To the Members
The Directors are pleased to present the 61 st Annual Report together with the auditedaccounts of HeidelbergCement India Ltd. (the Company) for the financial year ended 31stMarch 2020 (FY20).
THE YEAR IN RETROSPECT
The Indian economy witnessed slowdown during FY20 with the GDP growth falling from6.8% in FY19 to 5.6% in 1st quarter of FY20 and further to 5.1% and 4.7% in 2nd and 3rdquarters respectively. A weak rural demand and stress in financial sector were cited asthe key contributory factors for this sluggish growth. The year saw Central Governmenttake a slew of measures to revamp the financial sector address NBFC crisis mergestate-run banks reduce stress in real estate sector and speed-up resolution process underInsolvency and Bankruptcy Code (IBC). These measures were aptly supported by RBI throughits accommodative monetary policy frequently cutting repo rates to ease the credit flowin the economy. However slow pace of transmission of rates from banks to the borrowers ledto some discontentment.
India's eight core industries grew by just 0.6% in FY20 as against growth of 4.4% inFY19. A record low growth of core industries had a cascading effect on industrial outputgrowth (as eight-core industries carry ~40% weight in the Index of Industrial Production)and consequently the GDP growth. India's Wholesale Price Index based inflation eased to 1%during FY20 compared to 3.1% during FY19 primarily on account of weakening demand.
During FY20 cement production registered decline of 0.8 percent (as against growth of~13 percent in FY19) which is only second such instance of a decline in the past 15 yearsafter the demonetization effected in FY17. The cement demand was impacted by a host offactors including slowdown in government expenditure post the general elections changesin state governments which triggered reviews of existing projects and delays in clearingnew projects heavy monsoons and risk of spread of COVID-19 followed by nation-widelockdown from last week of March 2020. India's cement manufacturing capacity stood at 505million tonnes as at March 2020 an increase of about 20 million tonnes over last year.The capacity utilization has fallen from 70% in FY19 to 67% in FY20.
National Infrastructure Pipeline (NIP) of INR 102 trillion announced by the Governmentis being projected as a key for achieving vision of making India a USD 5 trillion economyby FY25. The pace of execution of infrastructure projects constituting NIP holds lot ofpromise for the Indian cement industry.
FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS
During FY20 the Company produced 4.69 million tonnes of cement compared to 4.82million tonnes during the financial year ended 31st March 2019 (FY19) a decrease of 2.5%.Cement sales during the year were 4.71 million tonnes compared to 4.90 million tonnes inFY19 a decrease of 3.9%. Net sales in FY20 were INR 21696.2 million compared to INR21333.5 million in FY19 an increase of 1.7%. The Company achieved highest ever netprofit of INR 2680.6 million in FY20 compared to INR 2206.6 million in FY19.
A snapshot of the Company's financial performance for FY20 vis-a-vis performance forFY19 is as under: -
(Rs. in million)
|Particulars ||Financial Year ended 31 March 2020 1 ||Financial Year ended 31 March 2019 |
|Income || || |
|Revenue from Operations (Net of GST) ||21696.2 ||21333.5 |
|Other Income ||527.3 ||348.2 |
|Total Revenue ||22223.5 ||21681.7 |
|Earnings before Interest Tax Depreciation and Amortization (EBITDA)- Including other income ||5805.2 ||5181.6 |
|Depreciation and Amortization ||1086.1 ||1017.7 |
|Finance Cost ||738.5 ||747.8 |
|Profit before Tax ||3980.6 ||3416.1 |
|Total Tax expense ||1300.0 ||1209.5 |
|Net Profit for the year ||2680.6 ||2206.6 |
The Company maintains a sharp focus for achieving effective cost management throughvarious proactive initiatives across its facilities and operations. During FY20 the keycost elements viz. fuels raw materials and packaging witnessed price reduction onaccount of fall in global crude oil and commodity prices. Fall of ~14% in pet coke pricewas fully captured through adoption of right fuel mix. The fall in price of crude oil ledto reduction in Indian Polypropylene granule prices which got translated into ~8%reduction in price of packing bags purchased by the Company as our procurement mechanismlinks the price of bags with the changes in price of Polypropylene granules.
Despite shortage of flyash in the regions where the Company operates our continuousimprovement strategies enabled us to effectively source the same through alternate sourceswith an eye on the landed cost. Deterioration in quality of Indian coal was anotherconcern however our continuous liaison helped us to overcome these limitations.
Quality is not an act it is a habit - We truly believe in this statementand therefore while striving for optimizing the input costs we have never lost focus onquality of raw materials consumed in the manufacturing process. We use 100% mineral gypsumand high grade bauxite to sustain the quality and strength of cement. We have alsoimproved the visibility and durability of our packing bags resulting in minimal bagbursting during handling.
For a cement consumer more than quality it's the consistency that matters. Ourflagship brand -'mycem' - is known for its unparalleled consistent high quality.Appropriate brand acceptance and visibility has enabled the Company to expand its salesnetwork. The Company organized events training programs and conferences for its channelpartners to foster a stronger bond with them. The efforts of the sales team were backedwith additional support from teams of production quality control and logistics.
During FY19 capacity utilization of the Company's plants in Central India was ~97%.With an aim to achieve better operational efficiency and increase production capacity tocater to the growing demand the Company had rolled out debottlenecking projects forincreasing capacities of its grinding plants in Imlai and Jhansi. The debottleneckingprojects were financed through internal accruals and were completed within the scheduledtimelines. The grinding capacity of Imlai and Jhansi plants have got enhanced by 0.5Million Tonnes Per Annum (MTPA) and 0.55 MTPA respectively by end of FY20. The aggregatecement grinding capacity of the Company now stands enhanced to 6.26 MTPA the benefits ofwhich will be reaped in the coming years. The Company is also considering the possibilityof debottlenecking its clinker manufacturing capacity at Narsingarh plant.
The unprecedented spread of COVID-19 across the globe has impacted almost everybusiness and your Company is no exception to this. In compliance with the directionsissued by the Central and State Governments the Company suspended operations in its plantsin last week of March 2020. The operations were partially resumed with effect from 20thApril 2020 with reduced staff and under strict observance of guidelines to mitigate therisk of COVID-19. Given such challenging situations for the entire humanity across theglobe your Company as a responsible corporate citizen stands fully committed to thewellbeing of its employees and the society at large and is doing everything in itscapacity to support the Government in overcoming the challenge faced by the Nation.
DEBENTURE REDEMPTION RESERVE
The Company had allotted 10.4% Non-Convertible Debentures aggregating to INR 3700million on 16th December 2013. These debentures are redeemable in three instalments at theend of 6th 7th and 8th year from the date of allotment. Accordingly 1st redemptioninstalment of INR 1250 million was repaid on 16th December 2019 through internal accruals.The Company has adequate bank balance to repay the remaining instalments also.
The Debenture Redemption Reserve (DRR) stood at INR 710.1 million as on 31st March2019. In view of relaxation granted by the Ministry of Corporate Affairs to listedcompanies from creation of DRR it has been decided not to transfer any amount to DRRduring FY20. Accordingly the DRR remains unchanged at INR 710.1 million as on 31st March2020. The credit rating in respect of the aforesaid debentures has been reaffirmed asIND AA+ (with stable outlook) by India Ratings and Research Pvt. Ltd.
During FY20 the Company has already paid an interim dividend of INR 1.5 per share(15%). The Board has recommended a final dividend of INR 6.0 per share (60%) subject tothe approval of the shareholders in the ensuing AGM. Thus the total dividend for FY20including the proposed Final Dividend amounts to INR 7.5 per equity share (INR 4.0 pershare for FY19) and the same will absorb INR 1769.5 million including Dividend Tax of69.9 million already paid on interim dividend in December 201 9. Due to amendments in theIncome Tax Act 1961 that have become effective from 1 st April 2020 the proposed finaldividend will be taxable in the hands of shareholders however the Company will deduct taxat source at the applicable rates.
Dividend Distribution Policy
Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 requires top 500 listed companies based on market capitalization to formulate aDividend Distribution Policy. In compliance with the said requirement the Board ofDirectors had formulated a Dividend Distribution Policy in FY17 and the same is posted onthe Company's website. The web-link to access the said policy is as follows:
Unclaimed dividends: The respective due dates on which unclaimed amounts of dividendswill be transferred to Investor Education and Protection Fund' (IEPF) are givenbelow:
|S. No. ||Financial Year ||Dividend Per Share (INR) ||Date of declaration ||Date of transfer to IEPF |
|1 ||FY2016-17 ||2.00 ||22nd September 2017 ||28th October 2024 |
|2 ||FY2017-18 ||2.50 ||21st September 2018 ||27th October 2025 |
|3 ||FY2018-19 ||1.00 (Interim) ||25th October 2018 ||30th November 2025 |
|4 ||FY2018-19 ||3.00 (final) ||19th September 2019 ||24th October 2026 |
|5 ||FY2019-20 ||1.50 (Interim) ||23rd November 2019 ||28th December 2026 |
Committed to deliver on our Sustainability Goals 2030 we strive to excel inenvironment protection by reducing our footprints on water air land and CO2emissions thus facilitating a circular economy of recycle and reuse of waste materials.We remain committed to engage and deliver in the following key domain areas:
Driving Economic Strength & Innovation
Achieving excellence in Occupational Health and Safety
Reducing our Environment Footprint
Enabling Circular Economy
Being a Good Neighbour
Ensuring Compliance and Transparency
It gives us immense satisfaction to report that our operations have been net waterpositive for seventh consecutive year. The Company's carbon footprint was 578.6 kg ofCO2/ton of cement produced as against 585 kg of CO2/ton of cement during the previous yearand it is also lower than the industry average. Clinker incorporation factor of 63% wasachieved by maximising utilisation of fly ash and other additives; a big step towardspreserving natural limestone reserves for generations to come. During FY20 the Companygenerated 66524 Mega Watt of power from Waste Heat Recovery Power Plant at Narsingarhwhich was about 34% of its total power requirement. Various initiatives of the Companyaimed at promoting green and clean environment were carried out. All the plants of theCompany are ISO 14001 (Environment Management System) certified.
The green cover extends to about 38% of the factory area. Water bodies too have beendeveloped to support plantation. These water bodies and trees are home to a variety offlora and fauna. The enriched bio diversity provides shelter to numerous animal and birdspecies.
We strive to preserve and enhance the biodiversity across all plants and mines. TheCompany has taken several measures for improving air quality prevention of soil erosionand conservation of flora and fauna. The residents in colonies across all plants have alsodeveloped small home gardens. MAKING A DIFFERENCE THROUGH CSR HeidelbergCementGroup having obligated itself to build on the three pillars of Ecology Economy and SocialResponsibility has earned reputation of being a responsible Corporate Citizen. In ourstride to make the world a better place to live we have relentlessly contributed for thebenefit of people living around our plants and mines. Our CSR initiatives have widecoverage encompassing education skill development health & hygiene andinfrastructure development. We have adopted a comprehensive approach by encouragingcommunity participation at all levels from planning and implementation to monitoring andmaintenance of assets created under CSR projects.
We are directly supporting thirty villages at three locations viz. Damoh Jhansi andAmmasandra. During FY20 the Company has spent I NR 44.7 million on various CSR projects /programmes exceeding the obligations pursuant to Section 135 of the Companies Act 2013.
We have developed 20 Model Aanganwadi centres in Damoh & Jhansi in association withthe concerned District Women & Child Development Departments. These Aanganwadi centresare equipped with decent furniture and playing items that are appropriate for children inthe age group of 3 to 6 years. About 1000 children regularly attend classes organised inthese centres. We have also strengthened basic infrastructure of 45 government schoolsbenefitting more than 7000 students and 120 teachers.
The Company has renovated 11 government school buildings in surrounding areas whichinvolved extensive repairing of classrooms boundary walls flooring roof and toiletsthus giving a complete new look to these schools. Our scholarship schemes facilitatehigher education to meritorious students. As a development partner of Gyanodaya VidhyaMandir School Damoh we are providing financial support to educate160 students.
Under health programme our experienced team of doctors and nursing staff regularlyorganizes rural health check-up camps in nearby villages. This doorstep medical check-upalong with provision for free medicines is a great relief for old people expectingmothers children women and poor families. Many initiatives are also directed towardsmeeting elementary health-related needs with focus on treating common local ailments.
To meet requirement of potable water we supplied water through tankers in summerseason in villages near our mines in Damoh. Under Nal-Jal' scheme water supply hasbecome operational in one of the villages near our mines in Damoh and the work of layingdown water pipelines is in progress in some other villages.
Complementing the Government's Skill India Mission we had set up a skill developmentcentre known as Sakshamta Vikas Kendra adjoining our Jhansi Plant whichcontinues to make its contributions for enhancing vocational skills of the rural youth.Enthused by the success of centre in Jhansi we have now developed a centre in Damoh too.We have tied up with Usha International Ltd. and started a sewing Silai Schoolin Damoh with a view to enhancing the quality of training cum supporting livelihood. Inorder to give training to farmers on modern agricultural techniques and practices we haveassociated with Krishi Vigyan Kendra of Damoh. A new 5 year projectLivestock Development Centre has also commenced operations in Damoh inpartnership with BAIF Research Development Foundation which strives to improve cattlebreed for enhancing income of rural families.
Through infrastructure development projects the Company is developing basicinfrastructure like roads drainage lines community halls water tanks crematorium etc.in the nearby villages.
In view of the onslaught of COVID-19 pandemic the Company is maintaining constantdialogue with local panchayat and village representatives to assess their needs andprovide them necessary support to the extent possible.
The Company has distributed face masks sanitizer dispensers grocery items foodpackets etc. to the local people in need. Sanitization drive was also carried out in somevillages with high-risk profile. All these tasks were executed in close coordination withthe officials of district administration.
The Report on CSR activities together with brief outline of CSR Policy of the Companyis annexed herewith as Annexure - A'.
OCCUPATIONAL HEALTH & SAFETY
Besides our business priorities the Occupational Health and Safety (OH&S) hasremained our Company's foremost priority. Every employee must return home smiling tohis family. Driven by this philosophy we endeavor to provide a safe and healthyworking environment.
The day at the plants begins with safety gate meetings wherein important safety aspectsare discussed along with safety prayer and pledge. To improve the Happiness Quotient amongthe workmen people are encouraged to share jokes during their daily gate meeting andenter plant after having taken the safety pledge. We believe that it's the Smilesthat will take you Miles.
Safety conversations and safety zones are effectively used for employee engagement andnurturing safety culture in all aspects of operations. Safety zones have been created atall plants with cross functional teams including contractual employees.
HeidelbergCement Group's cardinal norms guidelines standards and legal requirementsalong with stipulations under ISO 45001-Occupational Health and Safety Management Systemare being strictly adhered to at all the plants. Safety Leadership training programs wereconducted for top management plant heads and department heads at all plants forimplementing group's clean site and safe site initiatives safety conversations and safetyzone concepts. Employees were imparted safety induction trainings refresher courses andjob specific trainings like scaffolding safety working at height and in confined spaceetc.
A schedule of twenty four most critical safety hazards relevant to the cement industryhas been compiled. These Safety themes are announced every month and key aspects relatingto the theme are dwelt upon throughout the month so as to firmly instill the safetyculture in the organization. Drivers and helpers were also imparted training on defensivedriving techniques. Monitoring of the workplace for noise particulate matter free silicaand illumination level is being done as per the regulatory norms. All plants are ISO 45001certified. During March 2020 the management activated its Contingency Managementand Business Continuity Plan to counter the impending risk of COVID-19 pandemic. Thefirst priority that was envisaged by the business continuity team was to create awarenessamongst the employees about this disease and the means to safeguard against it. Thereforevarious communications were issued and awareness sessions were conducted to makeemployees aware about the impending risk. Posters in the local languages were also put atthe prominent locations to educate workmen.
In order to protect against COVID-19 thermal scanning of individuals has been mademandatory at entry gates of all plants. In addition to the usual Personal ProtectiveEquipment (PPE) COVID-19 protection has also been made mandatory while working in theplant premises. Sanitizer dispensing machines and handwashing facilities have beenprovided at relevant places and social distancing norms are being strictly followed.
We are happy to inform that the Company has achieved safe business year with nofatality and Lost Time Incidents Frequency Rate (LTIFR) was 0.1.
AWARDS AND ACCOLADES
The Company continues to pursue excellence in all areas of its operations which isbeing recognized in the form of awards and honours.
Diamond Patheria Limestone Mines was given Subh Karan Sarawagi'Environment Award by Mr. Pralhad Joshi Hon'ble Minister of Mines Coal &Parliamentary Affairs at the 53rd AGM of Federation of Indian Mineral Industries (FIMI).
Jhansi Plant was given Excellent Energy Efficient Unit' award byConfederation of Indian Industry (CII) at the 20th National Awards for Excellence inEnergy Management.
Narsingarh Plant was given Safety Systems Excellence Award (Gold) in LargeManufacturing Sector (Hazardous) category by Federation of Indian Chambers of Commerce andIndustry (FICCI).
Narsingarh Plant was given Platinum Award in Health and Safety category byNational Safety Council MP Chapter.
Ammasandra Plant was given Unnatha Suraksha Puraskara'- Safety Award byNational Safety Council Karnataka Chapter.
The essence of Corporate Governance lies in promoting and maintaining integritytransparency and accountability. The Company believes in creating and sustainingrelationship based on trust and transparency with all its stakeholders. The governanceframework enjoins the highest standards of ethical and responsible conduct. All theDirectors and employees consider it their personal responsibility to conduct themselves inaccordance with the Code of Conduct set out by the organization.
The Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 have reinforced the governance regime in India. The Company is compliantwith the corporate governance requirements as prescribed under the said regulations.Pursuant to the provisions of the listing regulations a certificate from M/s. NityanandSingh & Co. a firm of Company Secretaries in Practice confirms compliance withconditions of Corporate Governance and forms an integral part of this Report. The Companyhas also ensured compliance with applicable Secretarial Standards issued by the Instituteof Company Secretaries of India pursuant to Section 118(10) of the Companies Act 2013.
A certificate furnished by Mr. Jamshed Naval Cooper Managing Director and Mr. AnilKumar Sharma Chief Financial Officer in respect of the financial statements and the cashflow statement for the financial year ended 31 st March 2020 is annexed as AnnexureB' to this Report.
Management Discussion and Analysis Report is also given as an addition to this Report.
BUSINESS RESPONSIBILITY REPORT In terms of Regulation 34(2)(f) of the SEBI ListingRegulations a Business Responsibility Report forms part of this Annual Report.
There was no change in the Board of Directors during the financial year ended 31stMarch 2020.
Retirement by rotation
Ms. Soek Peng Sim retires by rotation at the ensuing AGM and being eligible has offeredherself for reappointment. Her brief profile is given in the Notice of AGM. The Boardhereby recommends her reappointment.
Reappointment of Managing Director The members of the Company at the AGM held on22nd September 2017 had reappointed Mr. Jamshed Naval Cooper as Managing Director of theCompany for a period of three years from 1 st July 2017 till 30th June 2020. The Board atits meeting held on 28th May 2020 has reappointed Mr. Jamshed Naval Cooper as ManagingDirector for a further period of three years from 1 st July 2020 until 30th June 2023subject to the approval of the members in the ensuing AGM. The Board hereby recommends theresolution for reappointment of Mr. Cooper as provided at Item No. 4 of the Notice of AGM.
Declaration of Independent Directors
Ms. Akila Krishnakumar and Mr. Ramakrishnan Ramamurthy Independent Directors on Boardhave submitted declarations to the Company that they fulfill the criteria of independenceas laid down under Section 149(6) of the Companies Act 2013 and Regulation 16 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Board ofDirectors based on the declarations received from the Independent Directors haveverified the veracity of such declarations and confirm that the Independent Directorsfulfill the conditions of independence specified in the Listing Regulations and areindependent of the management of the Company.
DISCLOSURES UNDER COMPANIES ACT 2013 Number of Board Meetings: During FY20 fiveboard meetings were held. The details of the same are given in the Corporate GovernanceReport.
Composition of Audit Committee: The Audit Committee of the Company comprises threemembers namely Mr. Ramakrishnan Ramamurthy (Chairman of the Committee) Ms. AkilaKrishnakumar and Ms. Soek Peng Sim.
Board Evaluation: In accordance with the provisions of the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried 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 Stakeholders RelationshipCommittee and Risk Management Committee. The manner in which the performance evaluationhas been carried out has been explained in the Corporate Governance Report.
Policy for appointment and remuneration of directors:
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a Nomination and Remuneration Policy. The policy inter alia lays down the criteriafor determining qualifications attributes and independence of potential candidates forappointment as directors and determining their remuneration. The brief details of thePolicy have been provided in Corporate Governance Report. The said Policy has been postedon website of the Company and the web link to access the said policy is as follows:
The Board has also adopted a Board Diversity Policy which requires theBoard to ensure appropriate balance of skills experience and diversity of perspectives inits own composition.
Annual Return: The extract of the Annual Return in the prescribed form MGT - 9 isannexed herewith as Annexure C'.
Key Managerial Personnel: No changes took place in the Key Managerial Personnel(KMP) during FY20. The following persons continue to be the KMP of the Company:-
Mr. Jamshed Naval Cooper Managing Director;
Mr. Sushil Kumar Tiwari Whole-time Director;
Mr. Anil KumarSharma Chief Financial Officer; and
Mr. Rajesh Relan Legal Head & Company Secretary. General: TheDirectors state that no disclosure or reporting is required in respect of the followingitems as there were no transactions with respect to these items during FY20:
Details relating to deposits covered under Chapter V of the Companies Act 2013.
Issue of equity shares with differential rights as to dividend voting orotherwise.
Issue of stock options or sweat equity shares.
No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and the Company's operations in future.
Loans investments guarantees and securities in terms of Section 186 of theCompanies Act 2013.
INTERNAL FINANCIAL CONTROLS The Company has in place relevant internal controlspolicies and procedures to ensure orderly and efficient conduct of its business. StandardOperating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for allcritical processes across its operations. The internal financial controls are tested foroperating effectiveness 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 annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) that such accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31 st March 2020 and ofthe profit of the Company for the financial year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the financial statements for the financial year ended 31st March 2020 havebeen prepared on a going concern' basis;
(e) that proper internal financial controls were in place and that such internalfinancial controls were adequate and were operating effectively; and
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All transactions entered into between the Company and its related parties during thefinancial year ended 31st March 2020 were in the ordinary course of business and on anarm's length basis. The particulars of such transactions have been disclosed in the notesto accounts of the Balance Sheet presented in the Annual Report. During the year underreview the Company has not entered into any related party transaction exceeding thethreshold limit provided under the Companies Act 2013/Rules made thereunder and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. A statement of allthe related party transactions is placed before the Audit Committee on a quarterly basisspecifying 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:
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 may emerge from time to time. The Risk Management processes ofthe Company ensure that the risks are identified well in time and addressed proactively.
The business risks have been classified under the broad heads - strategic operationalfinancial and legal & compliance risks. The Company's Risk Management Policy lays downa bottom-up process comprising risk identification analysis and evaluation treatment andcontrolling. Risk owners identify and analyse all risks in their area of operations. Thebusiness risks are reviewed by the Senior Management and critical risks are placed beforethe Risk Management Committee/Board of Directors for review. The amended Regulation 21 ofthe SEBI Listing Regulations requires the top 500 listed companies based on marketcapitalization to constitute a Risk Management Committee. Accordingly the Board ofDirectors has constituted a Risk Management Committee. The details relating to compositionof the Committee and its functions are provided in Corporate Governance Report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has established a vigil mechanism / whistle blower policy to deal with theinstances of unethical behaviour fraud conflict of interest mismanagement and violationof the Code of Conduct. During FY20 no complaint was received under the Vigil Mechanism.The details of the vigil mechanism are given in the Corporate Governance Report and a copyof the Policy has been posted on the Company's website. The web link to access the same isas follows:
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
The Company continues to remain compliant with the provisions of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 which aims toprotect women at workplace against any form of sexual harassment and prompt redressal ofany complaint. During FY20 no complaint was received by the Company in this regard.
In accordance with the provisions of Section 139(1) of the Companies Act 2013 themembers at the 63rd Annual General Meeting (AGM) of the Company held on 22nd September2017 had appointed S.N. Dhawan & Co. LLP. Chartered Accountants as statutoryauditors of the Company to hold office up to the conclusion of the 63rdAGM i.e. forconducting statutory audits commencing from FY2017-18 until FY2021 -22.
The observations of the Auditors in their report on Accounts read with the relevantnotes are self-explanatory. The Independent Auditors' Report does not contain anyqualification reservation or adverse remark.
The Company is maintaining cost records in accordance with provisions of Section 148 ofthe Companies Act 2013 and the Rules made thereunder. The Cost Audit for FY19 wasconducted by M/s R. J. Goel & Co. Cost Accountants Delhi and as required Cost AuditReport was duly filed with the Ministry of Corporate Affairs Government of India. TheAudit of the cost accounts of the Company for FY20 is also being conducted by the saidfirm and the Report will be filed within the stipulated time.
In accordance with Section 148 of the Companies Act 2013 and the Companies (CostRecords and Audit) Rules 2014 the Board of Directors has on the recommendation of theAudit Committee appointed M/s. R.J. Goel & Co. Cost Accountants as Cost Auditor ofthe Company for FY21 on a remuneration of INR 250000. Pursuant to Section 148(3) of theCompanies Act 2013 a resolution seeking member's ratification for the remunerationpayable to M/s. R. J. Goel & Co. Cost Accountants for FY21 is included in the Noticeconvening the AGM. The Board recommends the aforesaid resolution for approval of themembers.
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 2020 in accordance with the provisions of Section 204of the Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The Report of the Secretarial Auditor is annexed herewith asAnnexure D'. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
Secretarial Compliance Report: SEBI had vide its circular dated 8th February 2019 madeit mandatory for listed companies to annually submit a Secretarial Compliance Report tostock exchanges. M/s. Nityanand Singh & Co. has furnished Secretarial ComplianceReport for FY20. The said Report does not contain any qualification reservation oradverse remark. The said Report has been placed on website of the Company and the web linkto access the same is as under:
PARTICULARS OF EMPLOYEES
The particulars of employees required pursuant to Section 197 of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 form part of this Report and are annexed as Annexure E'. Inaccordance with the provisions of Section 136 of the Act the Board's Report and thefinancial statements for the financial year ended 31st March 2020 are being sent to themembers and others entitled thereto excluding the details to be furnished under Rule 5(2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 whichare available for inspection by the members at the Registered Office of the Company duringbusiness hours on all working days up to the date of the ensuing Annual General Meeting.If any member desires to have a copy of the same he may write to the Company Secretary inthis 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 form part of this Report andare annexed as Annexure F'.
We are thankful to the Central and State Government(s) agencies for their continuedsupport and co-operation. Your Directors are thankful to all stakeholders includingCustomers Bankers Suppliers Distributors Dealers and Contractors for their continuedassistance co-operation and support. The Directors wish to place on record their sincereappreciation to all employees for their commitment and continued contribution to theCompany. The Directors are grateful for the confidence faith and trust reposed by theshareholders in the Company.
| ||For and on behalf of the Board |
|Place: Gurugram ||Akila Krishnakumar |
|Date: 28th May 2020 ||Chairperson |