Your Directors take pleasure in presenting the 28th Annual Report on the business andoperations of the Company together with the audited financial statements for the FinancialYear ended 31st March 2020.
STATE OF COMPANY'S AFFAIRS:
|FINANCIAL HIGHLIGHTS || ||Rs. in Lakhs |
|Particulars ||2019-20 ||2018-19 |
|Revenue from operations ||166290.16 ||155880.44 |
|Other income ||6369.32 ||5064.63 |
|Total Revenue ||172659.48 ||160945.07 |
|Earnings Before Interest Depreciation Taxation & Amortisation (EBITDA) ||32388.92 ||23759.83 |
|Finance Costs ||4620.06 ||4050.23 |
|Depreciation ||4116.71 ||3704.62 |
|Profit/(Loss) Before Taxation ||23652.15 ||16004.98 |
|Less: Tax including Deferred Tax ||4884.53 ||4251.25 |
|Profit/(Loss) After Taxation ||18767.62 ||11753.73 |
Your directors recommend payment of dividend of Rs. 7/- (70%) per equity share ofRs.10/- each for the financial year ended 31st March 2020 (previous year Rs.6.00 pershare) amounting to Rs.3268.89 lakhs. The dividend payout is subject to approval ofmembers at the ensuing Annual General Meeting.
During the year under review the Company proposes to transfer Rs.5000 lakhs to theGeneral Reserve.
The paid up equity share capital of your Company as on 31 March 2020 was Rs.46.70Crores. There was no fresh issue of capital during the year under review. The Company hasneither issued shares with differential voting rights sweat equity shares nor has itgranted any stock options.
REVIEW OF OPERATIONS:
During the FY 2019-20 your company has produced 293491 MT of Ductile Iron Pipeswhich is marginally lower by 5023 MT compared to the FY 2018-19which is attributable toloss of production for 9 days during March 2020 due to temporary suspension ofoperations owing to nationwide lockdown declared by the Government to prevent the spreadof COVID-19.
Your Company continues to play a constructive role in the nation building movement bycontributing to water supply and infrastructure development in the country which are thethrust areas of the Government. During the FY 2019-20 your company's Ductile Iron Pipesof about 7300 KM have been used for transportation of potable water and sewerageunder its brand name "SRIPIPES" for various prestigious water projectsacross the country thus increasing its market share further.
|Production at a glance: || || || |
|Product ||2019-20 ||2018-19 ||% of Change |
| ||Prod. ||Sales * ||Prod. ||Sales * ||Prod. ||Sales |
|Ductile Iron Pipes (MT) ||293491 ||285848 ||298514 ||290873 ||-1.68 ||-1.73 |
|Liquid metal from MBF (MT) ||299477 ||298326 ||288215 ||287915 ||3.91 ||3.62 |
|LAM Coke (MT) $ ||167240 ||175101 ||170607 ||159700 ||-1.97 ||9.64 |
|Cement (MT) ||60654 ||60719 ||77394 ||76496 ||-21.63 ||-20.62 |
*Sales include captive consumption also. $ Company has changed weighment pattern fromwet to dry basis. Accordingly previous year's figures also changed in line with dryweighment pattern.
Due to pandemic COVID 19 the entire operations of your company as per the Government'sdirective were suspended w.e.f. 23rd March 2020. The production of Ductile Iron Pipes forthe year ended 31st March 2020 would have crossed 300000 MT had the plant run for theentire month of March 2020 and would have achieved more than 100% of the capacity.
Your Company has successfully commenced commercial operations of Ferro Alloys Plant inthe fourth quarter of the financial year which marks completion of both the phases ofFerro Alloys project. With the commissioning of Ferro Alloys plant the Company has becomeself-sufficient meeting the captive requirement of Ferro Silicon and the surplusproduction is being sold in the domestic market.
During the year under review your Company has reported Profit Before Tax (PBT) of Rs.236.52 Crores which is higher by 47.79% compared to FY 2018-19. The improved performanceof your Company is predominantly attributable to lower raw material cost higher salesrealization with an optimum product mix coupled with various cost reduction measures. YourCompany has recorded a marginal growth of about 4% in revenue from Ductile Iron Pipes atRs.1396.22 Crores as compared to Rs.1345.59 Crores achieved during the FY 2018-19. TheEBITDA of the Company was also higher at Rs.323.89 Crores and the Profit After Tax (PAT)being Rs.187.67 Crores comparedin to Rs.237.59 Crores and Rs.117.54 Crores achieved duringthe FY 2018-19 respectively.
The expansion plans as envisaged during the FY 2019-20 to install new MBF additionalHot Blast Stoves Raw material handling system creating additional balancing facilitiesto increase production capacity of DI Pipes have been started by the Company.
Commissioning of Facilities like Cement Lining Machine VI Sand Blasting System GasketStorage system and 15 MT Cranes in connection with projects relating to capacity additionof DI Pipes have been completed.
With respect to all other projects your directors regret to state that most of themachinery and equipment in connection with new MBF and DI Pipes expansion projects are tobe imported owing to COVID-19 pandemic already there was a delay of about Six months inthe execution of these projects. Further due to increasing spread of COVID-19 across theglobe as well as in India it is anticipated that the schedule of these projects may getaffected due to delay in receipt of machinery erection & commissioning engineersvisit due to VISA regulations/ protocols resulting in further delay in completion of theseprojects. The estimated completion schedule as on date is first quarter of 2021-22.
Your company has lost more than a month's production due to suspension of theoperations following nationwide lockdown declared by the Government of India. Thoughproduction has started from May 2020 but due to absenteeism consequent to the nationwidelockdown normal production is affected. Your company is hopeful that normal productionwill be established from the 2nd quarter of the current year.
The company is having comfortable order book for supply of Ductile Iron pipes. Duringthis Covid-19 situation safe and hygienic water supply is most important for theGovernment. Ductile Iron pipe is the safest and most suitable pipe for transportation ofwater not only in urban cities but also in rural India. The company is hopeful thatCentral and State Government will continue to give priority and remain committed inrespect of ongoing and future water supply sewerage and irrigation projects in thecountry. of Mr. X.J.J.
COVID 19 STEPS TAKEN BY THE COMPNAY:
Your company stands by the society and community in times of despair. The entireemployees of the company contributed their one-day salary towards Andhra Pradesh ChiefMinister's COVID19 Relief Fund. Apart from the above the company has distributed ricewheat and other food items in eight villages nearby its plant. The company has alsosupplied face masks and sanitisers to these villages.
The company strictly follows all precautions and guidelines prescribed by theGovernment particularly towards adhering to safety measures in respect of its employees.
Considering the operational and financial performance of the Company CARE Limitedreaffirmed its rating for the Company's long term borrowing programmes with CARE AA-(Double A Minus) and CARE A1+ (A One Plus) for the short term bank facilities includingCommercial Paper. While the rating CARE AA-indicates high degree of safety regardingtimely servicing of financial obligations carrying very low credit risk rating CARE A1+indicates very strong degree of safety regarding timely payment of financial obligationscarrying lowest credit risk. Further India Ratings & Research has assigned its ratingfor the Company's long term borrowing programmes and short term fund based working capitalfacilities with IND AA-/Stable and rating IND A1+ for the Company's non-fund basedfacilities and Commercial Paper. While rating AA-denotes high degree of safety regardingtimely servicing of financial obligations carrying very low credit risk rating A1+denotes very strong degree of safety regarding timely payment of financial obligationscarrying lowest credit risk.
CHANGES IN DIRECTORS/KEY MANAGERIAL PERSONNEL:
Appointment of Independent Director:
Upon the recommendation of Nomination and Remuneration Committee the Board hasapproved the appointment of Mr X.J.J. Abraham as an additional independent director of theCompany with effect from 6th September 2019 and he will hold office up to theconclusion of ensuing Annual General Meeting of the Company. Your Company has received anotice under Section 160 of the Companies Act 2013 from a shareholder of the Companysignifying his intention to propose the name of Mr X.J.J. Abraham for appointment as aDirector of your Company in the Annual General Meeting. Brief profile Abraham is given inthe notice of the Annual General Meeting for the perusal of the shareholders.
Vacation of office of Nominee Director:
Mr. Solomon Arokiaraj IAS Nominee Director of APIDC vacated his office as directorpursuant to Section 167 (1) of the Companies Act 2013 and consequently ceased to be adirector of the Company with effect from 6th September 2019.
Appointment of Nominee Director:
Andhra Pradesh Industrial Development Corporation (APIDC) has nominated Mr M.Satyanarayana as its Nominee Director on the Board of Directors of your Company witheffect from 3rd February 2020 in place of Mr. Solomon Arokiaraj IAS.
Resignation of Whole-time Director:
During the year under review Mr V. Poyyamozhi Whole-time Director has resigned fromhis directorship with effect from close of working hours of 3rd February 2020 on personalgrounds. Your Directors place on record their sincere appreciation for the activeparticipation and valuable contributions rendered to the Company by Mr Poyyamozhi duringhis association with the Company.
Re-appointment of director:
Mrs. Priya Manjari Todi retires by rotation at the ensuing Annual General Meeting andbeing eligible offers herself for re-appointment.
The Company has received declarations from the Independent Directors confirming thatthey meet with the criteria of independence as prescribed both under subsection (6) ofSection 149 of the Companies Act 2013 and under SEBI's Listing Regulations 2015 asamended from time to time.
The board of directors of your company confirms that plans are in place for orderlysuccession for appointment to the board of directors and senior Management and they arereviewed every year.
Your Company ensures to evolve and follow the corporate governance guidelines and bestpractices to enhance long term shareholder value. Your Company considers it an inherentresponsibility to disclose timely and accurate information regarding its operations aswell as governance of the Company. A separate section on Corporate Governance forms a partof the Directors' Report at Annexure I to this Report.
A separate section on Corporate Governance and the certificate from the PracticingCompany Secretary confirming compliance of Corporate Governance norms as stipulated inRegulation 34 read along with Schedule V of the SEBI Listing Regulations form part ofthis Report at Annexure I.
INTERNAL FINANCIAL CONTROLS & ADEQUECY:
The Company has an adequate system of internal controls in place. It has documentedpolicies and procedures covering all financial and operating functions. These controlshave been designed to provide a reasonable assurance with regard to maintaining of properaccounting controls for ensuring reliability of financial reporting monitoring ofoperations and protecting assets from unauthorized use or losses compliances withregulations. The Company has continued its efforts to align all its processes and controlswith global best practices.
The controls based on the prevailing business conditions and processes have beentested during the year and no reportable material weakness in the design or effectivenesswas observed. The framework on Internal Financial Controls over Financial Reporting hasbeen reviewed by the internal and external auditors.
The Company's internal financial controls were operating effectively based on theinternal control criteria established by the Company considering the essential componentsof internal control stated in the guidance note on audit of internal control overfinancial reporting issued by the Institute of Chartered Accountants of India.
The Audit committee of the Board of Directors actively reviews the adequacy andeffectiveness of internal control systems and suggests improvements wherever needed tostrengthen the same.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI LODR) discussion on state of Company's affairs hasbeen covered as part of the Management Discussion and Analysis (MDA) in a separate sectionvide Annexure II to this Report.
RISK MANAGEMENT POLICY:
The Company has a robust risk management framework comprising risk governing structureand defined management processes. The Company's Risk Management framework protects andadds value to the organization and its stakeholders with the objective to establish a riskintelligence framework for managing objectively expected risk exposures so as to maintainfinancial stability of your Company.
The major risks identified by the functions are systematically addressed throughmitigating actions on a continuous basis. The risks are evaluated quantified &prioritized and mitigation plans are reviewed & monitored at various stages. The majorrisks connected with the business their likely bearing on the performance of the Companyand their mitigation are covered under Risks and Concerns Section of the ManagementDiscussion and Analysis.
NOMINATION & REMUNERATION POLICY:
The Board has adopted a Nomination and Remuneration Policy recommended by Nominationand Remuneration Committee in terms of the provisions of Section 178 of the Act. TheNomination and Remuneration Policy is available at the company's websitewww.srikalahasthipipes.com.
The Nomination and Remuneration Committee of the Company is in compliance with theprovisions of Section 178 of the Companies Act 2013 read along with the applicable rulesthereto and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and the terms of reference to the Committee include :-
To guide the Board in relation to appointment retention and removal ofDirectors Key Managerial Personnel and Senior Management.
To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
To recommend to the Board on remuneration payable to the Directors and KeyManagerial Personnel.
Recommend to the Board a policy relating to the remuneration for the directorskey managerial personnel and other employees.
Devise a policy on Board diversity.
Criteria for making payments to non-executive directors:
The aggregate remuneration/commission payable to all the Non-executive directors willbe recommended by the Nomination and Remuneration Committee (NRC) to the Board based onCompany's performance profits and any other significant qualitative parameters as may bedecided by the Board.
The NRC will recommend to the Board the quantum of remuneration/commission for eachDirector based upon individual contributions of directors and their active involvement andparticipation in strategic decision making. Based on the recommendation of the NRC theBoard will consider payment of remuneration/commission to each of the non-executivedirector every year for its approval which shall be within the overall limits prescribedunder the Companies Act 2013.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Your Company understands its social responsibility and remain focussed to support thosefrom the socially and economically backward groups and remain focussed to improve thequality of life of the various communities.
In this process your Company has identified several corporate social responsibilityinitiatives relating to Social Empowerment & Welfare Village development HealthCare Education and animal welfare during the year and initiated various activities inneighbouring villages around plant locations.
The Board has adopted a Corporate Social Responsibility Policy (CSR Policy) inaccordance with Schedule VII of the Companies Act 2013. The Annual Report on CSRactivities as required under Rule 8 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 read with section 134(3) and 135(2) of the Companies Act 2013 is atAnnexure III to this Report.
During the FY 2019-20 the Company has spent Rs.342.58 lakhs as against Rs.347.62 lakhsto have been spent towards various CSR activities which are covered in detail in theReport on CSR which forms part of this report leaving a shortfall of Rs.5.04 lakhs.During the year under review the Company's spend on CSR activities is slightly lower asfunds earmarked for certain projects could not be spent completely towards the intendedprojects. Since the unspent amount of Rs.5.04 Lakhs is earmarked for the ongoing projectof animal welfare and protection as well as towards expenditure related to combat COVID-19pandemic this amount is not required to be transferred to Prime Ministers National ReliefFund and instead will be carried forward to the next financial year for spending towardsthe intended ongoing projects of animal welfare & protection and also towardscombating COVID-19 during the FY 2020-21.
Your Company continues to stay focussed on initiatives that would auger well for theoverall development of the communities and make a difference in the quality of living ofthe underprivileged.
WHISTLE BLOWER MECHANISM (POLICY):
The Company has a vigil mechanism named Whistle Blower Policy/Vigil Mechanism whereinEmployees/ Directors/Stakeholders of the Company are free to report any unethical improperactivity actual or suspected fraud or violation of the Company's Code of Conduct. ThePolicy provides for adequate safeguard against victimization of employees who avail themechanism and also provides direct access to the Chairman of the Audit Committee. Duringthe year under review the Company has not received any complaints under the saidmechanism. The Whistle Blower Policy of the Company has been displayed on the Company'swebsite at www.srikalahasthipipes.com
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY:
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and Rules made there-under yourCompany has constituted Internal Complaints Committee (ICC). While maintaining the highestgovernance norms the Company has zero tolerance for sexual harassment at workplace.During the year 2019-20 the Company has not received any complaint of sexual harassment.
The Board of Directors carry out an annual evaluation of its performance and theperformance of its Committees as well as individual Directors. The performance of theboard was evaluated by the board after seeking inputs from all the directors on the basisof criteria such as the board composition and structure effectiveness of board processesinformation and functioning etc.
The criteria for the performance evaluation of the Board of Directors includes aspectssuch as its composition and structure and the effectiveness of its processes informationflowand functioning. The criteria for the performance evaluation of individual Directorsincludes aspects such as the Director's contribution to the Board of Directors andCommittee meetings including preparation on the issues to be discussed as well asmeaningful and constructive contribution and inputs during meetings. In addition theChairperson is evaluated on the key aspects of his/her role.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. The Board and the Nomination and RemunerationCommittee reviewed the performance of individual directors on the basis of criteria suchas the contribution of the individual director to the board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole performance of the Committee(s) of theBoard and performance of the Chairman was evaluated taking into account the views ofother directors.
Performance evaluation of independent directors was done by the entire Board excludingthe independent director being evaluated.
All the Board members of the Company are afforded every opportunity to familiarizethemselves with the Company its management its operations and industry perspective on aregular basis. They are made to interact with senior management personnel and proactivelyprovided with relevant news views and updates on the Company and sector. All theinformation/documents sought by them is/are also shared with them for enabling a goodunderstanding of the Company its various operations and the industry.
The Company organised a Plant visit for independent directors along with SeniorManagement team in September 2019 to apprise the directors on the detailed operationalaspects. The Directors were apprised on key aspects of operations and market trend and theCompany's performance and its future projects.
The details of programmes for familiarisation for Independent Directors are posted onthe website of the Company at www.srikalahasthipipes.com.
NUMBER OF MEETINGS OF THE BOARD:
The details of the number of Meetings of the Board held during the Financial Year2019-20 are given in the Corporate Governance Report which forms part of this report.
RELATED PARTY TRANSACTIONS:
All related party transactions (RPTs) entered into by the Company with its relatedparties during the year under review were on arms' length basis and in the ordinary courseof business and did not attract provisions of section 188 of the Companies Act 2013 andwere also not material transactions under regulation 23 of the SEBI Listing Regulations2015. During the year 2019-20 as required under section 177 of the Companies Act 2013and regulation 23 of the SEBI Listing Regulations 2015 all RPTs were placed before AuditCommittee for its approval.
A statement showing the disclosure of transactions with related parties as required byIndAs 24 is given separately in this Annual Report under notes to financial statements.
There were no material transactions entered into with related parties during the yearunder review which may have had any potential conflict with the interests of the Company.
No Related Party Transactions (RPTs) were entered into by the Company during thefinancial year which attracted the provisions of section 188 of the Companies Act 2013.There being no material' related party transactions as defined under regulation 23of SEBI Listing Regulations 2015 there are no details to be disclosed in Form AOC-2 inthat regard.
The Company has formulated a policy on "Related Party Transactions" and theprocess of dealing with such transactions which are in line with the provisions of theCompanies Act 2013 and SEBI LODR. The same is available on the website of the Companywww.srikalahasthipipes. com.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The statement containing particulars of employees as required under Section 197 (12) ofthe Companies Act 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report. However in terms of Section136 of the Companies Act 2013 the Annual Report excluding the aforesaid information isbeing sent to all the members of the Company and others entitled thereto. Any memberinterested in obtaining such particulars may write to the Company Secretary at theRegistered Office of the Company.
The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of sub-section 12 of Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is forming part of this report vide Annexure IV.
QUALIFIED INSTITUTIONS PLACEMENT:
Your Company has successfully raised Rs.250 crores through its Qualified InstitutionalPlacement (QIP) in the month of December 2017 in order to cater to the businesspurposes including repayment of long term and short term debt to fund the organic andinorganic growth of the Company to meet working capital requirements of the Company andfor general corporate purposes. Your Company has utilized entire proceeds raised throughQIP for the intended purposes as envisaged in the offer document. Utilization of QIPproceeds during the FY 2019-20 in compliance of SEBI's LODR Regulations 2015 is givenbelow.
| || || ||Rs. Lakhs |
|Particulars ||As on Mar-19 ||During FY 2019-20 ||Total |
|Amount received from QIP Issue ||- ||- ||25000 |
|Less: Payment of HDFC Term Loan & ICICI ECB ||5214 ||- ||5214 |
|Capex ||2936 ||1423 ||4359 |
|Exp of QIP ||559 ||- ||559 |
|Working Capital Requirement ||11686 ||3182 ||14868 |
|Fixed Deposits lying in Banks ||4605 ||- ||- |
|Total ||25000 ||4605 ||25000 |
Energy conservation technology absorption and foreign exchange earnings and outgo:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is given in Annexure V and forms part ofthis report.
Extract of Annual Return:
As per the requirements of Section 92(3) of the Companies Act 2013 and Rules framedthereunder the extract of the annual return for FY 2019-20 is given in Annexure VII inthe prescribed Form No. MGT-9 which is part of this report.
Particulars of information forming part of the Board's Report pursuant to Section 134of the Companies Act 2013 and relevant Rules thereof not covered elsewhere in the reportare given hereunder:
1. There are no qualifications reservations or adverse remarks or disclaimer made bythe Statutory Auditors in their report or by the practicing Company Secretary in theSecretarial Audit Report.
2. The Company as per its policy has granted loans to employees aggregating Rs.39.16lakhs during the year ended 31st March 2020.
3. Particulars of Loans or investments covered under Section 186 of the Companies Act2013 form part of the notes to the financial statement provided in this
Annual Report. These loans are primarily granted for effective utilization of surplusfunds available with the Company.
4. There are no material changes or commitments occurring after 31st March 2020 whichmay affect the financial position of the Company or may require disclosure.
5. During the year under review there has been no change in the nature of business ofthe Company.
6. The Company did not have any subsidiaries joint ventures and associate companieswhich have ceased during the year.
7. The Company has not accepted deposits under Chapter V of the Companies Act 2013.
8. The Company has not received any such orders from Regulators Courts or Tribunalsduring the year which may impact the going concern status or the Company's operations infuture.
9. The Company is in compliance with the Secretarial Standards issued by the Instituteof Company Secretaries of India on Meetings of the Board of Directors (SS-1) and GeneralMeetings (SS - 2).
M/s. Lodha & Co. Chartered Accountants (Firm Reg. No. 301051E) were appointed asStatutory Auditors of the Company for a term of five years (subject to ratification byshareholders at every AGM if required under the prevailing law at that time)to holdoffice from the conclusion of 25th Annual General Meeting held in 2017 till the conclusionof 30th Annual General Meeting of the Company to be held in 2022.
The requirement to place the matter relating to appointment of the Auditors forratification by the members at every Annual General Meeting is done away notifi dated 7thMay 2018 issued by the withvide Ministry of Corporate Affairs. Accordingly no resolutionis of appointment of the Auditors proposedforratification who were appointed in theAnnual General Meeting held on 27th September 2017. Further the Notes on financialstatements referred to in the Auditors' Report are self-explanatory and do not call forany further comments.
The Auditors' Report does not contain any qualification reservation or adverse remark.
In terms of the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the Board of Directors of yourCompany have on the recommendation of the Audit Committee appointed M/s.Narasimhamurthy& Co. Cost Accountants Hyderabad as Cost Auditors to conduct thecost audit of your Company for the financial year ending 31st March 2021 at aremuneration as mentioned in the Notice convening the Annual General Meeting. As requiredunder the Act the remuneration payable to the cost auditor is required to be placedbefore the Members in a general meeting for their ratification.
Accordingly a resolution seekingMember'sratificationfor the remuneration payable toCost Auditors forms part of the Notice of the ensuing Annual General Meeting. The CostAudit Report of the Company for the Financial Year ended 31 March 2019 was filed in XBRLmode with the Ministry of Corporate Affairs within the stipulated due date.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rulesthereunder Mr. S. Chidambaram Company Secretary in Practice was appointed to conduct thesecretarial audit of the Company for the FY 2019-20.
The secretarial audit report confirming compliance by Practicing Company Secretary tothe applicable provisions of the Companies Act 2013 SEBI LODR Regulations 2015 andother applicable laws is appended at Annexure VI to this report and it does not containany qualification reservation or adverse remark.
In line with the provisions of Section 138 of the Companies Act 2013 M/s. Chaturvedi& Co Chennai were appointed by the Board as Internal Auditors of the Company for theFY 2019-20.
The Audit Committee defines the scope of internal audit from time to time and alsoreviews the observations of internal auditors and the action taken report submitted by themanagement on the observations at its meeting held every quarter and also suggests themanagement the improvements required in the systems followed by the Company.
In support of "Green Initiative" taken by the Ministry of Corporate Affairs("MCA") in the Corporate Governance" by allowing service of documents by aCompany to its Members through electronic mode the Company will continue to send variouscommunications and documents like notice calling general meetings audited financialstatements directors' report auditor's report etc. in electronic form to the emailaddress provided by the Members to the Depositories or to the Company.
Your Company impresses upon its shareholders to contribute to this green initiative infull measure by registering their e-mail addresses in respect of electronic holdings withthe Depository through their concerned Depository Participant. Members who hold shares inphysical form are requested to take necessary steps for registering the same so that theycan also become a part of the initiative and contribute to the Green Movement.
ANNEXURES TO THE BOARD'S REPORT:
1. Corporate Governance Report is enclosed vide Annexure I.
2. Pursuant to Regulation 34 of Listing Regulations 2015 Management Discussion andAnalysis Report is enclosed vide Annexure II.
3. Pursuant to Section 135 (4) (a) of the Companies Act 2013 read with Rule 8 (1) ofthe Companies (Corporate Social Responsibility Policy) Rules 2014 the annual report onCSR activities in the prescribed format forming part of the Director's Report is enclosedvide Annexure III.
4. Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointmentand remuneration of managerial personnel) Rules 2014 is enclosed vide Annexure IV.
5. Pursuant to Section 134 (3) (m) of the Companies Act 2013 information relating toConservation of Energy Technology absorption and foreign exchange earnings and outgo isenclosed vide Annexure V.
6. Pursuant to Section 204 (1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and remuneration of managerial personnel) Rules 2014 the Secretarial AuditReport is enclosed vide Annexure VI.
7. As per the requirements of Section 92(3) of the Companies Act 2013 and Rules framedthereunder the extract of the annual return for the FY 2019-20 is enclosed vide AnnexureVII.
8. Pursuant to Regulation 34 of Listing Regulations 2015 Business ResponsibilityReport is enclosed vide Annexure VIII.
DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors of the Company confirms that:
i) In the preparation of annual accounts the applicable accounting standards have beenfollowed and there has been no material departure.
ii) The selected accounting policies were applied consistently and the Directors madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2020 and of the profit theCompany for the financial year ended 31st March 2020.
iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
iv) The annual accounts have been prepared on a going concern basis.
v) Sufficient internal financial controls have been laid down and such internalfinancial controls are adequate and were operating effectively and vi) Proper systems toensure compliance with the provisions of all applicable laws have been devised and suchsystems were adequateand operating effectively.
Your Directors wish to convey their appreciation to all of the Company's employees fortheir contribution towards the Company's performance. Your Directors would also like tothank the shareholders employee unions customers dealers suppliers bankersGovernments and all other business associates for their continuous support to the Companyand their confidencein its management on behalf of the Board.
Your Directors also wish to place on record their appreciation for the valuable supportreceived by your Company from Banks Govt. Authorities Customers Auditors and otherstakeholders. The Board thanks the employees at all levels for the dedication commitmentand hard work putof in by them for Company's achievements. Your Directors are grateful tothe Shareholders/ Stakeholders for their confidence and faith reposed in the management ofthe Company.
Your Directors also place on record their sincere appreciation for the valuableguidance received from Mr Mayank Kejriwal Managing Director and for his constructivecontribution in shaping the progressive growth of your Company.
For and on behalf of the Board of Directors