Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting their 35th Annual Report for the Financial Year 2017-18 together with the Audited Balance Sheet as at 31st March, 2018 and the Profit & Loss Account for the year ended on that date.
1. FINANCIAL RESULTS:
(Rs. In Lakhs)
Particulars |
2017-18 |
2016-17 |
Net Operational Income |
19259.33 |
19827.30 |
Other income |
295.01 |
191.25 |
Profit before interest and depreciation |
2925.46 |
3391.15 |
Less: Interest |
691.63 |
702.34 |
Less: Depreciation |
1058.25 |
878.76 |
Profit/(Loss) before taxation |
1095.35 |
1810.05 |
Less : Provision for taxation including deferred tax liability |
454.20 |
670.78 |
Less: short provision of earlier years |
(154.16) |
- |
Total Comprehensive Income |
763.39 |
1163.35 |
OPERATIONS:
In the Financial year 2017-18, the Company continued its strong growth momentum due to its ability to satisfy its customers and the rigor in following strong internal processes.
Revenue growth in the year has increase because the Company has, from July and onwards, started selling cement at F.O.R. rates (till June 2017 at ex-factory rate). The Operating and the net profit is also satisfactory.
The Overall revenue for the year 2017-2018 at Rs 19259.33 Lakhs is reduced by 2.86% (Rs. 19827.30 Lakhs in 2016-2017), operating profit at Rs. 1175.59 Lakhs is reduced by 35.05% (Rs. 1810.05 Lakhs in 2016-2017) and the net profit (after other comprehensive income) for the year at Rs. 763.39 Lakhs is also reduced by 34.38% (Rs. 1163.35 Lakhs in 2016-2017).
Cement Division: Production of Cement and Clinker were 4,79,663 MTS and 4,48,635 MTS respectively during the twelve months ended 31st March, 2018 as against were 4,85,637 MTS and 4,40,730 MTS respectively during the previous year ended 31st March, 2017.
During the year under review 81% of the installed capacity of the Company was utilized as against 82% during the previous year ended 31st March, 2017.
Wind Power: The Company has generated 27,59,112 units as against 31,11,983 units during the previous year.
Electronic Division: The Company has produced 2,096 sq. mts of Printed Circuit Boards as against 1,796 sq. mts during the previous year.
CURRENT YEAR OUTLOOK:
CEMENT DIVISION:
Indiaâs Cement Industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. India is the second largest producer of cement in the world. Some of the recent major government initiatives such as development of 98 smart cities are expected to provide a major boost to the sector. A significant factor which aids the growth of this sector is the ready availability of the raw materials for making cement, such as limestone and coal.
The housing sector is the biggest demand driver of cement, accounting for about 67% of the total consumption in India. The other major consumers of cement include infrastructure at 13%, commercial construction at 11% and industrial construction at 9%.
Indiaâs total cement production capacity is nearly 430 million tonnes as on 31st March, 2018. The cement industry has registered a flat growth of 5% in 2018 because of the governmentâs focus on infrastructural development. The industry is currently producing 280 MT for meetings its domestic demand and 5 MT for exports requirement. The countryâs per capita consumption stands at around 225 kg.
This capacity addition is disproportionately high in South India. During the last 7 years, South Indian cement capacity alone has increased by approximately 80 million tons. This has resulted in significant pressure on capacity utilization and price realization, as well.
Indiaâs cement production capacity is expected to reach 550 million tonnes by 2025. Telangana is undertaking major irrigation projects and Andhra Pradesh is committed to building a new capital city by FY 2019-20 which give a major boost to cement industries in Southern India.
With the split of Andhra Pradesh into two states, which required the establishment of a new government in the new state of Telangana, demand has pick up and expected to pick up further and utilization to improve on the back of fresh demand for housing, urban and infrastructure development from the new states.
In the Hyderabad market, the prices were on a declining trend and reached around Rs 265 per bag in November 2017, after which they increased by Rs 20 per bag to Rs 285 per bag in December 2017 and sustained at the same level until February 2018. Your Company continues to concentrate on cost reduction measures in all areas of production and distribution to protect and improve its profitability. Despite of few adverse conditions, your Directors are hopeful that the performance of the company would achieve another level of milestone in producing the cement.
ELECTRONICS DIVISION:
The PCB industries in India manufacture and market mainly single sided, double sided & multi-layered PCBs. Keerthi Industries Limited (Electronic Division) is engaged in the manufacturing of flexible, rigid and rigid flex PCBs of double sided and multilayer varieties. The major market for your company for this division comes from the Healthcare and Defense Sectors. During the year 2017-18, the segment wise contributions to the total PCB business is as under:
Sl. No. |
Segment |
Contribution (In Rs.) |
% of total contribution |
Automobile |
8,11,304 |
1.00% |
|
Defense |
1,39,39,904 |
17.27% |
|
Health Care |
6,10,10,048 |
75.59% |
|
Consumer Electronics and telecom products |
49,48,724 |
6.13% |
|
Total |
8,07,09,980 |
100% |
Further, the industry is witnessing sizeable growth in the market for PCBs for consumer electronics and telecom products. In the coming years, the market in these segments is expected to grow around 40% to 50% as compared to the current scenario. Your company intends to reap benefits from this growth and accordingly, the turnover of PCB business may increase.
The sales turnover of electronics division is satisfactory. Development of prototypes for new customers in the telecom and defense sectors was done during the year. The division expects to improve its customer base in different segments in the years to come. Supply of PCBs for BDL Konkurs missile program is completed and repeat order was placed to increase the quantities. The division is exploring further opportunities in the defense sector to improve business in the near future.
SUGAR DIVISION:
In view of the adverse market for sugar industry and since there is no progress in the division in particular, effective steps could not be taken for furtherance of the business.
2. DIRECTORS:
a) The Companyâs Board of Directors have been constituted in compliance with the provisions of Companies Act read with the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (âSEBI (LODR) Regulationâ. The Composition of the Board is as under:
1. Smt. J. Triveni
Executive Chairperson & Whole-timeDirector
2. Sri. J. S. Rao
Managing Director
3. Sri. J. Sivaram Prasad
Independent Director
4. Sri. K. Harishchandra Prasad
Independent Director
5. Sri. Boddu Venkata Subbaiah
Independent Director
b) In accordance with the provisions of Companies Act, 2013, Sri. J. S. Rao, the Managing Director of the Company would retire by rotation and, being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment at the ensuing Annual General Meeting.
c) As required under Section 134 (3) (d) of the Companies Act, 2013, All independent directors have given declarations to the Company that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013.
d) Other Disclosure
Board Evaluation
Pursuant to Section 178 (2) of the Companies Act, 2013, the Nomination and Remuneration Committee has evaluated the performance of individual Directors in its duly convened meeting. Pursuant to Section 134 (3) (p) of the Companies Act, 2013 and Regulation 4 (2) (f)(ii) (9) of the (âSEBI (LODR) Regulation, 2015, the Board has carried out an evaluation of its own performance, as well as the evaluation of the Committees of the Board. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Remuneration Policy is stated in the Corporate Governance Report.
Meetings
During the year Four (4) Board Meetings and Four (4) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
3. DETAILS OF WHOLE-TIME KEY MANAGERIAL PERSONAL (KMP)
During the period under review, Sri. J. S. Rao, Managing Director, Smt. J. Triveni, Executive Chairperson & Whole-time Director, Sri. Y. Sadasiva Rao, Chief Financial Officer and Ms. Akriti Sharma, Company Secretary & Compliance Officer are the Whole-Time Key Managerial Personal of the Company.
Sri. J. S. Rao, the Managing Director, has been given additional charge of CFO w.e.f. 28.01.2017 untill a suitable candidate is appointed in the office of CFO. Sri. J. S. Rao (Managing Director and CFO), has resigned from the office of CFO w.e.f. 31-03-2018 and is acting as Managing Director w.e.f. 31.03.2018. Sri. Y. Sadasiva Rao has been appointed as CFO w.e.f. 30.04.2018
Further. Mr. Rajesh Kumar Yadav has been resigned as Company Secretary and Compliance Officer of the Company w.e.f. 30.06.2018 and Ms. Akriti Sharma has been appointed as Company Secretary and Compliance Officer w.e.f 09.08.2018.
4. DIVIDEND:
(a) 9% Cumulative Redeemable Preference Shares
Your Board has recommended payment of final dividend @ 9% on 9% Cumulative Redeemable Preference Shares for the financial year 2017-18. The same is tabulated hereunder:
Sl. No |
No of 9% Cumulative Preference Share |
Per share (in Rs.) |
Total amount of Dividend entitle to receive |
% of dividend per share |
Dividend Per share (In Rs.) |
1. |
5,00,000 |
70/- |
31,50,000 |
9% |
6.30/- |
2. |
2,70,100 |
100/- |
24,30,900 |
9% |
9.00/- |
3. |
2,68,340 |
81.37/- |
19,65,134 |
9% |
7.32/- |
Total |
10,38,440 |
75,46,034 |
(b) Equity Shares
During the financial year ended 31st March, 2018, your directors have recommended a dividend @ 9% i.e. Rs. 0.90/- per equity shares of Rs. 10/- each amounting Rs. 86.92 Lakhs including dividend tax of Rs. 14.77 Lakhs as against a dividend of NIL in the previous year.
5. RESERVE AND SURPLUS
During the financial year 2017-18 Rs.50 Lakhs has been transferred to Capital Redemption Reserve Account.
6. SHARE CAPITAL:
(a) No Change in Authorized Capital:
During the year under review, there was no change in the Authorized Capital of the Company. The Authorized Capital of the Company is Rs. 38,00,00,000/- (Rupees Thirty Eight Crores only) divided into 2,73,00,000 Equity shares of Rs. 10/each aggregating Rs. 27,30,00,000/- and 10,70,000 9% Cumulative Redeemable Preference Shares of Rs. 100/- each aggregating Rs. 10,70,00,000/-.
(b) Change in Paid up Shares Capital:
During the period under review, the 1st Installment of Rs. 50.00 lakhs has been redeemed against the 2,68,340 9% Cumulative Redeemable Preference Shares of Rs. 100/- each. The Paid up share Capital of the Company as on 31st March, 2018 is Rs. 16,40,11,380/- divided into 80,16,738 Equity shares of Rs. 10/- each aggregating Rs. 8,01,67,380/- and 10,70,000 9% Cumulative Redeemable Preference Shares (5,00,000 of Rs. 70 each, 270100 of Rs. 100 each and 268340 of Rs. 81.37 each) aggregating Rs. 8,38,44,000/-.
7. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:
During the period under review, there are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Companyâs future operations.
8. DEMAT OF SHARES:
The Equity Shares of your Company have been admitted by CDSL / NSDL for dematerialization. All the Shareholders whose shares are in physical mode are requested to dematerialize their share holding through their depository participants so that it will improve the liquidity of our stock. The Board pleased to inform that in compliance with Regulation 39 of the SEBI (LODR), Regulation, 2015 entered with Bombay Stock Exchange Limited, the unclaimed equity shares were dematerialized and the same are lying in the DEMAT suspense account. Shareholders are requested to claim their shares in DEMAT form by submitting their claims to the Company / RTA.
9. DIRECTORSâ RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Companies Act, 2013, your directors confirm:
(a) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.
(b) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period.
(c) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.
(d) That the directors had prepared the annual accounts on the going concern basis.
(e) That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
10. PUBLIC DEPOSITS:
Your Company has not accepted any deposits within the meaning of Section 73 or 74 of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.
11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.
12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairperson & Managing Director.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
13. INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial control commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accuracy of provisions and other estimates.
14. RELATED PARTY TRANSACTIONS:
All transactions entered by the Company with related party were in the ordinary course of the business. The Audit Committee granted approval of the same. There were no materially significant transactions with Related Parties during the financial year 2017-18 which were in conflict with the interest of the Company.
During the year, your Company has entered into following Related Party Transactions as per Section 188 (1) of the Companies Act, 2013:
S. No |
Nature of Transactions |
Amount (In Rs.) |
Legal Framework |
Legal Requirements |
Date of prior Approval obtained |
Date of Contract |
Amount of discount (In Rs.) |
1. |
Sell of Cement to DCS Sporting Pvt Ltd |
94,500 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
23.10.2017 |
11,250 |
2. |
Sell of Cement to DCS Sporting Pvt Ltd |
90,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
15.11.2017 |
11,250 |
3. |
Sell of Cement to DCS Sporting Pvt Ltd |
92,250 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
28.11.2017 |
11,250 |
4. |
Sell of Cement to DCS Sporting Pvt Ltd |
92,250 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
15.12.2017 |
11,250 |
5. |
Sell of Cement to DCS Sporting Pvt Ltd |
92,250 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
10.03.2018 |
11,250 |
6. |
Sell of Cement to DCS Sporting Pvt Ltd |
94,500 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
28.03.2018 |
11,250 |
7. |
Sell of Cement to DCS Sporting Pvt Ltd |
90,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
11.04.2018 |
11,250 |
8. |
Sell of Cement to DCS Sporting Pvt Ltd |
90,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
22.04.2018 |
11,250 |
9. |
Sell of Cement to DCS Sporting Pvt Ltd |
90,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
02.05.2018 |
11,250 |
10 |
Sell of Cement to DCS Sporting Pvt Ltd |
90,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Omnibus approval of Audit Committee dated 14-09-2017 Board Approval -14-09-2017 |
14.05.2018 |
11,250 |
TOTAL |
9,15,750 |
1,12,500 |
15. COST AUDITORS:
Cost Audit records have been maintained by the company for the F.Y.2017-18. Pursuant to the directives of the Central Government and provisions of Section 148 of the Companies Act, 2013, qualified Cost Auditors have been appointed to conduct the cost audit for the F.Y. 2018-19.
16. AUDITORS:
The Company had, on its 34th AGM held on 31st August, 2017, appointed M/s. Brahmayya and Co., as Statutory Auditor for 5 years i.e. to hold office until the conclusion of 39th AGM.
17. ADDITIONAL INFORMATION:
Information pursuant to Section 134 (3) (l) & (m) of the Companies Act, 2013 is annexed herewith as (Annexure II), which is detailed in Form A and Form B.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Your Company has duly constituted CSR Committee on 29-05-2014. The Annual Report on CSR activities is annexed herewith as: (Annexure III)
19. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s VCSR & Associates, Company Secretaries in Whole-time Practice, to carry out Secretarial Audit for the financial year 2017-2018. The Secretarial Audit report is annexed herewith as â(Annexure IV)â & â(Annexure IV.I)â
20. EXTRACT OF ANNUAL RETURN:
The details forming part of the Annual Return in form MGT-9 is annexed herewith as â(Annexure V)â
21. DISCLOSURE AS PER SECTION 197(12) Refer â(Annexure VI)â.
22. HEALTH AND SAFETY/ INDUSTRIAL RELATIONS:
The company continues to accord high priority to health and safety of employees at manufacturing locations. During the year under review, the company conducted safety training programmes for increasing disaster preparedness and awareness among all employees at the plants. Training programmes and mock drills for safety awareness were also conducted for all employees at the plants. Safety Day was observed with safety competition programmes with aim to imbibe safety awareness among the employees at the plant.
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
23. RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 21 of the Listing Regulation, the company has constituted a risk management committee on is Board Meeting held on 29th May, 2015. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report.
At present the company has not identified any element of risk which may threaten the existence of the company.
24. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are discussed separately, together with the Certificate from the Practicing Company Secretary of the Company regarding compliance with the requirements of Corporate Governance as stipulated SEBI (LODR) Regulations, 2015.
25. ACKNOWLEDGEMENTS:
Your Directors are thankful to Canara Bank, MID Corporate Branch Somajiguda, Andhra Bank, SCF Branch and Indian Bank, Main Branch, Koti for their continued support during the year under review and acknowledge with gratitude the help extended by the Central Government and Government of Telangana & Andhra Pradesh. Your directors also wish to place on record their appreciation of the services rendered and co-operation extended by the Workmen, Staff, Dealers, Customers and other concerned.
By Order of the Board of Directors
Sd/-
Place: Hyderabad (J. Triveni)
Date: 30-05-2018 Executive Chairperson
DIN: 00029107
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting their 33rd Annual Report for the Financial Year 2015-16 together with the Audited Balance Sheet as at 31st March, 2016 and the Profit & Loss Account for the year ended on that date.
1. FINANCIAL RESULTS:
('' In Lakhs)
Particulars |
2015-16 |
2014-15 |
Net Operational Income |
18256.65 |
15291.54 |
Other income |
118.65 |
118.63 |
Profit before interest and depreciation |
4253.72 |
2682.85 |
Less: Interest |
618.01 |
947.01 |
Less: Depreciation |
823.47 |
825.82 |
Profit/(Loss) before taxation |
2974.80 |
1044.32 |
Less : Provision for taxation including deferred tax liability |
973.57 |
(1093.88) |
Less: short provision of earlier years |
10.07 |
251.65 |
Net Profit/(Loss) after taxation |
1991.16 |
1886.55 |
2. PERFORMANCE OF THE YEAR UNDER REVIEW:
In the Financial year 2015-16, the Company continued its strong growth momentum due to its ability to satisfy its customers and the rigor in following strong internal processes.
Revenue growth in the year remained high. The Operating profit get increased and thereby increasing the net profit.
The Overall revenue for the year 2015-2016 at Rs 18375.30 Lakhs is higher by 19.24% (Rs 15410.17 Lakhs in 2014-2015), operating profit at Rs. 2974.80 Lakhs is higher by 184.86% (Rs. 1044.32 Lakhs in 2014-2015) and the net profit for the year at Rs. 1991.16 Lakhs is higher by 5.55% (Rs. 1886.55 Lakhs in 2014-2015)
Cement Division: Production of Cement and Clinker were 4,12,284 MTS and 4,02,841 MTS respectively during the twelve months ended 31st March, 2016 as against were 3,88,946 MTS and 3,72,780 MTS respectively during the previous year ended 31st March, 2015.
During the year under review 69% of the installed capacity of the Company was utilized.
Wind Power: The Company has generated 28,17,466 units as against 29,48,120 units during the previous year.
Electronic Division: The Company has produced 2,111 sq. mts of Printed Circuit Boards as against 1838 sq. mts during the previous year.
CURRENT YEAR OUTLOOK:
CEMENT DIVISION:
India''s Cement Industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. India is the second largest producer of cement in the world. Some of the recent major government initiatives such as development of 98 smart cities are expected to provide a major boost to the sector.
Cement demand in India is expected to increase due to government''s push for large infrastructure projects, leading to 45 million _tonnes of cement needed in the next three to four years. In addition, cement production in India is expected to touch 550-600 million tonnes (MT) in the next three to four year.
The Company also continues to concentrate on cost reduction measures in all areas of production and distribution to protect and improve its profitability. However, exorbitant increase in input prices and frequent power holidays are the major constraints to sustain in the market. However, with the bifurcation of Andhra Pradesh into state of Telangana and residuary state of Andhra Pradesh, the construction of new capital and other development measures of both the states as specified in the Andhra Pradesh Reorganization Act 2013 shall spurt enormous demand for the cement and other infrastructure related products. As such, the coming year''s performance is estimated to be good. Despite of few adverse conditions, your Directors are hopeful that the performance of the company would achieve another level of milestone in producing the cement.
ELECTRONIC DIVISION:
The improvement shown in the sales turnover of electronics division is satisfactory. Development of prototypes for new customers in the high-end automobile segment was done during the year. The division expects to improve its customer base in the automobile segment in the years to come. Supply of PCBs for Konkurs missile program is completed for the existing requirements and development of flexi cables for Invar missile program is underway. The division is exploring further opportunities in the defense sector to improve business in the near future.
The division was identified as one of the potential vendors for developing Gas Electron Multiplier (GEM) foils by European Organization for Nuclear Research (CERN) for their Compact Muon Solenoid (CMS) division. Senior Executives of your company visited CERN, Switzerland during the year on CERN''s invitation, for discussions. GEM foils are expected to be developed by electronics division in a time frame of two years. Apart from their present use in scientific experiments at CERN, GEMs are likely to find applications in medical imaging and other areas.
SUGAR DIVISION:
In view of the adverse market for sugar industry and since there is no progress in the division in particular, effective steps could not be taken for furtherance of the business.
3. DIRECTORS:
a) The Company''s Board of Directors have been constituted in compliance with the provisions of Companies Act read with the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("SEBI (LODR) Regulation". The Composition of the Board is as under:
1. Smt. J. Triveni
Executive Chairperson & Whole-time Director
2. Sri. J. S. Rao
Managing Director
3. Sri. J. Sivaram Prasad
Non-Executive Director
4. Sri. K. Harishchandra Prasad
Independent Director
5. Sri. E. Siva Sankaram
Independent Director
6. Sri. Boddu Venkata Subbaiah
Independent Director
b) In accordance with the provisions of
Companies Act, 2013, Sri. J. S. Rao, the Managing Director of the Company would retire by rotation and, being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment at the ensuing Annual General Meeting.
c) As required under Section 134 (3) (d) of the Companies Act, 2013, All independent directors have given declarations to the Company that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013.
d) Other Disclosure Board Evaluation
Pursuant to Section 178 (2) of the Companies Act, 2013, the Nomination and Remuneration Committee has evaluated the performance of individual Directors in its duly convened meeting. Pursuant to Section 134 (3) (p) of the Companies Act, 2013 and Regulation 4 (2) (f) (ii) (9) of the ("SEBI (LODR) Regulation (erstwhile Clause 49 of the Listing Agreement) the Board has carried out an evaluation of its own performance, as well as the evaluation of the Committees of the Board. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Remuneration Policy is stated in the Corporate Governance Report.
Meetings
During the year Four (4) Board Meetings and Four (4) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
4. DETAILS OF WHOLE-TIME KEY MANAGERIAL PERSONAL (KMP)
During the period under review, Sri. J. S. Rao, Managing Director, Smt. J. Triveni, Executive Chairperson & Whole-time Director, Sri. Y. Venkateswara Rao, Chief Financial Officer and Mr. Rajesh Kumar Yadav, Company Secretary & Compliance Officer are the Whole-Time Key Managerial Personal of the Company.
5. DIVIDEND:
In view of inadequate profits Your Directors regret their inability to recommend any dividend on Equity Shares for the year 2015-2016.
6. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:
During the period under review, there are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company''s future operations.
7. POSTAL BALLOT
The Company has, on 23rd April, 2015, approved the following resolution through Postal Ballots.
The details have been discussed in the Corporate Governance Report.
8. DEMAT OF SHARES:
The Equity Shares of your Company have been admitted by CDSL/NSDL for dematerialization. All the Shareholders whose shares are in physical mode are requested to dematerialize their share holding through their depository participants so that it will improve the liquidity of our stock. The Board pleased to inform that in compliance with Regulation 39 of the Listing Regulation (erstwhile clause 5A of the listing agreement) entered with Bombay Stock Exchange Limited, the unclaimed equity shares were dematerialized and the same are lying in the DEMAT suspense account. Shareholders are requested to claim their shares in DEMAT form by submitting their claims to the Company/ RTA.
9. DIRECTORS'' RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Companies Act, 2013, your directors confirm:
(a) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.
(b) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period.
(c) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.
(d) That the directors had prepared the annual accounts on the going concern basis.
(e) That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
10. PUBLIC DEPOSITS:
Your Company has not accepted any deposits within the meaning of Section 73 or 74 of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.
11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.
12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the
Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairperson & Managing Director.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
13. INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial control commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accuracy of provisions and other estimates.
14. RELATED PARTY TRANSACTIONS:
All transactions entered by the Company with related party were in the ordinary course of the business. The Audit Committee granted approval of the same. There were no materially significant transactions with Related Parties during the financial year 2015-16 which were in conflict with the interest of the Company.
During the year, your Company has entered into following Related Party Transactions as per Section 188 (1) of the Companies Act, 2013:
S. No |
Date of transaction |
Nature of Transactions |
Amount (In Rs.) |
Legal Framework |
Legal Requirements |
Date of Approval obtained |
1 |
22-07-2015 |
Purchase of equipments and erection and commissioning services from M/s. Green Secure Systems Pvt. Ltd, a Related Party u/s 2 (76) of the Act. |
Rs. 5.6 Crores plus applicable duties and taxes |
Listing Agreement and Sec-188 (1) (a) of Companies Act, 2013 |
Board approval and Audit Committee |
Board Approval -29-05-2015 Audit Committee approval - 08-082015 |
S. No |
Date of transaction |
Nature of Transactions |
Amount (In Rs.) |
Legal Framework |
Legal Requirements |
Date of Approval obtained |
2 |
19-12-2015 |
Sell of Cement to Executive Chairperson of the Company |
70,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Audit Committee approval - 13-112015 Board Approval -13-11-2015 |
3 |
16-02-2016 |
Sell of Cement to Executive Chairperson of the Company |
30,750 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Audit Committee approval -13-11-2015 Board Approval -13-11-2015 |
4 |
*14-02-2016 |
Appointment of Smt. J. Sarada Govardhini (Related Party) in place of Profit |
Monthly Salary of Rs. 2.50 Lakhs per month |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (f) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Audit Committee approval -12-02-2016 Board Approval -12-02-2016 |
5 |
05-03-2016 |
Sell of Cement to Executive Chairperson of the Company on Arm''s length price |
19,500 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Audit Committee approval -12-02-2016 Board Approval -12-02-2016 |
6 |
22-03-2016 |
Sell of Cement to Chief Operating Officer of the Company |
45,000 |
Regulation 23 (2) of SEBI Listing Regulation and Sec-188 (1) (a) of Companies Act, 2013 |
Prior approval of Audit Committee and Board |
Audit Committee approval -12-02-2016 Board Approval -12-02-2016 |
*Smt. J. Sarada Govardhini, has been appointed as Chief Operating Officer in accordance with the provisions of Sec 188 (1) of the Companies Act, 2013 for a period of 5 years at proposed remuneration of Rs. 2.50 Lakhs per month upto a maximum of Rs. 4.30 Lakhs per month, which requires prior approval by Ordinary Resolution of Members in the ensuing AGM. The Board recommends the approval of the Shareholders.
15. COST AUDITORS:
Cost Audit records have been maintained by the company for the F.Y.2015-16. Pursuant to the directives of the Central Government and provisions of Section 148 of the Companies Act, 2013, qualified Cost Auditors have been appointed to conduct the cost audit for the F.Y.2015-16.
16. AUDITORS:
M/s. K.S. Rao & Co., Chartered Accountants, Hyderabad, has been appointed for three consecutive years i.e. till the conclusion of 34th AGM (Subject to the ratification by the shareholders at each AGM) by the shareholders at the 31st AGM. The Board of Directors recommends the ratification of appointment of M/s. K.S. Rao & Co., Chartered Accountants, at the ensuing Annual General Meeting.
17. REPLY TO AUDITOR''S COMMENT:
Regarding Auditor''s emphasis matter on confirmation of balances from Sundary Debtors, Sundary Creditors and for Loans and advances, the same were subsequently collected, adjusted and paid.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Your Company has duly constituted CSR Committee on 29-05-2014. Your Company has incurred losses in the last two years out of the three immediately preceding financial years, Hence, the requirement in connection with spending of money on specified projects under corporate social responsibility rules as envisaged under section 135 (5) of the Companies Act, 2013 are not applicable to the Company in the Financial year 2015-16.
However Your Company has been contributing generously for upliftment of poor and needy people within and immediate vicinity of the factory for their development in education, cultural, vocational and philanthropic activities. Moreover, your company has been providing on job training to students of Engineering collages at free of cost. As a listed company, necessary measures have been taken to comply with the Listing Regulations of Stock Exchanges.
The Annual Report on CSR activities is annexed herewith as: (Annexure C)
19. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s VCSR & Associates, Company Secretaries in Whole-time Practice, to carry out Secretarial Audit for the financial year 2015-2016. The Secretarial Audit report is annexed herewith as "(Annexure D)" & "(Annexure D1)"
20. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "(Annexure E)".
21. DISCLOSURE AS PER SECTION 197(12) Refer " (Annexure F)".
22. HEALTH AND SAFETY/ INDUSTRIAL RELATIONS:
The company continues to accord high priority to health and safety of employees at manufacturing locations. During the year under review, the company conducted safety training programmes for increasing disaster preparedness and awareness among all employees at the plants. Training programmes and mock drills for safety awareness were also conducted for all employees at the plants. Safety Day was observed with safety competition programmes with aim to imbibe safety awareness among the employees at the plant.
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
23. ADDITIONAL INFORMATION:
Information pursuant to Section 134 (3) (l) & (m) of the Companies Act, 2013 is annexed herewith as (Annexure B), which is detailed in Form A and Form B.
24. RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 21 of the Listing Regulation, the company has constituted a risk management committee on is Board Meeting held on 29th May, 2015. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report.
At present the company has not identified any element of risk which may threaten the existence of the company.
25. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are discussed separately, together with the Certificate from the Practicing Company Secretary of the Company regarding compliance with the requirements of Corporate Governance as stipulated SEBI (LODR) Regulations, 2015.
26. ACKNOWLEDGEMENTS:
Your Directors are thankful to Canara Bank, MID Corporate Branch Somajiguda, Andhra Bank, SCF Branch and Indian Bank, Main Branch, Koti for their continued support during the year under review and acknowledge with gratitude the help extended by the Central Government and Government of Telangana & Andhra Pradesh. Your directors also wish to place on record their appreciation of the services rendered and co-operation extended by the Workmen, Staff, Dealers, Customers and other concerned.
By Order of the Board of Directors
Sd/-
Place: Hyderabad (J. Triveni)
Date: 28-05-2016 Executive Chairperson
DIN: 00029107
Mar 31, 2014
Dear Members,
The Directors are pleased to present your Company''s 31st Annual Report
for the Financial Year 2013-14 together with the Audited Balance Sheet
as at 31st March, 2014 and the Profit & Loss Account for the year ended
on that date.
FINANCIAL RESULTS: (Rs. In Lakhs)
2013-14 2012-13
Net Operational Income 12506.71 10769.28
Other income 109.77 55.78
Profit before interest and 400.69 (146.56)
depreciation
Less: Interest 897.47 897.89
Less: Depreciation 1352.73 1372.68
Profit/(Loss) before taxation (1849.51) (2417.13)
Less : Provision for taxation (45.06) (36.98)
including deferred tax liability_
Less: short provision of 0.00 0.96
earlier years
Net Profit/ILoss) after" (1804.45) (2455.07)
taxation
Less: Capital Redemption 0.00 150.00
Reserve
Add: Surplus Brought 1194.95 3800.02
Forward from previous years_
Balance carried to Balance (609.50) 1194.95
Sheet
OPERATIONS:
During the year 2013-14, your Company witnessed reduced performance.
While, our revenues increased by 16.13% over the previous year,
Rs.710.31 Lakhs of cash loss was incurred due to drop in margins and
lower demand for the cement in the cement division.
Cement Division: Production of Cement and Clinker were 3,95,268 MTS and
3,54,323 MTS respectively during the twelve months ended 31st March,
2014 as against 3,29,357 MTS and 2,96,770 MTS respectively during the
previous year. In view of strained cash flows, the finance facilities
(working capital and term loans) of the company availed from the Canara
Bank, Andhra Bank and Indian Bank has been restructured to align the
future cash flows. The same was discussed elaborately elsewhere in the
Annual report.
l During the year under review 67% of the installed capacity of the
Company was utilised.
Wind Power: The Company has generated 35, 36,160 units as against 32,
76,684 units during the previous year.
Electronic Division: The Company has produced 2028 sq.mts of Printed
Circuit Boards as against 2233 sq.mts during the previous year.
FUTURE PROSPECTS:
CEMENT DIVISION:
India''s potential in infrastructure is vast and cement plays a vital
role in the growth and development of the nation. India is the second
largest producer of cement in the world. The cement industry has been
expanding on the back of increasing infrastructure activities and
demand from housing sector over the past many years. An investment
allowance for infrastructure projects of Rs 100 crore (US$ 16.05
million) and above has also been announced by the Government.In
addition, cement production in India is expected to touch 407 million
tonnes (MT) by 2020.
The Sudden burst in capacity expansion in the industry situated in
southern region coupled with low demand growth led to fierce
competition for market share which resulted in prices dropping to
unremunerative levels. The Company also continues to concentrate on
cost reduction measures in all areas of production and distribution to
protect and improve its profitability. However, exorbitant increase in
input prices and frequent power holidays are the major constraints to
sustain in the market. However, with the bifurcation of Andhra Pradesh
into state of Telangana and residuary state of Andhra Pradesh, the
construction of new capital and other development measures of the both
the states as specified in the Andhra Pradesh Reorganization Act 2013
shall spurt enormous demand for the cement and other infrastructure
related products. As such, the coming year''s performance is estimated
to be good. Despite of few adverse conditions, your Directors are
hopeful that the performance of the company would achieve satisfactory
level.
ELECTRONIC DIVISION:
The improvement shown in the sales turn over of electronics division is
satisfactory. Development of prototypes for new customers in the
high-end automobile segment was done during the year. The division
expects to improve its customer base in the automobile segment in the
years to come. Supply of PCBs for Konkurs missile program is completed
for the existing requirements and development of flexi cables for Invar
missile program is underway. The division is exploring further
opportunities in the defense sector to improve business in the near
future.
The division was identified as one of the potential vendors for
developing Gas Electron Multiplier (GEM) foils by European Organization
for Nuclear Research (CERN) for their Compact Muon Solenoid (CMS)
division. Senior Executives of your company visited CERN, Switzerland
during the year on CERN''s invitation, for discussions. GEM foils are
expected to be developed by electronics division in a time frame of two
years. Apart from their present use in scientific experiments at CERN,
GEMs are likely to find applications in medical imaging and other
areas.
SUGAR DIVISION:
The Company has planned to install 3500 TPD integrated sugar mill,50
KLPD ethanol Plant and 20 MW Co-generation power plant with an
estimated cost of 319.92 Crores at Mosttor Village, Yadgir Dist in the
state of Karnataka. Order for project preplanning has been given to
M/s. MITCON Consultancy Services Limited. The Company has secured
In-principle approval from the Government of Karnataka for establishing
the integrated sugar project. The company has purchased Acres 97 and 19
gunats of land for establishment of the project. The requisite
approvals under Environment laws and other project related statutory
compliance are under progress. Considering the operational
difficulties, the Chief Director (Sugar), Department of Food and public
distribution, Ministry of Consumer affairs, New Delhi has extended the
validity period of our Industrial Entrepreneurs Memorandum (IEM) up to
27-07-2014 whereby the unit should be commissioned and achieve the
commercial production. The financial syndication for sugar division
becomes a tedious task for the company in view of weak performance of
cement division in general and the lackluster performance of sugar
industry. In view of the adverse market for sugar industry and on going
cash crunch in the company, could not take "effective steps" as defined
in sugar control order to implement the sugar project.
DIRECTORS:
In accordance with the provisions of Companies Act, 1956 Sri. J
Sivarama Prasad Non Executive Director of the Company would retire by
rotation and, being eligible, offer himself for re-appointment.
In view of new legislative changes, we have received proposals from the
shareholders for reappointment of Sri E Siva sankaram, Sri BV Subbaiah
and Sri K Harishchandra Prasad non executive directors as Independent
directors of the Company in the ensuing Annual General meeting in
accordance with Section 149 of the Companies Act, 2013 and clause 49 of
the listing agreement for a period of five years. The profiles of the
reappointed directors are mentioned elsewhere in the report.
DIVIDEND:
In view of severe cash losses, your Board could not recommend any
dividend for the financial year 2013-2014.
REDEEMABLE PREFERENTIAL SHARES:
The second installment of Rs.35/- each on first tranche of 500000, 9%
non convertible redeemable preferential shares of Rs.l00/-each could
not paid on due date, due to no accumulated profits and adverse market
for issue of new preferential shares. Your directors are taking steps
for extension of period of redemption of 9 % redeemable preferential
shares by 3 more years for which preferential shareholder has kindly
agreed. The company will initiate postal ballot process to secure the
necessary consent from the equity shareholders for extending the period
of redemption of 9 % redeemable preferential shares by 3 more years.
DEMAT OF SHARES:
The Equity Shares of your Company have been admitted by CDSL/NSDL for
dematerilisation. All the Shareholders whose shares are in physical
mode are requested to dematerialize their share holding through their
depository participants so that it will improve the liquidity of our
stock. The Board pleased to inform that in compliance with clause 5A of
the listing agreement entered with Bombay Stock Exchange Limited, the
unclaimed equity shares were dematerialized and the same are lying in
the DEMAT suspense account. Shareholders are requested to claim their
shares in DEMAT form by submitting their claims to the Company/RTA.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
(i) that in the preparation of the accounts for the financial year
ended on 31st March, 2014, the applicable accounting standards have
been followed along with proper , explanation relating to material
departures;
(ii) 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 state
of affairs of the company at the end of the financial year and of the
loss of the company for the year under review.
(iii) that he 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; and
(iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2014 on a going concern basis.
PUBLIC DEPOSITS:
Your Company has no public deposits in accordance with Section 73 or 74
of the Companies Act, 2013
COST AUDITORS:
Cost Audit records have been maintained by the company for the
F.Y.2013-14. Pursuant to the directives of the Central Government and
provisions of Section 148 of the Companies Act, 2013, qualified Cost
Auditors have been appointed to conduct the cost audit for the
F.Y.2013-14.
REPLY TO AUDITOR''S QUALIFICATIONS:
Regarding Auditor''s emphasis matter on confirmation of balances from
Sundry Debtors, Sundry Creditors and for Loans and Advances, the same
were subsequently collected, adjusted and paid.
AUDITORS:
M/s. K.S. Rao & Co., Chartered Accountants, Hyderabad, the present
Auditors, retires at the ensuing Annual General Meeting, and is
eligible for reappointment.
PERSONNEL:
Employer-Employee relations remained cordial during the year under
review. Your Directors place on record their sincere appreciation of
the contribution made by the employees of the Company at all levels. As
regards, information pursuant to Section 217(2AA) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975
(as amended), there are no employees governed by the said provisions.
HEALTH AND SAFETY:
The company continues to accord high priority to health and safety of
employees at manufacturing locations. During the year under review, the
company conducted safety training programmes for increasing disaster
preparedness and awareness among all employees at the plants. Training
programmes and mock drills for safety awareness were also conducted for
all employees at the plants. Safety Piy was observed with safety
competition programmes with aim to imbibe safety awareness among the
employees at the plant.
CORPORATE SOCIAL RESPONSIBILITY:
Your company has been contributing generously for upliftment of poor
and needy people within and immediate vicinity of the factory for their
development in education, cultural, vocational and philanthropic
activities. Moreover, your company has been providing on job training
to students of Engineering collages at free of cost. As the company has
been incurring losses for the last two years, the rules in connection
with spending of money on specified projects under corporate social
responsibility rules are not applicable to the Company.
ADDITIONAL INFORMATION:
Information pursuant to Section 217(e)&(2A) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 is annexed herewith.
ACKNOWLEDGEMENTS:
Your Directors are thankful to Canara Bank, Somajiguda Branch, Andhra
Bank, SCF Branch and Indian Bank, Main Branch, Koti for their continued
support during the year under review and acknowledge with gratitude the
help extended by the Central Government and Government of Telangana.
Your directors also wish to place on record their appreciation of the
services rendered and co-operation extended by the Workmen, Staff,
Dealers, Customers and other concerned.
By Order of the Board of Directors
Place: Hyderabad (J. Triveni)
Date: 29-05-2014 Executive Chairperson
Mar 31, 2013
Dear Members,
The Directors are pleased to present your Company''s 30th Annual Report
for the Financial Year 2012-13 together with the Audited Balance Sheet
as at 31st March, 2013 and the Profit & Loss Account for the year ended
on that date.
FINANCIAL RESULTS: (Rs.in Lakhs)
2012-13 2011-12
Net Operational Income 10769.28 17593.25
Other income 55.78 48.71
Profit before interest and (146.56) 4240.97
depreciation
Less: Interest 897.89 953.23
Less: Depreciation 1372.68 1356.95
Profit/(Loss) before taxation (2417.13) 1930.79
Less : Provision for taxation 36.98 714.03
including deferred tax liability
Less: short provision of 0.96 22.79
earlier years
Net Profit/(Loss) after (2455.07) 1193.97
taxation
Less: Capital Redemption 150.00
Reserve
Add: Surplus Brought 3800.02 2606.05
Forward from previous years
Balance carried to Balance 1194.95 3800.02
Sheet
OPERATIONS:
During the year 2012-13, Keerthi industries Ltd witnessed lackluster
performance. While, our revenues decreased by 38.78% over the previous
year, Rs.1082.38 Lakhs of cash loss accrued on account of emaciated
margins and lower demand and couple of other reasons in the cement
division.
Cement Division: The production of Cement and Clinker were 3,29,357 MTS
and 2,96,770 MTS respectively during the twelve months ended 31st
March, 2013 as against 4,85,391 MTS and 4,28,303 MTS respectively
during the previous year.
During the year under review the capacity of the Company was augmented
at 55% of the installed capacity.
Wind Power: The Company has generated 32,76,684 units as against
34,88,954 units during the previous year .
Electronic Division: The Company produced 2233 sq.mts of Printed
Circuit Boards as against 2087sq. mts during the previous year.
FUTURE PROSPECTS:
CEMENT DIVISION:
Country''s cement production is likely to raise by 6.4 per cent this
fiscal, due to the continued fillips given for the infrastructure
projects. The Company expects to sustain and improve the output levels
during the year. Also, the Company will have the benefit of increased
production from its capacity enhancement project, which will enable the
Company to meet the market demand for cement. The Sudden burst in
capacity expansion in the industry situated in southern region coupled
with low demand growth led to fierce competition for market share which
resulted in prices dropping to unremunerative levels. The Company also
continues to concentrate on cost reduction measures in all areas of
production and distribution to protect and improve its profitability.
However, exorbitant increase of input prices of cement and frequent
power holidays are the major constraints to sustain in the market.
However, the slew of economic reforms announced by the Government and
expectation of RBI lowering interest rates will boost sentiments and
kick start the sagging construction industry. Despite of few adverse
conditions, your Directors are hopeful that the performance of the
company would achieve satisfactory level.
ELECTRONIC DIVISION:
The Division is taking the necessary steps to streamline the operations
and expects to improve the performance by increasing the sales volumes.
The division has shown considerable progress in terms of sales turn
over. The increase in turn over is a result of improved business from
health care and defense sectors. There is an appreciable growth in the
off take to these segments in the year under review. The division is
optimistic in developing new customer base in the automobile segment.
Development of new PCBs for the existing and new missile programs is
under way for defense sector. The division is working closely with the
indigenization team of Bharat Dynamics Limited, Bhanur for the
introduction of these PCBs.
SUGAR DIVISION:
The Company has planned to install 3500 TPD integrated sugar mill,50
KLPD ethanol Plant and 20 MW Co-generation power plant with an
estimated cost of 319.92 Crores at Mosttor Village, Yadgir Dist in the
state of Karnataka. Order for project preplanning has been given to
M/s. MITCON J
Consultancy Services Limited. The Company has secured In-principle
approval from the Government of Karnataka for establishing the
integrated sugar project. The company has purchased Acres 97 and 19
gunats of land for establishment of the project. The requisite
approvals under Environment laws and other project related statutory
compliance are under progress. Considering the operational
difficulties, the Chief Director (Sugar), Department of Food and public
distribution, Ministry of Consumer affairs, New Delhi has extended the
validity period of our Industrial Entrepreneurs Memorandum (IEM) up to
July 2014 whereby the unit should be commissioned and achieve the
commercial production. The financial syndication for sugar division
becomes a tedious task for the company in view of worst performance of
cement division in general and in particular the lackluster performance
of sugar industry. The company has been scouting for strategic partners
for implementation of the said project.
DIRECTORS:
In accordance with the provisions of Companies Act, 1956 and the
Company''s Articles of Association, Sri K Harishchandra Prasad and Sri.
BV Subbaiah Directors of the Company would retire by rotation and,
being eligible, offer themselves for re-appointment.
DIVIDEND:
In view of severe cash losses, your Board could not recommend any
dividend for the financial year 2012-2013.
REDEEMABLE PREFERENTIAL SHARES:
The first installment of Rs.30/- each on the first tranche of 500000, 9%
non convertible redeemable preferential shares of Rs.100/- each has paid
on due date.
DEMAT OF SHARES:
The Equity Shares of your Company have been admitted by CDSL/NSDL for
dematerilisation. All the Shareholders whose shares are in physical
mode are requested to dematerialize their share holding through their
depository participants so that it will improve the liquidity of our
stock. The Board pleased to inform that in compliance with clause 5A of
the listing agreement entered with Bombay stock exchange limited, 8832
unclaimed equity shares were dematerialized and the same are lying in
the DEMAT suspense account. Shareholders are requested to claim their
shares in DEMAT form by submitting their credentials with the Company/
k RTA.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
(i) that in the preparation of the accounts for the financial year
ended on 31st March, 2013, the applicable accounting standards have
been followed along with proper explanation relating to material
departures;
(ii) 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 state
of affairs of the company at the end of the financial year and of the
Profit of the company for the year under review.
(iii) 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; and
(iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2013 on a going concern basis.
PUBLIC DEPOSITS:
Your Company has not invited any deposits from public / shareholders in
accordance with the Section 58A of the Companies Act, 1956.
COST AUDITORS:
Cost Audit records have been maintained in respect of Cement and power
divisions for the FY.2012- 13. Pursuant to the directives of the
Central Government and provisions of Section 233B of the Companies Act,
1956, qualified Cost Auditors have been appointed to conduct the cost
audit for the FY.2012-13.
REPLY TO AUDITOR''S QUALIFICATIONS:
Regarding Auditor''s emphasis matter on confirmation of balances from
Sundry Debtors, Sundry Creditors and for Loans and Advances, the same
were subsequently collected, adjusted and paid.
AUDITORS:
M/s. K.S. Rao & Co., Chartered Accountants, Hyderabad, the present
Auditors, retires at the ensuing Annual General Meeting, and is
eligible for reappointment. J
PERSONNEL:
Employer-Employee relations remained cordial during the year under
review. Your Directors place on record their sincere appreciation of
the contribution made by the employees of the Company at all levels. As
regards, information pursuant to Section 217(2AA) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 (as
amended), there are no employees governed by the said provisions.
HEALTH AND SAFETY:
The company continues to accord high priority to health and safety of
employees at manufacturing locations. During the year under review, the
company conducted safety training programmes for increasing disaster
preparedness and awareness among all employees at the plants. Training
programmes and mock drills for safety awareness were also conducted for
all employees at the plants. Safety Day was observed with safety
competition programmes with aim to imbibe safety awareness among the
employees at the plant.
CORPORATE SOCIAL RESPONSIBILITY:
Your company has been contributing generously for upliftment of poor
and needy people within and immediate vicinity of the factory for their
development in education, cultural, vocational and philanthropic
activities. Moreover, your company has been providing on job training
to students of VNR VJIET Engineering collage at free of cost.
ADDITIONAL INFORMATION:
Information pursuant to Section 217(e)&(2A) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 is annexed herewith.
ACKNOWLEDGEMENTS:
Your Directors are thankful to Canara Bank, Somajiguda Branch, Andhra
Bank, SCF Branch and Indian Bank, Main Branch, Koti for their continued
support during the year under review and acknowledge with gratitude the
help extended by the Central Government and Government of Andhra
Pradesh. Your directors also wish to place on record their appreciation
of the services rendered and co-operation extended by the Workmen,
Staff, Dealers, Customers and other concerned.
By Order of the Board of Directors
Sd/-
Place: Hyderabad (J. Triveni)
Date: 29-05-2013 Executive Chairperson
Mar 31, 2012
The Directors are pleased to present your Company's 29th Annual
Report for the Financial Year 2011-12 together with the Audited Balance
Sheet as at 31st March, 2012 and the Profit & Loss Account for the year
ended on that date.
FINANCIAL RESULTS: (Rs. In Lakhs)
2011-12 2010-11
Net Operational Income 17593.25 8353.84
Other income 48.71 40.68
Profit before interest and 4240.97 1338.11
depreciation
Less: Interest 953.23 421.96
Less: Depreciation 1356.95 669.51
Profit/(Loss) before taxation 1930.79 246.65
Less : Provision for taxation 714.03 69.46
Less: short provision of 22.79 -
earlier years
Add: excess provisions of - 31.21
earlier years
Net Profit after taxation 1193.97 208.40
Add: Surplus Brought 2606.05 2397.65
Forward from previous years
Balance carried to Balance 3800.02 2606.05
Sheet
OPERATIONS:
During the year 2011-12, Keerthi industries Ltd witnessed splendid
performance. While, our revenues increased 210% over the previous year,
our post-tax profit surged manifold on account of increased margins and
augmentation of additional capacity in cement division.
Cement Division: The production of Cement and Clinker were 4,85,391 MTS
and 4,28,303 MTS respectively during the twelve months ended 31st
March, 2011 as against 2,77,716 MTS and 2,21,259 MTS respectively
during the previous year.
During the year under review the Company was augmented at 81% of the
installed capacity. In view of augmentation of additional capacity, the
operational results of the company during the year are not comparable
with the previous year.
Wind Power: The Company has generated 34,88,954 KWH as against 27,71,454
KWH during the previous year .
Electronic Division: The Company produced 2087 sq.mts of Printed
Circuit Boards as against 1441sq.mts during the previous year.
FUTURE PROSPECTS: CEMENT DIVISION:
Demand for cement is expected to grow at 8% in the coming year due to
the continued fillips given for the infrastructure projects. The
Company expects to sustain and improve the output levels during the
year. Also, the Company will have the benefit of increased production
from its capacity enhancement project, which will enable the Company to
meet the increased market demand for cement. The Company also continues
to concentrate on cost reduction measures in all areas of production
and distribution to protect and improve its profitability. However,
exorbitant increase of input prices of cement and frequent power
holidays are the major constraints to sustain in the market. Despite of
few adverse conditions, your Directors are hopeful that the performance
of the company would achieve satisfactory level.
ELECTRONIC DIVISION:
The division will continue to strengthen the PCB edge, timely
expansion, the PCB business to do fine and stronger. The Company is
taking the necessary steps to streamline the operations and expects to
improve the performance by increasing the sales volumes. The Company
has approached to various defense PSUs to secure the work orders for
manufacturing rigid PCB and the responses received from them are quite
optimistic. During the year under review there is an appreciable
improvement in the performance of electronic division. The division has
shown more than 30% growth in sales volume and proportionate increase
in operating profit. The division has established a loyal customer base
in health care instrumentation segment. The high temperature resistant
cables made by the division for a defense PSU have been approved for
use in their missile programme. There is an improvement in the
projected off take to the above segments in the next financial year.
SUGAR DIVISION
The Company has planned to install 3500 TPD integrated sugar mill,50
KLPD ethanol Plant and 20 MW Co-generation power plant with an
estimated cost of 31992 Lakhs at Mosttor Village, Yadgir Dist in the
state of Karnataka. Order for project preplanning has been given to
M/s. MITCON Consultancy Services Limited. The Company has secured
In-principle approval from the Government of Karnataka for establishing
the integrated sugar project. The company has purchased Acres 97 and 19
gunats of land for establishment of the project. The requisite
approvals under Environment laws and other project related statutory
compliance are under progress. Considering the operational
difficulties, the Chief Director (Sugar), Department of Food and public
distribution, Ministry of Consumer affairs, New Delhi has extended the
validity period of our Industrial Entrepreneurs Memorandum (IEM) up to
26th July, 2014 whereby the unit should be commissioned and achieve the
commercial production.
DIRECTORS:
In accordance with the provisions of Companies Act, 1956 and the
Company's Articles of Association, Sri E Siva Sankaram and Sri. J
Sivaram Prasad directors of the Company would retire by rotation and,
being eligible, offer themselves for re- appointment.
DIVIDEND:
Having applied the internal accrued funds of Rs. 2400 Lakhs for cost
escalation of the project at cement division and on going redemption
plan of first trench of 9% Cumulative Redeemable preferential shares in
the month of November 2012, your Board could not recommend any dividend
for the financial year 2011-2012.
OPTIONALLY CONVERTIBLE DEBENTURES/ PREFERENTIAL SHARES:
The 9% Optionally Fully Convertible unsecured Debentures of face value
of Rs.100/- each aggregating value of Rs. 770.98 allotted to various
shareholders in pursuant to Scheme of amalgamation sanctioned by
Honorable High court of Andhra Pradesh has been redeemed. The First
tranche of 9% redeemable preferential shares have fallen due for
redemption by November, 2012.
DEMAT OF SHARES:
The Equity Shares of your Company have been admitted by CDSL/NSDL for
demat. All the Shareholders whose shares are in physical mode are
requested to dematerialize their share holding through their depository
participants so that it will improve the liquidity of our stock.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'
Responsibility Statement, it is hereby confirmed:
(i) that in the preparation of the accounts for the financial year
ended on 31st March, 2012, the applicable accounting standards have
been followed along with proper explanation relating to material
departures;
(ii) 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 state
of affairs of the company at the end of the financial year and of the
Profit of the company for the year under review.
(iii) that he 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; and
(iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2012 on a going concern basis.
PUBLIC DEPOSITS:
Your Company has not invited any deposits from public / shareholders in
accordance with the Section 58A of the Companies Act, 1956.
COST AUDITORS:
Cost Audit records have been maintained in respect of Cement and power
divisions for the F.Y.2011-
12. Pursuant to the directives of the Central Government and
provisions of Section 233B of the Companies Act, 1956, qualified Cost
Auditors have been appointed to conduct the cost audit for the
F.Y.2012-13.
REPLY TO AUDITOR'S QUALIFICATIONS:
Regarding Auditor's Qualification on confirmation of balance from
Sundry Debtors, Sundry Creditors and for Loans and Advances, the
management is confident of realizing the receivables at the stated
values other than those disclosed as doubtful and in the process of
obtaining confirmation from the parties.
AUDITORS:
M/s. K.S. Rao & Co., Chartered Accountants, Hyderabad, the present
Auditors, retires at the ensuing Annual General Meeting, and is
eligible for reappointment.
PERSONNEL:
Employer-Employee relations remained cordial during the year under
review. Your Directors place on record their sincere appreciation of
the contribution made by the employees of the Company at all levels. As
regards, information pursuant to Section 217(2AA) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 (as
amended), there are no employees governed by the said provisions.
HEALTH AND SAFETY:
The company continues to accord high priority to health and safety of
employees at manufacturing locations. During the year under review, the
company conducted safety training programmes for increasing disaster
preparedness and awareness among all employees at the plants. Training
programmes and mock drills for safety awareness were also conducted for
all employees at the plants. Safety Day was observed with safety
competition programmes with aim to imbibe safety awareness among the
employees at the plant.
ADDITIONAL INFORMATION:
Information pursuant to Section 217(e)&(2A) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 is annexed herewith.
ACKNOWLEDGEMENTS:
Your Directors are thankful to Canara Bank, Somajiguda Branch, Andhra
Bank, SCF Branch and Indian Bank, Main Branch, Koti for their continued
support during the year under review and acknowledge with gratitude the
help extended by the Central Government and Government of Andhra
Pradesh. Your directors also wish to place on record their appreciation
of the services rendered and co-operation extended by the Workmen,
Staff, Dealers, Customers and other concerned.
By Order of the Board of Directors
Place: Hyderabad (J. Triveni)
Date: 01-09-2012 Executive Chairperson
Mar 31, 2010
The Directors are pleased to present your Companys 27th Annual Report
for the Financial Year 2009-10 together with the Audited Balance Sheet
as at 31st March, 2010 and the Profit & Loss Account for the year ended
on that date.
FINANCIAL RESULTS:
(Rs. lakhs)
2009-10 2008-09
(9 months)
Operational Income 7789.61 7774.52
Operating Profit/(Loss) 1263.35 1764.97
Depreciation & Interest 354.05 272.89
Profit/(Loss) for the year 909.30 1492.08
OPERATIONS:
The performance of your company for the year under review was
satisfactory in spite of steep fall in cement prices for last six
months. Another reason was sluggish market demand coupled with excess
supply of cement in the market which resulted in steep fall in cement
prices. Due to the implementation of capacity expansion, the Company
has shutdown its plant from the month of February 2010 for erecting the
expanded cement capacity, which lead to the revenue loss for the last
quarter of the year.
Cement Division: The production of Cement and Clinker were 2,80,107 MTS
and 2,72,078 MTS respectively during the twelve months ended 31st
March, 2010 as against 2,34,378 MTS and 2,23,183 MTS respectively
during the previous year(nine months).
Wind Power: The Company has generated 31,42,779 KWH as against
24,99,271 KWH during the previous year (nine months).
Electronic Division: The company produced 3,349 sq.mts of PCB as
against 3,343 sq.mts during the previous year(nine months).
FUTURE PROSPECTS:
CEMENT DIVISION:
Your Company initiated capacity expansion and de- bottlenecking
programs to maintain growth and improve efficiencies. The trial
production of the expanded capacity began in the month of August, 2010.
With the expanded capacity of 900 TPD, your Companys total capacity
will be 1800 TPD.
The last few years have been a golden period for cement manufacturers
when the government increased spending on infrastructure development.
High commercial activity and rising demand for housing on account of
higher per capita income has kept cement offtake growth in double
digits. The main factors behind increase in demand of cement were:
60 percent higher Public Sector Development Projects allocation,
increasing number of real estate development projects for commercial
and residential use, developing export market.
The sharp decline in cement prices were due to domestic competition
among producers squcesing the profitability of the industry. Thus, your
Directors are confident that the performance of the company would be
much better in the current year.
ELECTRONIC DIVISION:
The division will definitely continue to strengthen the PCB edge,
timely expansion, the PCB business to do fine and stronger. The Company
is taking the necessary steps to streamline the operations and expects
to improve the performance by increasing the sales volumes.
WIND POWER DIVISION:
Wind energy, with an average growth rate of 30%, is the fastest growing
source of renewable energy in the world. India occupies the fifth place
in the world in wind energy generation after USA, Germany, Spain, and
China. New technological developments in wind energy design have
contributed to the significant advances in wind energy penetration and
to get optimum power from available wind. In this study, an attempt has
been made to analyze and review the development and dissemination of
wind energy in India.
SCHEME OF ARRANGEMENT
During the period under report, the Honble High Court of Andhra
Pradesh vide order dated 19th January, 2010, sanctioned the Scheme of
Arrangement, whereupon the erstwhile Hyderabad Flextech Limited stands
merged with the company. The said order was filed with Registrar of
Companies and subsequently got approval for the same.
LISTING APPROVAL FOR NEW SHARES ISSUED PURSUANT TO THE SCHEME OF
AMLAGAMATION
The Bombay Stock Exchange has given listing permission for listing of
2,21,588 equity shares issued to shareholder of Hyderabad Flextech
Limited pursuant to the Scheme of Amalgamation as approved by the
Honble High Court of Andhra Pradesh.
DEMAT OF SHARES:
The Equity Shares of your Company have been admitted by CDSL/NSDL for
demat.
DIRECTORS:
In accordance with the provisions of Companies Act, 1956 and the
Companys Articles of Association, Sri E.Siva Sankaram and Sri
J.Sivaram Prasad, Directors would retire by rotation and, being
eligible, offer themselves for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed: (i) That in the preparation of the accounts for the
financial year ended on 31st March, 2010, the applicable accounting
standards have been followed along with proper explanation relating to
material departures; (ii) 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 state of affairs of the company at the end of the
financial year and of the Profit of the company for the year under
review. (iii) That the Directors have taken proper and sufficient care
for the maintenance of adequate accounting iscords 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; and (iv) That the Directors have prepared the accounts
for the financial year ended 31st March, 2010 on a going concern basis.
REPLY TO AUDITORS QUALIFICATIONS.
Regarding Auditors Qualification on confirmation of balance from
Sundry Debtors, Sundry Creditors and for Loans and Advances, the
management is confident of realising the receivables at the stated
values other than those disclosed as doubtful and in the process of
obtaining confirmation from the parties.
AUDITORS:
M/s. K.S. Rao & Co., Chartered Accountants, Hyderabad, the present
Auditors, retires at the ensuing Annua! General Meeting, and are
eligible for re- appointment.
PERSONNEL:
Employer-Employee relations remained cordial during the year under
review. Your Directors place on record their sincere appreciation of
the contribution made by the employees of the Company at all levels. As
regards, information pursuant to Section 217(2AA) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 (as
amended), there are no employees governed by the said provisions.
ADDITIONAL INFORMATION:
Information pursuant to Section 217(e)&(2A) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 is annexed herewith.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Cement Division:
Industry Structure and Developments:
The Indian economic growth rate has been quite rapid compared to other
emerging economies primarily due to higher reliance on domestic demand.
The growth trajectory is expected to continue on the back of strong
domestic demand and huge outlay on infrastructure planned by the
Government. The long-term domestic outlook remains buoyant with the
progressive reforms, increasing FDI, robust investments, growing
incomes and aspirations. India being one of the major producers of
cement and the demand is largely based on Infrastructure Projects,
Urban development and housing, Roads and Buildings, Ports etc.,
However, the cost of the raw material and fuel namely Limestone, Coal,
Power and Freight charges are all controlled by the Government and any
increase in the price of the above mentioned items affects the cost of
the production on which the company does not have any control. Thus,
industry has been to in ups and downs. The Government spending on
infrastructure is likely to benefit the revenue and earnings of all the
cement companies across the country.
Opportunities and Threats:
The demand will be driven by Governments continued thrust on
infrastructure development and to boost rural and housing sector.
Infrastructure development is need of the nation, this along with
rising housing provision will accelerate construction activity.
Recovery of the global scenario could also provide impetus to economic
growth and Cement demand.
Concerns of the Indian Cement Industry are high cost of Power and Coal,
high freight cost, inadequate infrastructure, non availability of
Wagons, poor quality of coal and heavy taxes/ royalty levies.
Electronic Division:
Industry Structure and Developments:
Your Company is one of the few companies specialized in manufacturing
flexible printed circuit boards in India. The flexible PCBs being sold
by the Company in India is an import substitute. The PCB industry
purely depends on growth of electronic industry. The Electronic
Industry is looking up and doing well, giving a scope for PCB industry
to expand.
Opportunities and Threats:
Spreading into domestic market, as an import substitute,
is a major opportunity for the Company. However, due to fall in
exports, there is a constraint on DTA eligibility. Therefore, the
Company would have to make DTA sales by paying full Excise Duty, which
is an additional burden on the margins. The company has been following
this system through out the year under review.
Wind Power Division:
Industry Structure and Developments:
India began wind development in the 1990s, and development has only
begun to take off in the last few years. Although a relative newcomer
to the wind industry compared with Denmark or the US, a combination of
domestic policy support for wind power and the rise of a leading global
wind turbine manufacturer have led India to become the country with one
of the largest installed wind power capacity in the world, and the wind
energy leader in the developing world.
Opportunities and Threats:
However, fundamental risks in the Indian market remain, making
international manufacturers somewhat reluctant to invest. In addition,
Indias relatively undeveloped national infrastructure meant that
transport and installation of megawatt-scale wind power technology was
impossible until recently. In addition, we have been undergoing power
sector reforms of varying degrees, and the impact of such reforms on
renewable energy is still somewhat uncertain.
Segment or product-wise performance:
Segment-wise or product-wise performance has already been furnished
elsewhere in this report.
Outlook:
This has been discussed elsewhere in this Report.
Internal control systems and their adequacy:
The company is following a proper and adequate system of internal
controls in respect of all its activities including safeguarding and
protecting its assets against loss from unauthorized use of
disposition. Further all transactions entered into by the company are
duly authorized and recorded correctly. M/s. Pavuluri & Co., Chartered
Accountants, Hyderabad have been working as the Internal Auditors of
the company. The Internal Auditors are submitting reports to the
company on a Quarterly basis.
Financial/operational performance:
This has been already discussed elsewhere in this Report.
Human Resources/Industrial Relations:
The company enjoys very cordial industrial relations, due to which
there is very low employee/labour turnover in the company. You will be
happy to note that ever since the inception of the Company, there were
no strikes, lockouts, lay-offs, retrenchments, etc.
ACKNOWLEDGEMENTS:
Your Directors are thankful to Canara Bank, Somajiguda Branch, Andhra
Bank, SCF Branch and Indian Bank, Main Branch, Koti. for their
continued support during the year under review and acknowledge with
gratitude the help extended by the Central Government and Government of
Andhra Pradesh.
Your directors also wish to place on record their appreciation of the
services rendered and co-operation extended by the Workmen, Staff,
Dealers, Customers and other concerned.
By Order of the Board of Directors
Place: Hyderabad (J. Triveni)
Date: 30-08-2010 Executive Chairperson
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