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HeidelbergCement India Ltd.

BSE: 500292 Sector: Industrials
NSE: HEIDELBERG ISIN Code: INE578A01017
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VOLUME 33601
52-Week high 175.00
52-Week low 101.75
P/E 43.47
Mkt Cap.(Rs cr) 3,694
Buy Price 162.65
Buy Qty 69.00
Sell Price 163.00
Sell Qty 453.00
OPEN 163.00
CLOSE 161.40
VOLUME 33601
52-Week high 175.00
52-Week low 101.75
P/E 43.47
Mkt Cap.(Rs cr) 3,694
Buy Price 162.65
Buy Qty 69.00
Sell Price 163.00
Sell Qty 453.00

HeidelbergCement India Ltd. (HEIDELBERG) - Director Report

Company director report

To the Members

The Directors are pleased to present the 58th Annual Report together withthe audited accounts of the Company for the financial year ended 31st March2017 (FY 2017).

THE YEAR IN RETROSPECT

The year 2016-17 began on a positive note on the back of encouraging fundamentals likesubdued inflation lower commodity prices declining interest rates softer crude oilprices and lower current account deficit. Good rainfall after two successive years ofscarce rainfall came as major respite for the rural economy. Rise in rural income coupledwith mild income boost from the Seventh Pay Commission and One Rank One Pension pay-outspaved the way for much awaited consumption-led recovery. This growth momentum received asetback in the third quarter on account of the demonetization drive. However the GDP isestimated to grow by around 7.1% during the FY 2017. Clearing all hurdles GST would soonbecome a reality for India. The macroeconomic indicators during the year remainedencouraging; however its resultant effect was not visible in the cement demand. Lowinfrastructure spends and tepid demand from the housing segment remained the key reasonsfor the softening in cement demand. Over-capacity in the cement industry and low capacityutilizations impacted prices and margins. At the end of March 2017 the overall installedcement manufacturing capacity stood close to 440 million tonnes. Cement production duringFY2016-17 was about 274* million tonnes compared to 282.5 million tonnes in thecorresponding period indicating de-growth of 3%.

* Source: Website of Office of Economic Adviser Ministry of Commerce and Industry.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

The Company has adopted Indian Accounting Standards (Ind-AS) from 1st April2016. The financial statements of the Company for the financial year ended 31stMarch 2017 are Ind-AS compliant and the corresponding gures for the financial year ended31st March 2016 have been restated.

During the year ended 31st March 2017 the Company produced 4.44 milliontonnes of cement compared to 4.43 million tonnes in the year ended March 2016 an increaseof 0.3%. Cement sales for the year were 4.47 million tonnes compared to 4.44 milliontonnes in the year ended March 2016 an increase of 0.8% by volume. Gross sales in 2016-17were INR 20018.5 million compared to INR 19159.2 million in 2015-16. The net profit inthe year 2016-17 was INR 762.1 million compared to INR 353.9 million in 2015-16.

A snapshot of the Company's financial performance for the financial year ended 31stMarch 2017 vis--vis performance for the financial year ended 31st March 2016is as under: -

(Rs. in Millions)
Particulars Financial Year ended 31st March 2017 Financial Year ended 31st March 2016
Income
Revenue from Operations (Gross) 20018.5 19159.2
Other Income 236.9 224.4
Total Revenue 20255.4 19383.6
Earnings before Interest Tax Depreciation and 3025.5 2536.1
Amortization (EBITDA) - including other income
Net Depreciation and Amortization 991.5 997.8
Finance Costs 897.7 1084.5
Profit before Tax 1136.3 453.8
Total Tax expense 374.2 99.9
Net Profit for the year 762.1 353.9

On the operations front during FY 2016-17 the fuel cost increased signicantly. Petcokeprices touched a peak of USD 96 per Metric tonne (CIF) compared to the low of USD 40 perMetric tonne (CIF) witnessed at the beginning of the year. International Coal prices tooincreased in the range of 50% to 60%; however domestic coal prices increased only by about10% to 15% for various grades. Government increased Clean Environment Cess on coal fromINR 200 per tonne to INR 400 per tonne. The Company had to scout for alternative sourcesof fly ash as the power plants with which the Company has long term agreements reducedpower generation leading to shortage of fly ash. The company managed to reduce logisticscost by 10% on fly ash transportation by optimising the size of vehicles and fasterturnaround of vehicles. The Company continued its efforts to reduce logistics cost byrationalising its Rail-Road mix for inward and outward movement of materials.

Reverse auctioning for procurement of bags helped the company contain its packingcosts. Besides this various other cost elements and consumption parameters remain infocus in pursuit to achieve cost leadership. Sensitivity to ecology and environment hasdirect bearing on cement and aggregate industry. The ban on sand mining in Uttar Pradeshhas impacted the construction industry and therefore the demand of cement too.Notwithstanding the sluggish progress in infrastructure and real estate sector theCompany increased its sales volume marginally. Through the persistent efforts of salesteam and the channel partners Company's brand ‘mycem' has made a mark in the mindsof the consumers enabling the Company to secure premium compared to some of the competingbrands. In the year 2015 the Company pioneered the concept of CADS (Channel AuthorizationDigital Signage) an electronic digital display at the dealers' shops that aims atbuilding customers' condence in channel partners. The Company is also encouraging itsdealers to install Point-of-Sale machines (PoS) for collection of sale proceeds throughelectronic means from their customers/retailers.

TRANSFER TO DEBENTURE REDEMPTION RESERVE

The Company had issued Non-Convertible Debentures aggregating to INR 3700 millioncarrying interest of 10.4% per annum on 16th December 2013. It is proposed totransfer an amount of INR 134.2 million (previous year INR 134.1 million) out of theprofits for the financial year ended 31st March 2017 to the DebentureRedemption Reserve (DRR) to meet the obligations towards the redemption of debenturescommencing from 16th December 2019.

During the year the credit rating in respect of the aforesaid debentures has beenupgraded to "IND AA+" (with stable outlook) from "IND AA" by IndiaRatings and Research Pvt. Ltd. a credit rating agency.

REPAYMENT OF EXTERNAL COMMERCIAL BORROWINGS

The Company had borrowed USD 125 million in nine tranches from January 2011 to October2012 by way of External Commercial Borrowings (ECB) for the purpose of financing itsDamoh-Jhansi expansion project. Each tranche of ECB is repayable after a period of fiveyears from the date of its draw down. The entire amount of ECB is hedged against exchangerate and interest rate fluctuations through cross currency swap agreements. DuringFY2016-17 fourth fifth sixth and seventh tranche of said ECB aggregating to USD 45million have been repaid. The last two tranches of said ECB of USD 10 million each willbecome due for payment during the FY2017-18.

DIVIDEND

Pursuant to the provisions of the SEBI (Listing Obligations

& Disclosure Requirements) Regulations 2015 the Board of Directors of the Companyhas formulated a Dividend Distribution Policy. The same has been posted on the Company'swebsite. The web-link to access the said policy is as follows:

http://mycemco.com/sites/default/files/HCIL%20Dividend%20Distribution%20Policy.pdf

After considering the various factors enumerated in the said Policy includingfinancial performance of the Company during FY 2016-17 and debt repayment schedule theBoard of Directors is pleased to recommend a dividend of INR 2/- (20%) per equity share ofINR 10 each for FY 2016-17 for approval of the members at the ensuing AGM. The dividendoutgo will be INR 545.5 million (inclusive of a dividend tax of INR 92.3 million).

A STEP TOWARDS CLEAN ENERGY

The Company had commissioned the Waste Heat Recovery-based Power Generation Plant (WHRPlant) at its Narsingarh Plant in Damoh Madhya Pradesh on 15th February 2016.The WHR Plant utilises the waste heat generated from the clinker lines at Narsingarh Plantfor generating power. During FY 2016-17 WHR Plant stabilised and generated 56.0million units of power resulting in equivalent reduction in grid power leading to savingsin power cost.

ENVIRONMENTAL SUSTAINABILITY

The Company firmly believes in sustainable development and deploys best practices toensure environment protection and conservation of natural resources. Under the programme"Sustainable Development Goals 2030" focus is on energy efficiency waterconservation emission reduction sanitation and hygiene. Continuous efforts are made tooptimise usage of natural resources following the principles of "Reduction Recycleand Re-use". During FY 2016-17 all of the waste was recycled by all the plants andthere was zero municipal solid waste discharge. Partnership with associations and forumssuch as Cement Sustainability Initiative of the World Business Council for SustainableDevelopment National Safety Council and Confederation of Indian Industry has enabled theCompany to stay focussed on matters of sustainability by benchmarking against the bestpractices.

ENRICHING BIODIVERSITY

Recognizing the importance of biodiversity for sustainable development the Company hastaken several measures for improving air quality prevention of soil erosion andconservation of ora and fauna. These include development of water bodies and green belt inand around the plants and mines. A master plan is under preparation for developing greenareas at all the plant locations. The Company is also encouraging residents in itscolonies to develop and nurture small home gardens.

TOUCHING LIVES THROUGH MEANINGFUL CSR INITIATIVES

The Company is committed to the wellbeing of local communities and continues to makeits contribution through variety of community development programmes and projects. TheCorporate Social Responsibility (CSR) activities of the Company cover healthcare primaryeducation rural infrastructure development vocational training & entrepreneurship.The Company believes that involving local communities in identification and execution ofCSR projects strengthens the Company's bond with relevant stakeholders. During FY17 theCompany has spent INR 9.49 million on various CSR activities / projects exceeding theobligations pursuant to Section 135 of the Companies Act 2013 by a liberal margin.Industry requires skilled manpower which can be sourced from a large pool of unskilledunemployed rural youth after imparting them requisite training. The Company consistentlyconducts training programmes for rural youth for which it has also commenced constructionof a training centre which is scheduled to be completed in FY 2017-18. The training centrewill include four classrooms and two conference rooms. This will help in enlarging thescope and reach of the training programmes. To promote education the company constructeda library hall in a Girls' hostel and also distributed books to the students residing inthe vicinity of its plants. To promote sports the Company sponsored sports meets inschools in the nearby areas. The Company continued to extend its support towardsdevelopment of infrastructure around its plants and mines. Ghats were constructed inDistrict Damoh to facilitate easy access of the villagers to the river. The Company alsoconstructed concrete roads and culverts in Damoh for safe speedier and smootherconnectivity to overcome the commuting problems faced by local people in areas surroundingits plants. The Company organised free health check-up camps provided mobile medicalservices and distributed medicines in the nearby villages. The Company's Central Indiaplants are situated in water scarce Bundelkhand region free water was supplied throughwater tankers to the villages near the Narsingarh plant. In order to improve waterstorage the Company helped the district administration by deepening the Singpur pond inDamoh District.

The Report on CSR activities together with the brief outline of CSR Policy of theCompany is annexed herewith as ‘Annexure – A'.

OCCUPATIONAL HEALTH & SAFETY

"Nothing is more important to us than the safety of our workers oursubcontractors and the communities in and near which we operate" says Dr. BerndScheifele Chairman of HeidelbergCement Group.

Occupational health & safety remains our foremost priority. The Company achievedzero fatality in its operations during the year under review. Top management is fullycommitted to implementing the high safety standards of the HeidelbergCement Group.Implementation of cardinal norms on safety and ensuring compliance with the legalobligations and benchmarking against the industry's best safety practices is a way of lifewithin the Company. All plants are OHSAS 18001:2007 certified. The Company has continuedto focus on embedding strong safety culture top-down and bottom-up. Maiden safetyinter-plant audit was carried out by the safety professionals and best practices wereimplemented across locations. Robust safety observation tours by the functional managersand HODs is practiced across all plant locations. Some notable safety equipment installedin all the plants during FY17 include elevated pull cord on the conveyor belts toprotect people working near them and putting guard around all rotating parts of equipmentand providing interlocking of motor coupling guards for all electrical drives above 160kW.

AWARDS AND ACCOLADES

The Company continues to pursue excellence in all areas of its operations and we arehappy to report that it received the following awards and honours:

• ‘1st Prize for Overall Performance' by Mines Safety AssociationKarnataka Zone III for Yerekatte Mines.

• Narsingarh Plant and Jhansi Plant were recognised as Excellent Energy EfficientUnits in cement sector by Confederation of Indian Industry at the 15th EnergyEfficiency Summit organised at Hyderabad.

• Jhansi Plant was given ‘Energy Best Practices Award' and ‘EnvironmentBest Practices Award' at the National Conclave on recent advances in cement industryorganised by Quality Circle Forum of India organised at Hyderabad.

• Diamond Patharia Limestone Mines has been accredited with Five Star Rating* bythe Ministry of Mines Government of India. The accreditation certificate was receivedfrom Mr. Piyush Goyal Hon'ble Minister of Mines on 15th February 2017 at NewDelhi.

* "Star Rating of Mines" is a new scheme initiated by the Ministry of MinesGovernment of India to recognise the performance of mines by giving them rating rangingfrom one to five stars. Under the scheme mines bearing major minerals are evaluated onthe parameters relating to sustainable development.

CORPORATE GOVERNANCE

The Company believes in creating and sustaining relationship based on trust andtransparency with all its stakeholders. The governance framework enjoins the higheststandards of ethical and responsible conduct. All the Directors and employees are bound bythe Codes of Conduct setting out the fundamental standards to be followed by them whiledischarging their duties. The Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 have further reinforced the governance regimein India. The Company is in compliance with the corporate governance requirements underthe Companies Act 2013 and the SEBI Listing Regulations. Pursuant to the provisions ofthe listing regulations a separate section on Corporate Governance together with acertificate from M/s. Nityanand Singh & Co. a firm of Company Secretaries inPractice confirming compliance with conditions of Corporate Governance forms an integralpart of this Report. A Management Discussion and Analysis Report is also given as anaddition to this Report. A certificate furnished by Mr. Jamshed Naval Cooper ManagingDirector and Mr. Anil Kumar Sharma Chief Financial Officer in respect of the financialstatements and the cash flow statement for the financial year ended 31st March2017 is annexed as Annexure ‘B' to this Report.

BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations a BusinessResponsibility Report forms part of this Annual Report.

DIRECTORS

There was no change in the Board of Directors during the financial year ended 31stMarch 2017. Dr. Albert Scheuer (DIN: 02170574) retires by rotation at the ensuing AnnualGeneral Meeting (AGM) and being eligible has offered himself for reappointment. His briefprofile is given in the Notice of AGM. The Board recommends his re-appointment by themembers at the ensuing AGM.

Independent Directors: Mr. P.G. Mankad (DIN: 00005001) Mr. S. Krishna Kumar (DIN:01785323) and Mr. Pradeep V. Bhide (DIN: 03304262) were appointed as Independent Directorsby the members for a term of five years from 1st April 2014 up to 31stMarch 2019 in the 55th Annual General Meeting held on 19th June 2014and they continue to be on the Board of Directors. All the independent directors havesubmitted declarations to the Company that they full the criteria of independence as laiddown under Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

DISCLOSURES UNDER COMPANIES ACT 2013

Number of Board Meetings: During the financial year ended 31st March2017 four board meetings were held. The details of the same are given in the CorporateGovernance Report.

Composition of Audit Committee: The Company has an Audit Committee comprising fourmembers namely Mr. S. Krishna Kumar (Chairman of the Committee) Mr. P.G. Mankad Mr.P.V. Bhide and Ms. Soek Peng Sim. Other details about the said Committee are given in theCorporate Governance Report. All the recommendations made by the Audit Committee wereaccepted by the Board.

Board Evaluation: In accordance with the provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an annual evaluation of its own performance that of the directorsindividually and that of all the Committees constituted by it namely the AuditCommittee Nomination and Remuneration Committee CSR Committee and the Stakeholders‘Relationship Committee. The manner in which the performance evaluation has been carriedout has been explained in the Corporate Governance Report.

Policies for appointment and remuneration of directors: The Board has on therecommendation of the Nomination and Remuneration Committee framed a ‘Nomination andRemuneration Policy‘. The policy inter alia lays down the criteria fordetermining qualifications positive attributes and independence of potential candidatesfor appointment as directors and determining their remuneration. The said policy isannexed as Annexure ‘C' to this Report. The Board has also adopted a ‘BoardDiversity Policy‘ which requires the Board to ensure appropriate balance of skillsexperience and diversity of perspectives in its composition.

Extract of Annual Return: The extract of the Annual Return in the prescribed formMGT – 9 is annexed herewith as Annexure ‘D'.

Key Managerial Personnel: No changes took place in the Key Managerial Personnel(KMP) during the financial year ended 31st March 2017. The following personscontinue to be the KMP of the Company:-

• Mr. Jamshed Naval Cooper Managing Director;

• Mr. Sushil Kumar Tiwari Whole-time Director;

• Mr. Anil Kumar Sharma Chief Financial Officer; and

• Mr. Rajesh Relan Legal Head & Company Secretary.

General: The Directors state that no disclosure or reporting is required in respectof the following items as there were no transactions with respect to these items duringthe financial year ended 31st March 2017:

INTERNAL FINANCIAL CONTROLS

The Company has in place various internal controls policies and procedures to ensureorderly and efficient conduct of its business. Standard Operating Procedures (SOPs) andRisk Control Matrix (RCM) have been designed for all critical processes across all plantswarehouses and offices. The internal financial controls are tested for operatingeffectiveness through management's ongoing monitoring and review processes andindependently by the internal auditors. In our view the internal financial controls areadequate and are operating effectively.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them and based on the assessment of the management the Board ofDirectors makes the following statements in terms of Section 134 of the Companies Act2013: (a) that in the preparation of the accounts for the financial year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any; (b) that such accounting policieshave been selected and applied consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2017 and of the profit of the Company for thefinancial year ended on that date; (c) that proper and sufficient care has been taken forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; (d) that the financial statements for the financial yearended 31st March 2017 have been prepared on a ‘going concern' basis; (e)that proper internal financial controls were in place and that such internal financialcontrols were adequate and were operating effectively; and (f) that systems to ensurecompliance with the provisions of all applicable laws were in place and were adequate andoperating effectively.

RELATED PARTY TRANSACTIONS

All the transactions entered into between the Company and its related parties duringthe financial year ended 31st March 2017 were in the ordinary course ofbusiness and on an arm's length basis. The particulars of such transactions have beendisclosed in the notes to accounts of the Balance Sheet presented in the Annual Report.During the year under review the Company has not entered into any related partytransaction exceeding the threshold limit provided under the Companies Act 2013 /

Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. A statement of all the related party transactions is placed before theAudit Committee on a quarterly basis specifying the nature and value of the transactions.The Company has in place a Policy on Related Party Transactions and a framework for thepurpose of assessing the basis of determining the arm's length price of relevanttransactions. The said policy and the framework are annually reviewed by the AuditCommittee and the Board of Directors. The same have been posted on the Company's website.The web-link to access the said policy and framework is as follows:

http://mycemco.com/sites/default/files/Related%20Party%20Transaction%20Policy.pdf

RISK MANAGEMENT

One of the factors that distinguish a company's journey to create sustainable value forits shareholders is its ability to manage the business risks. Many risks exist in theoperating environment and emerge on a regular basis. The Risk Management processes of ourCompany focus on ensuring that these risks are identied and evaluated in a timely mannerand addressed proactively. The business risks have been classied under the broad heads -strategic operational financial and legal & compliance risks. The Company's RiskManagement Policy lays down a bottom-up process comprising risk identification analysisand evaluation treatment and controlling. Risk owners identify and analyse all risks intheir area of operations. The business risks are reviewed by the Senior Management andthereafter evaluated by the Audit Committee and the Board of Directors on a quarterlybasis.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism / whistle blower policy to deal with theinstances of unethical behaviour fraud conict of interest mismanagement and violationof the Code of Conduct. The details of the vigil mechanism are given in the CorporateGovernance Report and the same has been posted on the Company's website. The web link toaccess the said policy is as follows:

http://mycemco.com/sites/default/files/HCIL%20Whistle%20Blower%20Policy.pdf

AUDITORS

The observations of S.R. Batliboi & Co. LLP. Statutory Auditors in their report onAccounts for the financial year ended 31st March 2017 read with the relevantnotes are self-explanatory. The Auditors' Report does not contain any qualificationreservation or adverse remark.

Section 139 of the Companies Act 2013 read with the Companies (Audit and Auditors)Rules 2014 provides for mandatory rotation of statutory auditors after completion oftenure as stated therein. The term of office of the present statutory auditors of theCompany S.R. Batliboi & Co. LLP. will end after the closure of the ensuing AGM. TheBoard places on record its appreciation for the valuable services rendered by S.R.Batliboi & Co. LLP during their tenure.

The Board of Directors at its meeting held on 9th February 2017 had considered andrecommended for approval of the members the appointment of S.N. Dhawan & Co. LLP. asstatutory auditors of the Company to hold office from the conclusion of 58th AnnualGeneral Meeting until the conclusion of 63rd Annual General Meeting (FY 2017-18 to FY2021-22) Accordingly a Resolution seeking member's approval for the appointment of S.N.Dhawan & Co. LLP. Chartered Accountants as statutory auditors of the Company isincluded at Item No. 3 of the Notice convening the AGM. S.N. Dhawan & Co. LLP. havegiven their consent and confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules made thereunder for their appointment as statutory auditors of theCompany. The Board recommends the aforesaid resolution for approval of the members.

COST AUDIT

The Cost Audit for the financial year ended 31st March 2016 was conducted byM/s R.J. Goel & Co. Cost Accountants Delhi and as required Cost Audit Report wasduly filed with the Ministry of Corporate Affairs Government of India. The Audit of thecost accounts of the Company for the financial year ended 31st March 2017 isalso being conducted by the said firm and the Report will be filed within the stipulatedtime. In accordance with Section 148 of the Companies Act 2013 and the Companies (CostRecords and Audit) Amendment Rules 2014 the Board of Directors has on the recommendationof the Audit Committee appointed M/s. R.J. Goel & Co. Cost Accountants as CostAuditor of the Company for the financial year 2017-18 on a remuneration of INR 250000.Pursuant to Section 148(3) of the Companies Act 2013 a resolution seeking member'sratification for the remuneration payable to M/s. R.J. Goel & Co. Cost Accountants isincluded at Item No. 7 of the Notice convening the AGM. The Board recommends the aforesaidresolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co. a firm of Company Secretariesin Practice as Secretarial Auditor for carrying out secretarial audit of the Company forthe financial year ended 31st March 2017 in accordance with the provisions ofSection 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Report of the Secretarial Auditor is annexedherewith as Annexure ‘E'. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section 197 of the Companies Act2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 shall be provided on request. In accordance with the provisions ofSection 136 of the Act the Board's Report and the Accounts for the financial year ended31st March 2017 are being sent to the members and others entitled theretoexcluding the information on employees' particulars which is available for inspection bythe members at the Registered Office of the Company during business hours on all workingdays up to the date of the ensuing Annual General Meeting. If any member desires to have acopy of the same he may write to the Company Secretary in this regard.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 forming part of this Reportare annexed as Annexure ‘F'.

ACKNOWLEDGEMENTS

Your Directors are thankful to all stakeholders including Customers BankersSuppliers Distributors Dealers and Contractors for their continued assistanceco-operation and support. The Directors wish to place on record their sincere appreciationto all employees for their commitment and continued contribution to the Company. TheDirectors are grateful for the condence faith and trust reposed by the shareholders inthe Company. We are thankful to various agencies of the Central and State Government(s)for their continued support and co-operation.

For and on behalf of the Board
Place: Gurugram P.G. Mankad
Date: 25th May 2017 Chairman