and holds office up to the conclusion of the ensuing Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility statement, it is hereby confirmed:

a) that in preparation of the accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the statement of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a "going concern" basis.

AUDIT COMMITTEE:

The Audit Committee consists of Sri D.Krishna Mohan, Sri A.V.Narasimha Reddy, A.Sathya Bhushana Rao. Sri D. Krishna Mohan is the Chairman of the Audit Committee. The management is taking steps to induct a member on the Audit Committee. All are independent and non executive directors. The Audit Committee met four times during last year and reviewed the Internal Audit Reports and quarterly results.

CORPORATE GOVERNANCE:

The company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of clause 49 to the Listing Agreement with the Stock Exchange are complied.

A separate report on Corporate Governance is incorporated along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and are given separately as a part of the Directors' Report. Further as a part of the report, "Management Discussion and Analysis" has also been furnished.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO:

The information required under section 21 7(i)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 with respect to these matters are set out in the Annexure I and forms part of the report.

COMPLIANCE WITH LISTING AGREEMENT:

Clause 43A:

The Equity/Preference Shares of the Company are listed on the Bombay Stock Exchange Limited and the annual listing fee was paid to the said Stock Exchange.

Cash Flow statement is attached as Annexure II and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are happy to acknowledge the financial assistance given to the Company by the Banks. Your Directors also express their thanks to the various Central and State Government Departments and the shareholders for their support and help extended during the year.

By Order of the Board of Directors For Panyam Cements & Mineral Industries Ltd

S.P.Y REDDY Chairman

Place: Hyderabad Dt:- 30th May, 2011


Mar 31, 2010

The Directors present the 54th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2010.

I. FINANCIAL RESULTS :

(Rs.in lakhs)

Year ended Year ended

31st March 31st March

2010 2009

Income:

Gross Sales 15943.90 21537.18

Other Income 1404.26 1931.09

17348.16 23468.27

Profit before interest and depreciation 3905.28 5962.03

Less: Interest 1212.14 1472.92

Less .Depreciation 338.84 332.53

Net Profit before Deferred Revenue Expenses 2354.30 4156.58

and prior period expenses/ income

Less: Deferred Revenue Expenses Written off 282.85 282.85

Less: Prior Period Expenses/ Income (-) 17.46 3.66

Net Profit for the year before Tax 2053.99 3877.39

Provision for Tax - Fringe Benifit Tax - 10.00

- Income Tax for the year 600.00 400.00

- Income Tax for earlier years 20.84

Net profit after Tax 1453.99 3446.55

Loss brought forward from previous year (5259.65) (8706.20)

Loss carried to Balance Sheet (3805.66) (5259.65)



The performance of the Cement Unit during the year under review was satisfactory. The company has produced during the year 2009-10 433034 M.Tonnes of cement as against 503252 M.Tonnes in the previous year, registering a capacity utilization of 82% as against 95% in the previous year. The reduction in production was due to power cuts imposed by the Government during the last quarter of the year 2009-10.

The gross sales for the year under report was Rs. 15943.90 lakhs as against Rs.21537.17 lakhs in the previous year. The net profit after tax for the year was Rs.1453.99 lakhs as against Rs.3446.55 lakhs in the previous year. The decrease in turnover for the year 2009-10 was on account of lower volume of sales due to sluggish in the open market and by government project works in the district on account of floods in October, 2009 and also due to fall in sale price of cement due to recession during the last two quarters of the year 2009-10. The net profit for the year 2009-10 was also decreased due to low realization and reduction in sales volumes during the last two quarters of the year under report.

As mentioned in the last years report the developer, M/s. Bhimshankar Realtors Private Limited has already taken up the civil works to complete the apartments by the end of 2011. As on date in four blocks roofs have been completed upto 3rd floor and in the remaining six blocks the basement work is in progress.

MODERNISATION OF THE CEMENT UNIT:

The modernization of Kiln No. 1 for increasing its capacity from 550 M.Tonnes per day to 1800 M.Tonnes per day was successfully completed in April, 2010 and the trial runs are under progress and the production will be commenced during June 2010. The Modernisation project was financed by Indian Overseas Bank and State Bank of Hyderabad.

DIVIDEND:

Your Directors regret their inability to recommend any dividend on Equity Shares in view of the carry forward losses. Consequently the payment of dividend in respect of Redeemable "C" Cumulative Preference Shares held by the Financial Institutions also has been passed over.

PUBLIC DEPOSITS:

The Company has not accepted any public deposits under Section 58-A of the Companies Act, 1956.

CURRENT WORKINGS AND PROSPECTS:

The working of the Cement Unit is satisfactory and the management is focusing on the reduction of consumption cost of power and fuel.

Cement demand outlook for the current financial year is expected to be good on account of increasing trend due to boom in construction and infrastructural activities. The Government of India and State Governments have been taking various steps to promote industrial growth by implementing various housing and infrastructural projects like housing schemes, major irrigation projects, national and state highways, air ports and water ports etc. These measures will boost the demand for cement.

Further, the company has successfully completed the Modernisation of Kiln I for increasing the production. In order to meet the requirements of the kiln at enhanced capacity of 1800 TPD, the management is planning to upgrade the internal plant and machinery for improving its productivity and efficiency. The company is also planning to have railway siding line direct from factory premises to the nearest railway station for fast movement of inward and outward materials at low transportation cost. The estimated cost of the above project is Rs.45.00 crores. The company has approached the Banks for sanction of term loan to part finance the project and the companys request is under active consideration by Banks.

AUDITORS REPORT:

As regards non-provision of gratuity liability on actuarial valuation in respect of Cement Division employees, the gratuity liability is provided on retirement of employees on a consistent basis.

As regards non-remittance of undisputed statutory dues as mentioned in para (ix) of Annexure to Auditors Report and interest dues to debenture holders as mentioned in para (xi) of the Annexure to the Report, the Company is clearing the statutory dues in a phased manner and interest dues to one of the debenture holders are under negotiations with the party.

EMPLOYEES:

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

There are no employees drawing remuneration more than the sum prescribed pursuant to Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDITORS:

M/s. Brahmayya & Co., Chartered Accountants, Adoni, the Companys statutory auditors retire at the conclusion of the ensuing Annual General Meeting and are eligible for re appointment.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Sri D. Krishna Mohan and Dr. R.K.Prasad Sunkara will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility statement, it is hereby confirmed:

a) that in preparation of the accounts for the financial year ended 31stMarch, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the statement of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a "going concern" basis.

AUDIT COMMITTEE:

The Audit Committee consists of Sri D.Krishna Mohan, Sri A.V.Narasimha Reddy and Sri A.Sathya Bhushana Rao. Sri D. Krishna Mohan is the Chairman of the Audit Committee. The management is taking steps to induct a member on the Audit Committee. All are independent and non executive directors. The Audit Committee met four times during last year and reviewed the Internal Audit Reports and quarterly results.

CORPORATE GOVERNANCE:

The company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of clause 49 to the Listing Agreement with the Stock Exchange are complied.

A separate report on Corporate Governance is incorporated along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and are given separately as a part of the Directors Report. Further as a part of the report, "Management Discussion and Analysis" has also been furnished.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO:

The information required under section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 with respect to these matters are set out in the Annexure I and forms part of the report.

COMPLIANCE WITH LISTING AGREEMENT:

Clause 43A :

The Equity/Preference Shares of the Company are listed on the Bombay Stock Exchange Limited and the annual listing fee was paid to the said Stock Exchange.

Cash Flow statement is attached as Annexure II and forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are happy to acknowledge the financial assistance given to the Company by the Banks. Your Directors also express their thanks to the various Central and State Government Departments and the shareholders for their support and help extended during the year.

By Order of the Board of Directors

For Panyam Cements & Mineral Industries Ltd

S.P.Y.REDDY

Chairman

Place:- Hyderabad

Dated:-29th May, 2010



 
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